Vidhyadhar Noparam Jat, Navi Mumbai V. Deputy Commissioner of Income-tax, Panvel Circle, Panvel

ITA 1072/PUN/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4922 (ITAT-PUNE)
• Duration Of Justice: 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 04-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Assessee Lawyers: MUKESH KUMAWAT
• Keywords: Principle of natural justice; Corroborative evidences

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.1072/PUN/2018 / ASSESSMENT YEAR : 2014-15 SHRI VIDHYADHAR NOPARAM JAT, FLAT NO.10, BUILDING NO.20, K L 5, TYPE, SECTOR 3E, KALAMBOLI, NAVI MUMBAI 410218. PAN : ADBPJ5570C. . / APPELLANT V/S THE DY. COMMISSIONER OF INCOME TAX, PANVEL CIRCLE, PANVEL. . / RESPONDENT ASSESSEE BY : SHRI MUKESH KUMAWAT. REVENUE BY : SHRI M.K. VERMA. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 2, PUNE DATE D 18.12.2017 FOR THE ASSESSMENT YEAR 2014-15. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS AN INDIVIDUAL STATED TO BE ENGAGED IN THE B USINESS OF TRANSPORTATION UNDER THE NAME AND STYLE OF VIKAS BHARAT I ROADWAYS. ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y. 2014-15 ON 22.02 .2016 DECLARING TOTAL INCOME OF RS.19,16,180/-. THE CASE WAS SELEC TED FOR / DATE OF HEARING : 24.01.2019 / DATE OF PRONOUNCEMENT: 14.02.2019 2 SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S 143(3 ) OF THE ACT VIDE ORDER DT13.12.2016 AND THE TOTAL INCOME WAS DETERMIN ED AT RS.23,16,180/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE C ARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.18.12.2017 (IN APP EAL NO.PN/CIT(A)-2/DCIT CIR/PVL/499/2017-18) GRANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSE E IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1. THE LEARNED ITO HAS RAISED THE DEMAND ON THE GR OUNDS THAT SOME EXPENSES ARE DEBITED TO PROFIT & LOSS A/C BY SUPPORTING THEM WITH SELF GENERATED VOUCHERS AND MADE AD HOC DISALLOWANCE OF RS.4 , OO,OOO/- AND THE SAME IS ADDED TO TOTAL INCOME OF THE ASSESSE . 2. THE LEARNED CIT (A) HAS CONSIDERED THE ABOVE GRO UND AND HAVE GIVEN RELIEF OF RS . 1 , 00 , 000/- ONLY ON THE BASIS THAT THE CONSTITUTION OF B USINESS IS ON PROPRIETARY CONCERN . 3. WE HAVE MADE ALL THE SUBMISSION REQUIRED TO PROVE THE GENUINENESS OF THE EXPENSES CLAIMED AND HAVE NOT INFLATED EXPENSES . THE LEARNED CIT (A) HAS NOT CONSIDERED THE SAME WHICH IS AGAINST TH E LAW OF NATURAL JUSTICE A ND ALSO NOT ASKED TO REPRESENT THE EXPENDITURE CLAI MED IN PROFIT & LOSS A/C . 3. ALL THE GROUNDS BEING INTER-CONNECTED ARE CONSIDERED TOGETHE R. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS TO VERIFY THE GENUINENESS OF THE EXPENSES DEBITED TO THE PROFIT AND LO SS ACCOUNT, AO CALLED FOR THE DETAILS / VOUCHERS. ON PERUSING THE SAME, H E NOTICED THAT SOME OF THE EXPENSES WERE INCURRED TOWARDS DIESEL, POW ER AND FUEL, REPAIRS AND MAINTENANCE ETC. IN CASH AND SOME BY SELF-M ADE VOUCHERS. AO WAS OF THE VIEW THAT THE SAME WERE NOT VERIFIABLE FROM THIRD PARTIES. HE THEREFORE MADE AN ADHOC DISALLOWANCE OF RS.4,00,000/-. A GGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO GRANTED PARTIAL RELIEF TO THE ASSESSEE BY OBSERVING AS UNDER : 6. I HAVE PERUSED THE FACTS OF THE CASE. IT IS SEE N THAT THE