M/s V.K. Transport Company, Gurdaspur V. The Dy. Commissioner of Income Tax, Pathankot

CO 23/ASR/2016

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2422 (ITAT-AMRITSAR)
• Duration Of Justice: 17 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 24-11-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 07-11-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P N ARORA

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SHRI T.S.KAPOOR, ACCOUNTANT MEMBER & SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.448/ASR/2016 ASSESSMENT YEAR: 2013-14 THE DCIT, VS. M/S V.K. TRANSPORT COMPANY, CIRCLE VI, PATHANKOT PATHANKOT ROAD, GURDASPUR & C.O. NO. 23/ASR/2016 (IN ITA NO.448/ASR/2016) ASSESSMENT YEAR: 2013-14 M/S V.K. TRANSPORT COMPANY, VS. THE DCIT, CIRCLE VI , PATHANKOT ROAD, GURDASPUR PATHANAKOT PAN NO. AAGFV7352N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAHUL DHAWAN RESPONDENT BY : SHRI P.N. ARORA DATE OF HEARING : 22.11.2016 DATE OF PRONOUNCEMENT : 24.11.2016 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THIS APPEAL BY THE REVENUE AND CORRESPONDING CROSS OBJECTION BY THE ASSESSEE, HAVE BEEN PREFERRED AGAINST THE ORDER OF THE COMMISSIONER OF 2 INCOME TAX (APPEALS)-2, AMRITSAR [HEREINAFTER REFER RED TO AS CIT(A)] DATED 31.05.2016 RELATING TO ASSESSMENT YEAR 2013-14. 2. THE SOLE ISSUE RAISED BY THE REVENUE THROUGH ITS GROUNDS OF APPEAL IS REGARDING THE ACTION OF THE CIT(A) IN DELETING THE ADDITION OF RS. 43,54,350/- WHICH WAS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF UNEXPLAINED TRANSPORTATION CHARGES SHOWN AS OUTSTAN DING AS ON 31.3.2013. 3. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT A SSESSEE IS IN THE BUSINESS OF CARRIAGE CONTRACTOR WITH FOOD CORPORATION OF IND IA (FCI). THE ASSESSEE DERIVES INCOME FROM TRANSPORTATION OF WHEAT AND RIC E FOR THE FCI. FOR THIS PURPOSE THE ASSESSEE HIRES TRUCK OF OTHER PRIVATE P ERSONS / PARTIES. THE ASSESSEE HAD SHOWN GROSS RECEIPTS FROM THE ABOVE TR ANSPORTATION BUSINESS AT RS. 14,56,42,632/- RECEIVED FROM FCI FOR THE RELEVA NT ASSESSMENT YEAR UNDER CONSIDERATION. THE MAJOR PART OF THE EXPENSES CLAIM ED BY THE ASSESSEE HAD ALSO BEEN SHOWN AS ON ACCOUNT OF TRANSPORTATION CHA RGES AMOUNTING TO RS. 13,86,94,510/-, OUT OF WHICH THE UNPAID TRANSPORTAT ION CHARGES HAD BEEN SHOWN AT RS. 43,54,350/- AS PAYABLE AS ON 31.3.2013 . THE ASSESSING OFFICER OBSERVED THAT IDENTITY AND THE PROVIDING OF THE ACT UAL SERVICES BY THE PARTIES TO WHOM THE SAID AMOUNT OF RS. 43,54,350/- WAS SHOW N AS PAYABLE AS ON 31.3.2013 WAS NOT ESTABLISHED. HE OBSERVED THAT ONL Y TRUCK NUMBERS WERE MENTIONED AND IT WAS STATED BY THE ASSESSEE THAT TH E PAYMENTS WERE GENERALLY 3 MADE TO THE DRIVERS OF THE TRUCKS AND SOMETIMES TO THE OWNERS. THE ASSESSING OFFICER FURTHER OBSERVED THAT EVEN OTHERWISE THE AS SESSEE HAD NOT SHOWN THE INCOME ACCRUED TO THE ASSESSEE FOR THE YEAR UNDER C ONSIDERATION FROM FCI BUT ONLY HAD BOOKED THE EXPENDITURE PAYABLE. HE THEREFO