TaxTMI 
TaxTMI 
2017 (5) TMI 1821
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.... follows. 6. We may record that this Court in the above referred decision in ITA No. 450/2009, had observed thus: "This appeal is filed by the Revenue questioning the order dated 30.4.2009 passed by the Income Tax Appellate Tribunal Bangalore Bench 'A' in ITA No. 947/Bang/08 (Assessment year 2004-05). The appellants have prayed for confirmation of the order dated 22.4.2008 passed by the Commissioner of Income Tax (Appeals) {'Appellate Commissioner' for short}. 2. The assessee is involved in Stevedoring operations of vessels and carrying on loading and unloading work at the port; assessee has engaged labour force from New Mangalore Port Trust ('NMPT for short), registered cargo Handling Workers Administrative Wing (RCHWAW); the payment to the labour so engaged would be made by cheques to NMPT and in turn NMPT would disburse the wages to the workers. Case of the assessee is that as the registered labour force at NMPT did not agree to work beyond the limit fixed by them, the assessee had. engaged the services of the private workers and had made payment in cash to the extent of Rs. 1,17,59,931/- and through cheques to sub-contractors to th....
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....al on record, more particularly the orders passed by the Appellate Commissioner and Income Tax Appellate Tribunal, Bangalore. 5. The Appellate Commissioner has in his detailed order clarified as to how the order passed by the Assessing Authority is unsustainable to the extent mentioned supra. To verify the genuineness of the payments made by the assessee to the sub-contractors through cheques, summons under Section 131 of the Income Tax Act issued to all the subcontractors mentioned in the assessment order and their statements recorded on oath by the Assessing Officer also came to be examined. It came to be noticed by the Appellate Commissioner that all the subcontractors have stated that they have carried loading and unloading work at the port for the assessee by engaging private labour and they have further confirmed the bill. All these labour contractors are assessed to tax and they have filed returns belatedly declaring the above labour contract proceeds and offered income to tax under Section 44AD of the Act. However the Appellate Commissioner, on facts has found that the vouchers issued to the sub-contractors and payments made to them are highly suspicious in nature.....
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....t of payments made to the labourers etc., Regarding payment to individual labourers, no details are maintained. There is no written agreement between the assessee and the subcontractors. The bills produced by the subcontractors before the authorities are computer generated bills which are identical in respect of all the sub-contractors and they did not have any service tax registration number, cell phone number etc., On perusal of their bank account records, it is observed by the Appellate Commissioner that when the payment by cheque was made, the amount was withdrawn by cash on the same day or on the next day. 6. In addition to the same, the Tribunal, on facts has found that the Appellate Commissioner did not find availability of any big labour force which can be engaged by assessee or any other cargo handling concern for the business. It is found that NMPT labour is so organized and strong that they would not allow any private sub-contractors to carry on the work and receive the huge payments as indicated by the assessee in this case. It is also found by the appellate Commissioner that even the nature of work and infrastructure available at NMPT port does not require eng....
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....rief facts of the case are that. 5. The respondent assessee is a partnership firm. It is engaged in the business of clearing and forwarding agent and transport contractor. During the course of assessment proceedings, the AO had noticed that the assessee firm had claimed a sum of Rs. 1,17,59,931/- as the speed money. The assessee firm claim, that this speed money was paid out of business expediency. It is claimed that the speed money is paid to the NMPT to complete the work on time and avoid the payment of charges to ship owners and these type of payment is common and is prevalent in this line of business. It is further submitted that the payment was not made for breach of any provisions of law nor illegal payment. The AO had set out the following facts against the allowability of this expenditure for the assessment year 2002-03 and finally disallowed the 20% of the expenditure. 1) Given the nature of business, such payments are to be made. 2) The assessee firm is making such claims even in earlier years. 3) To get extra hours of work, additional payments are to be made to complete the work without paying damages/demurrage to the ship owner. 4)....