ANIL TRANSPORT SERVICE, MUMBAI V. JCIT (OSD) CIR 15(1), MUMBAI

CO 74/MUM/2012

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7698 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 31-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 17-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T D SINGH
• Assessee Lawyers: C V DHARKAR
• Keywords: Additional evidence
• Section: 68; 144

Judgement Text

ITA NO.5165 OF 2011 & CO 74 OF 2012 ANIL TRANSPORT SERVICE MUMBAI A BENCH PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL 'A' BENCH, MUMBAI BEFORE SHRI B.R. MITTAL, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO.5165/MUM/2011 (ASSESSMENT YEAR: 2008-09) ACIT, CENTRAL CIRCLE 15(1), ROOM NO. 104, MATRU MANDIR, 1 ST FLOOR, TARDEO ROAD, MUMBAI 400007 VS. ANIL TRANSPORT SERVICE, B- 102 HARSHAD APARTMENTS, BEHIND EVARAD NAGAR, E.E. HIGHWAY, SION (EAST), MUMBAI 400 022 PAN: AALFA 8944 J (APPELLANT) (RESPONDENT) C.O. NO.74/MUM/2012 (ARISING OUT OF ITA NO.5165/MUM /2011) (ASSESSMENT YEAR: 2008-09) ANIL TRANSPORT SERVICE, B-102 HARSHAD APARTMENTS, BEHIND EVARAD NAGAR, E.E. HIGHWAY, SION (EAST), MUMBAI 400 022 PAN: AALFA 8944 J VS. ACIT, CENTRAL CIRCLE 15(1), ROOM NO. 104, MATRU MANDIR, 1 ST FLOOR, TARDEO ROAD, MUMBAI 400007 (CROSS OBJECTOR) (RESPONDENT) DEPARTMENT BY: SHRI T.D. SINGH, DR ASSESSEE BY: SHRI C.V. DHARKAR DATE OF HEARING: 23/8/2012 DATE OF PRONOUNCEMENT: 31/8/2012 O R D E R PER B. RAMAKOTAIAH, A.M. THE REVENUE APPEAL WAS PREFERRED AGAINST THE ORDER OF THE CIT (A)-26 MUMBAI DATED 28.04.2011 AND ASSESSEE PRE FERRED CROSS OBJECTION. 2. BRIEFLY STATED, ASSESSEE IS A REGISTERED FIRM ENGAG ED IN THE BUSINESS OF TRANSPORTATION OF DEBRIS AND OTHER MATE RIALS ARISING OF ITA NO.5165 OF 2011 & CO 74 OF 2012 ANIL TRANSPORT SERVICE MUMBAI A BENCH PAGE 2 OF 4 DEMOLITIONS. SINCE DETAILS CALLED FOR ARE NOT FILED BY ASSESSEE, AO REJECTED THE BOOKS OF ACCOUNT AND DISALLOWED 25% OF THE EXPENDITURE AT ` 85,01,277 CLAIMED IN THE BOOKS OF ACCOUNT. FURTHER, SINCE ASSESSEE HAS NOT FURNISHED ANY DETAILS, AN AM OUNT OF ` 68,84,302/- WAS ALSO ADDED AS INCOME UNDER SECTION 68 AS INCREASE IN CURRENT LIABILITY. THE ASSESSMENT WAS C OMPLETED UNDER SECTION 144. 3. BEFORE THE CIT (A) ASSESSEE SUBMITTED THAT OUT OF T HE EXPENDITURE CLAIM, DISALLOWANCE OF ` 85,01,277/- I.E. 25% OF THE TOTAL EXPENSES AGGREGATING TO ` 2,07,15,422/- WAS NOT APPROPRIATE. IT WAS SUBMITTED THAT MAJOR EXPENDITURE PERTAIN TO THE PAY MENTS TOWARDS WORK TO EIGHT PARTIES INCLUDING OFFBEAT DEVELOPERS PVT. LTD AND BALANCE OF EXPENDITURE WAS TOWARDS DAY-TO-DAY MAINT ENANCE. IT WAS ALSO FURTHER SUBMITTED THAT EXPENSES ON OIL, DIESEL AND PAYMENTS TO OTHER TRANSPORT SHOWN AS PURCHASES, ON WHICH TDS HA S BEEN MADE. THEREFORE, AS AGAINST ` 85,01,277/- DISALLOWED BY AO, THE CIT (A) SUSTAINED 10% OF THE DISALLOWANCES OF OTHER EXPENSE S AT ` 4,29,384/-. AFTER CONSIDERING THE SUBMISSIONS THAT THE CREDITS WERE TRADE CREDITS AND NOT LOAN CREDITS THE CIT (A) DELETED THE ADDITION UNDER SECTION 68. THEREFORE, THE REVENUE I S AGGRIEVED. NO OPPORTUNITY WAS GIVEN TO AO AND NO DETAILS WERE FUR NISHED IN THE COURSE OF ASSESSMENT. THE REVENUE HAS RAISED FOUR G ROUNDS IN THIS REGARD. 4. IN THE CROSS OBJECTION, ASSESSEE CONTENDS THAT AO W AS NOT CORRECT IN COMPLETING THE ASSESSMENT UNDER SECTION 144 WHICH WAS BAD IN LAW SUFFERING FROM LEGAL INFIRMITIES. 5. WE HAVE HEARD THE LEARNED DR AND THE LEARNED COUNSE L. AT THE OUTSET IN THE ASSESSMENT PROCEEDINGS, ASSESSEE HAS NOT FURNISHED INFORMATION WHICH LEAD TO AO FOR DISALLOW ANCE OF 25% OF THE EXPENSES AND ALSO MAKING ADDITION AS UNEXPLAINE D CASH CREDITS UNDER SECTION 68. EVEN THOUGH THE ESTIMATION WAS LI TTLE HIGH ITA NO.5165 OF 2011 & CO 74 OF 2012 ANIL TRANSPORT SERVICE MUMBAI A BENCH PAGE 3 OF 4 PITCHED WHICH IS NOT ACCORDING TO THE SPIRIT OF THE PROVISION OF SECTION 144, WE ARE OF THE OPINION THAT THE CIT (A) ALSO EQUALLY ERRED IN DELETING THE AMOUNTS. FIRST OF ALL THERE WAS NO ADDITIONAL INFORMATION BEFORE THE CIT (A) IN THE FORM OF ADDIT IONAL EVIDENCE SO AS TO DIFFER FROM AO. NOT ONLY THAT, ON THE BASIS O F THE STATEMENT MADE BY ASSESSEE, SUBSTANTIAL AMOUNTS WERE DELETED WITHOUT SUBJECTING THEM TO VERIFICATION BY AO IN REMAND PRO CEEDINGS. IT IS ALSO NOT PROPER TO DELETE ON THE REASON THAT ASSESS EE HAD PAID THE ENTIRE AMOUNT TO WORK DONE TO VARIOUS PARTIES AND T HIS CANNOT LEAVE ANY SCOPE FOR IMPROPER WORK DONE BY ASSESSEE, WITHO UT SUBJECTING THE SAME TO VERIFICATION. THIS REASONING IN OUR VIE W IS NOT CORRECT SINCE ANY EXPENDITURE CLAIM HAS TO BE VERIFIED WHET HER THE EXPENDITURE HAD BEEN SPENT WHOLLY AND EXCLUSIVELY F OR THE PURPOSE OF BUSINESS UNDER THE PROVISIONS OF SECTION 37(1). ASSESSEE HAD NOT COMPLIED WITH NOTICES BEFORE AO AND SINCE THE CIT ( A) ALSO DID NOT HAVE THE BENEFIT OF ANY ADDITIONAL EVIDENCE TO DELE TE THE ADDITIONS, WE ARE OF THE OPINION THAT THE MATTER REQUIRES RE-E XAMINATION BY AO. ACCORDINGLY THE ORDER PASSED BY AO UNDER SECTIO N 144 AND ORDER OF THE CIT (A) ARE SET ASIDE AND ASSESSMENT P ROCEEDINGS FOR THE ASSESSMENT YEAR IS RESTORED TO THE FILE OF AO. AO SHOULD GIVE DUE OPPORTUNITY TO ASSESSEE TO EXPLAIN VARIOUS CLAIMS. AO SHOULD ALSO KEEP IN MIND THAT ASSESSEE HAS NOT COME UP IN APPEA L ON THE 10% OF THE EXPENDITURE DISALLOWED AND CONFIRMED BY THE CIT (A). TO THAT EXTENT IF THE BALANCE EXPENDITURES ARE FOUND GENUIN E, THE ADDITION HAS TO BE SUSTAINED AS ASSESSEE ACCEPTED THE SAME. WITH THESE DIRECTIONS, THE REVENUE APPEAL IS CONSIDERED ALLOWE D FOR STATISTICAL PURPOSES. 6. IN A WAY, ASSESSEES OBJECTIONS WITH REFERENCE TO T HE PROCEEDINGS UNDER SECTION 144 RAISED IN THE CROSS O BJECTION WERE ALSO COVERED IN THIS DECISION. ITA NO.5165 OF 2011 & CO 74 OF 2012 ANIL TRANSPORT SERVICE MUMBAI A BENCH PAGE 4 OF 4 7. IN THE RESULT BOTH THE APPEAL OF REVENUE AND CROSS OBJECTION FILED BY ASSESSEE ARE CONSIDERED ALLOWED FOR STATIS TICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST AUGUST, 2012. SD/- SD/- (B.R. MITTAL) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 31 ST AUGUST, 2012. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, A BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI