M/s Global Travels, Hyderabad V. ITO, Hyderabad

ITA 1034/HYD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3214 (ITAT-HYDERABAD)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 23-03-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 22-07-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B V PRASADA REDDY

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B ', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI AKBER BASHA, ACCOUNTANT MEMBER ITA NO.1034/HYD/10 : A SSTT. YEAR 2006-07 M/S. GLOBAL TRAVELS, HYDERABAD ( PAN - AADFG 2836 K ) V/S. INCOME-TAX OFFICER, WARD 5(1), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : S HRI MOHD. AFZAL RESPONDENT BY : SHRI B.V.PRASADA REDDY O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YE AR 2006-07 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME-TAX(APPEALS). 2. GROUNDS OF APPEAL OF THE ASSESSEE ARE AS UNDER - 1. THE ORDER OF THE LEARNED. COMMISSIONER OF INCOME-TA X(APPEALS) IS AGAINST LAW, WEIGHT OF EVIDENCE AND PROBABILITIE S OF CASE. 2. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERR ED IN CONFIRMING THE DISALLOWANCE OF RS.8,70,672/- TOWARD S THE DISCOUNTS ALLOWED TO THE CUSTOMER TO DETERMINE THE TOTAL INCOME OF RS.8,90,572/-AS AGAINST RS.19,900/-. 3. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERR ED IN CONFIRMING THE DISALLOWANCE TOWARDS DISCOUNTS ALLOW ED TO THE CUSTOMERS IN THE ABSENCE OF ANY DEFECTS IN THE BOOK S OF ACCOUNTS PRODUCED DURING THE COURSE OF HARING. 4. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERR ED IN CONFIRMING THE DISALLOWANCE OAT 25% OF THE HANDLING CHARGES AND DISCOUNTS ALLOWED TO THE CUSTOMERS FOR MAKING AN AD DITION OF ITA NO.1034/HYD/10 M/S. GLOBAL TRAVELS, HYDERABAD 2 RS.8,70,672/- ON SURMISES AND CONJECTURES WITHOUT P OINTING OUT ANY DEFECTS IN THE BOOKS OF ACCOUNTS. 3. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THA T THE ASSESSEE IS IN THE BUSINESS OF SALE OF AIR-TICKETS ON COMMISSIO N BASIS. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE IS REGARDING DISALLOWAN CE OF RS.8,70,672 ON ACCOUNT OF DISCOUNTS ALLOWED TO THE CUSTOMERS BY T HE ASSESSEE. HE SUBMITTED THAT FULL DETAILS WERE SUBMITTED BEFORE T HE REVENUE AUTHORITIES AND MOSTLY THE SALE PROCEEDS OF THE AIR TICKETS WER E RECEIVED BY WAY OF CHEQUES AND THEREFORE NO DISALLOWANCE COULD HAVE BE EN MADE BY THE DEPARTMENT. HE SUBMITTED THAT THE CIT(A) HAS REPEA TED THE ORDER OF THE ASSESSING OFFICER WITH REGARD TO DISALLOWANCE OF TH E DISCOUNT ALLOWED TO THE CUSTOMERS AND HAS NOT GIVEN ANY VALID REASON FOR SU STAINING ANY PART OF THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. HE REL IED ON THE DECISION OF THE RAJKOT BENCH OF THE TRIBUNAL IN THE CASE OF ITO V/S GIRISH M. MEHTA (2006) 99 TTJ 394. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS OPP OSED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE . HE SUBMITTED THAT THE DETAILS OF THE CUSTOMERS TO WHOM THE DISCOUNTS HAVE BEEN CLAIMED TO HAVE BEEN ALLOWED, WERE NOT SUBMITTED EITHER BEFORE THE ASSESSING OFFICER OF THE CIT(A). HE SUBMITTED THAT THE SIGNATURES OF THE PA YEES OF THE DISCOUNT WERE NOT OBTAINED ON THE VOUCHERS FOR THE PAYMENT O F DISCOUNT MADE BY THE ASSESSEE. HE REFERRED TO THE RELEVANT PARAS OF THE ASSESSMENT ORDER AS WELL AS THE APPELLATE ORDER PASSED BY THE CIT(A) IN SUPPORT OF THE CASE OF THE REVENUE. HE SUBMITTED THAT NO CUSTOMER HAD BEE N IDENTIFIED BY THE ASSESSEE EITHER DURING THE ASSESSMENT OR DURING TH E APPELLATE PROCEEDINGS, ALTHOUGH THE ASSESSEE CLAIMED THAT MOST OF THE CUST OMERS ARE ITS OLD CUSTOMERS . HE SUBMITTED THAT THE SO CALLED RECEIP TS ARE MERELY SELF-MADE DOCUMENTS OF THE ASSESSEE. HE RELIED ON THE DECISIO N OF THE AHMEDABAD ITA NO.1034/HYD/10 M/S. GLOBAL TRAVELS, HYDERABAD 3 BENCH OF THE TRIBUNAL IN THE CASE OF AMIT ESTATE OR GANISER V/S. ITO (2009) 316 ITR(AT) 190, BESIDES THE DECISION OF THE HONBL E RAJASTHAN HIGH COURT IN SRI RAM AND CO. V/S. ACIT (2009) 316 ITR 139(RAJ ) AND OF THE HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF ARVIND BALONI V/S. ITAT AND OTHERS (2011) 330 ITR 589(P&H) IN SUPPORT OF HIS AR GUMENTS. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). WE FIND THAT THE DISALLOWANCE OF 25% OF THE HANDLING CHARGES ON THE DISCOUNT, MAD E BY THE ASSESSING OFFICER ON THE SALE OF THE AIR TICKETS HAS BEEN SUS TAINED BY THE CIT(A). IT IS A MATER OF COMMON KNOWLEDGE THAT SOME DISCOUNT IS N ORMALLY ALLOWED AND PAID BY THE TRAVEL AGENTS TO THEIR CUSTOMERS OUT OF ITS COMMISSION INCOME RECEIVED FROM THE AIRLINES COMPANY. THE ASSESSEE HA S CLAIMED THAT IT HAS PAID DISCOUNT TO ITS CUSTOMERS MOST OF WHOM ARE ITS OLD CUSTOMERS. THE ASSESSEE HAS FURTHER CLAIMED THAT THE PAYMENTS FOR THE AIR-TICKETS WERE RECEIVED BY THE ASSESSEE, AFTER DEDUCTING THE DISC OUNT AMOUNT THROUGH ACCOUNT PAYEE CHEQUES ONLY. THE CLAIM MADE BY THE ASSESSEE COULD NOT BE CONTROVERTED BY THE REVENUE. WE FIND THAT THE ASSES SING OFFICER HAS NOT CALLED FOR ANY OF THE CUSTOMERS TO WHOM THE DISCOUN TS HAVE BEEN CLAIMED AS HAVING BEEN PAID, FOR VERIFICATION OF THE CLAIM MADE BY THE ASSESSEE. IN THESE FACTS OF THE CASE, WE FIND THAT THE DISALLOWA NCE MADE AT 25% OF THE HANDLING CHARGES OF DISCOUNT IS EXCESSIVE. HOWEVER , WE FIND THAT THE ASSESSEE HAS ALSO NOT DISCHARGED ITS ONUS OF PROVIN G THE GENUINENESS OF THE FULL AMOUNT OF DISCOUNT ALLOWED BY IT TO ITS CUSTOM ERS BY SUBMITTING ANY DOCUMENTARY EVIDENCE. COMPLETE DETAILS OF THE PAYE ES OF THE DISCOUNT COULD NOT BE SUBMITTED BY THE ASSESSEE ALOGNWITH TH E IDENTITY PROOF OF THE PAYEES. IN THESE FACTS OF THE CASE, WE HOLD THAT T HE ENDS OF JUSTICE SHALL BE MET IF THE DISALLOWANCE OUT OF THE HANDLING CHARGES OF DISCOUNT IS RESTRICTED ITA NO.1034/HYD/10 M/S. GLOBAL TRAVELS, HYDERABAD 4 TO 10% THEREOF INSTEAD OF 25% SUSTAINED BY THE CIT( A). WE DIRECT ACCORDINGLY AND THE GROUNDS OF APPEAL OF THE ASSESS EE ARE PARTLY ALLOWED. 6. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALL OWED. ORDER PRONOUNCED IN THE COURT ON 8.7.2011 SD/- SD/- (AKBER BASHA) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 8 TH JULY, 2011 COPY FORWARDED TO: 1. M/S. GLOBAL TRAVELS, C/O. MOHD. AFZAL, ADVOCATE, 12 1 - 5 - 475 SHERSON'S RESIDENCY, FLAT NO.402, CRIMINAL COURT RO AD, RED HILLS, HYDERABAD 500 004. 2. INCOME - TAX OFFICER, WARD - 5 (1), HYDERABAD 3. COMMISSIONER OF INCOME - TAX(APPEALS), V, HYDERABAD. 4. COMMISSIONER OF INCOME - TAX IV, HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S.