APPELLANT IS AN INDIVIDUAL AND IS RUNNING PROPRIETARY BUSINESS O F TRANSPORTATION. DUR I NG THE YEAR UNDER CONSIDERATION, APPELLANT HAS SHOW N NET PROFIT 3 OF RS.19,28,645/- AGAINST GROSS RECEIPTS OF RS. 6,5 8,16,523/- WHICH COMES TO APPROXIMATELY 2.9 % . CONSIDERING THE NATURE OF BUSINESS, THE PROFIT PERCENTAGE SHOWN APPEARS TO BE VERY LOW. IT IS FURTHER SEEN THAT THE APPELLANT HAS CLAIMED LORRY RUNNING E X PENSES OF RS.69,93,424/- BESIDES REPAIRS AND MAINTENANCE THEREON OF MORE THAN RS.36,00,000/-. AS SOME OF THE E X PENSES HAVE BEEN DEBITED BY WAY OF SELF MADE V OUCHERS THERE F ORE INFLATION OF SOME OF THE E X PENSES CANNOT BE ABSOLUTELY RULED OUT PARTICULARLY, CONSIDERING THE FACT THAT THE APPELLANT IS RUNNING A PROPRIETARY CONCERN. HOWEVER , CONSIDERING THE ARGUMENTS TAKEN, I FEEL IT FAIR AND REASONABLE TO R ESTRICT THE D I SALLOWANCE AT RS . 3,00,000/- OUT OF E X PENSES CLAIMED UNDER V ARIOUS HEADS. THE APPELLANT THUS GETS RELIEF OF RS. 1,00,000/- . AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APP EAL BEFORE US. 5. BEFORE US, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFORE AO AND LD.CIT(A) AND SUBMITTED THAT DURING THE COURSE OF ASSESSM ENT PROCEEDINGS, ASSESSEE HAD SUBMITTED ALL THE DETAILS CALLED FOR INCLUDING THE LEDGER ACCOUNT AND OTHER SUPPORTING EVIDENCE. HE S UBMITTED THAT WITHOUT POINTING OUT TO ANY DISCREPANCY, AO HAD PROCEEDE D TO DISALLOW THE EXPENSES ON ADHOC BASIS AT RS.4,00,000/- WHICH WAS R EDUCED TO RS.3,00,000/- BY LD.CIT(A). HE SUBMITTED THAT THE INCURRING OF EXPENSES BY THE ASSESSEE HAS NOT BEEN DOUBTED BY TH E LOWER AUTHORITIES. HE FURTHER SUBMITTED THAT WITHOUT BRINGING ANY EVIDENCE ABOUT THE INFLATION OF SOME OF THE EXPENSES, NO DISALLOWANCE ON ADHOC BASIS IS CALLED FOR. HE THEREFORE SUBMITTED THAT THE ADDITION UPHELD BY LD.CIT(A) BE DELETED. LD.D.R. ON THE OTHER HAND, SUPPORTED THE ORDER OF AO. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO DISALLOWANCE OF RS.3,00,000/- ON ADHOC BASIS. IT IS AN UNDISPUTED FACT THA T ASSESSEE BEING IN THE TRANSPORTATION BUSINESS HAD INCURRED EXPEN SES ON DIESEL, POWER AND FUEL, REPAIRS AND MAINTENANCE ETC. HOWEVER, SOM E OF THE EXPENSES WERE MADE IN CASH AND SOME WERE MADE BY SE LF-MADE 4 VOUCHERS. IT IS ALSO A FACT THAT THE EXPENDITURE HAS BE EN DISALLOWED ON ADHOC BASIS WITHOUT BRINGING ANY MATERIAL ON RECORD TO DE MONSTRATE THE INFLATION OF EXPENSES. CONSIDERING THE TOTALITY OF THE FACTS A ND IN VIEW OF THE FACT THAT NO EVIDENCE WITH REGARD TO THE INFLATION OF EXPENSES HAVE BEEN BROUGHT ON RECORD BY THE REVENUE AND THE NATUR E OF BUSINESS OF THE ASSESSEE, WE ARE OF THE VIEW THAT NO DISALLOWANCE IS CALLED FOR IN THE PRESENT CASE. WE THEREFORE DIRECT TO DELETE THE ADDITION MADE BY THE AO. THUS, THE GROUND OF THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON 14 TH DAY OF FEBRUARY, 2019. SD/- SD/- ( VIKAS AWASTHY ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER ' / ACCOUNTANT MEMBER PUNE; DATED : 14 TH FEBRUARY, 2019. YAMINI #$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4 5. 6. CIT(A) 2, PUNE. PR.CIT-2, THANE. '#$ %%&',) &', *+ / DR, ITAT, SMC PUNE; $-.// GUARD FILE. / BY ORDER // TRUE COPY // 012%3&4 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.