M/s. M.T. Automobiles, Burdwan V. ITO, Ward - 1(3), Durgapur, Durgapur

ITA 152/KOL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2459 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2010
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 05-05-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 22-01-2010
• Court: TRIBUNAL
• Department Lawyers: SRI P K MISHRA
• Assessee Lawyers: ARVIND AGARWAL
• Keywords: Business income; Depreciation

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA ( (( ( ) )) ) . .. . . . . . , ,, , ! ! ! ! '#$ '#$ '#$ '#$ . .. .% %% % . . . . &' &' &' &', , , , () () () () [BEFORE HONBLE SHRI G. D. AGRAWAL, VP & HONBLE SR I D. K. TYAGI, JM] $* $* $* $* / ITA NO. 152 /KOL/2010 +, #-. +, #-. +, #-. +, #-./ // / ASSESSMENT YEAR : 2006-07 M/S. M. T. AUTOMOBILES -VS- INCOME-TAX OFFICER, WD-1(3), KOLKATA. (PA NO. AAFFM 0957 R) (01 / APPELLANT ) (2&01/ RESPONDENT ) FOR THE APPELLANT: / SHRI ARVIND AGARWAL FOR THE RESPONDENT: / SHRI SRI P. K. MISHRA (%3 / ORDER PER D. K. TYAGI, JM ( . . . . % %% % . . . . &' &' &' &', () ) THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A), DURGAPUR DATED 27.10.2009 FOR THE ASSESSME NT YEARS 2006-07 ON THE FOLLOWING GROUNDS OF APPEAL : 1 A). FOR THAT, IN VIEW OF FACTS AND CIRCUMSTANCES OF THE CASE, LD. C.I.T.(A) ERRED ON FACTS AS WELL AS IN LAW IN SUSTAINING AN ADDITION O F RS. 2,07,382/- E.G., 50% OUT OF TOTAL ADDITION OF RS. 4,14,765/- MADE BY LD. A.O. ON ACCO UNT OF ALLEGED UNDISCLOSED SALES OF PETROLEUM, DIESEL AND EXTRA MADE ETC. 1 B). FOR THAT, WITHOUT PREJUDICE TO THE ABOVE, LD. CIT(A) ERRED IN NOT CONSIDERING CERTIFICATE ISSUED UNDER MEMO NO. DGP/R/DEALER/MT A UTO ISSUED BY CHIEF DIVISIONAL RETAIL SALES MANAGER, IOC LTD., AUDITORS CERTIFICA TE AND OTHER MATERIALS REGARDING HANDLING LOSS ETC. BROUGHT ON RECORD BY THE APPELLA NT. 1 C). FOR THAT WITHOUT PREJUDICE TO THE ABOVE, LD. CIT(A) ERRED IN SUSTAINING PART ADDITION OF RS. 2,07,382/- AND THE LD. A.O. FAILED TO BRING ANY MATERIAL EVIDENCE REGARDING ALLEGED UNDISCLOSED SALES ON RECORD. 2 A). FOR THAT, IN VIEW OF THE FACTS AND CIRCUMSTAN CES OF THE CASE, LD. CIT(A) ERRED ON FACTS IN NOT CONSIDERING THE SUBMISSION OF THE APPE LLANT MADE WITH REGARD TO DISALLOWANCE OF RS. 65,559/- OUT OF INTEREST AMOUNT ING TO RS. 4,47,450/- PAID TO A PARTNER OF THE FIRM. 2 B). FOR THAT, WITHOUT PREJUDICE TO THE ABOVE, LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 65,559/- AS MADE BY THE A.O. 2 3. FOR THAT, IN VIEW OF THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. CIT(A) ERRED IN CONFIRMING DISALLOWANCE OF RS. 11,110/- ON ACCOUNT OF DEPRECIATION. 4). FOR THAT, ORDER OF LD. CIT(A) IS OTHERWISE BAD ON FACTS AS WELL AS IN LAW. 5). FOR THAT, THE APPELLANT CRAVES LEAVE TO ADDUCE ADDITIONAL GROUNDS AND / OR CHANGE OR AMEND ANY GROUNDS ALREADY ADDED AT THE TIME OF HEAR ING. 2. AT THE TIME OF HEARING BEFORE US THE LD. COUNSEL FOR THE ASSESSEE ONLY PRESSED GROUND NO. 1. SINCE THE OTHER GROUNDS AS SET OUT AB OVE WERE NOT PRESSED BY THE LD. COUNSEL, THE SAME ARE DISMISSED BEING NOT PRESSED. 3. GROUND NO. 1 RELATES TO SUSTAINING AN ADDITION O F RS.2,07,382/- I.E. 50% OUT OF TOTAL ADDITION OF RS.4,14,765/- ON ACCOUNT OF UNDIS CLOSED SALE OF PETROL, DIESEL AND XTRAMILE. BRIEFLY STATED FACTS OF THE CASE AS OBSER VED BY THE AO ARE THAT DURING THE ASSESSMENT PROCEEDINGS, THE AO ASKED THE ASSESSEE F OR QUANTITATIVE DETAILS AS WELL AS PHASE WISE SALE PRICE OF THE PRODUCTS. ON THE BASIS OF THESE DETAILS AND THE DETAILED CONTAINED IN THE AUDIT REPORT, THE AO WORKED OUT TH E SALE TO BE RS.4,97,35,714/- WHEREAS SALE CREDITED IN THE P & L ACCOUNT WAS RS.4 ,93,20,949/- ONLY. THE ASSESSEE WAS ASKED TO SUBMIT ITS EXPLANATION IN THE MATTER. IN REPLY, THE ASSESSEE INFORMED THAT THE QUANTITATIVE PHASE WISE DETAIL SUBMITTED EARLIE R WERE NOT ACCURATE. A NEW QUANTITATIVE PHASE WISE DETAILED TABLE WAS SUBMITTE D ALONG WITH PHOTO COPY OF THE STOCK REGISTER. THE ASSESSEE ALSO CLAIMED HANDLING LOSS O N THE THREE PRODUCTS WHICH WAS NEITHER MENTIONED IN THE AUDIT REPORT NOR INFORMED EARLIER. THE ASSESSEE ALSO INFORMED THAT 5120 LITERS OF XTRAMILE DIESEL WAS SOLD TO INS TITUTIONAL BUYERS AT THE LOWER RATE OF HSD. HOWEVER, THERE WAS NO RECIPROCAL ADJUSTMENT IN THE ACCOUNT OF XTRAMILE ON THIS ACCOUNT. THE A.O. THEN PREPARED A TABLE FROM THE MO NTHLY SALES REGISTER AND THEN COMPARED THE FIGURES TO THE FIGURES GIVEN IN THE AU DIT REPORT. THE A.O. ALSO POINTED OUT A DISCREPANCY FOUND FROM A COMPARISON OF THE STOCK REGISTER WITH THE LEDGER COPY SENT BY IOC. IT WAS FOUND THAT IN THE CASE OF HSD, 8,000 LITERS WAS ENTERED IN THE STOCK REGISTER WHEREAS THE INDIAN OIL CORPORATION IOC REP ORTED SENDING OF 12000 LITERS ON THAT DAY. THE A.O. ALSO OBSERVED THAT SIMILAR DISCREPANC Y WAS FOUND IN THE CASE OF HANDLING LOSS. INITIALLY, WHEN THE DETAILS WERE SUBMITTED TH ERE WAS NO CLAIM OF HANDLING LOSS. THERE WAS NO SUCH CLAIM IN THE AUDIT REPORT ALSO. T HE A.O. WAS OF THE OPINION THAT THE CLAIM OF HANDLING LOSS WAS AN AFTERTHOUGHT IN ORDER TO EXPLAIN THE DISCREPANCIES FOUND IN 3 THE FIGURES SUBMITTED BY THE ASSESSEE. HE ALSO OBSE RVED THAT THE PRODUCT WISE BREAK UP FURNISHED LATER TO SUBSTANTIATE THE TOTAL SALES FIG URE OF THE P &LI A/C. WAS INCONSISTENT AS CERTAIN QUANTITY WAS SHOWN AS TRANSFERRED OUT FROM ONE PRODUCT HEAD TO ANOTHER INCREASING THAT HEAD, BUT WITHOUT DECREASING THE Q UANTITY OF THE PRODUCT HEAD FROM WHICH THE TRANSFER HAD TAKEN PLACE. IN VIEW OF ALL THESE FACTS, THE AO CHOSE TO PLACE RELIANCE ON THE PRODUCE WISE PHASE WISE BREAK UP GI VEN BY THE ASSESSEE ON THE FIRST OCCASION. HE, THEREFORE, RELIED ON THE TABLE PREPA RED ON THE BASIS OF THE INFORMATION GIVEN BY THE ASSESEE ITSELF ON THE FIRST OCCASION A ND HELD THAT THE ASSESSEE HAD CONCEALED SALES OF RS.4,14,765/- AND ADDED THE SAME TO THE TO TAL INCOME. IN APPEAL, THE LD. CIT(A) SUSTAINED THE ADDITION TO 50% OF RS.4,14,765/- AND GAVE RELIEF TO THE ASSESSEE OF RS.2,07,382/-- AGGRIEVED BY THE SAID ORDER, NOW THE ASSESSEE IS IN APPEAL BEFORE US. 4. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE WHILE REITERATING HIS SAME SUBMISSIONS AS SUBMITTED BEFORE THE LOWER AUTH ORITIES FURTHER SUBMITTED THAT DURING THIS YEAR THE GROSS PROFIT RATE IS BETTER TH AN EARLIER YEARS AND THE SHORTAGE/HANDLING LOSS AS CLAIMED BY THE ASSESSEE I S ALSO LESS THAN THE EARLIER YEARS, WHICH WAS ACCEPTED BY THE DEPARTMENT IN EARLIER YEA RS. THEREFORE, THE ADDITION AS SUSTAINED BY THE LD. CIT(A) IN THE YEAR UNDER CONSI DERATION IS NOT CALLED FOR AND THE SAME MAY BE DELETED IN FULL. 5. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDE R OF THE LD. CIT(A) AND PRAYED BEFORE THE BENCH TO CONFIRM THE SAME. 6 WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BOT H THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND FORCE IN THE SUB MISSIONS OF THE LD. COUNSEL THAT THE SHORTAGE/HANDLING LOSS CLAIMED BY THE ASSESSEE DURI NG THIS YEAR IS LESS THAN THE EARLIER YEARS AND THE GROSS PROFIT RATE IS ALSO BETTER THAN THE EARLIER YEARS. TWO COPIES OF CHART SHOWING THE SHORTAGE/HANDLING LOSS CLAIMED AND ALS O THE G.P. PERCENTAGE ARE AVAILABLE PAGES 8A AND 13 OF THE ASSESSEES PAPER BOOK. SINCE THE DEPARTMENT HAD ACCEPTED THE CLAIM OF THE ASSESSEE FOR THE EARLIER YEARS AND ALS O THE SHORTAGE/HANDLING LOSS AS CLAIMED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION IS NEGLIGIBLE CONSIDERING THE EARLIER YEARS, WE ARE OF THE CONSIDERED VIEW THAT THE ADDIT ION SO SUSTAINED BY THE LD. CIT(A) 4 DURING THE YEAR UNDER CONSIDERATION WAS ON HIGHER S IDE THE ADDITION SO SUSTAINED BY THE LD. CIT(A) IS HEREBY DELETED. THE APPEAL OF THE AS SESSEE IS, THEREFORE, ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 16.7.10 SD/- SD/- . .. . . . . . , , , , ! ! ! ! . . . . % %% % . . . . &' &' &' &', , , , () (G. D. AGRAWAL) (D. K. TYAGI) VICE PRESIDENT JUDICIAL MEMBER ( (( (4 4 4 4) )) ) DATED : 16 TH JULY, 2010 #56 +7 +8# JD.(SR.P.S.) (%3 9 2++: %:-;- COPY OF THE ORDER FORWARDED TO: 1. 01 /APPELLANT M/S. M. T. AUTOMOBILES, STATION ROAD, P.O. UKHRA, DIST. BURDWAN, PIN 713363. 2 2&01 / ITO, WARD-1(3), DURGAPUR.. .. . 3. +3/ THE CIT, DURGAPUR 4. +3 ()/ THE CIT(A), DURGAPUR 5. #B+' 2+ / DR, KOLKATA BENCHES, KOLKATA &: 2+/ TRUE COPY, (%3C/ BY ORDER, $ /DEPUTY REGISTRAR .