Income Tax Officer,Ward-4(2), Nagpur V. Shri. Omprakash Daulatram Jairath, Nagpur

ITA 14/NAG/2011

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3077 (ITAT-NAGPUR)
• Duration Of Justice: 8 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 31-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR MILIND BHUSARI; K JOHN VIKRAM
• Assessee Lawyers: M MANI
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI P. K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D. T. GARASIA, HONBLE JUDICIAL MEMBER I.T.A. NO.14/NAG/11 ASSESSMENT YEAR: 2006-2007 INCOME TAX OFFICER, VS. SHRI OMPRAKASH DAULATRAM JAIRATH, WARD-4(2), OM TRAILOR TRANSPORT, NAGPUR. 5, SUKHSAGAR COMPLEX, OLD BHANDARA ROAD, WARDHMAN NAGAR, NAGPUR. PAN:ABKPJ2971N (APPELLANT) (RESPONDENT) C.O. NO. 01/NAG/2011 (IN I.T.A. NO.14/NAG/11) ASSESSMENT YEAR: 2006-2007 SHRI OMPRAKASH D AULATRAM JAIRATH, VS. INCOME TAX OFFICER, NAGPUR. WARD-4(2), NAGPUR. (OBJECTOR) (RESPONDENT) REVENUE BY : SHRI K. JOHN VIKRAM AND DR. MILIND BHUSARI, CIT, D. R. ASSESSEE BY : SHRI M. MANI, ADVOCATE DATE OF HEARING :18/10/2012 DATE OF PRONOUNCEMENT :30/11/2012 ORDER PER P. K. BANSAL: THE APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE ARE FILED AGAINST THE ORDER OF CIT(A) DATED 30/11/2010. IN ITS APPEAL, THE REVENUE HAS TAKEN THE FOLLOWING EFFECTIVE GROUNDS: I.T.A. NO. 14/NAG/11 & C.O. NO.01/NAG/2011 2 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A), ERRED IN RESTRICTING THE DISALLOWANCE TO 4% OF THE TOTAL DIESEL EXPENSES AS AGAINST DISALLOWED BY ASSESSING OFFICER @10% AT RS.10,30,900/-. 2. IN CROSS OBJECTION THE ASSESSEE HAS ALSO TAKEN GROUND NO. 1 RELATING TO THE SAME ISSUE REQUESTING THAT THE DISALLOWANCE IN RESPECT OF THE DIESEL EXPENSES BE REDUCED TO 0.5% TO 1%. 3. THE BRIEF FACTS RELATING TO THIS GROUND ARE THAT THE ASSESSEE CLAIMED DIESEL EXPENSES DEDUCTION OUT OF THE PROFIT WORKED OUT BY HIM. THE ASSESSING OFFICER WORKED OUT THAT THE DIESEL EXPENSES INCURRED BY THE ASSESSEE ARE AT 68.2% AND, THEREFORE, THEY ARE ON THE HIGHER SIDE EVEN THOUGH THE ASSESSEE HAS GIVEN THE COMPARATIVE CASE WHERE THE DIESEL EXPENSES WERE 70.48%. THE ASSESSING OFFICER ALSO NOTICED THAT IN THE IMMEDIATELY PRECEDING YEAR THE DIESEL EXPENSES WERE 63.27%. IT WAS ALSO MENTIONED THAT THE DIESEL EXPENSES WERE NOT SUPPORTED BY A SINGLE VOUCHER. THE ASSESSING OFFICER ALSO NOTICED FROM A LETTER RECEIVED FROM SECRETARY, NAGPUR TRUCK OWNERS ASSOCIATION THAT THE DIESEL EXPENSES AMOUNTS TO 60% OF THE TRANSPORTATION EXPENSES. THE ASSESSING OFFICER, THEREFORE, DISALLOWED 10% OF THE DIESEL EXPENSES. 4. WHEN THE MATTER WENT BEFORE THE CIT(A), THE ASSESSING OFFICER, IN THE REMAND REPORT GAVE THE CASE OF M/S ARYAN CARGO WHERE TRIP EXPENSES WERE AT 61.72%. THE CIT(A) AFTER HEARING THE SUBMISSIONS OF THE ASSESSEE REDUCED THE DISALLOWANCE OF THE DIESEL EXPENSES TO 4% BY OBSERVING AS UNDER: 4.2 I HAVE GONE THROUGH THE FACTS OF THE CASE AND SUBMISSIONS MADE BY THE APPELLANT, THE REMAND REPORT AND THE REPLY OF THE APPELLANT TO THE REMAND REPORT. AS POINTED OUT BY THE ASSESSING OFFICER, VOUCHERS AND BILLS IN RESPECT OF THE DIESEL EXPENSES HAVE NOT BEEN FURNISHED. HOWEVER, THE ASSESSEES EXPLANATION REGARDING THE TRADE PRACTICE IN THIS REGARD THAT THE DRIVERS ARE PAID PRIOR TO THE JOURNEY AND TAKE CARE OF OTHER INCIDENTAL EXPENSES 2 I.T.A. NO. 14/NAG/11 & C.O. NO.01/NAG/2011 3 CANNOT BE BRUSHED ASIDE. FURTHER THE APPELLANTS CONTENTION THAT INFORMATION OBTAINED FROM THE SECRETARY, NAGPUR TRUCK OWNERS ASSOCIATION, WHICH WAS NOT PROVIDED TO HIM BUT RELIED UPON BY THE ASSESSING OFFICER IS ALSO TO BE EXAMINED IN THE LIGHT OF THE FACT THAT ASSESSEE IS RUNNING TRAILORS AND NOT MERELY TRUCKS. CONSIDERING THE ENTIRE FACTS OF THE CASE, I FIND THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS EXCESSIVE AS ASSESSING OFFICER HAS NOT CONSIDERED THE OBJECTIONS OF THE ASSESSEE. IN MY CONSIDERED OPINION, THE DISALLOWANCE CAN BE RESTRICTED TO 4% OF THE TOTAL DIESEL EXPENSES. THIS IS KEEPING IN VIEW THE COMPARATIVE CASE OF ARYAN CARGO RELIED UPON BY THE ASSESSING OFFICER IN THE REMAND REPORT AND THE FACT THAT DIESEL EXPENSES AS COMPARED TO EARLIER YEAR IN THE ASSESSEES CASE HAS SHOWN AN INCREASE OF ABOUT 5% FROM THE EARLIER YEAR. ASSESSING OFFICER IS, THEREFORE, DIRECTED TO RESTRICT THIS ALLOWANCE TO 4% OF THE TOTAL DIESEL EXPENSES INCURRED DURING THE YEAR. THIS GROUND IS PARTLY ALLOWED. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. IN OUR OPINION, NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE CIT(A). THE ONUS IS ON THE ASSESSEE TO PROVE THE GENUINENESS OF THE EXPENSES. THIS IS A FACT THAT THE DIESEL EXPENSES INCURRED BY THE ASSESSEE WERE NOT SUPPORTED BY THE VOUCHERS. THIS IS ALSO FACT THAT TRUCKS AND TRAILERS CANNOT RUN WITHOUT INCURRING THE DIESEL EXPENSES. IN THE EARLIER YEAR, THE ASSESSEE HAS SHOWN THE DIESEL EXPENSES AT 63.27%. THE ASSESSEE HAS ALSO SUBMITTED THE COMPARATIVE CASE. THE ASSESSING OFFICER HAS ALSO BROUGHT ON RECORD A LETTER FROM THE SECRETARY, NAGPUR TRUCK OWNERS ASSOCIATION. THE LETTER OF THE TRUCK OWNER ASSOCIATION IS MERELY AN ESTIMATE. UNDER THESE FACTS AND CIRCUMSTANCES, IN OUR OPINION, THE LEARNED CIT(A) HAS RIGHTLY REDUCED THE DISALLOWANCE TO 4%. NO COGENT MATERIAL OR EVIDENCE WAS BROUGHT TO OUR KNOWLEDGE, WHICH MAY COMPEL US TO TAKE VIEW DIFFERENT FROM THE CIT(A). WE, THEREFORE, CONFIRM THE ORDER OF CIT(A) ON THIS ISSUE. THUS, THE APPEAL OF THE REVENUE IS DISMISSED WHILE GROUND NO. 1 OF THE CROSS OBJECTION OF THE ASSESSEE ALSO STANDS DISMISSED. 6. GROUND NO. 2 OF THE CROSS OBJECTION OF THE ASSESSEE RELATES TO THE DISALLOWANCE OF THE DEPRECIATION ON THE TROLLEY TO THE TUNE OF RS.11,250/-. THE 3 I.T.A. NO. 14/NAG/11 & C.O. NO.01/NAG/2011 4 FACTS RELATING TO THIS ISSUE ARE THAT THE ASSESSEE CLAIMED THE DEPRECIATION. WHEN THE ASSESSING OFFICER ASKED FOR THE BILL, THE ASSESSEE COULD NOT PRODUCE ANY PURCHASE BILL AND CONTENDED THAT HE HAD PURCHASED THE TROLLEY FROM SECOND HAND SCRAP MARKET AND ACCORDINGLY THE VOUCHERS WAS PREPARED WHICH IS SIGNED BY BOTH THE PARTIES. 7. WHEN THE MATTER WENT BEFORE THE CIT(A), THE CIT(A) DISALLOWED THE ADDITION BY OBSERVING AS UNDER: 7.0 REGARDING DEPRECIATION ON SECOND HAND TROLLEY, WHICH ASSESSEE STATED TO HAVE PURCHASED FROM THE MARKET, NO BILL WAS MADE AVAILABLE EITHER BEFORE THE ASSESSING OFFICER OR DURING THE APPELLATE PROCEEDINGS. SINCE THERE IS NO EVIDENCE OF ANY PURCHASE HAVING BEEN MADE IN SUPPORT OF THE CLAIM FOR DEPRECIATION, I CONFIRM THE ASSESSING OFFICERS FINDING THAT DEPRECIATION IS DISALLOWABLE. THIS GROUND IS, THEREFORE, DISMISSED. 8. AFTER HEARING THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT NO INTERFERENCE IS CALLED FOR IN THE ORDER OF CIT(A). THE ONUS IS ON THE ASSESSEE TO PROVE THAT HE MADE THE PURCHASE OF TROLLEY. SINCE THE ASSESSEE HAS NOT DISCHARGED HIS ONUS, WE DISMISS THIS GROUND. 9. GROUND NO. 3 HAS BEEN TAKEN BY THE ASSESSEE IN ITS CROSS OBJECTION AS ADDITIONAL GROUND STATING THAT IF THIS TRIBUNAL SUSTAINS THE DIESEL EXPENSES OVER AND ABOVE 4% THEN THIS GROUND BE TAKEN. IN THIS GROUND THE ASSESSEE CLAIMS THAT THE INCOME SHOULD BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 44AE. AT THE TIME OF HEARING, THE LEARNED AR WAS FAIR ENOUGH TO CONCEDE THAT IN CASE THIS TRIBUNAL DISMISSED THE APPEAL OF THE REVENUE, THE GROUND RAISED BY THE ASSESSEE MAY BE TREATED AS NOT PRESSED. 10. SINCE WE HAVE ALREADY DISMISSED THE APPEAL OF THE REV BY CONFIRMING THE DISALLOWANCE OF DIESEL EXPENSES @4%, THIS GROUND, THEREFORE, STANDS DISMISSED AS NOT PRESSED. 4 I.T.A. NO. 14/NAG/11 & C.O. NO.01/NAG/2011 5 11. IN THE RESULT, THE APPEAL OF THE REVENUE AS WELL AS CROSS OBJECTION FILED BY THE ASSESSEE STANDS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 30/11/2012) SD/. SD/. ( D. T. GARASIA ) ( P. K. BANSAL ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:30/11/2012 *CL SINGH COPY FORWARDED TO THE: 1. APPELLANT. 2. RESPONDENT. 3. CIT (A) 4. CIT 5. DR. ASSISTANT REGISTRAR 5