M/s Vivekanand Transport, Bangalore V. ACIT, Mangalore

ITA 1442/BANG/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2292 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 05-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BIJOY KUMAR
• Assessee Lawyers: S VENKATESAN
• Keywords: Corroborative evidences
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N. BARATHVAJA SANKAR, VICE PRESIDENT AND SHRI N.V. VASUDEVAN, JUDICIAL MEMBER ITA NO.1442/BANG/2012 ASSESSMENT YEAR : 2006-07 M/S. VIVEKANAND TRANSPORT, 202, SUPRABHAT, BEJAI KAPIKAD ROAD, MANGALORE. PAN : AACFV 4756C VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(1), MANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI S. VENKATESAN, C.A. RESPONDENT BY : SHRI BIJOY KUMAR PANDA, ADDL. CIT(DR) DATE OF HEARING : 11.06.2013 DATE OF PRONOUNCEMENT : 14.06.2013 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 30.05.2012 OF THE CIT(APPEALS), MYSORE RELATING TO ASSESSMENT YEAR 2006-07. ITA NO.1442/BANG/2012 PAGE 2 OF 4 2. THE ASSESSEE CARRIES ON BUSINESS OF TRANSPORT C ONTRACTOR. FOR THE A.Y. 2006-07, RETURN OF INCOME WAS FILED DECLARING TOTAL INCOME OF RS.27,46,344. IN THE COURSE OF ASSESSMENT PROCEEDI NGS U/S. 143(3) OF THE ACT, THE AO NOTICED THAT THE ASSESSEE HAD SHOWN THE TOTAL RECEIPTS ON ACCOUNT OF LORRY HIRE CHARGES OF RS.1,36,41,147. O N VERIFYING THE VOUCHERS FOR FREIGHT COLLECTION, THE AO FOUND THAT THE FREIG HT COLLECTED BY THE ASSESSEE FOR TRANSPORTATION TO SAME PLACE VARIED ON DIFFERENT OCCASIONS. WHEN THIS POINTED OUT BY THE AO, THE ASSESSEE SUBMI TTED THAT THE FREIGHT CHARGES WOULD DEPEND ON THE DEMAND AND SUPPLY POSIT ION OF THE GOODS AS WELL AS AVAILABILITY OF VEHICLES. THE ASSESSEE ALS O POINTED OUT THAT THE TIME OF LOADING OF THE GOODS AND THE TIME REQUIRED FOR D ELIVERY WERE ALSO RELEVANT FACTORS. THE ASSESSEE ALSO POINTED OUT THAT IF THE RE IS HALF LOAD, FREIGHT CHARGE WILL BE MORE AND WHEN THERE IS A FULL LOAD, THE RATES WILL BE LESS. THE AO DID NOT FIND FAULT WITH THE EXPLANATION OF T HE ASSESSEE, BUT MADE AN OBSERVATION THAT THE CLAIM OF THE ASSESSEE IS NOT S UPPORTED BY ANY EVIDENCE. THEREAFTER, THE AO MADE AN ADHOC ADDITIO N OF RS.2,50,000 TO THE TOTAL INCOME OF THE ASSESSEE BY OBSERVING THAT THE SAID ADDITION IS BEING MADE TO COVER UP POSSIBLE LEAKAGE OF INCOME. 3. ON APPEAL BY THE ASSESSEE, THE CIT(APPEALS) ACCE PTED THE CONTENTION OF THE ASSESSEE THAT THE PLEA OF THE ASS ESSEE WITH REGARD TO DIFFERENCE IN FREIGHT RATES TO THE SAME PLACE AS EX PLAINED BEFORE THE AO AS A PRACTICE PREVALENT IN THE LINE OF THE BUSINESS. HE, HOWEVER, WAS OF THE VIEW THAT THE ADDITION WAS MADE BY THE AO FOR WANT OF SUPPORTING EVIDENCE. ITA NO.1442/BANG/2012 PAGE 3 OF 4 THE CIT(A), HOWEVER, RESTRICTION THE ADDITION MADE BY THE AO FROM RS.2.5 LAKHS TO RS. 1 LAKH. 4. THE ASSESSEE IS AGGRIEVED BY THE ACTION OF THE C IT(A) IN NOT DELETING THE ENTIRE ADDITION AND HAS PREFERRED THE PRESENT A PPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE, WHO BROUGHT TO OUR NOTICE THAT FOR THE A.Y. 2007-08 , NO SUCH ADDITION WAS MADE BY THE AO IN THE ORDER PASSED U/S. 143(3) OF T HE ACT, DESPITE IDENTICAL CIRCUMSTANCES PREVAILING IN THAT ASSESSMENT YEAR AL SO. IT WAS ARGUED THAT THE ADDITION WAS ARBITRARY AND IS NOT BASED ON EVID ENCE. 6. THE LD. DR RELIED ON THE ORDER OF THE CIT(APPEAL S). 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT THE ENTIRE ADDITION OUGHT TO HAVE BEEN DELETED BY THE C IT(APPEALS). ADMITTEDLY, THE PRACTICE PREVAILING IN THE TRADE AS EXPLAINED BY THE ASSESSEE BEFORE THE AO HAS NOT BEEN DISPUTED NOR CA N IT BE DISPUTED. WE ARE OF THE VIEW THAT IT IS NOT POSSIBLE TO BRING IN ANY EVIDENCE BY THE ASSESSEE TO SHOW WHY DIFFERENT RATES WERE CHARGED F OR THE SAME PLACE OF TRANSPORTATION. THERE IS NO EVIDENCE ON RECORD TO SHOW THAT THE PLEA OF THE ASSESSEE IS NOT CORRECT, NOR IS THERE ANY EVIDENCE TO SHOW THAT THE ASSESSEE IN FACT COLLECTED TRANSPORTATION CHARGES M UCH MORE THAN WHAT IS DISCLOSED IN THE BOOKS OF ACCOUNT. IN SUCH CIRCUMS TANCES, WE ARE OF THE ITA NO.1442/BANG/2012 PAGE 4 OF 4 VIEW THAT THE ADDITION MADE BY THE AO WAS WITHOUT A NY BASIS. THE CIT(A) OUGHT TO HAVE DELETED THE ENTIRE ADDITION, RATHER T HAN SUSTAINING A PART OF THE ADDITION. WE THEREFORE ALLOW THE APPEAL OF THE ASSESSEE AND DIRECT THE ADDITION OF RS.1 LAKH SUSTAINED BY THE CIT(A) SHOUL D ALSO BE DELETED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. PRONOUNCED IN THE OPEN COURT ON THIS 14 TH DAY OF JUNE, 2013. SD/- SD/- ( N. BARATHVAJA SANKAR ) ( N.V. VASU DEVAN ) VICE PRESIDENT JUDIC IAL MEMBER BANGALORE, DATED, THE 14 TH JUNE, 2013. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.