Shri Kunal Parasbhai Bafna, Ahmedabad V. The Dy.CIT, Circle-9, Ahmedabad

ITA 1181/AHD/2015

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9974 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 06-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SOMOYJAN PAL
• Assessee Lawyers: PF JAIN
• Section: 40A(3); 234B; 2

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH SMC BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA NO.1181/AHD/2015 / ASSTT. YEAR: 2010-11 SHRI KUNAL PARASBHAI BAFNA (PROP. OF BAFNA TRANSPORT CORPORATION) 6, SARDAR PATEL ESTATE OPP: VATVA TRAINING SCHOOL NAROL, AHMEDABAD. PAN : AFLPB 6490 B VS. DCIT, CIR.9 AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI P.F. JAIN, AR REVENUE BY : MS.SOMOYJAN PAL, SR.DR ! / DATE OF HEARING : 01/01/2019 '#$ ! / DATE OF PRONOUNCEMENT: 02 /04/2019 %& / O R D E R ASSESSEE IS IN APPEAL BEFORE TRIBUNAL AGAINST ORDER OF THE LD.CIT(A)-3, AHMEDABAD DATED 9.2.2015 PASSED FOR TH E ASSTT.YEAR 2010-11. 2. THE ASSESSEE HAS TAKEN EIGHT GROUNDS OF APPEAL, BUT THE LD.COUNSEL FOR THE ASSESSEE HAS PRESSED ONLY GROUND NO.2. IN GROUND NO.5, THE ASSESSEE HAS PLEADED THAT THE LD.C IT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.27,723/- OUT OF TELEPHONE AND PETROL EXPENSES. THE LD.COUNSEL FOR THE ASSESSEE DID NOT PRESS THIS GROUND OF APPEAL. 3. IN GROUND NO.6, GRIEVANCE OF THE ASSESSEE IS THA T THE LD.CIT(A) HAS ERRED IN CONFIRMING CHARGING OF INTER EST UNDER ITA NO.1181 /AHD/2015 2 SECTION 234B TO 234C. THE LD.COUNSEL FOR THE ASSESS EE ADMITTED THAT IT IS CONSEQUENTIAL ISSUE AND THEREFORE DID NO T ADVANCE ANY ARGUMENTS. HENCE, THIS GROUND OF APPEAL IS REJECTE D. 4. GROUND NOS.1, 3, 4, 7 AND 8 ARE GENERAL GROUNDS OF APPEAL. HENCE, NO SPECIFIC FINDING IS REQUIRED TO BE RECORD ED. NOW I TAKE GROUND NO.2, WHICH IS SUBSTANTIAL GROUND, WHICH HAS BEEN PRESSED BY THE LD.COUNSEL FOR THE ASSESSEE. 5. GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.89,000/- WHICH WA S MADE BY THE AO UNDER SECTION 40A(3) OF THE INCOME TAX ACT, 1961. 6. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED HIS RETURN OF INCOME ON 10.10.2010 ELECTRONICALLY DECLA RING TOTAL INCOME AT RS.23,73,266/-. THE AO HAS OBSERVED THAT A SURVEY WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASS ESSEE ON 27.8.2009. THE ASSESSEE AT THE RELEVANT TIME WAS R UNNING A PROPRIETORSHIP CONCERN IN THE NAME AND STYLE OF M/S .BAFNA TRANSPORT COMPANY. THE AO HAS ISSUED A SHOW CAUSE N OTICE ASKING EXPLANATION OF THE ASSESSEE THAT A PAYMENT O F RS.1.46 CRORES WAS MADE IN THE F.Y.2009-10 IN VIOLATION OF SECTION 40A(3) OF THE INCOME TAX ACT, 1961. IN RESPONSE TO THE SH OW CAUSE NOTICE, IT WAS CONTENDED BY THE ASSESSEE THAT PAYME NT OF RS.1.46 CRORES WAS SUM OF ALL THREE FIRMS I.E. RS.80.47 LAK HS FOR KAPIL ROAD LINES; RS.64.64 LAKHS FOR BAFNA ROADLINES WHEREAS M/ S.BAFNA TRANSPORT COMPANY IS CONCERNED I.E. FOR THE PROPRIE TORSHIP IS CONCERNED, NO PAYMENT WAS MADE, AND THEREFORE, NO DISALLOWANCE OUGHT TO BE MADE. THE LD.AO OBSERVED THAT EXCEPT A ITA NO.1181 /AHD/2015 3 SUM OF RS.89,000, REST OF THE PAYMENTS WERE ATTRIBU TABLE TO OTHER TWO TRANSPORT COMPANIES, AND WERE DISALLOWED UNDER SECTION 40A(3). THEREFORE, THE RESIDUAL PAYMENT OF RS.89,0 00/- OUT OF THE TOTAL RS.1.46 CRORES HAS BEEN DISALLOWED IN THE HAN DS OF THE ASSESSEE. APPEAL TO THE CIT(A) DID NOT BRING ANY R ELIEF TO THE ASSESSEE. 7. THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT S HRI KUNAL PRASHBHAI BAFNA, PROPRIETOR OF KAPIL ROADLINES AND S MT.PRAVESH BAFNA PROPRIETOR OF BAFNA ROADLINES DISPUTED DISALLOW ANCE IN THEIR HANDS AND THE MATTER TRAVELLED UPTO THE TRIBUNAL IN ITA NO.1179/AHD/2015 AS WELL AS 1180/AHD/2015. THE TRI BUNAL HAS DELETED THE DISALLOWANCE OF ALLEGED RS.1.46 CRORES EXCEPT RS.89,000/-. HE PLACED ON RECORD COPY OF THE TRIBU NALS ORDER IN BOTH THE CASES. THE FINDING OF THE TRIBUNAL IN THE CASE OF BAFNA ROADLINES READS AS UNDER: 5. WE HAVE GONE THROUGH THE RELEVANT RECORD AN IMPUGNED ORDER ASSESSEE IS ENGAGED IN THE TRANSPORT BUSINESS AND GIVING HER REGULAR SERVICES TO M/S. NI RMA LTD. AND ASSESSEE HAS MADE CASH PAYMENT OF RS. 64,64,030 /- TO THE TRANSPORTERS FOR MAKING CASH PAYMENT OF MORE TH AN RS. 20,000/- TO THE OTHER TRANSPORTERS. LD. AR CONTENT ION IS THAT IN TRANSPORT BUSINESS CASH PAYMENT IS VERY MUCH PRE VALENT AS TRUCK DRIVERS OR OWNER INSIST FOR CASH AS THEY N EED THE SAME FOR THEIR ONWARD JOURNEY EXPENDITURE TOWARDS D IESEL, TOLL TAX, TYRE, REPAIR, TA/DA ETC. 6. IN THE PAST SEVERAL TRANSPORT UNITS MADE A REPRESENTATION TO THE GOVERNMENT AND IN FINANCE ACT 2009 GOVERNMENT HAS BROUGHT AN AMENDMENT FOR THE BENEFIT OF TRANSPORTERS W.E.F. 01.10.2009 THAT IN CASE PAYMENT MADE FOR PLYING, HIRING OR LEASING GOODS CARRIERS, THE P ROVISION OF SUB-SECTION (3) AND (3A) SHALL HAVE EFFECT AND WORD S RS. ITA NO.1181 /AHD/2015 4 10,000/- HAS BEEN SUBSTITUTED BY WORD 35,000/- MEAN ING THEREBY THAT IF ANY PAYMENT MADE TO ANY TRANSPORTER FOR PLYING, HIRING OR LEASING GOODS CARRIAGES THAT CASH PAYMENT LIMIT IS INCREASED TO RS. 35,000/-. AS WE CAN SEE FROM THE PAPER BOOK AT ONE GO NO PAYMENT HAS BEEN MADE FOR M ORE THAN 35,000/-. SINCE ABOVE AMENDMENT IS APPLICABLE IN THE CASE OF THE ASSESSEE, WE ALLOW THIS GROUND OF THE A SSESSEE. 8. ON DUE CONSIDERATION OF THE ABOVE FACTS AND CIRC UMSTANCES, I AM OF THE VIEW THAT THE AO SOUGHT TO DISALLOW RS.1. 46 CRORES IN THE HANDS OF THREE PROPRIETORSHIP CONCERNS. HE DIS ALLOWED MAJOR PORTION IN THE HANDS OF TWO PROPRIETORSHIPS. THE R ESIDUAL PAYMENT OF RS.89,000/- HAS BEEN DISALLOWED IN THE HANDS OF THE ASSESSEE. THE DISALLOWANCE OF MAJOR PAYMENTS HAS BEEN DELETED BY THE DIVISION BENCH OF THE ITAT IN THE CASE OF OTHER TWO CONCERNS. THUS, THE ISSUE IN DISPUTE IS SQUARELY COVERED IN F AVOUR OF THE ASSESSEE BY THE DECISION OF THE ITAT IN THE CASE OF OTHER TWO PROPRIETORSHIP CONCERNS. RESPECTFULLY FOLLOWING TH E ORDER OF THE DIVISION BENCH, I ALLOW THIS GROUND OF APPEAL AND D ELETE THE DISALLOWANCE OF RS.89,000/-. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 2 ND APRIL, 2019. SD/- (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 02/04/2019 %& '() *%)$ / COPY OF THE ORDER FORWARDED TO :