Shri Dashrathbhai Kanjibhai Chaudhary, V. The Income tax Officer,Ward-1, Palanpur

ITA 1296/AHD/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60220 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 12-03-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 22-04-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR SRDR

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, A BENCH . .. . . .. . , !'# !'# !'# !'#, , , , $ $ $ $ %&'( %&'( %&'( %&'(, , , , )* + ) )* + ) )* + ) )* + ) # # # # BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO.1296/AHD/2009 [ASSTT.YEAR : 2006-2007] DASHRATHBHAI KANJIBHAI CHAUDHARY C/O. HASU CHEMIST NR. KIRTI STAMBH, PALANPUR, DIST: BANASKANTHA. PAN : ADQPC 3197 D /VS. ITO, WARD-I PALANPUR. ( (( (-. -. -. -. / APPELLANT) ( (( (/0-. /0-. /0-. /0-. / RESPONDENT) 1& 2 3 )/ ASSESSEE BY : SHRI SAKAR SHARMA + 2 3 )/ REVENUE BY : SHRI RAHUL KUMAR, SR.DR 5 2 &(*/ DATE OF HEARING : 12 TH MARCH, 2012 678 2 &(*/ DATE OF PRONOUNCEMENT : 04-04-2012 )9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORDER OF THE COMMISSION ER OF INCOME TAX (APPEALS)-XV, AHMEDABAD DATED 23.02.2009 FOR ASSESS MENT YEAR 2006-2007. ITA NO.1296/AHD/2009 -2- 2. THE GROUNDS NOS.1, 2 AND 4 RAISED IN THIS ASSESS EE ARE AS UNDER: 1. THE LD.CIT(A) ERRED ON FACTS AND IN LAW IN CONF IRMING ADDITION OF RS.14,95,321/- BY DISALLOWING PART OF T RUCK RENT EXPENSES. 2. THE LD.CIT(A) ERRED ON FACTS AND IN LAW IN FURTH ER ENHANCING DISALLOWANCE OF TRUCK RENT EXPENSES BY RS .8,82,746/- 4. THE LD.CIT(A) ERRED ON FACTS AND IN LAW IN CONFI RMING ADDITION OF RS.15,57,281/- BY DISALLOWING PART OF D IESEL EXPENSES CLAIMED. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE AO HAS DISALLOWED RS.14,95,321/- OUT OF TOTAL TRUCK RENT E XPENSES OF RS.34,20,918/-. HE SUBMITTED THAT THE CIT(A) HAS W ENT A STEP FURTHER AND MADE AN ENHANCEMENT OF DISALLOWANCE BY ANOTHER AMOUNT OF RS.8,82,746/-. HE SUBMITTED THAT THE ASSESSEE HAS DECLARED TOTAL RECEIPTS FROM ITS TRUCK PLYING BUSINESS OF RS.91,89 ,752/- WHICH COULD NOT HAVE BEEN EARNED WITHOUT SPENDING EXPENSES UNDE R THE HEAD TRUCK HIRE CHARGES. HE SUBMITTED THAT THE ASSESS EE OWNED ONLY SIX TRUCKS AND IT HAS TAKEN ON HIRE TEN TRUCKS DURING T HE YEAR FROM OTHERS FOR ITS BUSINESS PURPOSE. HE SUBMITTED THAT EVEN I F THERE WERE CERTAIN DEFECTS IN THE ACCOUNTS MAINTAINED BY THE ASSESSEE, AT THE MOST, THE DEPARTMENT SHOULD HAVE ESTIMATED THE INCOME AT REAS ONABLE FIGURE IN THE LIGHT OF PROVISIONS OF SECTION 44AE OF THE ACT PRESCRIBING INCOME OF RS.42,000/- PER ANNUM PER TRUCK. THE LEARNED DR HAS OPPOSED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE . HE SUBMITTED THAT IT IS NOT A CASE OF THE AO WHERE THE PROVISION OF S ECTION 44AE OF THE ACT WAS APPLICABLE. HE SUBMITTED THAT THE NUMBER O F DEFECTS HAVE BEEN POINTED OUT BY THE AO AND THE CIT(A) IN THE AC COUNTS BOOKS AND SUPPORTING VOUCHERS OF THE ASSESSEE AND IT IS A CAS E OF MANIPULATION IN ITA NO.1296/AHD/2009 -3- ACCOUNTS ON THE PART OF THE ASSESSEE TO CLAIM MORE OUTGOINGS IN ORDER TO REDUCE ITS TAXABLE INCOME. HE REFERRED TO RELEV ANT PARAS OF THE ASSESSMENT ORDER IN SUPPORT OF HIS ARGUMENTS. HE H AS RELIED ON THE ORDERS OF THE AO AND THE CIT(A). 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND HAVE PE RUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THER E WERE NUMBER OF DEFECTS IN THE ACCOUNT BOOKS AND SUPPORTING VOUCHER S MAINTAINED BY THE ASSESSEE. ACCORDINGLY, THE ACCOUNT BOOKS OF TH E ASSESSEE DID NOT REFLECT THE TRUE AND CORRECT STATE OF AFFAIRS OF TH E ASSESSEE AND ARE LIABLE TO BE REJECTED. HOWEVER, THE APPROACH OF TH E DEPARTMENT IN DISALLOWING THE SUM OF RS.14,95,931/- AND FURTHER S UM OF RS.8,82,746/- OUT OF TOTAL EXPENSES ON ACCOUNT OF T RUCK RENT OF RS.34,20,918/- IS NOT SUSTAINABLE. WE FIND THAT TH E ASSESSEE HAS DECLARED TOTAL RECEIPTS OF RS.91,89,752/- FROM PLYI NG OF TRUCKS AND FACT THAT THE ASSESSEE HAS HIRED TEN TRUCKS FROM OUTSIDE RS DURING THE YEAR IS NOT IN DISPUTE. ACCORDINGLY, THE DISALLOWANCE MAD E BY THE DEPARTMENT UNDER THE HEAD TRUCK RENT EXPENSES AMO UNTING TO OVER RS.23 LAKHS OUT OF TOTAL EXPENSES OF RS.34,20,918/- UNDER THE HEAD TRUCK RENT EXPENSES IS EXCESSIVE AND FAR FROM GRO UND REALITY. IN THESE FACTS OF THE CASE, WE HOLD THAT IT SHALL BE R EASONABLE IN THE FACTS OF THE CASE TO ESTIMATE THE INCOME OF THE ASSESSEE DURING THE YEAR FROM PLYING OF 16 TRUCKS INCLUDING 10 TRUCKS TAKEN ON HI RE FROM OUTSIDERS, BY APPLYING RATE OF RS.60,000/- PER ANNUM PER TRUCK WHICH SHALL BE MEET ENDS OF JUSTICE FOR BOTH THE SIDES. ACCORDING LY, THE INCOME OF THE ASSESSEE FROM PLYING OF 16 TRUCKS IS ESTIMATED AT RS.9,60,000/- FOR THE RELEVANT YEAR. IT SHALL COVER THE DISALLOWANCE MADE UNDER THE HEAD DIESEL EXPENSES FOR VARIOUS DEFECTS AND NO SEPARA TE ADDITION UNDER ITA NO.1296/AHD/2009 -4- THE HEAD DIESEL EXPENSES BE MADE. ACCORDINGLY, G ROUND NOS.1, 2 AND 4 OF THE ASSESSEE ARE PARTLY ALLOWED. 5. THE GROUND NO.3 OF THE ASSESSEES APPEAL READS A S UNDER: 3. THE LD.CIT(A) ERRED ON FACTS AND IN LAW IN CONF IRMING ADDITION OF RS.7,43,385/- U/S.40(A)(IA) OF THE ACT. 6. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAS MADE PAYMENT TO FOUR PARTIES, OUT OF WHICH TWO PARTIES VIZ. SHRI CHANDUBHAI B. BHOI AND SHRI KESHARBHAI G. CHAUDHARY FURNISHED FORM NO.15-I WHICH WAS REJECTED BY THE CIT(A) BY OB SERVING THE SAME AS AFTER THOUGHT. THE LEARNED DR HAS RELIED ON THE ORDER OF THE AO AND THE CIT(A). 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND HAVE GO NE THROUGH THE ORDERS OF THE AO AND THE CIT(A). REGARDING ISS UE OF NON-TDS WITH REGARD TO THESE PARTIES, WE FIND THAT THE FACT THAT THE ASSESSEE HAS FURNISHED FORM NO.15-I FOR NON-TDS IS NOT IN DISPUT E. WE ARE UNABLE TO SUSTAIN THE REASONING OF THE LEARNED CIT(A) THAT THESE WERE AFTER THOUGHT ON THE PART OF THE ASSESSEE, ACCORDINGLY, T HE ADDITION MADE WITH REGARD TO THESE TWO PARTIES IS DELETED. REGAR DING THE PAYMENT OF RS.68,272/-, THE ASSESSEE HAS NOT DEDUCTED TDS AND ACCORDINGLY, THE DISALLOWANCE MADE UNDER SECTION 40A(IA) OF THE ACT IS CONFIRMED. REGARDING NON-TDS PAYMENT OF RS.1,48,359/- TO GORDH ANBHAI B. BHOI, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMI TTED THAT EACH TRIP WAS LESS THAN RS.20,000/- AND THEREFORE THE ISSUE I S COVERED BY THE CIRCULAR OF THE CBDT DATED 8.8.1995. THE LEARNED D R RELIED ON THE ORDERS OF THE AO AND THE CIT(A). WE HAVE CONSIDER ED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND TH E CIT(A). IN ITA NO.1296/AHD/2009 -5- VIEW OF THE FACT THAT THE ISSUE IS COVERED IN FAVOU R OF THE ASSESSEE WITH THE CIRCULAR OF THE CBDT CITED SUPRA AND SINCE EACH TRIP IS STATED TO BE LESS THAN RS.20,000/-, WE HOLD THAT NO ADDITION WIT H REGARD TO THIS PARTY IS CALLED FOR. ACCORDINGLY, THE GROUND NO.3 OF THE ASSESSEES APPEAL IS PARTLY ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !'# !'# !'# !'# /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD