D.C.I.T., Circle-3(1), Gwalior V. M/s coronation Finvest Pvt. Ltd., Guna

ITA 169/AGR/2013

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0748 (ITAT-AGRA)
• Duration Of Justice: 5 year(s) 11 month(s) 25 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-06-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 22-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 169/AGRA/2013 ASSTT. YEAR : 2007-08 D.C.I.T., CIRCLE 3(1), VS. M/S. CORONATION FINVE ST PVT. LTD., GWALIOR. 4, GAYATRI NAGAR, GWALIOR. (PAN : AABCC 4278 N) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.K. MISHRA, JR. D.R. RESPONDENT BY : NONE DATE OF HEARING : 18.06.2013 DATE OF PRONOUNCEMENT OF ORDER : 21.06.2013 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A), GWALIOR DATED 08.03.2013 FOR THE ASSESSMENT YEAR 20 07-08, CHALLENGING THE DELETION OF ADDITION OF RS.11,25,579/- ON ACCOUNT O F NOTIONAL HIRE CHARGES. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE COMPANY DERIVES INCOME FROM TRUCK PLYING CHARGES RECEIVED AND PROFIT ON TH E SALE OF VEHICLES. DURING THE PREVIOUS YEAR, THE ASSESSEE COMPANY HAD GIVEN ON HI RE 38 TRUCKS TO M/S. SIDDHESHWAR ROADLINES, SHIVPURI FROM WHOM IT HAS RE CEIVED HIRE CHARGES OF RS.21,44,421/-. THE AO MADE ADDITION OF RS.11,25,57 9/- HOLDING THAT THE ASSESSEE ITA NO. 169/AGRA/2013 2 HAS DELIBERATELY RECEIVED LESS HIRE CHARGES FROM M/ S. SIDDHESHWAR ROADLINES. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LD. CIT (A) AND SUBMISSIONS OF THE ASSESSEE ARE RECORDED IN THE APPELLATE ORDER IN WHI CH THE ASSESSEE EXPLAINED IN DETAIL THAT THE TRUCKS WERE GIVEN ON HIRE AT FAIR M ARKET RATE AND NO EVIDENCES HAVE BEEN BROUGHT ON RECORD BY THE AO TO ESTIMATE THE HI RE CHARGES. NO SUCH ENQUIRY HAS BEEN MADE BEFORE MAKING THIS ADDITION. THEREFOR E, THE ADDITION IS WHOLLY UNJUSTIFIED. AS THE OLD VEHICLES REQUIRE MORE RUNNI NG AND MAINTENANCE COST, THEREFORE, THE SAME IS AVAILABLE AT LOWER RATE IN M ARKET AND THE ASSESSEE HAS EARNED FAIRLY REASONABLE HIRE CHARGES. THEREFORE, THE AO S HOULD NOT DICTATE HOW MUCH HIRE CHARGES THE ASSESSEE SHOULD HAVE TO EARN. THE LD. C IT(A) CONSIDERING THE EXPLANATION OF THE ASSESSEE IN DETAIL DELETED THE A DDITION. HIS FINDINGS IN PARA 5 & 6 OF THE APPELLATE ORDER ARE REPRODUCED S UNDER : 5. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND WRI TTEN SUBMISSION. IT IS SEEN THAT THE ASSESSING OFFICER H AS TAXED NOTIONAL INCOME OF RS.11,25,579/- WHICH HAS NOT BEEN RECEIVE D BY THE APPELLANT. I AM OF THE CONSIDERED VIEW THAT IT IS U PON THE APPELLANT, TAKING INTO ACCOUNT ALL THE FACTS OF THE CASE TO DE CIDE AT WHAT RATE THE VEHICLES ARE TO BE GIVEN ON HIRE. THE A.O. CANNOT D ECIDE THE RATE AT WHICH THE APPELLANT SHOULD HAVE GIVEN THE VEHICLES ON HIRE. THE APPELLANT HAS EXPLAINED IN DETAIL THE REASON JUSTIF YING THE RENT WHICH HAS BEEN CHARGED. IN VIEW OF THE FACTS DISCUSSED BY THE APPELLANT IN ITA NO. 169/AGRA/2013 3 WRITTEN SUBMISSIONS, I AM OF THE CONSIDERED OPINION THAT THE INCOME WHICH HAS NOT BEEN RECEIVED BY THE APPELLANT CANNOT BE TAXED BY THE AO IN THE HANDS OF APPELLANT. THEREFORE, THE ADDITI ON MADE BY THE AO IN RESPECT OF NOTIONAL INCOME OF RS.11,25,579/- IS HEREBY DELETED AND APPEAL OF THE APPELLANT IS ALLOWED. 6. IN THE RESULT, THE APPEAL IS ALLOWED. 3. THE LD. DR RELIED UPON THE ORDER OF THE AO. HOWE VER, NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE NOTIFYING THE DATE O F HEARING THROUGH REGISTERED POST. THEREFORE, THE ASSESSEE IS PROCEEDED EXPARTE. 4. ON CONSIDERATION OF THE SUBMISSIONS OF THE LD. D R IN THE LIGHT OF FINDINGS OF THE AUTHORITIES BELOW, WE DO NOT FIND ANY JUSTIFICA TION TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) IN DELETING THE ADDITION. THE AO HAS FOUND THAT THE RATES AT WHICH THE TRUCKS HAVE BEEN GIVEN ON HIRE ARE APPARENTLY O N LOWER SIDE. THE ASSESSEE PRODUCED BOOKS OF ACCOUNT WHICH HAVE BEEN EXAMINED BY THE AO AND NECESSARY DETAILS WERE FILED IN RESPONSE TO THE QUESTIONNAIRE RAISED BY THE AO. THE AO HAS NOT POINTED OUT ANY SPECIFIC DEFECTS IN THE MAINTEN ANCE OF BOOKS OF ACCOUNT EXCEPT FINDING VAGUELY THAT HIRE CHARGES ARE ON LOWER SIDE . IF THE AO WANTED TO TAX A PARTICULAR INCOME, HE HAS TO BRING EVIDENCES IN SUP PORT OF THE FINDING THAT THE ASSESSEE EARNED MORE INCOME. THE AO HAS, HOWEVER, N OT BROUGHT ANY EVIDENCE ON RECORD TO SUPPORT HIS FINDINGS. THE LD. CIT(A), THE REFORE, RIGHTLY HELD THAT THE AO ITA NO. 169/AGRA/2013 4 CANNOT DECIDE THE RATES AT WHICH THE ASSESSEE SHOUL D HAVE GIVEN VEHICLE ON HIRE. IN THE ABSENCE OF ANY EVIDENCE OR MATERIAL ON RECORD T O SUPPORT THE FINDINGS OF THE AO, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE AD DITION WHICH IN OUR OPINION WAS ONLY ADDITION ON NOTIONAL BASIS. THE AO CANNOT DIRE CT THE ASSESSEE TO MAXIMIZE THE PROFIT. HONBLE SUPREME COURT IN THE CASE OF A. RAM AN & CO. 67 ITR 11 HELD THAT THE LAW DOES NOT OBLIGE A TRADER TO MAKE MAXIMUM PR OFIT. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF THE FINDINGS OF THE LD. CI T(A), WE DO NOT FIND ANY MERIT IN THE DEPARTMENTAL APPEAL. THE SAME IS ACCORDINGLY DI SMISSED. 5. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY