Hardarshan Singh, New Delhi V. DCIT, New Delhi

ITA 1447/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52610 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 04-08-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 22-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Corroborative evidences
• Section: 40A(3); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C DELHI BEFORE SHRI I.P. BANSAL AND SHRI K.G. BANSAL ITA NO. 1447(DEL)/2011 ASSESSMENT YEAR: 2007-08 SHRI HARDARSHAN SINGH, DEP UTY COMMISSIONER OF AC-6, GANGA RAM VATIKA, VS. INCOME-TAX , CIRCLE 26(1), NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. SAMPATH, ADVOC ATE RESPONDENT BY : NONE ORDER PER K.G. BANSAL : AM THE ASSESSEE HAS TAKEN UP TWO GROUNDS IN THE AP PEAL TO THE EFFECT THAT ON THE FACTS AND IN LAW, THE LD. CIT(APPEALS ) ERRED IN UPHOLDING THE ADDITION OF (I) RS. 8,51,43,744/- BY INVOKING TH E PROVISION CONTAINED IN SECTION 40(IA) OF THE INCOME-TAX ACT, 1961; AND (I I) RS. 2,82,913/- U/S 40A(3) OF THE ACT. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSE E FILED HIS RETURN ON 31.10.2007 DECLARING TOTAL INCOME OF RS. 8,57,684 /-. THE RETURN WAS PROCESSED U/S 143(1) ON 21.3.2009 AT THE INCOME RETURNED BY THE ASSESSEE. SUBSEQUENTLY, IT WAS PICKED UP FOR SCRUTINY BY ISSUING NOTICE U/S 143(2) ON 15.09.2008. THE ASSESSEE IS THE PROPRIETOR OF M/S SATGURU CARGO ITA NO. 1447(DEL)/2011 2 MOVERS, WHICH IS UNDERTAKING THE BUSINESS OF TRANS PORTATION OF CARGO. HE IS ALSO ENTERING INTO ARRANGEMENTS FOR TRANSPORTATI ON OF GOODS THROUGH VEHICLES OF OTHER TRANSPORT COMPANIES. THE DISPUT E RELATES TO THE LATTER BUSINESS. THE CASE OF THE ASSESSEE HAD BEEN THAT IN THIS BUSINESS, HE IS NOT CARRYING ON THE WORK OF TRANSPORTATION OF GOODS AND , THEREFORE, THE PROVISION CONTAINED IN SECTION 194 C IS NOT APPLICABLE TO HI M. HOWEVER, THE FINDING OF THE AO IS THAT THE ASSESSEE HAS BEEN CARRYING ON THIS BUSINESS ALSO IN RESPECT OF WHICH HE IS LIABLE TO DEDUCT TAX AT SO URCE FROM THE PAYMENTS MADE TO OTHER TRANSPORTERS. HE HAS NOT DEDUCTE D THE TAX AT SOURCE ON PAYMENT MADE TO SUCH TRANSPORTERS. THEREFORE, TH E EXPENDITURE INCURRED IN THIS BEHALF IS LIABLE TO BE DISALLOWED UNDER THE PROVISION CONTAINED IN SECTION 40(IA). IN ORDER TO ILLUSTRATE HIS POINT , HE DIRECTED THE ASSESSEE TO FILE A REVISED PROFIT AND LOSS ACCOUNT INCLUDI NG THE RECEIPTS AND EXPENDITURE FROM THIS BUSINESS IN THE PROFIT AND LOSS ACCOUNT. SUCH AN ACCOUNT WAS FURNISHED, WHICH SHOWS THAT THE INCOME FROM LORRY BOOKING AMOUNTING TO RS. 8,51,43,744/- AND BOOKING COMMISS ION OF RS. 26,02,032/-. THE EXPENDITURE ON LORRY BOOKING WAS THE SAME A S THE INCOME, I.E., RS. 8,51,43,744/-. THIS AMOUNT OF RS. 8,51,43,744/- WAS INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE. 20% OF THE EXPENDITURE I NCURRED IN CASH, COMPUTED AT RS. 2,82,913/-, WAS ALSO DISALLOWED B Y INVOKING THE PROVISION ITA NO. 1447(DEL)/2011 3 CONTAINED IN SECTION 40A(3). THUS, THE TOTAL INCO ME WAS COMPUTED AT RS. 8,62,84,341/-. 3. THE LD. CIT(A) CONFIRMED THIS ADDITION BY RECORDING THE FOLLOWING FINDINGS:- HOWEVER, ON A CAREFUL CONSIDERATION, I FIND THAT THE CLAIM OF THE APPELLANT CANNOT BE ACCEPTED IN THE ABSENCE OF BASIC INFORMATION AS TO HOW AND IN WHAT MANNER THE CLI ENT COMPANIES ARE MAKING PAYMENT AGAINST TRANSPORTA TION/CARRIES OF GOODS/ARTICLES TO THE APPELLANT. THE APPELLANT HAS ALSO NOT FURNISHED A RECONCILIATION OF THE TOTAL NUMBER OF LORRIES/TRUCKS ARRANGED BY HIM DURING THE FY UND ER CONSIDERATION AND DEDUCTION OF TAX BY THE CLI ENTS WITH REFERENCE TO INDIVIDUAL TRUCK/LORRY OWNERS. THE LD. COUNSEL FOR THE APPELLANT SUBMITS THAT THE BILLS ON BEHAL F OF THE TRUCK OWNERS ARE RAISED BY THE APPELLANT AND, THEREFOR E, THE PAYMENTS ARE ALSO MADE BY THE CLIENTS TO THE APP ELLANT. HOWEVER, WHEN HE WAS ASKED TO SUBMIT THE RECONC ILIATION BETWEEN THE BILLS SUBMITTED AND THE PAYMENTS RE CEIVED BY THE APPELLANT, HE EXPRESSED HIS INABILITY IN DOING SO. ACCORDING TO MY UNDERSTANDING OF ACCOUNTS, THE CLIENT COMPAN IES WILL EITHER MAINTAIN A CONSOLIDATED LEDGER ACCOUNT I N THE NAME OF THE APPELLANT AND ALL DEBITS AND CREDITS WILL BE ROUTED THROUGH THE SAME OR, ALTERNATIVELY, THE CLIENTS WILL MAIN TAIN ACCOUNTS IN THE NAMES OF THE INDIVIDUAL TRUCK/LORRY OWNER S AND SETTLE THEIR INDIVIDUAL ACCOUNTS AFTER DEDUCTION OF TA X ETC. AS TO THE CLAIM OF THE APPELLANT THAT HE HAS ACTED ONLY AS A FACILITATOR, I DO NOT FIND MYSELF IN AGREEMENT WITH THE SAME BECAUSE THE MANNER IN WHICH THE ACCOUNTS HAVE BEEN MAINTAINED BY HIM DO NOT SUPPORT THE CASE OF TH E APPELLANT. OTHERWISE ALSO, IT IS FIRST BETWEEN THE INDIVIDU AL TRUCK OWNERS AND THE APPELLANT THAT A BROAD AGREEMENT/UNDERS TANDING IS REACHED AS TO THE PROVIDING OF TRUCKS/TROLLEYS F OR ITA NO. 1447(DEL)/2011 4 TRANSPORTATION/CARRIES OF GOODS/ARTICLES AND, THER EFORE, THE RELATIONSHIP OF CONTRACTUAL NATURE IS DEVELOPED AT THIS STAGE ONLY. THEREFORE, IN THE ABSENCE OF ANY EVIDENCE TO THE CONTRARY, IT IS DIFFICULT TO ACCEPT THE ASSESSEE S CLAIM THAT HE WAS ACTING ONLY AS A FACILITATOR AND WAS NOT RESPONSIBLE FOR DEDUCTION OF TAX U/S 194C OF THE ACT. DURING THE COURSE OF HEARING, THE LD. COUNSEL FOR THE APPELLANT ALSO ATTEMPTED TO EXPLAIN THAT ALL THE TRUCK OW NERS ARE REGULAR INCOME TAX ASSESSEES AND HAVE PAID TAXE S ON THE TRANSPORTATION RECEIPTS OF RS. 8,51,43,744/- AND, THEREFORE, THERE IS NO LOSS TO THE REVENUE EVEN IN THE ABSE NCE OF DEDUCTION OF TAX BY THE APPELLANT. HOWEVER, ON BE ING ASKED TO FURNISH NECESSARY EVIDENCE SO AS TO SUBSTANTIA TE HIS CLAIM, THE LD. COUNSEL AGAIN EXPRESSED HIS INABILITY T O DO SO. THEREFORE, THIS PLEA OF THE APPELLANT IS ALSO NOT TENABLE IN THE ABSENCE OF SUPPORTING EVIDENCE AND IS BEING REJECTE D. IN VIEW OF THE AFORESAID, I DO NOT FIND ANY INFI RMITY IN THE ACTION OF THE LD. AO AND THE ADDITION OF RS. 8,51, 43,744/- MADE IN TERMS OF SECTION 40(IA) READ WITH SECTION 194C OF THE IT ACT, 1961 IS BEING SUSTAINED. 3.1 HE ALSO CONFIRMED THE ADDITION OF RS. 2,82 ,913/- BY RECORDING THE FOLLOWING FINDINGS:- 5. AS REGARDS GROUND NO. 2 RELATING TO DISALLOW ANCE OF RS. 2,82,913/- MADE IN TERMS OF SECTION 40A(3) OF TH E ACT, NO ARGUMENT/SUBMISSION HAS BEEN MADE ON BEHALF OF THE APPELLANT. THE LD. AO HAS RECORDED A CATEGORICAL FINDING TH AT THE PAYMENT OF RS. 14,14,564/- WAS MADE IN VIOLATION O F SECTION 40A(3) AND NO EXPLANATION IN REGARD TO COMPELLIN G CIRCUMSTANCES LEADING TO PAYMENT IN CASH IN EXCES S OF RS. 20,000/- HAS BEEN FURNISHED. IN VIEW OF THE AFORES AID, THE DISALLOWANCE OF RS. 2,82,913/- IS ALSO BEING ACCOR DINGLY SUSTAINED. ITA NO. 1447(DEL)/2011 5 3.2 AGGRIEVED BY THIS ORDER, THE ASSESSEE IS IN AP PEAL BEFORE US. 4. THE CASE WAS ORIGINALLY FIXED FOR HEARING O N 23.03.2011 AND ADJOURNED TO 02.08.2011. ON THIS DATE, A WRI TTEN APPLICATION WAS RECEIVED SIGNED BY THE LD. CIT, DR SEEKING ADJO URNMENT ON THE GROUND THAT SOME MORE TIME IS REQUIRED. HOWEVER, HE WA S NOT PRESENT TO EXPLAIN THE CONTENTS OF THE APPLICATION. BUT, THE CASE W AS ADJOURNED TO 04.08.2011. HE AGAIN FILED A WRITTEN APPLICATION WITHOUT MA KING PERSONAL APPEARANCE, SEEKING ADJOURNMENT ON THE GROUND THAT SOME TIME IS REQUIRED FOR PREPARATION OF THIS CASE. THE LD. COUNSEL FOR T HE ASSESSEE OPPOSED THE ADJOURNMENT APPLICATION. IT WAS SUBMITTED THAT THE ISSUE INVOLVED IS SIMPLE AND COVERED BY TWO DECISIONS OF HONBLE DELHI HIGH COURT AND PUNJAB & HARYANA HIGH COURT. HUGE DEMAND HAD BE EN RAISED AND THE REVENUE IS PRESSING FOR PAYMENT OF DEMAND. IT W AS FURTHER SUBMITTED THAT IN BOTH THE APPLICATIONS THE LD. CIT, DR HAS M ENTIONED THE SAME REASON. HE HAS ALSO NOT APPEARED IN PERSON TO EXPLAIN THE EXACT REASONS FOR SEEKING THE TIME. AFTER CONSIDERING THE SUBMISS IONS OF THE LD. COUNSEL, THE APPLICATION IS REJECTED, AS THE SAME REASON HAS BEEN ADVANCED TWICE AND THE EXACT REASONS HAVE NOT BEEN EXPLAINED BY W AY OF PERSONAL APPEARANCE. ITA NO. 1447(DEL)/2011 6 5. COMING TO THE MERITS OF THE CASE, IT IS SUBMI TTED THAT THE ASSESSEE OWNS AND OPERATE FOUR TRUCKS FOR TRANSPORTATION OF GOODS. THESE TRUCKS ARE NOT ADEQUATE IN NUMBER TO MEET THE MARKET RE QUIREMENT. THEREFORE, HE ARRANGES TRUCKS OF OTHER TRANSPORT COMPANIES FOR CARRIAGE OF GOODS FOR WHICH HE RECEIVES COMMISSION FROM THEM. THIS COM MISSION INCOME IS CREDITED TO PROFIT AND LOSS ACCOUNT. IN RESPECT OF THIS INCOME, THE ASSESSEE DOES NOT UNDERTAKE THE BUSINESS OF CARRIAGE OF G OODS AND NO WORK IS PERFORMED BY HIM. THE BILLS ARE PREPARED IN A MANNER THAT NET COMMISSION INCOME BECOMES PAYABLE BY THE ACTUAL T RANSPORTER TO THE ASSESSEE. TO SUPPORT THIS CONTENTION, RELIANCE HAS BEEN PLACED ON BILLS PREPARED AND ACCOUNTED FOR IN THE BOOKS. ONE SE T OF BILLS IN RESPECT OF TRANSPORTATION OF GOODS FROM HISSAR TO KURUKSHETR A HAS BEEN EXPLAINED IN DETAILS. IT IS FOUND THAT THE GOODS WERE CARRI ED THROUGH THE TRUCK BELONGING TO DELHI ASSAM ROADWAYS CORPORATION LTD. AND THE CONSIDERATION WAS FIXED AT RS. 70,000/-. ADVAN CE OF RS. 50,000/- WAS RECEIVED FROM THE CUSTOMER, LEAVING A BALANCE OF RS. 20,000/-PAYABLE BY IT. ON THE SAME DATE, I.E., 26.03.2007, THE AMOU NT OF RS. 50,000/- WAS HANDED OVER TO THE DRIVER RAM KISHAN OF TRUCK NO. HR 47E 7121 OF DELHI ASSAM ROADWAYS CORPORATION LTD. AGAIN, ON TH E SAME DAY, A FINAL BILL WAS DRAWN IN WHICH LORRY FREIGHT WAS SHOW N AT RS. 70,000/-. TWO ITA NO. 1447(DEL)/2011 7 AMOUNTS, I.E., RS. 50,000/- AND RS. 2,100/- REPRE SENTING MONEY PAID TO THE DRIVER AND THE COMMISSION OF THE ASSESSEE, AGGRE GATING TO RS. 52,100/-, WERE DEDUCTED SHOWING THE BALANCE AMOUNT PAYABLE AT RS. 17,900/-. ACCORDING TO THE LD. COUNSEL, THE BALANCE AMOU NT WOULD BE PAID BY THE CUSTOMER TO DELHI ASSAM ROADWAYS CORPORATION LTD. ON UNLOADING OF GOODS AT KURUKSHETRA. IT IS ALSO SUBMITTED THAT THE ONLY ACTIVITY CARRIED ON BY THE ASSESSEE WAS TO ACT AS AN INTERMEDIARY BETWEEN THE CUSTOMER AND DELHI ASSAM ROADWAYS CORPORATION LTD., FOR WHICH H E RECEIVED COMMISSION OF RS. 2,100/-. NO OTHER WORK HAS BEE N DONE BY THE ASSESSEE EXCEPT BRINGING THE TWO PARTIES TOGETHER. HE D ID NOT MAKE ANY PAYMENT TO THE AFORESAID ROADWAYS CORPORATION FOR TRANS PORTATION OF GOODS. SUCH PAYMENT WAS MADE BY THE CUSTOMER. THUS, THERE WAS NO LIABILITY ON ASSESSEE FOR DEDUCTION OF TAX AT SOURCE. 5.1 TO SUPPORT THE AFORESAID CONTENTION, RELIANC E HAS BEEN PLACED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. CARGO LINKERS, (2009) 179 TAXMAN 151. THE ASSESSEE HAD BEEN CARRYING ON THE BUSINESS OF CLEARING AND FORWARDING AGENT AND BO OKING CARGO FOR TRANSPORTATION ABROAD FOR VARIOUS AIRLINES OPERATI NG IN INDIA. THE FREIGHT CHARGES WERE COLLECTED FROM THE EXPORTERS, WHO I NTENDED TO EXPORT THE ITA NO. 1447(DEL)/2011 8 GOODS THROUGH A PARTICULAR AIRLINE AND PAID THE A MOUNT TO THE AIRLINE OR ITS GENERAL SALES AGENT. IN LIEU OF SUCH SERVICE, THE ASSESSEE CHARGED COMMISSION FROM THE AIRLINE. THE AO WAS OF THE VIEW THAT THE ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE FROM PAYMENT S MADE TO AIRLINES. THE PLEA OF THE ASSESSEE IN APPEAL WAS THAT IT ONLY RECEIVED COMMISSION FROM THE AIRLINE ON THE CARGO BOOKED ON BEHALF OF THE CLIENTS, WHO WERE EXPORTERS. THEREFORE, IT WAS NOT THE PERSON RE SPONSIBLE FOR MAKING PAYMENT IN TERMS OF SECTION 194C. THE TRIBUNAL R ECORDED THE FINDING THAT THE ASSESSEE IS NOTHING BUT AN INTERMEDIARY BETWEEN EXPORTER AND AIRLINE. IT BOOKS CARGO FOR AND ON BEHALF OF THE E XPORTER AND, THUS, FACILITATES THE CONTRACT FOR CARRYING GOODS. THE P RINCIPAL CONTRACT IS BETWEEN THE EXPORTER AND THE AIRLINE. THE HONBLE COURT AGREED WITH THE FINDING OF THE TRIBUNAL AND MENTIONED THAT THE QUESTION IS ON E OF FACT ABOUT THE NATURE OF CONTRACT BETWEEN THE PARTIES CONCERNED. IT H AS BEEN FOUND AS A MATTER OF FACT THAT THE CONTRACT IS BETWEEN THE EXPOR TER AND THE AIRLINE AND THE ASSESSEE IS MERELY AN INTERMEDIARY. ACCORDINGLY, IT HAS BEEN HELD THAT THE ASSESSEE IS NOT A PERSON RESPONSIBLE FOR DEDUCT ION OF TAX AT SOURCE U/S 194C OF THE ACT. ITA NO. 1447(DEL)/2011 9 5.2 IN THE CASE OF CIT VS. GREWAL BROTHERS, (2 011) 199 TAXMAN 201 (P&H) (MAGAZINE 11), THE FACTS STATED IN THE HE AD NOTE ARE THAT THE ASSESSEE-FIRM WAS ENGAGED IN THE BUSINESS OF T RANSPORTATION OF LIQUEFIED PETROLEUM GAS (LPG FOR SHORT). IT ENTERED INT O CONTRACTS WITH PETROLEUM COMPANIES FOR CARRIAGE OF LPG. THE COMPANIES DEDUCTED TAX AT SOURCE FROM THE PAYMENTS MADE TO IT. THE ASSESSEE PASS ED ON THE TRANSPORTATION WORK TO ITS PARTNERS AND THE PAYMENTS RECEIVED F ROM PETROLEUM COMPANIES WERE PASSED ON TO THEM AFTER DEDUCTING ITS COMM ISSION @ 3% OF THE VALUE OF THE CONTRACT. THE AO HELD THAT THE PARTN ERS WERE SUB-CONTRACTORS AND THE FIRM WAS LIABLE TO DEDUCT TAX AT SOURCE F ROM THE PAYMENTS MADE TO THEM. THE TRIBUNAL HELD THAT PROVISION CONTAINE D IN SECTION 194C WAS NOT APPLICABLE AND, THEREFORE, THE PROVISION CONTAI NED IN SECTION 40(IA) WAS ALSO NOT APPLICABLE. THE HONBLE COURT MENTIONED THAT THE FIRM AND PARTNERS MAY BE SEPARATE ENTITIES FOR INCOME-T AX AND IT MAY BE PERMISSIBLE FOR A FIRM TO GIVE CONTRACT TO ITS PARTNERS AND DEDUCT TAX FROM THE PAYMENTS MADE AS PER PROVISION CONTAINE D IN SECTION 194C, BUT IT WAS TO BE DETERMINED WHETHER THERE WAS ANY SEPA RATE SUB-CONTRACT OR THE FIRM MERELY ACTED AS AN AGENT. THE CASE OF T HE ASSESSEE WAS THAT IT WAS THE PARTNERS WHO WERE EXECUTING TRANSPORTA TION CONTRACT BY USING THEIR TRUCKS AND PAYMENT FROM THE COMPANY WAS ROUTED THROUGH THE FIRM ITA NO. 1447(DEL)/2011 10 AS AGENT. THE LD. CIT(A) AND THE TRIBUNAL AC CEPTED THIS PLEA. ONCE THIS PLEA IS UPHELD IT COULD NOT BE HELD THAT THERE WAS A SEPARATE CONTRACT BETWEEN THE FIRM AND THE PARTNERS. 5.3 WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. WE MAY EXPLAIN THE CONTENTS OF THE BI LL AS MENTIONED ABOVE. THE ASSESSEE RAISED A BILL NO. 3916 DATED 26.0 3.2007 ON THE AFORESAID DELHI ASSAM ROADWAYS AND ASKED IT TO ARRANGE THE TRUCKS OF THE CAPACITY OF 25 TONS ON HIS BEHALF. THE BILL AMOUNT WAS R S. 70,000/- AND RS. 50,000/- WERE PAID TO RAM KISHAN, DRIVER. SE COND BILL OF SAME NUMBER AND DATE SHOWS THE CONTRACT VALUE AT RS. 70,0 00/- AND BALANCE PAYABLE AT RS. 20,000/-. THE CHALLAN NO. 3916 OF THE SA ME DATE SHOWS BALANCE FREIGHT AT RS. 17,900/- AND COMMISSION OF RS. 2,1 00/-. THIS DETAILS SHOW THAT A CONTRACT HAS BEEN ENTERED INTO BETWEEN THE TWO PARTIES FOR A SUM OF RS. 70,000/- AND ADVANCE PAYMENT OF RS. 50,00 0/- HAS BEEN MADE THROUGH THE DRIVER OF THE DELHI ASSAM ROADWAYS. TH E ASSESSEE HAS NOT DONE THE WORK OF ACTUAL TRANSPORTATION OF GOODS. HE ERNED ONLY THE COMMISSION OF RS. 2,100/-. THUS, IT BECOMES CLEA R THAT THE ASSESSEE ACTED AS INTERMEDIARY BETWEEN THE CLIENT AND D ELHI ASSAM ROADWAYS CORPORATION LTD. THE COMPANY CARRIED THE GOODS AND THE ADVANCE ITA NO. 1447(DEL)/2011 11 RECEIVED FROM THE CUSTOMER WAS HANDED OVER TO TH E DRIVER OF THE COMPANY. IN THE FINAL BILL, THE ADVANCE AND THE COMMISSI ON OF THE ASSESSEE WERE DEDUCTED FROM THE BILL AMOUNT OF RS. 70,000/- AN D THE ASSESSEE HAD TO RECEIVE COMMISSION OF RS. 2,100/- FROM THE COMPANY . ACCORDING TO US, IT CANNOT BE SAID THAT ASSESSEE REALLY ENTERED INT O THE CONTRACT OF TRANSPORTATION OF GOODS. HE MERELY ACTED AS AN INTERMEDIARY. THUS, THE FACTS SEEM TO BE SIMILAR TO THE FACTS IN THE CAS E OF GREWAL BROTHERS (SUPRA) ALTHOUGH THE PROVISIONS OF PARTNERSHIP ACT MAKE T HE POSITION OF LAW SOME WHAT MESSY. IN THE CASE OF CARGO LINKERS, THE ASSESSEE ACTED AS AN INTERMEDIARY BETWEEN THE EXPORTS AND THE AIRLIN ES. IT RECEIVED THE AMOUNT FROM THE EXPORTER AND HANDED OVER THE SAME TO THE AIRLINE, WHO PAID COMMISSION. THESE FACTS ARE ALSO NEARER TO THE FACTS OF THE CASE AT HAND. ACCORDINGLY, FOLLOWING THIS DECISION, IT IS HEL D THAT THE ASSESSEE WAS NOT LIABLE TO DEDUCT TAX AT SOURCE. IN VIEW THEREOF , NO ADDITION COULD HAVE BEEN MADE U/S 40(IA). THUS, GROUND NO. 1 IS ALLO WED. 6. IN RESPECT OF GROUND NO. 2, THE FINDING OF THE AO IS THAT THE EXPENSES IN RESPECT OF OWN BOOKING WERE FURNISH ED AND IT WAS FOUND THAT CERTAIN PAYMENTS IN CASH EXCEEDING RS. 20,000/- W ERE MADE. SUCH PAYMENTS AGGREGATED TO RS. 14,14,564/-. THEREFO RE, 20% OF THIS ITA NO. 1447(DEL)/2011 12 EXPENDITURE WAS DISALLOWED. THE ASSESSEE FAILED TO FURNISH ANY FURTHER SUBMISSION IN THIS BEHALF. ACCORDINGLY, THE ACT ION OF THE AO HAS BEEN UPHELD. 6.1 BEFORE US, THE LD. COUNSEL WANTED THE MATTER TO BE RESTORED TO THE FILE OF THE AO FOR MAKING FURTHER VERIFICATION IN THE MATTER FOR WHICH NO PROPER EVIDENCE OR GROUND WAS STATED. WE ARE UNABLE TO ACCEDE TO SUCH REQUEST FOR THE SIMPLE REASON THAT THE CASE IS BEING HEARD AT THE INSISTENCE OF THE LD. COUNSEL, WHICH MEANS THAT HE IS FULLY PREPARED TO ARGUE ALL THE GROUNDS. AT THE SAME TIME, LOOKING TO THE PROVISION OF SECTION 40A(3), WHAT IS TO BE ASCERTAINED IS WHETHER TH E ASSESSEE HAS INCURRED ANY EXPENDITURE IN RESPECT OF WHICH A PAYMENT OR AGGRE GATE OF PAYMENTS MADE IN A DAY, OTHERWISE THAN BY AN ACCOUNT PAYEE C HEQUE DRAWN ON A BANK OR ACCOUNT PAYEE BANK DRAFT, EXCEED(S) RS. 2 0,000/-. SUCH PAYMENTS HAVE BEEN QUANTIFIED BY THE AO IN THE ASSESSMENT ORDER ON THE BASIS OF EVIDENCE FILED BY THE ASSESSEE. SUCH PAYMENTS S HOULD ALSO FIND PLACE IN THE TAX AUDIT REPORT, WHICH IS INCOMPLETE IN THIS RESPECT AS COLUMN 17(B)(B) HAS NOT BEEN FILLED UP. COLUMN 17(B)(A) ONLY MENTIONS THAT A CERTIFICATE HAS BEEN OBTAINED. THE LD. COUNSEL H AS NOT BEEN ABLE TO SHOW IN ANY MANNER THAT THERE IS ANY MISTAKE IN QUANTIFIC ATION MADE BY THE AO. ITA NO. 1447(DEL)/2011 13 THEREFORE, WE ARE OF THE VIEW THAT THE LD. CIT(A PPEALS) RIGHTLY UPHELD THE DISALLOWANCE OF RS. 2,82,913/-. 7. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 2 6 AUGUST, 2011. SD/- SD/- (I.P. BANSAL) (K.G. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE OF ORDER: 26.08.2011. SP SATIA COPY OF THE ORDER FORWARDED TO:- SHRI HARDARSHAN SINGH, AC-6, GANGA RAM RAM VATIKA, NEW DELHI. DCIT, CIRCLE 26(1), NEW DELHI. CIT CIT(APPEALS) THE DR, ITAT, NEW DELHI. ASSISTANT REGISTRAR.