M/s Gshosh and Chakraborty Transport, Asansol V. Income Tax Officer-Ward-2(1), Asansol, Asansol

CO 140/KOL/2013

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2357 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 9 month(s) 13 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 24-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 09-08-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 11-11-2013
• Court: TRIBUNAL
• Department Lawyers: S VENKATRAMANI
• Assessee Lawyers: U DASGUPTA
• Section: 40A(3); 143(3); 133(6); 2

Judgement Text

1 ITA NO. 2426/KOL/2013 & CO NO.140/K/2013 GHOSH & CHAKRABORTY TRANSPORT AY 2008-09 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA [BEFORE SHRI M. BALAGANESH, AM & SHRI K. NARASIMHA CHARY, JM] I.T.A NO. 2426/KOL/2013 ASSESSMENT YEAR: 2008-09 INCOME-TAX OFFICER, WD-2(1), ASANSOL VS. M/S. GHOS H & CHAKRABORTY TRANSPORT (PAN: AAEFG6342K) ( APPELLANT ) ( RESPONDENT ) & C.O. NO.140/KOL/2013 IN I.T.A NO. 2426/KOL/2013 ASSESSMENT YEAR: 2008-09 M/S. GHOSH & CHAKRABORTY TRANSPORT VS. INCOME-TAX OFFICER, WD-2(1), ASANSOL (CROSS OBJECTOR) (RESPONDENT) DATE OF HEARING: 11.08.2016 DATE OF PRONOUNCEMENT: 24.08.2016 FOR THE REVENUE: SHRI S. VENKATRAMANI, JCIT, S R. DR FOR THE ASSESSEE: SHRI U. DASGUPTA, ADVOCATE ORDER PER SHRI M. BALAGANESH, AM: THIS APPEAL BY REVENUE AND CROSS OBJECTION BY ASSES SEE ARE ARISING OUT OF ORDER OF CIT(A), ASANSOL VIDE APPEAL NO. 221/CIT(A)/ASL/W-2( 1)/ASL/10-11 DATED 13.08.2013. ASSESSMENT WAS FRAMED BY ITO, WARD-2(1), ASANSOL U/ S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR AY 2008-09 VIDE HIS ORDER DATED 28.12.2010. BOTH THE APPEAL AND THE CROSS OBJECTION ARE TAKEN T OGETHER FOR THE SAKE OF CONVENIENCE. 2. THE FIRST ISSUE TO BE DECIDED IN THE APPEAL OF THE REVENUE IS AS TO WHETHER THE LD CITA IS JUSTIFIED IN DELETING THE DISALLOWANCE MADE U/S 40A(3) OF THE ACT IN THE SUM OF RS. 33,92,219/- IN THE FACTS AND CIRCUMSTANCES OF THE C ASE. 2.1. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASS ESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF TRANSPORT CONTRACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LD AO OBSERVED THAT THE ASSESSEE HAD MADE CERTAIN PAYMENT S IN EXCESS OF RS. 20,000/- BY CASH / BEARER CHEQUES TO VARIOUS PARTIES TO THE TUNE OF RS . 33,92,219/- IN VIOLATION OF PROVISIONS OF 2 ITA NO. 2426/KOL/2013 & CO NO.140/K/2013 GHOSH & CHAKRABORTY TRANSPORT AY 2008-09 SECTION 40A(3) OF THE ACT . THE ASSESSEE WAS DIREC TED TO PRODUCE THE CASH BOOK BY THE LD AO WHICH WAS NOT COMPLIED WITH AND ACCORDINGLY THE LD AO DISALLOWED THE SUM OF RS. 33,92,219/- U/S 40A(3) OF THE ACT. ON FIRST APPEAL , THE LD CITA OBSERVED FROM THE CASH BOOK , THERE WAS NO PAYMENT EXCEEDING RS. 20,000/- MADE BY THE ASSESSEE AND HENCE THERE IS NO VIOLATION OF PROVISIONS OF SECTION 40A(3) OF THE ACT AND DELETED THE DISALLOWANCE. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US ON TH E FOLLOWING GROUND NO.1:- 1. THAT THE LD. CIT(A), ASANSOL HAS ERRED IN LAW AND ON FACTS BY ALLOWING THE RELIEF OF RS.33,92,219/-, DISALLOWANCES MADE BY THE AO U/S. 4 0A(3). 2.2. THE LD DR ARGUED THAT THE CASH BOOK WAS PROD UCED BY THE ASSESSEE ONLY BEFORE THE LD CITA AND THE LD CITA HAD PASSED THE ORDER WITHOUT C ALLING FOR A REMAND REPORT FROM THE LD AO ON THIS ISSUE AND ACCORDINGLY PRAYED FOR SET ASI DE OF THIS ISSUE TO THE FILE OF THE LD AO FOR VERIFICATION FROM HIS SIDE. IN RESPONSE TO TH IS, THE LD AR ARGUED THAT THE CASH BOOK WAS ALSO PRODUCED BEFORE THE LD AO FROM TIME TO TIME AL ONG WITH OTHER DOCUMENTS WHICH HAD BEEN ENDORSED BY THE LD AO IN HIS ASSESSMENT ORDER IN PARA 4 PAGE 2 AS BELOW:- THE A/R PRODUCED AUDITED BALANCE SHEET FOR A.Y. 2 008-09, TDS CERTIFICATES, LEDGER REGARDING EXPENSES DEBITED IN THE P&L ACCOUNT BILLS AND VOUCHERS IN SUPPORT OF EXPENSES INCURRED, BANK STATEMENTS FROM TIME TO TIME DURING THE CONDUCT OF THIS QUASI JUDICIAL PROCEEDINGS, ALL OF WHICH WERE EXAMINED AND VERIFIE D EITHER FULLY OR ON TEST CHECK BASIS. ACCORDINGLY, HE ARGUED THAT THE CASH BOOK WAS ALSO PRODUCED BEFORE THE LD AO WHO DID NOT PROPERLY APPRECIATE THE CONTENTS THEREON AT THE TIM E OF ASSESSMENT PROCEEDINGS. THE SAME CASH BOOK WAS ALSO PRODUCED BEFORE THE LD CITA WHO ON VERIFICATION OF THE SAME HAD COME TO A CONSCIOUS CONCLUSION THAT THERE WAS NO VIOLATI ON OF SECTION 40A(3) OF THE ACT. 2.3. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIN D THAT THE ONLY ISSUE WHICH IS RELEVANT FOR DISPOSAL OF THIS ISSUE IS FURNISHING OF CASH BO OK BEFORE THE LD AO WHICH IS DISPUTED BY THE LD AO. WE DEEM IT FIT AND APPROPRIATE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, TO SET ASIDE THI S ISSUE TO THE FILE OF THE LD AO, TO DECIDE THIS ISSUE AFRESH, IN ACCORDANCE WITH LAW, AFTER VERIFIC ATION OF THE CASH BOOK OF THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO FILE THE CASH BOOK BEF ORE THE LD AO. ACCORDINGLY, THE GROUND NO. 1 RAISED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 3. THE NEXT ISSUE TO BE DECIDED IN THE APPEAL OF T HE REVENUE IS AS TO WHETHER THE LD CITA IS JUSTIFIED IN GRANTING RELIEF TO THE TUNE OF RS. 4,69,961/- IN RESPECT OF ESTIMATED DISALLOWANCES MADE BY THE LD AO IN THE FACTS AND CI RCUMSTANCES OF THE CASE. 3 ITA NO. 2426/KOL/2013 & CO NO.140/K/2013 GHOSH & CHAKRABORTY TRANSPORT AY 2008-09 3.1. DURING THE COURSE OF HEARING, THE LD DR STATE D THAT THIS GROUND IS NOT PRESSED BY THE REVENUE. ACCORDINGLY, THE GROUND NO. 2 RAISED BY THE REVENUE IS DISMISSED AS NOT PRESSED. CO NO. 140/KOL/2013 CROSS OBJECTIONS OF THE ASSES SEE 4. THE FIRST ISSUE TO BE DECIDED IN THE CROSS OBJE CTION OF THE ASSESSEE IS AS TO WHETHER THE LD CITA IS JUSTIFIED IN SUSTAINING AN ADDITION OF R S. 10,59,492/- ON ACCOUNT OF OUTSTANDING TRANSPORT CHARGES PAYABLE IN THE FACTS AND CIRCUMST ANCES OF THE CASE. 4.1. THE BRIEF FACTS OF THIS ISSUE IS THAT THE LD AO OBSERVED THAT THE IN THE BALANCE SHEET, THE ASSESSEE FIRM HAD SHOWN RS. 11,64,892/- AS TRAN SPORT CHARGES PAYABLE. ON OBTAINING THE NAMES AND ADDRESSES OF THE TRANSPORTERS , THE L D AO ISSUED NOTICES U/S 133(6) OF THE ACT TO VERIFY THE VERACITY OF THE SAID CLAIM. HE OBSE RVED THAT WHEREVER THE NOTICES WERE SERVED, NO REPLIES WERE FILED BY THE PARTIES AND IN MOST OF THE CASES , THE NOTICES RETURNED BACK. ACCORDINGLY, THE LD AO PROCEEDED TO TREAT THE SUM O F RS. 10,59,492/- AS BOGUS LIABILITY AND BROUGHT THE SAME TO TAX AS INCOME OF THE ASSESSEE. IN FIRST APPEAL, THE ASSESSEE STATED THAT THE EXPENDITURES WERE INCURRED ON TRUCK OWNERS WHO WERE COMING FROM DIFFERENT PLACES TO WORK AND AFTER COMPLETION OF THE JOB THEY MOVED TO OTHER PLACES AND HENCE COULD NOT TRACE THOSE PARTIES. THE LD CITA OBSERVED THAT PHYSICAL PRODUCTION OF TRUCK DRIVERS MAY BE DIFFICULT BUT CORRESPONDING RELIABLE BILLS PROVING AUTHENTICITY SHOULD BE PRODUCED BY THE ASSESSEE WHICH WAS NOT DONE IN THE INSTANT CASE. A CCORDINGLY , HE UPHELD THE ADDITION MADE BY THE LD AO. AGGRIEVED, THE ASSESSEE HAD PREFERRE D THE FOLLOWING GROUND IN HIS CROSS OBJECTIONS:- 1. FOR THAT ON THE FACTS OF THE CASE THE LD. CIT( A) WAS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS.10,59,492/- ON ACCOUNT OF OUTSTANDING TRANSPO RT CHARGES PAYABLE, WHEN ALL PAYMENTS MADE TO TRANSPORTERS ARE VERIFIABLE AGAINST RESPECT IVE PAN AND SUPPORTED BY TDS, AND THE ADDITION MAY PLEASE BE DELETED. 4.2. THE LD AR REFERRED TO THE PAPER BOOK FILED B Y HIM COMPRISING OF BALANCE SHEET AS ON 31.3.2008 WHEREIN SUNDRY DEBTORS (BILLS RECEIVAB LE) WERE SHOWN AT RS. 17,25,844/- AND TRIED TO JUSTIFY THE FACT OF TRANSPORT CHARGES LYIN G OUTSTANDING AS PAYABLE IN THE SUM OF RS. 10,59,492/-. SINCE MONIES COULD NOT BE RECOVERED F ROM ITS SUNDRY DEBTORS AS ON 31.3.2008, THE SAME COULD NOT BE PAID TO TRUCK DRIVERS AS ON 3 1.3.2008. HE ARGUED THAT THE LD AO HAD ACCEPTED THE PAYMENT MADE TO TRUCK DRIVERS / OWNERS DURING THE YEAR AS GENUINE EXPENDITURE AND IT IS HIGHLY UNFAIR TO TREAT THE AMOUNTS PAYABL E AS A BOGUS LIABILITY AND MAKING ADDITION 4 ITA NO. 2426/KOL/2013 & CO NO.140/K/2013 GHOSH & CHAKRABORTY TRANSPORT AY 2008-09 THEREON. HE STATED THAT THE ENTIRE LIABILITIES WER E PAID BY THE ASSESSEE IN THE NEXT YEAR. IN RESPONSE TO THIS, THE LD DR VEHEMENTLY SUPPORTED TH E ORDERS OF THE LOWER AUTHORITIES. 4.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIALS AVAILABLE ON RECORD INCLUDING THE PAPER BOOK FILED BY THE ASSESSEE COMP RISING OF BALANCE SHEETS AS ON 31.3.2008 (PAGES 8 TO 22) ; VARIOUS LEDGER ACCOUNTS OF THE AS SESSEE (PAGES 23 TO 45) AND CASH BOOK OF THE ASSESSEE (PAGES 46 TO 82). THE FACTS STATED H EREINABOVE REMAIN UNDISPUTED AND HENCE THE SAME ARE NOT REITERATED FOR THE SAKE OF BREVITY . WE FIND IN THE FACTS AND CIRCUMSTANCES THAT THE PAYMENTS WERE MADE TO TRUCK DRIVERS / OWNE RS TOWARDS TRANSPORT CHARGES AND THE LD AO HAD ALSO ACCEPTED THE EXPENDITURE WHEREVER PAYME NTS WERE MADE BY THE ASSESSEE BEFORE THE END OF THE PREVIOUS YEAR BUT HAD ONLY DISALLOWE D THE AMOUNTS PAYABLE AS ON 31.3.2008. THE LD AR STATED THAT THE SAID DUES WERE ALSO DISCH ARGED IN THE SUBSEQUENT YEAR IMMEDIATELY ON RECOVERY OF ITS SUNDRY DEBTORS DUES. IN THESE FACTS AND CIRCUMSTANCES, WE DEEM IT FIT AND APPROPRIATE, IN THE INTEREST OF JUSTICE AND FAIR PL AY, TO SET ASIDE THIS ISSUE TO THE FILE OF THE LD AO , WITH A DIRECTION TO VERIFY THE SUBSEQUENT PAYM ENTS MADE BY THE ASSESSEE TOWARDS THIS TRANSPORT CHARGES PAYABLE AND DECIDE THE ISSUE ACCO RDINGLY. THE ASSESSEE IS DIRECTED TO PRODUCE NECESSARY EVIDENCES IN THIS REGARD TO THE L D AO. HENCE, THE GROUND NO. 1 RAISED IN THE CROSS OBJECTION OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 5. THE GROUND NOS. 2 & 3 RAISED BY THE ASSESSEE I N ITS CROSS OBJECTIONS WERE NOT PRESSED BY THE LD AR DURING THE COURSE OF HEARING BEFORE US . THE SAME IS TAKEN AS A STATEMENT FROM THE BAR AND ACCORDINGLY THE GROUND NOS. 2 & 3 RAISE D BY THE ASSESSEE ARE DISMISSED AS NOT PRESSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE AS WEL L AS THE CROSS OBJECTION OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES ORDER PRONOUNCED IN THE OPEN COURT ON 24.08.2016 SD/- SD/- (K. NARASIMHA CHARY) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED :24TH AUGUST, 2016 JD.(SR.P.S.) 5 ITA NO. 2426/KOL/2013 & CO NO.140/K/2013 GHOSH & CHAKRABORTY TRANSPORT AY 2008-09 COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT ITO, WARD-2(1), ASANSOL. 2 RESPONDENT M/S. GHOSH & CHAKRABORTY TRANSPORT, C/O , JAHAR MUKHERJEE, ADVOCATE, RABINDRA NAGAR, P.O. ASANSOL, DIST. BURDWAN, PIN-713304 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .