COMMISSIONER OF INCOME TAX Vs. CLIFFORD DSOZA

JUDGEMENT

(1.) THE respondent -assessee is carrying on the business as clearing and forwarding agent at New Mangalore Port Trust (for brevity 'NMPT'). The dispute in the present appeal is for the assessment year 2006 -07 in which year the assessee had declared its total income as Rs. 1,11,03,920/ -. By the assessment order dated 28.11.2008, the Assessing Authority has disallowed 30% of the speed money and consequently a sum of Rs. 67,59,784/ - was added to the income of the respondent -assessee. Challenging the said order, the respondent -assessee filed an appeal before the Commissioner of Income Tax (Appeals), Mangalore, which was allowed vide its order dated 21.10.2009. Being aggrieved, the revenue filed an appeal against the said order of the CIT (Appeals), which was dismissed by the Tribunal vide its order dated 30.07.2010. Aggrieved by the said orders, this appeal has been filed by the Department under Section 260 -A of the Income Tax Act, 1961.

(2.) WE have heard Sri E.I. Sanmathi, learned counsel appearing for the appellants -Department as well as Sri S. Parathasarathi, learned counsel appearing for the respondent -assessee and perused the record.

(3.) ON the other hand, the learned counsel for the respondent -assessee has submitted the very fact that 70% of the payment made has been allowed by the Assessing Officer would be a admission on the part of the Department that the sub -contractors were carrying on the business of providing labourers to the respondent -assessee and hence the genuineness of the transaction cannot be doubted. It is contended that the question as to whether the sub -contractors had paid the amount to the labourers or not is not a question to be answered by the respondent -assessee as once the assessee has made major payment to the sub -contractors through cheque and the TDS has also been deducted, it is for the sub -contractors to prove and show to the department in their assessment proceedings as to whether they have made payment to the labourers or not and that the respondent -assessee cannot be held responsible for the same. It was lastly contended by the learned counsel for the respondent -assessee that there is no basis for the Assessing Officer to come to the conclusion that 30% of the amount claimed to have been paid to the sub -contractors was not accepted as there was no material to show the same or material available before the Assessing Officer to arrive at that figure.