RE, HELD THAT THE BOOKING OF THE EXPENDITURE ON THE LAST DAY OF THE FINANCIAL YEAR WAS A DEVICE ADOPTED BY THE ASSESSEE TO REDUCE THE PROFIT / TAXABLE INCO ME OF THE ASSESSEE. THE ASSESSING OFFICER ALSO DOUBTED THE PAYMENT MADE DUR ING THE YEAR OF RS. 63,25,930/- PERTAINING TO THE LAST YEAR I.E. THE A MOUNT WHICH WAS SHOWN PAYABLE FOR THE IMMEDIATELY PRECEDING ASSESSMENT YE AR 2012-13. THE ASSESSING OFFICER, HOWEVER, NEITHER MADE ANY ADDITI ON IN RESPECT OF THE INCOME ACCRUED TO THE ASSESSEE FROM FCI FOR THE YEA R UNDER CONSIDERATION NOR IN RESPECT OF THE AMOUNT PAID OF RS. 63,25,930/- PE RTAINING TO THE EARLIER ASSESSMENT YEAR. EVEN THE ASSESSING OFFICER DID NOT MAKE ANY ADDITION IN RESPECT OF AMOUNT PAID ON ACCOUNT OF TRANSPORT CHAR GES FOR THE YEAR UNDER CONSIDERATION, BUT ONLY OF THE AMOUNT OF RS. 43,54 ,350/-, WHICH WAS SHOWN AS PAYABLE AS ON 31.3.2013. BEING AGGRIEVED BY THE ABOVE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE PREFERRED APPEAL BE FORE THE LD. CIT(A). 4. BEFORE LD. CIT(A), THE ASSESSEE SUBMITTED THAT T HE NATURE OF BUSINESS OF THE ASSESSEE WAS THAT OF TRANSPORTATION OF FOOD GRAINS FOR FCI. FOR THIS PURPOSE, THE ASSESSEE HAS TO HIRE TRUCKS OF THE PRI VATE PERSONS AND THE PAYMENT FOR THE SERVICES AVAILED IS PAID TO THE DRI VERS ETC. AND FOR THAT PURPOSE, THE TRUCK NUMBERS ARE NOTED THROUGH WHICH THE FOOD GRAINS WERE 4 TRANSPORTED. THAT THIS METHOD HAS CONSISTENTLY BEEN ADOPTED BY THE ASSESSEE FOR THE LAST SO MANY YEARS, WHICH HAS NEVER BEEN DO UBTED BY THE REVENUE AUTHORITIES. FOR THE ASSESSMENT YEAR 2010-11, THE A SSESSEE CLAIMED THE AMOUNT OF RS. 20,65,905/- AS PAYABLE ON THE LAST DA Y OF THE FINANCIAL YEAR ON ACCOUNT OF TRANSPORTATION CHARGES. SIMILARLY FOR AS SESSMENT YEAR 2011-12, THE AMOUNT PAYABLE ON ACCOUNT OF TRANSPORT CHARGES WAS CLAIMED AT RS. 30,19,165/-; EVEN IN THE IMMEDIATE PRECEDING ASSES SMENT YEAR 2012-13, THE AMOUNT PAYABLE ON THE LAST DAY OF THE ACCOUNTING YE AR IN RESPECT OF TRANSPORT CHARGES WAS CLAIMED AT RS. 63,25,930/- WHICH HAS BE EN ACCEPTED BY THE DEPARTMENT. THE LD. CIT(A) AFTER CONSIDERING THE SU BMISSIONS OF THE ASSESSEE OBSERVED THAT THOUGH THE ASSESSEE HAS MENT IONED THE TRUCK NUMBERS TO WHOM TRANSPORTATION CHARGES WERE SHOWN PLAYABLE, BUT THE ASSESSING OFFICER DID NOT MAKE ANY INQUIRY IN THIS RESPECT. I F THE ASSESSING OFFICER WANTED TO VERIFY THE GENUINENESS OF THE TRANSACTION S, HE COULD HAVE MADE NECESSARY ENQUIRY IN THIS REGARD FROM RTO REGARDING THE TRUCK NUMBERS AND THE IDENTITY OF THE PERSONS. EVEN THE ASSESSING OFF ICER DID NOT MAKE ANY ENQUIRY REGARDING THE TRANSPORTATION CHARGES PAID D URING THE YEAR RELEVANT TO THE EARLIER ASSESSMENT YEAR. THE LD. CIT(A) FURTHER DIRECTED THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNT FOR THE YEAR UNDER CON SIDERATION ALONG WITH RECEIPTS AND VOUCHERS OF THE PAYMENTS OF TRANSPORT CHARGES PAYABLE. AFTER VERIFICATION OF THE SAID EVIDENCES, THE LD. CIT(A) DELETED THE ADDITIONS SO MADE BY THE