Appeal details
Counselvise Citation
[2021] 109 COUNSELVISE.COM (IT) 0764 (ITAT-HYDERABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 8 month(s) 25 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
08-03-2021
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
DB-A
Assessment Year
2014-2015
Appeal Filed On
13-06-2018
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI S.S.GODARA, JUDICIAL MEMBER I.T.A. NO.1272/HYD/2018 ASSESSMENT YEAR: 2014-15 SREE SAI VEERA SERVICE STATION, HYDERABAD [PAN: AATFS1897A] VS INCOME TAX OFFICER, WARD-7(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S. RAMA RAO, AR FOR REVENUE : SHRI SUNIL KUMAR PANDEY, DR DATE OF HEARING : 10-02-2021 DATE OF PRONOUNCEMENT : 08-03-2021 O R D E R PER S.S.GODARA, J.M. : THIS ASSESSEES APPEAL FOR AY.2014-15 ARISES FROM TH E CIT(A)-8, HYDERABADS ORDER DATED 23-03-2018 PASSED IN CASE NO.10318/CIT(A)-8/HYD/2017-18, IN PROCEEDINGS U/S.1 44 OF THE INCOME TAX ACT, 1961 [IN SHORT, THE ACT]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE ASSESSEES HAS RAISED THE FOLLOWING SUBSTANTIVE GROUNDS IN THE INSTANT APPEAL: 1) THE ORDER OF THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.6,19,551/- MADE BY TH E ASSESSING OFFICER ON THE GROUND THAT THERE WAS UNDERSTATEMENT OF SALE; ITA NO. 1272/HYD/2018 :- 2 -: 3) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE CONSIDERED THE FACT THAT BOTH PURCHASES AND SALES O F PETROL AND DIESEL ARE VERIFIABLE AND PROPER RECORD WAS MAINTAINED AND THAT, THEREFORE, NO ADDITION CAN BE MADE ON THIS ACCOUNT; 4) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ADDITIONS OF RS.50,000/- AND RS.62,2 50/- MADE BY THE ASSESSING OFFICER ON THE GROUND THAT IOCL REIMB URSED THE EXPENDITURE INCURRED TOWARDS CCTV AND STAMPING CHAR GES. 5) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE CONSIDERED THE FACT THAT NEITHER SUCH EXPENDITURE W AS INCURRED BY THE APPELLANT NOR THE AMOUNTS WERE RECEIVED BY THE APPE LLANT DURING THE YEAR UNDER CONSIDERATION. 6) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.80,250/- MADE BY THE ASSESSING OFFICER ON THE GROUND THAT THE SAID AMOUNT OF COMMISSION WA S NOT RECORDED IN THE BOOKS OF ACCOUNT WITHOUT CONSIDERING THE FAC T THAT SUCH AMOUNT WAS ALREADY ACCOUNTED FOR IN THE BOOKS OF ACCOUNT O F THE APPELLANT. 7) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) , ERRED IN CONFIRMING ADDITION OF RS.58,254/- ON THE GROUND TH AT NO TAX WAS DEDUCTED AT SOURCE ON THE AMOUNT OF INTEREST PAID T O KOTAK MAHINDRA PRIME LIMITED (NBFC). 8) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING ADDITION OF RS.11,47,844/- MADE BY THE A SSESSING OFFICER BY APPLYING THE PROVISIONS U/S 69 OF THE I.T.ACT. 9) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE SEEN THAT THE SAID AMOUNT WAS RECEIVED AS ADVANCE F ROM CUSTOMERS AND SALES WERE EFFECTED TO THE SAID PARTIES IN THE SUBSEQUENT ASSESSMENT YEAR; 10) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) OUGHT TO HAVE CONSIDERED THE ACCOUNT COPIES OF THE SAID CONCERNS FIELD BEFORE HIM AND ALLOWED THE APPEAL. 3. LEARNED COUNSEL REPRESENTING ASSESSEE IS FAIR ENO UGH IN NOT PRESSING FOR THE ASSESSEES FOURTH TO SEVENTH SUBSTA NTIVE GROUNDS KEEPING IN MIND THE SMALLNESS OF THE SUMS INV OLVED THEREIN WITH A RIDER THAT THE SAME BE TREATED AS PRECEDENT (S). THE REVENUE IS EQUALLY FAIR IN NOT OPPOSING TO THE ABO VE STATED ITA NO. 1272/HYD/2018 :- 3 -: CONDITIONAL CONCESSION. WE THUS DECLINE THE ASSESSEE S FOURTH TO SEVENTH SUBSTANTIVE GROUNDS IN ABOVE TERMS. 4. COMING TO THE ASSESSEES SECOND SUBSTANTIVE GROUND SEEKING TO REVERSE BOTH THE LOWER AUTHORITIES ACTION M AKING ADDITION OF RS.6,19,551/- ALLEGEDLY REPRESENTING UNDERSTATEMENT OF SALES, THE CIT(A)S DETAILED DISCUSSI ON TO THIS EFFECT READS AS UNDER: 3. THE APPELLANT FIRM, A DEALER OF INDIAN OIL CORP ORATION LTD. (IOCL) PRODUCTS SELLING PETROL, DIESEL, LUBRICANTS ETC., F ILED RETURN OF INCOME ADMITTING TOTAL INCOME OF RS. 14,94,070/-. THE AO G AVE A NUMBER OF OPPORTUNITIES TO THE APPELLANT ON VARIOUS DATES AS CONTAINED IN PARA 1 OF THE ASSESSMENT ORDER. SINCE NO RESPONSE WAS RECE IVED FROM THE APPELLANT, THE AO COMPLETED THE ASSESSMENT U/S. 144 OF THE ACT AS UNDER: 3.1 THE AO OBTAINED THE DETAILS OF PETROLEUM PRODUC TS SUPPLIED BY IOCL TO THE APPELLANT, THE HANDLING LOSS ALLOWED FO R DIESEL AND PETROL AND THE MARGIN GIVEN TO THE APPELLANT: OVER THE SAL E OF PETROL AND DIESEL PER KILOLITRE (TERMED AS COMMISSION IN THE A SSESSMENT ORDER) AND WORKED OUT THE GROSS PROFIT ON ACCOUNT OF SALE OF DIESEL AND PETROL (TERMED AS COMMISSION IN THE ASSESSMENT ORDER) AT R S. 1,28,78,023/- AS AGAINST RS.1,22,58,472/- SHOWN BY THE APPELLANT IN THE P&L A/C. THE AO, THEREFORE ADDED RS. 6,19,551/- ON THIS ACCO UNT (PARA 2 TO 7 OF THE ASSESSMENT ORDER). APART FROM THE ABOVE, THE FOLLOWING DISALLOWANCES / ADDITIONS WERE MADE: I) FROM THE INFORMATION RECEIVED FROM IOCL, IT WAS FOUND THAT THE APPELLANT RECEIVED REIMBURSEMENT CHARGES FOR CCTV O F RS. 50,000/- AND STAMPING CHARGES OF RS. 62,250/- TOTALING TO R S.1,12,250/-, WHICH WERE NOT ADMITTED IN THE P&L A/C. AND THEREFO RE ADDED. II) AS PER FORM 26AS, THE APPELLANT WAS IN RECEIPT OF COMMISSION FROM AXIS BANK FOR THE TRANSACTIONS DONE THROUGH PAS MAC HINE OF RS. 80,250/- ON WHICH TDS WAS MADE BUT THESE RECEIPTS W ERE NOT SHOWN IN THE P&L A/C. AND THEREFORE ADDED. III) INTEREST PAYMENT MADE TO M/S.KOTAKMAHINDRA PRI ME LTD. (NBFC) FOR THE PAYMENT OF INTEREST ON THE VEHICLE LOAN AVA ILED OF RS. 58,254/- WAS DISALLOWED U/S. 40(A)(IA) SINCE TDS WAS NOT MAD E. IV) AS PER THE BALANCE SHEET, ADVANCES FROM THE CUS TOMERS OF RS. 11,47,344/- WERE SHOWN. THOUGH THE APPELLANT WAS RE QUESTED TO ITA NO. 1272/HYD/2018 :- 4 -: SUBMIT THE DETAILS AND EVIDENCES FOR THE ADVANCES A ND SUBSEQUENT SALE BILLS, IF ANY, LOR ADJUSTMENT OF SUCH ADVANCES , THE APPELLANT FIRM FAILED TO SUBMIT THE DETAILS/EVIDENCES AND THEREFOR E TILE AO ADDED THE SAME TO THE INCOME RETURNED. 5. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL PLEADINGS AGAINST AND IN SUPPORT OF THE IMPUGNED ADDITI ON. THE ASSESSEES ONLY CASE IS THAT IT DESERVES TO BE ASS ESSED ONLY QUA THE PROFIT ELEMENT OF THE IMPUGNED UNDERSTATEMENT OF SALES AS A CONSEQUENCE TO DISALLOWANCE OF HANDLING L OSS CLAIM OF THE FUEL STOCK. WE FIND NO MERIT IN ASSESSEES INS TANT GRIEVANCE IN ENTIRETY; MORE SO IN VIEW OF THE FACT THA T THE CIT(A) HAS MADE IT CLEAR THAT THE VERY SUM REPRESENTS GROSS PRO FIT ON ACCOUNT OF SALE OF DIESEL AND PETROL ONLY. THE FACT, HOWEVER, ALSO REMAINS THAT SUCH A LOSS TO FUEL STOCK AND MINOR VARIATIONS THEREIN CANNOT BE COMPLETELY RULED OUT ON AC COUNT OF VARIOUS MISCELLANEOUS FACTORS. WE THEREFORE HOLD TH AT A LUMPSUM PROFIT ADDITION OF RS.2,19,551/- ON WHOLESOME BASIS OUT OF THE IMPUGNED SUM WOULD MEET THE ENDS OF JUSTICE W ITH A RIDER THAT THE SAME SHALL NOT BE TREATED AS A PRECEDENT IN ANY OTHER ASSESSMENT YEAR; WHATSOEVER. THE ASSESSEE GETS R ELIEF OF RS.4 LAKHS IN FOREGOING TERMS. NECESSARY COMPUTATION TO FOLLOW AS PER LAW. 6. THIS LEAVES US WITH THE ASSESSEES LAST SUBSTANTIVE GRIEVANCE OF CHALLENGING ADDITION OF RS.11,47,844/-. THE ASSESSING OFFICER AS WELL AS THE CIT(A) HAVE QUOTED ASSESSEES FAILURE IN PLACING THE ADVANCES PAYING CUSTOMERS LIST IN THE LOWER PROCEEDINGS. THE VERY FACTUAL POSITION CONTINUE S BEFORE THE TRIBUNAL AS WELL. THE FACT ALSO REMAINS THAT SUCH A DVANCES IN FUEL RETAIL BUSINESS CANNOT BE ALTOGETHER RULED OUT AS WELL. WE MAKE IT CLEAR THAT THE ASSESSEE IS MERELY SELLING ITS FUEL ITA NO. 1272/HYD/2018 :- 5 -: STOCK ON APPROVED RATES ONLY HARDLY LIVING BEHIND ANY SCOPE OF MISREPRESENTATION IN THE BOOKS OF ACCOUNTS OR STOCK; PER SE. WE THEREFORE HOLD THAT A LUMPSUM ADDITION OF RS.2,47,8 44/- UNDER THIS LAST HEAD WILL MEET THE ENDS OF JUSTICE WITH A RIDER THAT THE SAME SHALL NOT BE TAKEN AS A PRECEDENT IN ANY OTH ER ASSESSMENT YEAR. THE ASSESSEE GETS RELIEF OF RS.9 LAK HS IN FOREGOING TERMS. NO OTHER ARGUMENT HAS BEEN RAISED BEFORE US. 7. THIS ASSESSEES APPEAL IS PARTLY ALLOWED IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH MARCH, 2021 SD/- SD/- ( A. MOHAN ALANKAMONY ) ( S.S. GODAR A ) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 08-03-2021 TNMM ITA NO. 1272/HYD/2018 :- 6 -: COPY TO : 1.SREE SAI VEERA SERVICE STATION, 12-2-729/A/B, RET I BOWLI, TOLI CHOWKI, HYDERABAD. 2.THE INCOME TAX OFFICER, WARD-7(1), HYDERABAD. 3.CIT(APPEALS)-8, HYDERABAD. 4.PR.CIT-3, HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.
