Shri Askokumar S. Bansal, Ahmedabad V. The Pr. CIT-3, Ahmedabad

ITA 1481/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8143 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 25-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SU RENDRA KUMAR
• Assessee Lawyers: KISHOR GOYAL
• Keywords: Assessment record; Prejudicial to interest
• Section: 40A(3); 143(3); 263

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD LOZJH IZNHI DQEKJ DSFM;K] YS[KK LNL; ,OA EGKOHN IZL KN] LOZJH IZNHI DQEKJ DSFM;K] YS[KK LNL; ,OA EGKOHN IZL KN] LOZJH IZNHI DQEKJ DSFM;K] YS[KK LNL; ,OA EGKOHN IZL KN] LOZJH IZNHI DQEKJ DSFM;K] YS[KK LNL; ,OA EGKOHN IZL KN] U;KF;D LNL; DS LE{KA U;KF;D LNL; DS LE{KA U;KF;D LNL; DS LE{KA U;KF;D LNL; DS LE{KA BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO.1481/AHD/2015 ( / ASSESSMENT YEAR : 2010-11) ASHOKKUMAR S. BANSAL, PROP. M/S. NORTH INDIA TRANSPORT COMPANY, SHIVSHAKTI ESTATE, OPP. HOTEL EVERGREEN NAROL, AHMEDABAD 382 405 / VS. PR. COMMISSIONER OF INCOME TAX -3, 4 TH FLOOR, C-WING, PRATYAKSHA KAR BHAVAN, NR. GOVT. PLOYTECHNIC, PANJRAPOLE, AMBAWADI, AHMEDABAD 380 015 ./ ./ PAN/GIR NO. : ACFPB 9624 C ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY : SHRI KISHOR GOYAL, CA REVENUE BY : SHRI SURENDRA KUMAR, CIT-DR / DATE OF HEARING 11/10/2017 !' / DATE OF PRONOUNCEMENT 22/11/2017 #$ / O R D E R PER MAHAVIR PRASAD, JUDICIAL MEMBER : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE OR DER OF THE PR. COMMISSIONER OF INCOME TAX(APPEALS)-3, AHMEDABAD, D ATED 23.03.2015 FOR THE ASSESSMENT YEAR (AY) 2010-11, ON THE FOLLOW ING GROUNDS: I. IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APPELL ANTS CASE, THE ORDER U/S.263, PASSED BY THE HONBLE PR.CIT-3, AHME DABAD, IS BAD IN LAW AND REQUIRES TO BE QUASHED. II. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE AP PELLANTS CASE, THE HONBLE PR.CIT OF INCOME TAX GROSSLY ERRED IN CONSI DERING THE ITA NO.1481/AHD /2015 ASHOKKUMAR S. BANSAL VS. PCIT ASST.YEAR 2010-11. - 2 - ASSESSMENT ORDER 143(3) PASSED BY THE LD.AO TO BE E RRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND HE E RRED IN INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT. III. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE AP PELLANT'S CASE, THE HON'BLE PR. COMMISSIONER OF INCOME TAX GROSSLY ERRE D IN DIRECTING, SET ASIDE FOR BEING MADE DE NOVO ASSESSMENTS BY INV OKING THE PROVISIONS OF SECTION 263. IV. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE AP PELLANT'S CASE, THE HON'BLE PR. COMMISSIONER OF INCOME TAX GROSSLY ERRE D IN INVOKING THE PROVISIONS OF SECTION 263 MERELY BASED ON THE C HANGE OF OPINION ON THE BASIS OF THE OBJECTION RAISED BY THE AUDIT P ARTY. V. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE AP PELLANT'S CASE, THE HON'BLE PR. COMMISSIONER OF INCOME TAX GROSSLY ERRE D IN NOT CONSIDERING THE FACT THAT THE DETENTION CHARGES WER E NOT CHARGED TO THE PROFIT AND LOSS ACCOUNT AND HENCE SEC.40(A)(3A) IS NOT APPLICABLE AND ACCORDINGLY THE APPELLANT WAS NOT LI ABLE TO PAY TAX. HENCE, THERE IS NO IMPACT ON THE TAX LIABILITY AND THE ORDER PASSED BY THE LD. AO CANNOT BE SAID TO BE PREJUDICIAL TO T HE INTEREST OF THE REVENUE. VI. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE AP PELLANT'S CASE, THE HON'BLE PR. COMMISSIONER OF INCOME TAX GROSSLY ERRE D IN NOT CONSIDERING THE FACT THAT SEC 40 (A) (3) IS NOT APP LICABLE WHERE THE INTERMEDIARIES/AGENTS MAKE COLLECTION ON BEHALF OF MORE THAN ONE DRIVER/ OWNER AND ARE EXEMPTED UNDER RULE 6DD(K) OF INCOME TAX RULE. ACCORDINGLY THE APPELLANT WAS NOT LIABLE TO P AY TAX AND HENCE, THERE BEING NO IMPACT ON THE TAX LIABILITY, THE ORD ER PASSED BY THE LD AO CAN NEVER BE SAID TO BE PREJUDICIAL TO THE INTER EST OF THE REVENUE. VII. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE AP PELLANT'S CASE, THE HON'BLE PR. COMMISSIONER OF INCOME TAX GROSSLY ERRE D IN NOT CONSIDERING THE LETTER SUBMITTED AFTER ASSESSMENT O RDER, WHEREAS THE SAME WAS COVERED UNDER THE MEANING OF 'RECORDS' AS DEFINED IN EXPLANATION (B) TO THE SEC. 263 (1) OF THE ACT. VIII. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND /OR WITHDRAW ANY GROUND OR GROUNDS OF APPEAL EITHER BEFORE OR AT THE TIME OF THE HEARING OF THE APPEAL. ITA NO.1481/AHD /2015 ASHOKKUMAR S. BANSAL VS. PCIT ASST.YEAR 2010-11. - 3 - 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- ON PERUSAL OF THE ASSESSMENT RECORDS, IT WAS OBSERV ED THAT THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDE R HAD NOT MADE DISALLOWANCE U/S.40A(3) OF THE ACT ON CASH PAYMENT EXCEEDING ON CASH PAYMENT EXCEEDING RS.35,000/- IN A SINGLE DAY TO A SINGLE PERSON WHICH WAS MADE IN RESPECT OF LORRY HIRE PAYABLE LEDGER A CCOUNT TOTALING TO RS.1,16,500/- (CORRECT FIGURE IS RS.1,06,500/-). DU RING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER RAISE D QUERY AS REGARD TO DISALLOWANCE OF THIS EXPENDITURE. TO THIS, THE ASSE SSEE HAD REPLIED THAT DUE TO SOME TECHNICAL PROBLEM WHILE TAKING PRINT OU T OF COPY OF LORRY HIRE PAYABLE LEDGER ACCOUNT NOT APPEAR. THE ASSESS EE HAD FILED A COPY OF LORRY HIRE PAYABLE LEDGER ACCOUNT, WHICH ACCORDIN G ALL THE DETAILS AVAILABLE. AFTER EXAMINATION THE DETAILS, THE AO DI D NOT DISALLOW THE EXPENDITURE U/S.40A(3) IF THE I.T. ACT AND PASSED T HE ORDER. HOWEVER, IT IS NOTICED FROM THE COPY OF LORRY HIRE PAYABLE LED GER ACCOUNT SUBMITTED ALONGWITH REPLY DATED 06.12.2012 THAT THO UGH THE PAYMENT MADE ON A PARTICULAR DATE MATCHES WITH THE PAYMENT APPEARING IN COPY OF LORRY HIRE PAYABLE LEDGER ACCOUNT FILED ALONGWITH REPLY DATED 01.08.2012, THE NARRATION ABOUT PAYMENT MADE IN RES PECT OF A PARTICULAR CREDIT NOTE DIFFER. THE PAYMENT MADE IN RESPECT OF CREDIT NOTE 17057, 17058 AND 17060 WAS FOR RS.35,500/- ON EACH OCCASIO N AS PER COPY OF LORRY HIRE PAYABLE LEDGER ACCOUNT, SUBMITTED ON 0 1.08.2012, THIS PAYMENT IS APPEARING AT RS.30,500/- IN RESPECT OF A LL THESE THREE CREDIT NOTES, AS PER COPY OF 'LORRY HIRE PAYABLE LEDGER AC COUNT', SUBMITTED ON ITA NO.1481/AHD /2015 ASHOKKUMAR S. BANSAL VS. PCIT ASST.YEAR 2010-11. - 4 - 06.12.2012. THE BALANCE AMOUNT OF RS.5,000/- EACH I S SHOWN AGAINST THREE CREDIT NOTES BEARING NUMBER 17065, 17067 AND 17068 WHICH WERE NOT FINDING MENTION IN COPY OF 'LORRY HIRE PAYABLE LEDGER ACCOUNT', SUBMITTED EARLIER. TO MATCH THE AMOUNT OF PAYMENT O N 27.03.2010, PAYMENT IN RESPECT OF CREDIT NOTES BEARING NUMBER 1 7065, 17067 AND 17068 IS SHOWN AT RS.25,000/- EACH AND PAYMENT IN R ESPECT OF CREDIT NOTE 17057,17058 AND 17060 IS SHOWN AT RS.5,000/- IN COP Y OF 'LORRY HIRE PAYABLE LEDGER ACCOUNT' FILED ON 06.12.2012 WHILE I N COPY OF 'LORRY HIRE PAYABLE LEDGER ACCOUNT' FILED ON 01.08.2012, PAYMEN T IN RESPECT OF EACH OF CREDIT NOTES BEARING NUMBER 17065, 17067 AND 170 68 WAS SHOWN AT RS.30,000/-. IT IS VERY DIFFICULT TO BELIEVE THAT A NY SOFTWARE RELATED PROBLEM CAN INCLUDE OR EXCLUDE ANY CREDIT NOTE AND CHANGE THE AMOUNT OF PAYMENT WHILE TAKING PRINT OUT. THE EXPLANATION OFF ERED BY ASSESSEE WAS NOT BEYOND SUSPICION AND SEEMED TO HAVE BEEN FABRIC ATED. UNDER THESE CIRCUMSTANCES, THE AO OUGHT TO HAVE OBTAINED THE OR IGINAL CREDIT NOTES SO AS TO VERIFY THE AMOUNT OF PAYMENT MODE IN RESPECT OF CREDIT NOTE BEARING NO.17057, 17058, 17060, 17065, 17067 AND 17068 BEFO RE ACCEPTING THE ASSESSEES VERSION. THE AO FAILED TO DO SO AND ACCE PTED THE EXPLANATION WITHOUT MAKING ENQUIRIES. THE ORDER PASSED BY THE A O IS THEREFORE, ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE ON THIS COUNT. 3. IN VIEW OF THE ABOVE FACTS, A SHOW-CAUSE NOTICE U/S.263 WAS ISSUED ON 04.03.2015 ASKING THE ASSESSEE AS TO WHY THE ASS ESSMENT ORDER PASSED BY THE ASSESSING OFFICER BE NOT HELD AS ERRONEOUS A ND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE ASSESSEE WAS, THEREFOR E, ASKED TO SHOW-CAUSE ITA NO.1481/AHD /2015 ASHOKKUMAR S. BANSAL VS. PCIT ASST.YEAR 2010-11. - 5 - AS TO WHY THE SAID ASSESSMENT ORDER SHOULD NOT BE M ODIFIED OR SET-ASIDE TO BE MADE DE-NOVO. 4. IN RESPONSE TO THE NOTICE, ASSESSEE FILED FOLLOW ING REPLY: 3.2.2 THE ASSESSEE HAS STATED THAT THE ASSESSEE IS A TRANSPORTER AND AFTER TAKING BOOKING FROM THE PARTIES, THE ASSESSEE ACQUIRED THE TRUCKS FROM THE OPEN MARKETS THROUGH THE BROKERS AND SEND THE GOODS. THE PAYMENTS ARE NOT MADE TO THE TRUCK DRIVER OR TO THE TRUCK OWNER. THE PAYMENT IS MADE TO THE BROKERS WHO PROVIDED THE TRU CK WHICH WAS ENGAGED FOR THE GOODS. THESE BROKERS PAID TO THE TR UCK OWNERS. THE FREIGHT EXPENDITURE LEDGER ACCOUNT SHOW THAT NO PAY MENT WAS MADE TO THE TRUCK DRIVER OR TRUCK OWNER BY THE ASSESSEE. HE NCE THE PROVISION OF SECTION 40A(3) ARE NOT APPLICABLE. THE ASSESSEE HAS FURTHER STATED THAT THE ISSUE REGARDING CHALLAN NO. 17057, 17058 AND 17 060 SHOWING AMOUNT OF RS.35,500/- EACH WERE ERRONEOUSLY ENTERED BY THE ACCOUNTANT. BUT THEY WERE RECTIFIED BY THE AUDITOR. 5. THE LD. PR. CIT(A) WAS NOT SATISFIED WITH THE CO NTENTION OF THE ASSESSEE. ASSESSMENT ORDER DATED 30.01.2013 WAS HEL D TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND SET ASIDE FOR BEING MADE DE-NOVO AFTER GIVING OPPORTUNITY TO THE ASSESSEE. 6. WE HAVE GONE THROUGH THE IMPUGNED ORDER AND DOCU MENTS FILED BY THE ASSESSEE. LD. AR STATED THAT DURING THE ASSESSM ENT PROCEEDINGS, WE HAVE ALREADY CLARIFIED THAT THE ASSESSEE IS A TRANS PORTER AND AFTER TAKING BOOKING FROM THE CONSIGNOR/CONSIGNEE FOR TRANSPORTA TION ASSESSEE ACQUIRES THE TRUCKS FROM THE OPEN MARKET THROUGH TH E INTERMEDIARIES/BROKERS ON BEHALF OF THE CONSIGNOR/C ONSIGNEE. THIS CLEARLY SHOWS THAT HE WAS ACTING ON AGENT OF THE CONSIGNOR/ CONSIGNEE. NO PAYMENT WAS DIRECTLY MADE TO TRUCK DRIVERS AS THE A SSESSEE WAS NOT ITA NO.1481/AHD /2015 ASHOKKUMAR S. BANSAL VS. PCIT ASST.YEAR 2010-11. - 6 - CONCERNED WITH THE TRUCK OWNERS/TRUCK DRIVERS. MORE OVER, IT IS ALSO TO BE NOTED THAT TRUCK DRIVERS NOT ALWAYS TRUCK OWNERS. T HE TRUCK DRIVER IS AN EMPLOYEE OF THE TRUCK OWNER. 7. SO FAR QUERY IN RESPECT OF PAYMENT OF DETENTION CHARGES IS RS.20,000/- IS CONCERNED. LD. AR STATED THAT DETENT ION HOLDS ONTO THE TRUCK OWNERS TRUCK OUTSIDE THE FACTORY, GODOWN OR DEPOT THE FREE TIME ALLOTTED. DETENTION IS CHARGED WHEN TRUCKS HAVE BEE N LOADED OR UNLOADED BEYOND THE FREE TIME THAT IS ALLOTTED TO THE CONSIG NER OR CONSIGNEE. IF THE TRUCKS ARE NOT LOADED OR UNLOADED DURING THIS FREE TIME, THE TRUCK OWNER WILL CHARGE DETENTION FOR THE ADDITIONAL DAYS THE T RUCK IS IN THE POSSESSION OF THE CONSIGNER OR CONSIGNEE AND FURTHER STATED TH AT NO DETENTION CHARGES HAS BEEN CHARGED TO PROFIT AND LOSS ACCOUNT AND IT IS ONLY A MODE OF COLLECTION BY THE ASSESSEE ON BEHALF OF TRUCK OWNER S/TRUCK DRIVERS FROM THE CONSIGNEE OR CONSIGNOR. ALSO STATED BY THE AR T HAT SINCE THE ASSESSEE NEVER CLAIMED ANY EXPENDITURE/INCOME IN RESPECT OF DETENTION CHARGES IN THE RELEVANT ASSESSMENT YEAR AS WELL AS IN THE EARL IER ASSESSMENT YEAR AND ACCORDINGLY SECTION 40A(3)/40A(3A) IS NOT APPLICABL E. 8. SO FAR QUERY REGARDING PAYMENT IN RESPECT OF FRE IGHT CHARGES MORE THAN RS.35,000/- IN CASH ON AND AFTER 01.10.2009 IS CONCERNED. AR STATED THAT ALL THE PAYMENTS WERE MADE BY THE ASSESSEE TO THE INTERMEDIARIES/BROKERS DURING THE YEAR AND NOTHING WAS PAID TO THE TRUCK DRIVERS/TRUCK OWNERS DIRECTLY. LD. AR STATED THAT W HATEVER QUERY HAS BEEN MADE BY THE LD. PR.CIT(A), SIMILAR QUERY WERE MADE IN THE ITA NO.1481/AHD /2015 ASHOKKUMAR S. BANSAL VS. PCIT ASST.YEAR 2010-11. - 7 - ASSESSMENT ORDER U/S.143(3). LD. AR CITED JUDGMENTS OF APEX COURT IN THE IN SEVERAL MATTERS: CIT VS. MAX INDIA LTD. (2007) 295 ITR 282 (SC): IT WAS HELD THAT THE PHRASE PREJUDICIAL TO THE INTE RESTS OF THE UNDER SECTION 263 HAS TO BE READ IN CONJUNCTION WITH THE EXPRESSION ERRONEOUS ORDER PASSED BY THE ASSESSING EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL INTERESTS OF THE REVENUE. FOR EXAMPLE, WHEN AN INCO ME TAX OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN IT HAS RE SULTED IN LOSS OF REVENUE; OR WHERE TWO VIEWS ARE POSSIBLE AND THE IN COME TAX OFFICER HAS TAKEN ONE VIEW WHICH THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTEREST REVENUE, UNLESS THE VIEW TAKEN BY THE INCOME TAX OFFICER IS UNSUSTAINABLE IN LAW. SIDDH INTERNATIONAL VS. CIT(2009) 28 (II) ITCL 75 ( AHD-TRIB): IT WAS HELD THAT WHERE THE VIEW ADOPTED BY ASSESSI NG OFFICER WAS A POSSIBLE VIEW SAME COULD NOT BE AMENABLE TO REVISIO NAL JURISDICTION ON GROUND THAT IT WAS AN ERRONEOUS AND PRE-JUDICIAL OR DER. CIT V. R.K. CONSTRUCTION CO. (2009) 313 ITR 65 (GUJ ): (2008): IT WAS HELD THAT WHERE PAYMENTS MADE TO SUB-CONTRA CTORS WERE GENUINE AND ASSESSING OFFICER HAD ADOPTED A POSSIBL E VIEW ON THE BASIS OF EVIDENCES FURNISHED BY ASSESSEE COMMISSIONER HAD NO JURISDICTION TO INVOKE SECTION 263 AFTER TAKING A DIFFERENT VIEW. 9. IN OUR CONSIDERED OPINION, LD. AO ALREADY MADE A N ENQUIRY ON WHICH LD. PR.CIT ISSUED A SHOW-CAUSE NOTICE U/S.263 AS ASSESSEE NEVER CLAIMED SUCH EXPENDITURE WHILE COMPUTING INCOME AS DEFINE U/S.40(A)(3). ACCORDINGLY, CLAIM OF THE ASSESSEE CA NNOT BE DISALLOWED U/S.40(A)(3). 10. THEREFORE, IN VIEW OF THE ABOVE OBSERVATION AND JUDICIAL PRECEDENCE, WE QUASH THE ORDER PASSED U/S.263. ITA NO.1481/AHD /2015 ASHOKKUMAR S. BANSAL VS. PCIT ASST.YEAR 2010-11. - 8 - 11. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 22/11/2017 SD/- SD/- IZNHI DQEKJ DSFM;K IZNHI DQEKJ DSFM;K IZNHI DQEKJ DSFM;K IZNHI DQEKJ DSFM;K EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LNL; L; L; L; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; (PRADIP KUMAR KEDIA) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 22/11/2017 PRITI YADAV, SR.PS !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. % &' ( / CONCERNED CIT 4. ( () / THE PR.CIT(A)-3, AHMEDABAD 5. +,- ..&' , &'' , 01#%# / DR, ITAT, AHMEDABAD 6. -23 4 / GUARD FILE. % & / BY ORDER, + . //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 03/11/2017 (DICTATION-PAD 7 PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 16/11/2017 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER