The ITO, Ward-1, GANDHIDHAM V. Shri Ahri Valji Mahadeva, GANDHIDHAM

ITA 1040/RJT/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50014 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 02-05-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 26-10-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Assessee Lawyers: DM RINDANI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI A.L. GEHLOT (AM) AND SHRI N.R.S. GANESA N (JM) I.T.A. NO.1040/RJT/2009 (ASSESSMENT YEAR 2004-05) ITO, WD.1 VS SHRI AHIR VALJI MAHADEVA GANDHIDHAM SHOP 08, TANKERS ASSO.BLDG OPP. HOTEL GOKUL GANDHIDHAM-KUTCH PAN : AESPA4754M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AVINASH KUMAR RESPONDENT BY: SHRI DM RINDANI O R D E R PER N.R.S. GANESAN, JM THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-II, RAJKOT DATED 21-08-2009 AND PERTAINS TO ASSESSMENT YEAR 2004-05. THE ONLY ISSUE ARISES FOR CONSIDERATION IS ADDITION OF RS.24 ,90,169 ON ACCOUNT OF DIFFERENCE IN TDS CERTIFICATE AND THE RECEIPTS SHOW N IN THE RETURN OF INCOME. 2. SHRI AVINASH KUMAR, THE LD.DR SUBMITTED THAT THE ASSESSEE HAS SHOWN THE RECEIPT AT RS. 3,03,16,212. HOWEVER, IN THE TD S CERTIFICATE THE RECEIPT WAS SHOWN AT RS. 3,28,06,281. THE ASSESSEE EXPLAINED B EFORE THE ASSESSING OFFICER THAT THE ASSESSEE WAS CHARGING FIXED AMOUNT FROM TH E FREIGHT CONTRACTORS OF THE FREIGHTS OF GANDHIDHAM / KANDLA TO MORANA. HOWEVER , THE PRINCIPAL PARTY WOULD PAY SOME AMOUNT DIRECTLY TO THE OWNER OF THE TANKER IN CASE THE TANKER WAS DIVERTED TO OTHER PLACES. THE EXTRA AMOUNT PAID TO THE TANKER OWNERS DIRECTLY BY THE PRINCIPAL PARTY FOR DIVERSION OF THE AREA WOULD NOT BE REFLECTED IN THE BOOKS OF THE ASSESSEE. HOWEVER, THE PRINCIPAL PARTY HAS DED UCTED TAX AND HAS SHOWN IN THE TDS CERTIFICATE ISSUED TO THE ASSESSEE. THE AS SESSING OFFICER HAS NOT ACCEPTED THIS EXPLANATION. HOWEVER, THE CIT(A) FOU ND THAT THE ASSESSING OFFICER HAS NOT TAKEN ANY EFFORT TO FIND OUT THE NATURE OF THE TRANSACTION. THE EXTRA ITA NO.1040/RJT/2009 2 MONEY PAID TO THE TRUCK OWNERS WAS NOT INFORMED TO THE ASSESSEE SINCE THE ASSESSEE WAS BOOKING THE TRUCKS ON COMMISSION BASIS AND THE EXTRA AMOUNT WAS NOT PAID TO THE ASSESSEE. THE CIT(A) FOUND THA T THERE WAS NO DIFFERENCE AND ACCORDINGLY DELETED THE ADDITION. THE LD.DR SU BMITTED THAT THE TDS WAS MADE IN THE HANDS OF THE ASSESSEE. IF THE EXTRA AM OUNT WAS NOT PAID TO THE ASSESSEE THERE IS NO NEED FOR MAKING THE TDS IN THE HANDS OF THE PRESENT ASSESSEE. IN THE ABSENCE OF ANY MATERIAL TO SHOW T HAT THE EXTRA MONEY WAS NOT PAID TO THE ASSESSEE OR IT WAS PAID TO THE TANK OWN ERS DIRECTLY THE FIGURE FOUND IN THE TDS CERTIFICATE CANNOT BE IGNORED. 3. ON THE CONTRARY, SHRI RM RINDANI, THE LD.REPRESE NTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS BOOKING THE CARGO F OR TRANSPORT ON COMMISSION BASIS FROM ONE PLACE TO ANOTHER. IF THE PRINCIPAL WANTS TO DIVERT THE PLACE OF TRANSPORT THE EXTRA MILEAGE NEEDS TO BE PAID BY THE PRINCIPAL. THEREFORE, THE PRINCIPAL PAY THE EXTRA MONEY FOR THE EXTRA MILEAGE OPERATED BY THE TANKERS DIRECTLY TO THE TANK OWNERS AND NOT TO THE ASSESSEE . THEREFORE, THIS DIFFERENCE HAS OCCURRED. REFERRING TO THE MONTHWISE STATEMENT , THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS CLEARLY SH OWN THE TOTAL RECEIPT MONTHWISE. ON A QUERY FROM THE BENCH WHETHER THE M ONTHWISE RECEIPTS REFLECT ANY TRIPWISE PAYMENT, THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE TRIPWISE PAYMENT WAS NOT AVAILABLE WITH THE ASSESSE E AND WHAT WAS FILED WITH THE LOWER AUTHORITY IS ONLY MONTHWISE RECEIPT STATEMENT . THE LEARNED REPRESENTATIVE ALTERNATIVELY SUBMITTED THAT IN CASE IT WAS FOUND T HAT THE PAYMENTS MADE TO THE TANK OWNERS ARE THE PAYMENTS MADE TO THE ASSESSEE T HEN THE ENTIRE RECEIPT CANNOT BE TAKEN AS INCOME OF THE ASSESSEE THEN WHAT IS TO BE TAKEN IS ONLY THE INCOME PORTION. THE LD.REPRESENTATIVE PLACED HIS RELIANCE ON THE JUDGMENT OF THE GUJARAT HIGH COURT IN THE CASE OF CIT VS PRESIDENT INDUSTRIES (2002) 258 ITR 654 (GUJ). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND HAVE ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NO T IN DISPUTE THAT THE TDS ITA NO.1040/RJT/2009 3 CERTIFICATE CLEARLY SHOWS THE PAYMENT OF RS.3,28,06 ,381 TO THE ASSESSEE. HOWEVER, THE ASSESSEE HAS SHOWN THE RECEIPT ONLY AT RS. 3,03,16,212. IF THE CONTENTION OF THE ASSESSEE THAT THE PAYMENT WAS MAD E DIRECTLY TO THE TANK OWNERS IN RESPECT OF THE AREA DIVERTED BY THE PRINC IPAL, THEN THERE IS NO NEED FOR MAKING ANY DEDUCTION IN THE HANDS OF THE ASSESSEE. THE EXTRA PAYMENT MADE TO THE TANK OWNERS NEED NOT BE REFLECTED IN THE TDS CE RTIFICATE ISSUED TO THE ASSESSEE AT ALL. IN THE ABSENCE OF ANY MATERIAL TO SHOW THAT THE EXTRA PAYMENT WAS PAID TO THE TANK OWNERS DIRECTLY THE FIGURE FOU ND IN THE TDS CERTIFICATE CANNOT BE IGNORED. THE ASSESSEE HAS NOT PRODUCED ANY MATE RIAL BEFORE THE LOWER AUTHORITIES TO SHOW THAT THE PAYMENT WAS MADE DIREC TLY TO THE BANK OWNERS. MONTHWISE STATEMENT DOES NOT GO TO HELP THE ASSESSE E IN THE ABSENCE OF ANY OTHER MATERIAL TO SUGGEST THAT THE PAYMENT WAS DIRE CTLY MADE TO THE TANK OWNERS. IN THE ABSENCE OF ANY MATERIAL, IN OUR OPINION, THE AMOUNT SHOWN AS PAID TO THE ASSESSEE AT RS.3,28,06,381 HAS TO BE TAKEN AS RECEI PT IN THE HANDS OF THE PRESENT ASSESSEE. THEREFORE, WE ARE UNABLE TO UPHO LD THE ORDER OF THE CIT(A) ON THIS ISSUE. HOWEVER, WE FIND MERIT IN THE ALTERNAT IVE CONTENTION OF THE ASSESSEE. THE ENTIRE RECEIPT CANNOT BE THE INCOME. AS SUBMIT TED BY THE LD.REPRESENTATIVE FOR THE ASSESSEE ONLY THE INCOME WHICH IS EMBEDDED IN THE RECEIPT HAS TO BE BROUGHT FOR TAXATION. ACCORDINGLY WE SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THAT OF THE ASSESSING OFFICER. HOWEVER, WE DIRECT THE ASSESSING OFFICER TO TAKE ONLY THE INCOME PORTION WHICH IS EMBEDDED IN T HE RECEIPT FOR TAXATION AS HELD BY THE GUJARAT HIGH COURT IN THE CASE OF PRESI DENT INDUSTRIES (SUPRA). 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13-05-2011. SD/- SD/- (A.L. GEHLOT) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT, DT : 13 TH MAYAY, 2011 PK/- ITA NO.1040/RJT/2009 4 COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A)-II, RAJKOT 4. THE CIT-I, RAJKOT 5. THE DR, I.T.A.T., RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT