ACIT(OSD), WARD-1(3), Kolkata, Kolkata V. M/s Sar Parivahan (P) Ltd., Kolkata

ITA 1712/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1765 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2017
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 04-04-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 26-08-2016
• Court: TRIBUNAL
• Department Lawyers: S ALLONG YADEN CIT LD
• Assessee Lawyers: KAUSHAL KUMAR SURANA LD
• Keywords: Additional evidence; Assessment record
• Section: 69C; 142(1); 68

Judgement Text

1 ITA NO. 1712/KOL/2016 M/S. SAR PARIVAHAN P.LTD IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA BEFORE: SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIA L MEMBER I.T.A NO. 1712/KOL/2016 ASSESSMENT YEAR: 2011-12 ASSTT.COMMISSIONER INCOME TAX(OSD) WARD 1(3), KOLKATA. APPELLANT VS M/S. SAR PARIVAHAN PVT. LTD. PAN: AAHCS 3892C. RESPONDENT FOR THE APPELLANT : SHRI SALLONG YADEN, ADDL.CIT, LD.SR.DR FOR THE RESPONDENT : SHRI KAUSHAL KUMAR SURANA, LD. AR DATE OF HEARING : 04-04-2017 DATE OF PRONOUNCEMENT : 24-05-2017 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY REVENUE IS AGAINST THE ORDER DATED 2 2-06-2016 OF CIT(A), 4, KOLKATA FOR THE ASSESSMENT YEAR 2011-12. 2. THE ONLY EFFECTIVE ISSUE IN THIS APPEAL IS TO B E DECIDED AS TO WHETHER THE CIT-A IS JUSTIFIED IN DELETING THE IMPU GNED ADDITION WITHOUT SEEKING A REMAND REPORT FROM THE AO IN THE FACTS AN D CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PRIVATE LIMITED COMPANY AND ENGAGED IN THE BUSINESS OF TRANSPORT. T HE ASSESSEE FILED ITS RETURN OF INCOME FOR THE A.Y UNDER CONSIDERATION AT RS. NIL. UNDER SCRUTINY, 2 ITA NO. 1712/KOL/2016 M/S. SAR PARIVAHAN P.LTD THE NOTICES U/S. 143(2) AND 142(1) OF THE ACT WERE ISSUED. IN RESPONSE TO WHICH, THE ASSESSEE ALONG WITH ITS AUTHORIZED REPRE SENTATIVE APPEARED TO EXPLAIN THE RETURN AS FILED. THE AO FOUND THAT THE ASSESSEE HAS CLAIMED LORRY HIRE CHARGES PAYABLE TO AN EXTENT OF RS.2,01, 16,200/- UNDER THE HEAD SUNDRY CREDITORS AS ON 31-03-2011 FOR 258 LOR RIES. IN SUPPORT OF WHICH, THE ASSESSEE FILED THE LIST OF 258 LORRIES. THE AO AFTER EXAMINING OF SUCH DETAILS FOUND THAT THE ASSESSEE DID NOT FURNIS H THE COMPLETE ADDRESS OF 199 LORRY OWNERS. FOR NON-SUBMISSION OF SUCH DET AILS IN RESPECT OF 199 LORRY OWNERS, THE AO TREATED THE CLAIM OF ASSESSEE AS BOGUS AND ADDED THE SUM OF RS. 1,66,00,368/- U/S. 69C OF THE ACT TO THE TOTAL INCOME OF ASSESSEE. 4. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFO RE THE CIT-A AND CONTENDED THAT ALL THE DETAILS OF LORRY HIRE CHARGE S ALONG WITH SAMPLE BILLS AND CHALLANS RELATING TO IMPUGNED AMOUNT WERE FILED BEFORE THE AO. THE ASSESSEE FURTHER CONTENDED THAT THE SAID LIABILITIE S WERE SUBSEQUENTLY DISCHARGED AND THERE WAS NO OUTSTANDING BALANCE. TH E AO DOUBTED THE GENUINENESS OF THESE LIABILITIES ON THE PRETEXT THA T THE COMPLETE DETAILS WERE NOT PROVIDED BY THE ASSESSEE. THE ASSESSEE FUR THER CONTENDED THAT THE AO DID NOT TAKE ANY STEP TO SEND THE NOTICES TO THE SAID PARTIES. THE AO DID NOT FIND ANY FAULT IN THE EVIDENCES AND WITH OUT CONSIDERING THE PAYMENT MADE TO SUNDRY CREDITORS SUBSEQUENTLY ADDE D THE SAID AMOUNT ON MERE SUSPICION. THE CIT-A CONSIDERING THE SUBMIS SIONS OF THE ASSESSEE FOUND THAT ALL THE DETAILS WERE PRODUCED BEFORE THE AO AND WITHOUT CONSIDERING THE PAYMENT MADE TO SUNDRY CREDITORS A S ON 31-03-2014 DELETED THE IMPUGNED ADDITION BY OBSERVING AS UNDER :- 4.2 I HAVE CONSIDERED THE SUBMISSIONS OF THE AR OF THE APPELLANT AND HAVE ALSO GONE THROUGH THE ASSESSMENT ORDER ON THE ISSUE AT H AND. I FIND THAT THE FACTS EMERGING FROM RECORDS REVEAL THAT THE APPELLANT SUBMITTED PR IMARY DOCUMENTS IN SUPPORT OF E-RETURN FILED BY IT. THE APPELLANT HAS SUBMITTED ITS AUDITE D ACCOUNTS, TAX AUDIT REPORT U/S 44AB. COMPUTATION OF INCOME ETC. THE APPELLANT HAS ALSO F URNISHED DETAILS RELATING TO ITS CLAIM OF SUNDRY CREDITORS OF RS.5,61,80.184/-. THIS SUM INCL UDED A SUM OF RS.1,66,00,038/- AS LORRY HIRE CHARGES PAYABLE TO 258 NUMBERS OF LORRIE S. THE APPELLANT HAS FURNISHED LIST OF SUCH SUNDRY CREDITORS. THE LIST CONTAINED THE LORRY NUMBERS ALONG WITH AMOUNTS AND SOME ADDRESSES. I FIND THAT THE AO HAS NOT CONDUCTED ANY ENQUIRY ON THE PRETEXT THAT THE ADDRESS FURNISHED BY THE APPELLANT WAS NOT COMPLETE . THIS ACCORDING TO ME CANNOT BE THE SOLE GROUND FOR MAKING THE IMPUGNED ADDITION. I FIN D THAT THE APPELLANT HAS DULY FURNISHED 3 ITA NO. 1712/KOL/2016 M/S. SAR PARIVAHAN P.LTD THE LORRY NUMBERS. THE AO COULD HAVE GATHERED ANY I NFORMATION RELATING TO SUCH LORRIES BY WRITING TO THE REGIONAL TRANSPORT ORGANIZATION (RTO ) OFFICE. THE AO COULD HAVE MADE ENQUIRIES WITH THE BANK AND COLLECTED INFORMATION W ITH REGARD TO PAYMENTS MADE TO THESE VERY CREDITORS IN SUBSEQUENT YEAR BY THE APPELLANT. I FIND THAT NO SUCH ENQUIRY WAS CONDUCTED BY THE AO IN THIS REGARD. I FURTHER FIND FROM THE ASSESSMENT ORDER THAT THE AO HIMSELF HAS ADMITTED THAT THESE SUNDRY CREDITORS W ERE PAID OFF OR SQUARED UP ON OR BEFORE 31.03.2014. THEREFORE, IT IS DIFFICULT TO AC CEPT THE AO'S CONTENTION THAT THE AMOUNT PAYABLE AGAINST LORRY HIRE CHARGES IS BOGUS IN NAT URE. ONCE THE PAYMENTS MADE TO THESE PARTIES IN SUBSEQUENT YEAR IS ACCEPTED, IT CANNOT B E HELD THAT THE LORRY HIRE CHARGES PAYABLE TO VARIOUS PARTIES ARE BOGUS IN NATURE. IN MY CONSIDERED VIEW, PAYMENTS CANNOT BE MADE TO BOGUS PERSONS. THE AO HAS NOT BROUGHT AN Y MATERIAL ON RECORD TO JUSTIFY AS TO WHY THESE SUNDRY CREDITORS SHOULD BE TREATED AS BOG US IN NATURE, THE AO HAS MADE THE ADDITION PURELY ON SUSPICION WITHOUT ANY JUSTIFICAT ION. THE DETAILS FILED BY THE APPELLANT HAVE BEEN ACCEPTED BY THE AO. I AM ALSO IN AGREEMEN T WITH THE AR OF THE APPELLANT THAT SINCE THE SUNDRY CREDITORS WERE ALL SQUARED OFF, TH E APPELLANT WAS CONSTRAINED TO PRODUCE SUCH CREDITORS FOR VERIFICATION. I ALSO AGREE WITH THE CONTENTIONS OF THE AR OF THE APPELLANT THAT PROVISIONS OF SECTION 69C CANNOT BE INVOKED IN THE PRESENT CASE. HERE IT IS NOT THE CASE OF THE AO THAT THE APPELLANT HAS FAILED TO OFF ER ANY EXPLANATION OR THE EXPLANATION OF THE APPELLANT IS NOT SATISFACTORY IN RESPECT OF THE SUNDRY CREDITORS FOR LORRY HIRE CHARGES PAYABLE IS CONCERNED. I ALSO AGREE WITH THE APPELLA NT'S CONTENTIONS THAT PROVISIONS OF SECTION 68 AND 69C CANNOT BE INVOKED SIMULTANEOUSLY FOR THE SAME TRANSACTION. IN VIEW OF THE FOREGOING, IT IS HELD THAT THE ACTION OF AO IS BAD IN LAW. THE ADDITION OF RS.1,66,00,038/- MADE BY THE AO ON ACCOUNT OF BOGUS LORRY HIRE CHARGES PAYABLE IS, THEREFORE, DIRECTED TO BE DELETED. THIS GROUND OF A PPEAL IS ALLOWED. 5. THE LD.DR SUBMITS THAT THE ASSESSEE FAILED TO SU BSTANTIATE ITS CLAIM THAT THE AMOUNT IS PAYABLE AS ON 31-03-2011. HE FUR THER SUBMITS THAT DURING THE COURSE OF SCRUTINY PROCEEDINGS THE ASSES SEE DID NOT PROVIDE COMPLETE DETAILS OF 199 LORRY OWNERS. THE CIT-A HAS GIVEN RELIEF TO THE ASSESSEE BASING ON NEW SUBMISSIONS AND ADDITIONAL D OCUMENTS FILED BEFORE HIM. HE SUPPORTED THE ORDER OF THE AO. 6. THE LD.AR SUBMITS THAT THE TRANSPORT BUSINESS IS AN UNORGANIZED SECTOR AND THE ASSESSEE PROVIDED ALL THE DETAILS TO THE AO. THE LD. AR FURTHER SUBMITS THAT AT THE TIME OF ASSESSMENT THER E WAS NO OUTSTANDING BALANCE PAYABLE AS ON 31-03-2014. HE RELIED ON THE ORDER OF THE CIT-A AND URGED TO DISMISS THE APPEAL OF REVENUE. 7. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD.DR COULD NOT BRING ANY MATERIAL ON R ECORD TO SHOW THAT THE ASSESSEE FILED NEW/ADDITIONAL EVIDENCE BEFORE THE C IT-A AND BASING ON WHICH THE CIT-A HAS GIVEN RELIEF TO THE ASSESSEE IN DELETING THE IMPUGNED ADDITION. WE FIND THAT THE ASSESSEE DID NOT PRODUCE ANY NEW/ADDITIONAL EVIDENCE BEFORE THE CIT-A. WE FIND THAT THE CIT-A E XAMINING THE ASSESSMENT RECORD FOUND THAT ALL THE DETAILS WERE FILED BEFORE THE AO. THE 4 ITA NO. 1712/KOL/2016 M/S. SAR PARIVAHAN P.LTD AO DID NOT CONDUCT ANY ENQUIRY ON PRETEXT THAT SOME OF THE DETAILS WERE NOT FILED BEFORE HIM. THE CIT-A AFTER EXAMINING AND TAKING INTO CONSIDERATION THE SUBMISSIONS OF THE ASSESSEE THAT ALL THE SUNDRY CREDITORS WERE PAID OFF OR SQUARED UP ON OR BEFORE 31. 03. 20 14 THEREFORE, THE CIT- A IS JUSTIFIED IN OBSERVING THAT WHEN THE PAYMENTS MADE TO SAID SUNDRY CREDITORS IN SUBSEQUENT YEARS AND THE SAME IS ACCEP TED AND AGAIN TREATED THE SAME AS BOGUS BY THE AO IS NOT CORRECT. IN VIEW OF THE SAME, WE FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE CIT-A. WE UPHOLD THE SAME. THE GROUND RAISED BY THE REVENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24-05-2017 SD/- SD/- J.SUDHAKAR REDDY S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 24-05-2017 ORDER PRONOUNCED BY SD/- SD/- W.A S.S.V.R A.M J.M PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT THE ASSTT. COMMISSIONER OF INCOME TAX ( OSD), WARD 1(3), P-7, CHOWRINGHEE SQUARE, 4 TH FLOOR, R.NO.11A, KOLKATA-69. 2 RESPONDENT M/S. SAR PARIVAHAN PVT. LTD 80/B PHEAR S LANE, KOLKATA-12 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .