The ITO, RAJKOT-GUJARAT V. Shri Pinakin H Rajyaguru, RAJKOT-GUJARAT

ITA 1171/RJT/2010

• Counselvise Citation: 117124914 RSA 2010
• Duration Of Justice: 3 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 01-08-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 16-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VILAS V SHINDE
• Assessee Lawyers: DM RINDANI
• Keywords: Unexplained expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBULAL: RAJKOT BENCH: RAJKOT BEFORE SHRI T K SHARMA, JM AND SHRI D K SRIVASTAVA, AM ITA NO. 1171/RJT/2010 ASSESSMENT YEAR: 2007-08 ITO, WARD-1(4), RAJKOT V. SHRI PINAK IN H. RAJYAGURU MUKTIRAM COMPLEX, NR. RASHTRIYA SHALA, MANHAR PLOT, RAJKOT PAN : ADSPR 5639 K DATE OF HEARING : 01.08.2013 DATE OF PRONOUNCEMENT : 30.09.2013 REVENUE BY : SHRI VILAS V. SHINDE, DR ASSESSEE BY : SHRI D M RINDANI, CA ORDER D. K. SRIVASTAVA: THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)-I, RAJKOT ON 28.06.2010, ON THE FOLLOWING GROUNDS:- THE LEARNED CIT (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.24,06,500/- ON ACCOUNT OF UNDISCLOSED INCOME FOR DIESEL AND OIL EXPS. THE LEARNED CIT (A) HAS ERRED IN LAW AND ON FACTS I N DELETING THE ADDITION OF RS.19,73,500/- ON ACCOUNT OF SUPPRESSION OF INCO ME. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD. CI T (A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED TO THE AB OVE EXTENT. 2. THE ASSESSEE IS AN INDIVIDUAL. HE IS ENGAGED IN TRANSPORTATION BUSINESS AND TRANSPORTS THE GOODS OF BHARAT PETROLEUM CORPOR ATION LTD. (BPCL) AND HINDUSTAN PETROLEUM LTD. (HPCL). HE FILED HIS RETUR N OF INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL ON 27.03.2008 RETURNIN G TOTAL INCOME AT RS.1,79,920/- AS AGAINST WHICH HIS TOTAL INCOME WAS ASSESSED AT RS.45,60,250/- AFTER ADDING A SUM OF RS.43,80,334/-. ADDITION OF R S.19,73,500/- WAS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DIFFERENCE IN TRANS PORTATION RECEIPTS SHOWN IN THE BOOKS OF ACCOUNT VIS--VIS SHOWN IN FORM NO.16A ISS UED BY BPCL AND HPCL. THE OTHER ADDITION OF RS.24,06,834/- WAS MADE BY TH E ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE HAD MADE PURCHASES OF DIES EL AMOUNTING TO 2 1171-RJT-2010 SHRI PINAKIN H RAJYAGURU RS.24,06,834/- WITHOUT RECORDING THE SAME IN THE BO OKS OF ACCOUNTS. ON APPEAL, THE LD CIT(A) HAS DELETED BOTH THE AFORESAID ADDITI ONS. 3. PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT A SUM OF RS.38,69,627/- ALONE WAS RECORDED BY THE ASSESSEE IN ITS BOOKS AS TRANSP ORTATION RECEIPTS FROM BPCL AND HPCL. THE ASSESSING OFFICER PERUSED FORM NO.16A ISSUED BY BPCL AND HPCL IN WHICH PAYMENTS AGGREGATING TO RS.58,43,127/ - WERE SHOWN TO HAVE BEEN MADE BY THEM TO THE ASSESSEE. ACCORDING TO THE ASSE SSING OFFICER, THERE WAS THUS UNDER-RECORDING OF SALES TO THE EXTENT OF RS.1 9,73,500/-. ON BEING CALLED UPON TO RECONCILE THE AFORESAID DIFFERENCE, THE ASS ESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THAT THE AMOUNT SHOWN IN FORM NO. 16A WAS TOTAL AMOUNT PAID BY BPCL AND HPCL. IT WAS ALSO SUBMITTED THE ASSESSE E HAD SHOWN ONLY THE NET AMOUNT