ACIT, Thanjavur V. Shri J. Kanagarajan, Tiruvarur

ITA 136/CHNY/2014

• Counselvise Citation: 13621714 RSA 2014
• Duration Of Justice: 1 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 28-10-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 16-01-2014
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: G BASKAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , . ' # , $ #% BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER . /ITA NOS. 136 & 137/MDS/2014 / ASSESSMENT YEAR : 2008-09 THE ASSISTANT COMMISSIONER OF SHRI J. KANAGARAJ AN, INCOME-TAX, PROP. SRI VENKATESWARA TRADERS, CIRCLE-I, V. NO.7, JUBLEE MARKET, THANJAVUR. TIRUVARUR 610 001. PAN AAPLK5645D ( /APPELLANT) RESPONDENT) / APPELLANT BY : SHRI P. RADHAKRISHNAN, JCIT / RESPONDENT BY : SHRI G. BASKAR, ADVOCATE ! / DATE OF HEARING : 28.10.2015 '# ! / DATE OF PRONOUNCEMENT : 06.11.2015 & / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THESE APPEALS BY THE REVENUE ARE DIRECTED AGAINS T THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) DA TED 5.9.2013. - - ITA 136 & 137/14 2 2. FIRST, WE TAKE UP THE APPEAL IN ITA NO.137/MDS/2 014, WHICH IS REGARDING QUANTUM ADDITION. FIRST ISSUE I N THIS APPEAL IS WITH REGARD TO DELETION OF ADDITION OF ` 9 LAKHS OUT OF ` 10 LAKHS MADE BY THE ASSESSING OFFICER TOWARDS NON PRODUCTIO N OF PROPER EVIDENCE SUCH AS LORRY TRANSPORT RECEIPT, RECEIPTS PER TRIP AND LOAD BASIS ETC. THE ASSESSING OFFICER OBSERVED THA T THE ASSESSEE HAS NOT PRODUCED FULL DETAILS OF BILLS AND VOUCHERS IN RESPECT OF LORRY HIRE CHARGES AND OTHER EXPENSES AN D DISALLOWED ` 10 LAKHS. AGAINST THIS, THE ASSESSEE WENT IN APPE AL BEFORE THE COMMISSIONER OF INCOME-TAX(APPEALS), WHO REDUCED ON LY ` 1,00,000/- OUT OF ` 10 LAKHS BY OBSERVING THAT THE ASSESSING OFFICER HAS NOT PIN POINTED THE SPECIFIC DEFECTS AN D ALSO NOT REJECTED THE BOOKS OF ACCOUNT. AGAINST THIS, THE R EVENUE IS IN APPEAL BEFORE US. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. THE ASSESSEE CLAIMED EXTERNAL HIRE CHAR GES OF ` 60,96,100/-, IOC HIRE CHARGES OF 23,58,870/- AND LO CAL HIRE CHARGES OF ` 64,28,950/- AS WELL AS INCURRED OTHER EXPENDITURES WHICH ARE NOT SUPPORTED BY PROPER VOUCHERS AND BILL S. THERE IS EVERY CHANCE OF INCURRING THE EXPENSES BY WAY OF SE LF-MADE - - ITA 136 & 137/14 3 VOUCHERS AND IT REQUIRES DISALLOWANCES. CONSIDERIN G THE NATURE OF EXPENSES, WE ARE INCLINED TO DISALLOW 5% OF THE ABOVE PAYMENTS WHICH MADE BY CASH AND CHEQUE CANNOT BE IN CLUDED FOR DISALLOWANCE. THIS GROUND IS PARTLY ALLOWED. 4. NEXT GROUND IS WITH REGARD TO DELETION OF ADDITI ON MADE U/S.40(A)(IA) OF THE ACT, TO THE TUNE OF ` 14,23,336/- ON THE REASON THAT THE HAS NOT DEDUCTED TDS ON HIRE CHARGES. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. THOUGH THE COMMISSIONER OF INCOME-TAX(A PPEALS) HAS GIVEN RELIEF TO THE ASSESSEE ON TWO COUNTS, ONE IS ON THE REASON THAT THE ASSESSEE HAS ALREADY PAID HIRE CHA RGES AND THE PROVISIONS OF SEC.40(A)(IA) IS NOT APPLICABLE IN V IEW OF THE DECISION OF THE SPECIAL BENCH OF THIS TRIBUNAL IN T HE CASE OF MERILYN SHIPPING AND TRANSPORTS V. ACIT (136 ITD 23 ) (VISAKHAPATNAM). HE HAS ALSO GIVEN DEDUCTION U/S.1 94C OF THE ACT AS NOT APPLICABLE TO HIRE CHARGES PAYMENT. HOW EVER, BOTH THE PARTIES ARGUED ONLY ON THE ISSUE OF APPLICABILI TY OF SECF.40(A)(IA) OF THE ACT, IN THE EVENT OF PAYMENT OF HIRE CHARGES BY THE ASSESSEE. CONSIDERING THIS, WE ARE INCLINED TO REMIT THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER FOR EXAMINING, - - ITA 136 & 137/14 4 WHETHER HIRE CHARGES WAS ALREADY PAID OR OUTSTANDIN G AT THE END OF THE CLOSE OF THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR IN THE LIGHT OF THE DECISION OF THIS TRIBUNAL IN TH E CASE OF N. PALANIVELU V. ITO IN ITA NO.618/MDS/2015 DATED 29.4 .2015, WHEREIN IT WAS HELD AS UNDER: 3. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MERILYN SHIPPING AND TRANSPORTS VS. ACIT (2012) 136 ITD 23 (VISAKHAPATNAM) AND JUDGMENT OF GUJARAT HIGH COURT IN THE CASE OF CIT VS. M/S. VECTOR SHIPPING SERVICE S (P) LTD IN ITA NO.122 OF 2013 DATED 09.7.2013 HELD THAT SEC 40(A)(IA) IS NOT APPLICABLE WHEN THERE IS NO OUTSTANDING BALANCE AT THE END OF THE CLOSE OF THE YEAR RELEVANT TO THE ASSESSMENT YEA IN RESPECT OF THESE PAYMENT. HOWEVER, THE ASSESSEE HAS NOT BROUGHT ON RECORD, THE DETAILS OF OUTSTANDING EXPEN SES OR SCHEDULE OF SUNDRY CREDITORS SHOWING WHETHER THE IMPUGNED AMOUNT IS OUTSTANDING AT THE END OF THE CLOSE OF THE PREVIOUS YEAR RELEVANT TO THE ASSESSME NT YEAR EITHER IN THE NAME OF THE PARTY OR OUTSTANDING EXPENSES. HENCE, IN THE INTEREST OF JUSTICE, WE ARE REMITTING THE ISSUE BACK TO THE FILE OF THE ASSESSI NG OFFICER WITH DIRECTION TO VERIFY THE CLAIM OF THE ASSESSEE AND THE ASSESSEE SHALL PLACE NECESSARY EVIDENCE IN SUPPORT OF HIS CLAIM. 4. FURTHER, WE MAKE IT CLEAR THAT IF THE IMPUGNED AMOUNT IS NOT OUTSTANDING AT THE END OF THE CLOSE O F THE ASSESSMENT YEAR IN RESPECT OF THE EXPENSES EITH ER AS OUTSTANDING EXPENSES OR AS SUNDRY CREDITORS, THI S AMOUNT CANNOT BE DISALLOWED. THIS GROUND IS REMITTE D BACK TO THE ASSESSING OFFICER FOR FRESH CONSIDERATI ON. - - ITA 136 & 137/14 5 THEREFORE, WE REMIT THIS ISSUE TO THE FILE OF THE A SSESSING OFFICER FOR CONSIDERATION. ACCORDINGLY, THIS APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 6. NOW, WE TAKE UP THE APPEAL IN ITA NO.136/MDS/201 5. THE ISSUE IN THIS APPEAL IS REGARDING LEVY OF PENAL TY U/S.271(1)(C) OF THE ACT IN RESPECT OF ADDITION MADE TOWARDS NON- PRODUCTION OF VOUCHERS AND BILLS TO THE EXTENT OF ` 10 LAKHS AND ADDITION OF ` 14,23,336/- MADE U/S.40(A)(IA) OF THE ACT AND WORKE D OUT THE PENALTY OF ` 7,30,000/-. SINCE, THE COMMISSIONER OF INCOME- TAX(APPEALS) DELETED THE PENALTY ON THE REASON THAT THERE WAS NO SUSTENANCE OF QUANTUM ADDITION IN THIS CASE. AGAIN ST THIS, THE REVENUE IS IN APPEAL BEFORE US. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. WE FIND THAT THE ADDITION OF ` 10 LAKHS WAS MADE BY THE ASSESSING OFFICER DUE TO DEFICIENCY IN VOUCHERS , WHICH IS REDUCED BY US IN PARA NO.3 OF THIS ORDER. THIS IS O NLY ESTIMATED BASIS. THERE IS NO CONCLUSIVE PROOF THAT THE ASSES SEE HAS CONCEALED HIS INCOME OR FURNISHED INACCURATE PARTIC ULARS OF HIS INCOME. BEING SO, LEVY OF PENALTY U/S.271(1)(C) OF THE ACT IS NOT JUSTIFIED IN VIEW OF THE ESTIMATED ADDITION IN THIS CASE. HENCE, WE - - ITA 136 & 137/14 6 ARE INCLINED TO DELETE THE PENALTY. REGARDING NON DEDUCTION OF TDS U/S.40(A)(IA), THIS ISSUE WAS REMITTED IN QUANT UM APPEAL, PENALTY CANNOT BE LEVIED AT THIS STAGE. ACCORDINGL Y, THIS APPEAL OF THE REVENUE IS DISMISSED. 8. IN THE RESULT, THE REVENUES APPEAL IN ITA NO.137/MDS/2014 IS PARTLY ALLOWED FOR STATISTICAL P URPOSES AND ITA NO.136/MDS/2014 IS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 06 TH OF NOV., 2015 AT CHENNAI. SD/- SD/- ( $% & ) ( ' ( ) $ ) *%+,-,./01,2345,.62,+778,293 : ;< /JUDICIAL MEMBER ! ;<=>>70.?,.?@A1BA2 ': /CHENNAI, C; /DATED, THE 06 TH NOV., 2015. MPO* ;D EFGF /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. H3 /CIT(A) 4. H /CIT 5. FIJ K /DR 6. JLM /GF.