ASSESSING OFFICER. BEING AGGRIEVED BY T HE ABOVE ORDER OF THE CIT(A), THE REVENUE HAS COME IN APPEAL BEFORE US. 5 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALS O GONE THROUGH THE RECORD. THE LD. DR HAD VEHEMENTLY CONTENDED THAT TH E GENUINENESS OF THE TRANSACTIONS HAS NOT BEEN ESTABLISHED. THE ASSESSEE HAS FAILED TO PROVE THE AVAILING OF THE SERVICES FROM THE SAID PARTIES AND FURTHER THAT THE IDENTITY OF THE PAYERS HAS NOT BEEN ESTABLISHED. HE IN THIS RES PECT HAS RELIED UPON THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT (CENTRAL), LUDHIANA VS. PUNJAB BREWERIES LTD IN IT A NO. 217 OF 2002 DATED OF DECISION - APRIL 17, 2012 REPORTED IN 2012-TTOL- 301-HC-P&H-IT AND HAS STRESSED THAT IT CANNOT BE A GROUND TO ACCEPT THE C ONTENTION OF THE ASSESSEE FOR THE RELEVANT YEAR UNDER CONSIDERATION ON THE GR OUND THAT IN RESPECT OF THE EARLIER ASSESSMENT YEARS, SUCH CLAIM OF THE ASSESSE E HAD BEEN ACCEPTED BY THE TRIBUNAL. HE HAS RELIED UPON ANOTHER DECISION OF TH E DELHI BENCH OF THE ITAT IN THE CASE OF M/S SARVOTTAM CONSTRUCTION PVT LTD V S. ITO IN ITA NO. 2005/DEL/2008 VIDE ORDER DATED 19.10.2012 REPORTED IN 2012-TIOL-887- ITAT-DEL TO STRESS THAT WHEN THE EXPENSES ARE NOT S UPPORTED BY THE PROPER VOUCHERS, THEY CANNOT BE ALLOWED MERELY BECAUSE THE PAYMENT HAS BEEN MADE VIA ACCOUNT PAYEE CHEQUE. 6. THE LD. AR, ON THE OTHER HAND, HAS RELIED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF BERGER PAINTS INDIA LTD VS. CIT REPORTED IN 266 ITR 99 (SC) AND ANOTHER DECISION O F THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. M/S EXCEL INDUSTRIES LTD REPORTED IN (2013) 6 358 ITR 295 (SC) AND HAS STRESSED THAT THOUGH RES JUDICATA IS NOT APPLICABLE TO THE INCOME TAX PROCEEDINGS BUT THE CO NSISTENT VIEW TAKEN IN FAVOUR OF THE ASSESSEE ON ANY ISSUE SHOULD NOT BE D ISTURBED WITHOUT ANY CONVINCING REASON. 6. ADMITTEDLY, THE ASSESSEE IS IN THE BUSINESS OF T RANSPORT OF FOOD GRAINS FOR FCI. FOR THIS PURPOSE, THE ASSESSEE HAS TO HIR E THE TRANSPORTATION FACILITY / PRIVATE TRUCKS. IT IS ALSO COMMONLY KNOWN THAT TH E TRANSPORTATION CHARGES ARE GENERALLY PAID TO THE CONCERNED PERSONS OPERAT ING THE TRUCKS INCLUDING THE DRIVERS AND OWNERS. THE ASSESSEE DURING THE YEA R EARNED GROSS RECEIPT OF RS. 14,56,42,632/- ON ACCOUNT OF TRANSPORTATION CHA RGES, WHEREAS, BOOKED THE EXPENDITURE ON ACCOUNT OF TRANSPORT CHARGES AT RS. 13,86,94,510/-. OUT OF THE ABOVE STATED AMOUNT, ONLY RS. 43,50,350/- HAS R EMAINED UNPAID AT THE END OF THE FINANCIAL YEAR. THE ASSESSING OFFICER HAS NO T DOUBTED THE PAYMENT MADE DURING THE YEAR. HE HAS ONLY MADE ADDITION IN RESPECT OF THE CHARGES SHOWN AS PAYABLE AT THE END OF THE YEAR. THE ASSESS EE HAD MENTIONED THE TRUCK NUMBERS TO WHOM THE PAYMENT WAS PAYABLE. THE LD. AR OF THE ASSESSEE HAS BROUGHT OUR ATTENTION TO THE PAPER BOOK PAGES 1 8 TO 23 AND HAS CONTENDED THAT THE ABOVE EXPENSES HAVE ACTUALLY BEEN PAID BY THE ASSESSEE DURING THE NEXT FINANCIAL YEAR. THE ASSESSEE HAS PRODUCED THE EVIDENCES OF MAKING THE ABOVE PAYMENT DURING THE SUBSEQUENT PERIOD ALONG WI TH THE VOUCHERS ETC. AND BOOKS OF ACCOUNT BEFORE THE CIT(A). THE LD. CIT(A) HAS GIVEN A CATEGORICAL 7 FINDING THAT THE SAID EVIDENCES INCLUDING THE VOUCH ERS ETC. WERE PRODUCED BEFORE HIM AND WHICH WERE VERIFIED BY HIM. HE HAS A LSO GIVEN A FINDING THAT THESE EVIDENCES WERE ALSO PRODUCED BEFORE THE ASSES SING OFFICER BUT THE ASSESSING OFFICER HAS NOT COMMENTED ON THE SAID EVI DENCES. UNDER THESE CIRCUMSTANCES, WHEN THE LD. CIT(A) HAS GIVEN A CAT EGORICAL FINDING THAT THE NECESSARY EVIDENCES SUCH AS BOOKS OF ACCOUNT ALONGW ITH RECEIPTS / VOUCHERS OF PAYMENT OF TRANSPORTATION CHARGES WERE PRODUCED BEFORE HIM AND THE SAME HAVE BEEN VERIFIED, WE ARE NOT INCLINED TO INTERFER E OR TO DOUBT THE ABOVE SAID VERIFICATION DONE BY THE CIT(A). EVEN OTHERWISE, AS SESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS CRYPTIC. ON THE ONE HAND, THE ASSESSING OFFICER DOUBTS THE GENUINENESS OF THE TRANSACTIONS IN RESPE CT OF THE EXPENDITURE PAYABLE AND ON THE OTHER HAND, THE ASSESSING OFFICE R HAS NOT COMMENTED ABOUT THE TRANSPORTATION CHARGES ALREADY PAID DURIN G THE YEAR. EVEN ASSESSING OFFICER DID NOT BOTHER TO MAKE ANY INQUIR Y IN RESPECT OF THE PAYMENT OF RS.63,25,930/- PERTAINING TO THE PRECEDI NG ASSESSMENT YEAR. NO INQUIRES WERE MADE BY THE ASSESSING OFFICER EVEN IN RESPECT OF THE EXPENDITURE CLAIMED PAYABLE DURING THE YEAR. THE A SSESSING OFFICER DID NOT BOTHER TO MAKE AN INQUIRY BY CALLING THE OWNERS OF THOSE TRUCKS TO VERIFY THE PAYMENTS MADE BY THE ASSESSEE. THE ADDITIONS HAVE B EEN MADE MERELY ON ASSUMPTION BASIS IN RESPECT OF THE AMOUNT PAYABLE O NLY. WHEN THE ASSESSEE HAS BEEN CONSISTENTLY FOLLOWING THE MERCANTILE SYS TEM OF ACCOUNTING AND THIS METHOD OF ACCOUNTING HAS CONSISTENTLY BEEN ACCEPTED THE REVENUE AUTHORITIES, WE DO NOT FIND ANY JUSTIFICATION ON THE PART OF THE ASSESSING OFFICER TO MAKE 8 DEPARTURE THEREFROM THIS YEAR WITHOUT ANY CONVINCIN G REASON ON THIS ISSUE. WE, THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORD ER OF THE CIT(A) AND THE SAME IS, THEREFORE, UPHELD. THE APPEAL OF THE REVE NUE IS THEREFORE, DISMISSED. 7. SO FAR AS THE CROSS OBJECTION OF THE ASSESSEE (C.O. NO.23/ASR/16 ) ARE CONCERNED, THE LD. AR OF THE ASSESSEE HAS STATED TH AT THE SAID CROSS OBJECTION HAS BEEN FILED JUST TO SUPPORT THE ORDER OF THE CIT (A). NO SEPARATE RELIEF HAS BEEN CLAIMED THROUGH CROSS OBJECTIONS. THE ASSESSE E IS NOT AGGRIEVED BY THE ORDER OF THE CIT(A) AND HAS NOT CLAIMED ANY RELIEF AGAINST THE ORDER OF THE CIT(A), HENCE, THE CROSS OBJECTIONS OF THE ASSESSEE ARE NOT MAINTAINABLE AND THE SAME ARE ACCORDINGLY DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE AS WELL AS CROSS OBJECTIONS OF THE ASSESSEE ARE HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24.11.2016 SD/- SD/- (T.S KAPOOR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 24 TH NOVEMBER, 2016 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 9