Shri Dinesh B.Bharwad, Ahmedabad V. The Income tax Officer,Ward-1(3), Ahmedabad

ITA 1123/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1564 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 04-05-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 23-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Keywords: Unexplained expenditure
• Section: 80C; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: S H RI ANIL CHATURVEDI , ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER SHRI DINESH B BHARWAD, PROP. M/S. ATITHI GOKUL ROAD LI NES, GOTA CHOWKDI, S.G. HIGHWAYS, AHMEDABAD - 380054 PAN: AESPB5783R (APPELLANT) VS THE ITO, WARD - 1(3), AHMEDABAD (RESPONDENT) REVENUE BY : S H RI V. K. SINGH , SR. D . R. ASSESSEE BY: S H RI URVASHI SHODHAN , A.R. DATE OF HEARING : 04 - 05 - 2 016 DATE OF PRONOUNCEMENT : 30 - 05 - 2 016 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 20 06 - 07 , AR IS ES FROM ORDER OF THE CIT(A) - 6, AHMEDABAD DATED 06 - 03 - 2013 IN APPEAL NO. CIT(A) - VI/ITO. / WD - 1(3)/ 2 23/11 - 12 , IN PROCEEDI NGS UNDER SECTION 144 R.W.S. 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 1123 / A HD/20 13 A SSESSMENT YEAR 200 6 - 07 I.T.A NO. 1123 /AHD /2013 A.Y. 2006 - 07 PAGE NO SHRI DINESH B. BHARWAD VS. ITO 2 2. THE ASSESSEE RAISES FOUR SUBSTANTIVE GROUNDS INTER ALIA CHALLENGING VALIDITY OF REOPENING, DISALLOWANCE/ADDITION OF 5% OF LORRY HIRING CHARGING ON ESTIMATION BASIS AMOUNTING TO RS. 24,46,2 68/ - , UNEXPLAINED AGRICULTURAL EXPENSES OF RS. 1,86,050/ - AND T UITION THAT PERTAINING TO TUITION FEE U/S. 80C OF THE ACT AMOUNTING TO RS. 7,500/ - ; RESPECTIVELY. HE DOES NOT PRESS FOR FIRST AND LAST SUBSTANTIVE GROUND DURING THE COURSE OF HEARING. THE SAME ARE ACCORDINGLY REJECTED. 3. WE COME TO THE ISSUE OF LORRY H IRING CHARGES DISALLOWANCES OF R S. 24,46,268/ - MADE BY BOTH THE LOWER AUTHORITIES ON ESTIMATION BASIS. THE ASSESSE COMMENCED HIS TRANSPORT BUSINESS ON 01 - 07 - 2005. THIS IS FIRST ASSESSMENT YEAR OF HIS BUSINESS . HIS TURNOVER IS OF RS. 5,25,62,020/ - AND GP IS @ 5.01% COMING TO RS. 26,38,303/ - . THE ASSESSING OFFICER FRAMED A REGULAR ASSESSMENT ON 28 - 11 - 2008 DISALLOWING VARIOUS EXPENSES . THE SAME INCREASED THE ABOVE STATED GP TO 7.8%. THE ASSESSING OFF ICER REOPENED THE SAID REGULAR ASSESSMENT . HE SOUGHT FOR LORRY HIRING CHARGES EXPENSES DETAILS OF RS. 4,89,24,950/ - @ 93.3% OF THE GROSS FREIGHT INCOME. HE FOUND THE ASSESSEE TO HAVE ENTERED CHALLAN NOS., PAYEES NAMES, TOTAL FREIGHT ADVANCE PAYMENTS AND DIESEL CHARGES ONLY IN FEW CASES. THIS MADE HIM TO INVOKE THE IMPUGNED ADHOC DISALLOWANCE @ 5% COMING TO RS. 24,46,248/ - DUE TO ASSESSEE S FAILURE IN PRODUCING BILLS, RELEVANT ACCOUNT, BILTIES, PAYMENT RECEIPT AND VOUCHERS. THE CIT(A) CONFIRMS ASSESSING OFFICER. I.T.A NO. 1123 /AHD /2013 A.Y. 2006 - 07 PAGE NO SHRI DINESH B. BHARWAD VS. ITO 3 4. WE HAVE HEARD BOTH THE PARTIES. TH E ASSESSEE INVITES OUR ATTENTION TO HIS GP ALREADY DECLARED, ASSESSED AND REASSESSED @ 5.01%, 7.8% AND 12% RESPECTIVELY. HE FILES A CHART OF NET PROFIT OF ASSESSMENT YEAR 2006 - 07 AND 2007 - 08. IT CLARIFIES THAT NP RATIO IN THE IMPUGNED ASSESSMENT YEAR 0.8 6% AGAINST 0.66% I.E. ALREADY ON THE HIGHER SIDE. WE FIND THAT THERE NO GENUINENESS ISSUE QUA THE IMPUGNED EXPENSES SINCE 95% THEREOF HAS ALREADY ALLOWED. THIS IS FIRST YEAR OF ASSESSEE S BUSINESS . WE T AKE INTO ACCOUNT ALL THESE PECULIA R FACTS AND CIRCU MSTANCES FOR ACCEPTING ASSESSEE S ARGUMENTS CHALLENGING LORRY HIRING CHARGING DISALLOWANCES IN QUESTION @ 5% COMING TO RS. 24,46,268/ - MADE ON ADHOC BASIS. IT IS MADE CLEAR THAT ORDER SHALL NOT FORM ANY PRECEDENT. THE REVENUE S ARGUMENTS SUPPORTING THE I MPUGNED DISALLOWANCE ARE ACCORDINGLY REJECTED. 5. WE COME TO THE ISSUE OF UNEXPLAINED AGRICULTURAL EXPENSES ADDITION OF RS. 1,86,050/ - NOW. THE ASSESSING OFFICER ADDS THIS AMOUNT QUOTING AS S ESSEE S FAILURE IN FILING OF DETAILS OF AGRICUL TURAL SOURCES. L D. AUTHORIZED R EPRESENTATIVE SUBMITS THAT THE ASSESSEE HAD DECLARED NET AGRICULTURAL INCOME OF RS. 4,65,116/ - AND THE ASSESSING OFFICER ADDED 40% THEREOF AS UNEXPLAINED EXPENDITURE. 6. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL SUBMISSIONS. I T IS CLEAR FROM THE ABOVE FACTS THAT THE ASSESSING OFFICER HAS MADE 40% ADDITION OF THE NET AGRICULTURAL INCOME DECLARED BY TREATING THE SAME AS UNEXPLAINED. THERE IS NO ACCOUNT OF ASSESSEE S LAND HOLDING SIZE OR HIS AGRICULTURE IN PRECEDING AND I.T.A NO. 1123 /AHD /2013 A.Y. 2006 - 07 PAGE NO SHRI DINESH B. BHARWAD VS. ITO 4 SUCCEEDIN G ASSESSMENT YEAR. NO FAULT IS ALSO FOUND IN HIS NET AGRICULTURAL INCOME. WE REITERATE THAT THE ASSESSING OFFICER HAS NOT CONSIDERED THIS NET INCOME ASPECT AND THE SAME CONTINUES IN THE LOWER APPELLATE PROCEEDINGS. WE ACCEPT ASSESSEE S ARGUMENTS IN THES E FACTS AND CIRCUMSTANCES AND THOSE RAISED AT REVENUE S BEHEST IN SUPPORT OF THE IMPUGNED ADDITION. OUR THIS ORDER SHALL NOT FORM A PRECEDENT IN ANY PRECEDING AND SUCCEEDING ASSESSMENT YEAR. 7. THIS ASSESSEE S APPEAL IS PARTLY ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 30 - 05 - 201 6 SD/ - SD/ - ( ANIL CHATURVEDI ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 30 /05 /2016 AK / COPY OF ORDER FORWARDED T O: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,