RECEIVED FROM THEM IN HIS BOOKS OF ACCOUNTS. IT WAS POINTED OUT BY THE ASSESSEE BEFORE THE ASSESSING OFFICER THAT DIESEL P URCHASED BY THE ASSESSEE WAS DIRECTLY PAID BY THE BPCL AND HPCL WITH THE RESULT THAT THE AMOUNT SO PAID BY THEM WAS EXCLUDED FROM THE AMOUNTS PAYABLE TO THE A SSESSEE AND THEREFORE IT WAS THE NET AMOUNT RECEIVED BY THE ASSESSEE FROM TH EM WHICH WAS SHOWN BY HIM IN HIS BOOKS OF ACCOUNT. THE ASSESSING OFFICER DID NOT ACCEPT THE AFORESAID SUBMISSIONS MADE BY THE ASSESSEE. HE THEREFORE TREA TED THE SAID DIFFERENCE OF RS.19,73,500/- AS SUPPRESSED SALE AND ACCORDINGLY A DDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 4. THE ASSESSEE ALSO PERUSED THE DETAILS OF THE DIE SEL EXPENSES FURNISHED BY THE ASSESSEE. HE NOTICED THAT THE ASSESSEE HAD SHOW N DIESEL EXPENSES AT RS.11,86,737/- IN HIS BOOKS OF ACCOUNTS. HE ALSO NO TICED THAT M/S. YATAYAT SANGAM HAD SOLD DIESEL FOR RS.35,93,571/- TO THE AS SESSEE. HE THEREFORE TREATED THE DIFFERENCE OF RS.24,06,834/- AS PURCHASES OF DI ESEL OUTSIDE THE BOOKS OF ACCOUNTS. IT WAS THE CASE OF THE ASSESSEE BEFORE TH E ASSESSING OFFICER THAT THE SAID PAYMENTS AGGREGATING TO RS.24,06,834/- WERE MA DE BY BPCL AND HPCL DIRECTLY TO M/S. YATAYAT SANGAM. HOWEVER HIS EXPLAN ATION IN THIS BEHALF WAS NOT ACCEPTED BY THE ASSESSING OFFICER. 3 1171-RJT-2010 SHRI PINAKIN H RAJYAGURU 5. ON APPEAL, THE LD CIT(A) HAS DELETED BOTH THE AD DITIONS WITH THE FOLLOWING OBSERVATIONS:- 9. I HAVE CAREFULLY CONSIDERED THE ISSUE AND I FIN D THAT PAYMENTS WERE MADE BY BPCL DIRECTLY TO YATAYAT SANGAM PETROL PUM P ON THE BASIS OF THE FLEET CART AND SUCH PAYMENT HAS BEEN DIRECTLY DEDUC TED BY THEM ON MONTHLY BASIS FROM THE BILLS. APPELLANT HAS TAKEN T HE NET AMOUNT OF CHEQUE RECEIVED FROM BPCL AS FREIGHT RECEIVABLE INSTEAD OF GROSS AMOUNT OF THE BILL. THUS THE NET AMOUNT TAKES INTO CONSIDERATION, THE PAYMENT MADE DIRECTLY BY THEM TO THE PETROL PUMP ON THE BASIS OF FLEET CARD. IT IS ONLY AN ACCOUNTING IRREGULARITY BECAUSE IF THE GROSS FIGURE IS TAKEN, THEN A SIMILAR AMOUNT WHICH HAS BEEN PAID DIRECTLY BY BPCL TO PETR OL PUMP WILL HAVE TO BE DEDUCTED AS DIESEL EXPENSES. SINCE THIS AMOUNT H AS NOT BEEN SEPARATELY CLAIMED AS DEDUCTION AND ONLY NET AMOUNT RECEIVED FROM BPCL HAS BEEN SHOWN AS RECEIPT OF THE APPELLANT, THE ADD ITION IS PATENTLY SUPERFLUOUS BECAUSE IF THIS AMOUNT IS ADDED, THEN A SIMILAR AMOUNT WILL HAVE TO BE ALLOWED AS A DEDUCTION ON ACCOUNT OF PUR CHASE OF DIESEL BY THE APPELLANT. IT IS ALSO NOTICED THAT IT IS MANDATORY FOR THE APPELLANT TO PURCHASE DIESEL FROM THE PETROL PUMP OF BPCL AND SU CH PAYMENT IS DIRECTLY MADE BY BPCL TO THE PETROL PUMP ON THE BASIS OF THE IR CARD LIMIT FIXED BY BPCL OF RS. 2 LAKH PER MONTH. SUCH PURCHASES HAVE B EEN MADE BY THE APPELLANT FROM YATAYAT SANGAM AND THE AMOUNT HAS BEEN DIRECTLY PAID BY BPCL AND THE SAME HAS BEEN DEDUCTED FROM PAYMENTS T O BE MADE BY THE APPELLANT. THUS, THIS ADDITION IS PURELY SUPERFLUOU S AND, AS DISCUSSED IF THIS ADDITION IS MADE, THEN AN IDENTICAL AMOUNT WILL HAV E TO BE REDUCED AS EXPENDITURE ON ACCOUNT OF DIESEL PURCHASE. THEREFOR E, ADDITION OF RS.24,06,834 IS DELETED. 10. EVEN THE NEXT ADDITION OF RS.19,73,500 DESERVES TO BE DELETED BECAUSE THE AO HAS MADE THE ADDITION ON ACCOUNT OF DIFFERENCE BETWEEN GROSS FREIGHT AS PER TDS CERTIFICATE AND FREIGHT SH OWN BY THE APPELLANT IN HIS BOOKS OF ACCOUNTS. THE DIFFERENCE IS ON ACCOUNT OF THE AMOUNT, WHICH YATAYAT PETROL PUMP RECEIVED FROM BPCL. MERELY BECA USE BPCL DID NOT 4 1171-RJT-2010 SHRI PINAKIN H RAJYAGURU MAINTAIN ANY SEPARATE LEDGE, IT WOULD NOT MEAN THAT THE PAYMENT TO YATAYAT SANGAM HAS BEEN MADE BY THE APPELLANT. WHEN IT IS APPARENT FROM THE TDS CERTIFICATE AS WELL AS THE CERTIFICATE FROM YATAYAT SANGAM THAT SUCH AMOUNT HAS BEEN RECEIVED BY THEM DIRECTLY FROM BPCL AND NOT FROM THE APPELLANT. THIS CLEARLY AMOUNT TO DOUBLE ADDITION A ND THEREFORE, THE SAME IS DELETED. 6. IN SUPPORT OF APPEAL, THE LD. DEPARTMENTAL REPRE SENTATIVE RELIED UPON THE ASSESSMENT ORDER. 7. IN REPLY, THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE RELIED UPON THE ORDER PASSED BY THE LD CIT(A). HE HAS ALSO FILED A SUMMARY OF HIS SUBMISSIONS WHICH READS AS UNDER:- 1. THE AO HAS MADE AN ADDITION OF RS.19,73,500/- O N ACCOUNT OF DIFFERENCE IN TRANSPORTATION RECEIPTS AS SHOWN IN T HE BOOKS OF THE ASSESSEE AND FORM 16A ISSUED BY BPCL AND HPCL. 2. THE AO HAS ALSO MADE AN ADDITION OF RS.24,06,834 /- ON ACCOUNT OF PURCHASE OF DIESEL IN CASH FROM M/S. YATAYAT SANGAM AS UNEXPLAINED EXPENDITURE. 3. THE CIT(A) DELETED THE ADDITION OF RS.24,06,834/ - ON THE FOLLOWING GROUNDS: THE APPELLANT HAS RECEIVED THE NET AMOUNT AS TRANS PORTATION RECEIPTS AFTER DEDUCTION OF PAYMENTS MADE DIRECTLY BY BPCL. THE CIT (A) HAS OBSERVED THAT SINCE THE NET AMOUNT HAS BEEN RECEIVED FROM BPCL, THE ADDITION IS PATENTLY SUPERF LUOUS AS EVEN OTHERWISE A SIMILAR AMOUNT WILL HAVE TO BE ALLOWED AS DEDUCTION ON ACCOUNT OF PURCHASE OF DIESEL BY THE APPELLANT. 4. THE ADDITION OF RS.19,73,500/- WAS DELETED ON S IMILAR GROUNDS AS IN POINT 3 ABOVE BY THE HON. CIT(A). 8. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY CON SIDERED THEIR SUBMISSIONS. THE DEPARTMENT HAS PLACED NO MATERIAL BEFORE US TO REBUT THE FACTS RECORDED BY 5 1171-RJT-2010 SHRI PINAKIN H RAJYAGURU THE LD. CIT(A) IN HIS APPELLATE ORDER. THE LD. CIT( A) HAS GIVEN COGENT REASONS FOR DELETING THE IMPUGNED ADDITIONS. THE ASSESSEE HAS S ATISFACTORILY EXPLAINED THE REASONS FOR THE DIFFERENCE IN THE AMOUNT OF RECEIPT S RECORDED IN THE BOOKS OF ACCOUNTS VIS--VIS THOSE SHOWN IN FORM NO.16A ISSUE D BY BPCL AND HPCL. WE SEE NO REASON TO DISTURB THE ORDER PASSED BY THE LD . CIT(A) IN THIS BEHALF. HIS ORDER IS THEREFORE CONFIRMED. APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 30.09.2013 SD/- SD/- (T. K. SHARMA) ( D. K. SRIVASTAVA) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT: 30.09.2013 BT COPY OF ORDER FORWARDED TO:- 1. APPELLANT ITO, WARD-1(4), RAJKOT 2. RESPONDENT- SHRI PINAKIN H. RAJYAGURU, MUKTIRAM COM PLEX, NR. RASHTRIYA SHALA, MANHAR PLOT, RAJKOT 3. CONCERNED CIT-I, RAJKOT 4. CIT (A)-I, RAJKOT 5. DR, ITAT, RAJKOT 6. GUARD FILE. BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT