The ACIT, Circle-1(1), Guntur, V. M/s Ashok Transports, Guntur

CO 5/VIZ/2012

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8599 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 24 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 03-05-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 01-05-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 09-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N O N E
• Assessee Lawyers: B SASMAL
• Section: 194C; 27

Judgement Text

ITA 332 & 333/VIZ/2011 AND CO NOS.5&6/VIZ/2012 M/S. ASHOK TRANSPORT, R. AGRAHARAM, GUNTUR IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NOS.332 & 333/VIZAG/2011 ASSESSMENT YEARS : 2005-06 & 2006-07 ACIT CIRCLE-1(1) GUNTUR M/S. ASHOK TRANSPORTS R. AGRAHARAM, GUNTUR (APPELLANT) VS. (RESPONDENT) PAN NO.AAJFA 4836F CO NOS.5 & 6/VIZAG/2012 ASSESSMENT YEARS : 2005-06 & 2006-07 ACIT CIRCLE-1(1) GUNTUR M/S. ASHOK TRANSPORTS R. AGRAHARAM, GUNTUR (APPELLANT) VS. (RESPONDENT) APPELLANT BY: SHRI B. SASMAL, ADDL. CIT RESPONDENT BY: N O N E DATE OF HEARING : 01.05.2013 DATE OF PRONOUNCEMENT : 03.05.2013 ORDER PER SHRI B.R. BASKARAN, ACCOUNTANT MEMBER:- THE APPEALS FILED BY THE REVENUE AND CROSS OBJECT IONS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER DATE D 28.02.2011 PASSED BY LD. CIT(A) GUNTUR AND THEY RELATE TO THE ASSESSMENT YEARS 2005-06 & 2006- 07. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPIT E SERVICE OF NOTICE BY SPEED POST AND HENCE WE PROCEED TO DISPOSE THE APPE ALS EX-PARTE, QUA THE ASSESSEE, QUA THE ASSESSEE. 2. SINCE THE ISSUES URGED IN BOTH THE APPEALS ARE I DENTICAL IN NATURE, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY CO MMON ORDER. THE ASSESSEE HAS FILED CROSS OBJECTIONS, IN WHICH THE A SSESSEE HAS ONLY SUPPORTED THE ORDER PASSED BY LD. CIT(A). ITA 332 & 333/VIZ/2011 AND CO NOS.5&6/VIZ/2012 M/S. ASHOK TRANSPORT, R. AGRAHARAM, GUNTUR 2 3. THE ONLY ISSUE URGED IN BOTH THE APPEALS FIL ED BY THE REVENUE IS, WHETHER THE LD. CIT(A) IS JUSTIFIED IN CANCELLING T HE PENALTY LEVIED U/S 271B OF THE INCOME-TAX ACT. 4. THE FACTS RELATING TO THE SAME ARE STATED IN BRI EF. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRANSPORTATION OF GOODS OF ITS CUSTOMERS. IN BOTH THE YEARS, THE ASSESSEE DECLARED ONLY BROKERAGE INC OME FOR ARRANGING LORRIES TO ITS CUSTOMERS. HOWEVER, IT WAS NOTICED THAT THE CUSTOMERS OF THE ASSESSEE HAD PAID THE TRANSPORT CHARGES TO THE ASSESSEE AND THEY HAVE ALSO DEDUCTED TAX AT SOURCE U/S 194C OF THE ACT ON THE SAID PAYME NTS. IT WAS FURTHER NOTICED THAT THE ASSESSEE HAS ALSO CLAIMED CREDIT A ND ALSO REFUND OF TDS SO DEDUCTED. DURING THE COURSE OF ASSESSMENT PROCEED INGS, THE ASSESSING OFFICER MADE ENQUIRIES WITH SOME OF THE CUSTOMERS A ND ALL OF THEM CONFIRMED THAT THEY HAVE PAID ONLY TRANSPORT CHARGES TO THE A SSESSEE AND FURTHER THEY CONFIRMED THAT THEY HAVE DEDUCTED TAX AT SOURCE U/S 194C OF THE ACT. SINCE, THE ASSESSEE HAD SHOWN ONLY BROKERAGE INCOME, THE A SSESSING OFFICER REJECTED THE BOOK RESULTS AND CONSIDERED THE TRANSP ORT CHARGES RECEIVED BY THE ASSESSEE AS HIS TURNOVER. THE ASSESSING OFFICE R, ACCORDINGLY, ESTIMATED THE INCOME OF THE ASSESSEE AT 5% OF THE GROSS TRANS PORT RECEIPTS IN BOTH THE YEARS. THE ASSESSING OFFICER NOTICED THAT THE GROS S TRANSPORT RECEIPTS RECEIVED BY THE ASSESSEE EXCEEDED THE LIMITS PRESCR IBED U/S 44AB OF THE ACT. THE ASSESSING OFFICER FURTHER NOTICED THAT THE ASSE SSEE DID NOT GET HIS ACCOUNTS AUDITED AND FILED THE AUDIT REPORT AS PRES CRIBED UNDER SECTION 44AB OF THE ACT. HENCE, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S 271B OF THE ACT AND LEVIED PENALTY IN BOTH THE YEAR S UNDER CONSIDERATION. THE ASSESSEE CHALLENGED THE SAID PENALTY ORDERS BEF ORE LD. CIT(A) AND SUCCEEDED. 5. AGGRIEVED, THE REVENUE HAS FILED THIS APPEAL BEF ORE US. ITA 332 & 333/VIZ/2011 AND CO NOS.5&6/VIZ/2012 M/S. ASHOK TRANSPORT, R. AGRAHARAM, GUNTUR 3 6. WE HAVE HEARD THE LD. D.R. IN THIS REGARD. THE REVENUE PLACED RELIANCE ON THE DECISION OF CHANDIGARH BENCH OF ITA T IN THE CASE OF SARDARI LAL OBERAI VS. ITO (2007) 106 TTJ (CHD) 1033, WHERE IN THE TRIBUNAL HAS TAKEN THE VIEW THAT THE TRANSPORT CHARGES RECEIVED BY A TRANSPORT CONTRACTOR SHALL CONSTITUTE TURNOVER AND HENCE PENALTY U/S 27 1B IS LEVIABLE. THE LD. D.R. FURTHER POINTED OUT THAT THE VERY FACT THAT THE CUS TOMERS OF THE ASSESSEE HAD DEDUCTED TAX AT SOURCE U/S 194C OF THE ACT CLEARLY SHOW THAT THE ASSESSEE HAS UNDERTAKEN TRANSPORT CONTRACTS FROM ITS CUSTOME RS AND HENCE, THE TRANSPORT CHARGES RECEIVED BY THE ASSESSEE FROM THE M SHALL CONSTITUTE HIS TURNOVER. THE LEARNED D.R FURTHER SUBMITTED THAT T HE LEARNED CIT(A) HAS MISDIRECTED HIMSELF IN ACCEPTING THE CONTENTION OF THE ASSESSEE THAT HE HAS PAID THE TRANSPORT CHARGES TO THE CONCERNED LORRY O WNERS AFTER RETAINING HIS COMMISSION/BROKERAGE AND HENCE THE BROKERAGE INCOME ALONE SHALL CONSTITUTE THE TURNOVER OF THE ASSESSEE. THE LEARNED D.R SUBM ITTED THAT THE ASSESSING OFFICER HAS MADE ENQUIRIES WITH THE CUSTOMERS OF TH E ASSESSEE AND BROUGHT OUT ON RECORD THAT THEY HAD DEALINGS ONLY WITH THE ASSESSEE AND NOT WITH THE LORRY OWNERS. 7. WE FIND FORCE IN THE SAID CONTENTIONS OF THE LEARNED D.R. WE NOTICE THAT THE LD. CIT(A) HAS DELETED THE PENALTY ON THE GROUND THAT THE ASSESSEE HAS PAID THE TRANSPORT CHARGES TO THE CONCERNED OWN ERS OF THE VEHICLE. HOWEVER, THE CONTENTIONS RAISED BY LEARNED D.R SHOW THAT THE VIEW TAKEN BY THE LD. CIT(A) IS AGAINST THE FACTS AVAILABLE ON RE CORD. WE ALSO NOTICE THAT THE ASSESSEE HAS FAILED TO SHOW THAT THERE WAS REAS ONABLE CAUSE IN NOT GETTING HIS ACCOUNTS AUDITED. ACCORDINGLY, WE ARE UNABLE TO SUSTAIN THE ORDERS PASSED BY LEARNED CIT(A). ACCORDINGLY, WE R EVERSE THE ORDERS OF THE LD. CIT(A) IN BOTH THE YEARS AND RESTORE THE PENALT Y LEVIED BY THE ASSESSING OFFICER U/S 271B OF THE ACT IN BOTH THE YEARS. SIN CE WE HAVE ALLOWED THE APPEALS FILED BY THE REVENUE, THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE LIABLE TO BE DISMISSED. ITA 332 & 333/VIZ/2011 AND CO NOS.5&6/VIZ/2012 M/S. ASHOK TRANSPORT, R. AGRAHARAM, GUNTUR 4 8. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE ALLOWED AND CROSS OBJECTIONS ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 03.05.2013 SD/- SD/- (D. MANMOHAN) (B.R. BASKARAN) VICE PRESIDENT ACCOUNTANT MEMBER VISAKHAPATNAM, DATED 3 RD MAY, 2013 VG/SPS COPY TO 1 ACIT CIRCLE-1(1), GUNTUR 2 M/S. ASHOK TRANSPORT, R. AGRAHARAM, GUNTUR 3 THE CIT, GUNTUR 4 THE CIT(A), GUNTUR 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM