ITO 22(3)(3), NAVI MUMBAI V. RAMESH CHOTELAL GUPTA, NAVI MUMBAI

ITA 1799/MUM/2012

• Counselvise Citation: 179919914 RSA 2012
• Duration Of Justice: 2 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 04-08-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 15-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J K GARG
• Keywords: Audit objection; Additional evidence
• Section: 143(3); 142(1)

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - D BENCH. , ! ! ! ! . .. .! # ! # ! # ! # . .. .$ $ $ $ . .. .! # ! # ! # ! # . .. .% % % % BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & DR. S.T.M . PAVALAN,JUDICIAL MEMBER /. ITA NO.1799/MUM/2012, % % % % & & & & / ASSESSMENT YEAR-2005-06 ITO 22(3) (3), 3RD FLOOR, TOWER NO.6, VASHI RLY. STATION COMPLEX, VASHI, NAVI MUMBAI-400703 VS RAMESH CHOTELAL GUPTA, A-59, ASHOKA COMPLEX, SECTOR-18, VASHI, NAVI MUMBAI-400703 PAN:AATPG3133G ( '( / APPELLANT) ( )*'( / RESPONDENT) + , / REVENUE BY : SHRI J.K.GARG % -. + , / ASSESSEE BY : NONE % % % % + ++ + . . . . / DATE OF HEARING : 04-08-2014 /0& + . / DATE OF PRONOUNCEMENT : 04-08-2014 % + % + % + % + 254 254 254 254( (( (1 11 1) ) ) ) .7. 8 .7. 8 .7. 8 .7. 8 ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM % % % % : CHALLENGING THE ORDER DATED 05.01.2012 OF THE CIT(A )-33,MUMBAI ASSESSING OFFICER (AO) HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) ERRED IN ADMITTING THE ADDITIONAL EVIDENCE IN THE FORM OF DETAILS OF GROSS CONTRACTUAL RECEIPTS OF RS. 4,08,70,571/- AND EXPENSES OF RS.3,99,72,545/- WITHOUT GIVING OPPORTU NITY TO THE ASSESSING OFFICER. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED BY NOT SEEKING REMAND REPORT ON THE DETAILS SUBMITTED BY T HE ASSESSEE. 3). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) ERRED BY ALLOWING THE EXPENSES OF RS.3,99,72,545/- WITHOUT GIVING OPP ORTUNITY TO THE ASSESSING OFFICER. 4). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) ERRED BY ALLOWING THE EXPENSES OF RS.3,99,72,545/ - WITHOUT EXAMINING THE APPLICABILITY OF PROVISIONS OF SECTION 40(A)(IA) OF THE I.T.ACT, 1961. 5). THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A ) ON THE ABOVE GROUNDS BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 6). THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER AN Y GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2 .ASSESSEE AN INDIVIDUAL,FILED HIS RETURN OF INCOME 30.10. 2005, DECLARING TOTAL INCOME AT RS 3,00, 850/-.THE AO COMPLETED THE ASSESSMENT ON 25.11.2010 U/S 143(3) OF THE ACT DETERMINING THE INCOME OF THE ASSESSEE AT RS. 1,66,35,830/-.INITIAL LY THE ASSESSMENT WAS PROCESSED U/S 143(1) OF THE ACT ON 14.06.2006 ACCEPTING THE INCOME RETURNED BY THE ASSESSEE AND A REFUND WAS ISSUED. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRANSPORTATI ON AND IS OWNER OF TWO VEHICLES. HE OPTED FOR THE PROVISIONS OF SECTION 44-AE OF THE ACT AND HAD SHOWN AN INCOME OF RS. 84,000/- FROM THOSE VEHICLES. DURING THE YEAR UNDER CONSIDERATION, HE H AD RECEIVED COMMISSION. TOWARDS HIRING OF VEHICLES IN HIS PROPRIETARY CONCERN M/S TAJ FREIGHT CARRIER.HE HAD ALSO SHOWN GROSS COMMISSION OF RS. 8.98 LAKHS AFTER CLAIMING THE EXPENSES NET P ROFIT WAS SHOWN AT RS. 1,40,850/- AS PER THE PROFIT & LOSS ACCOUNT. AN AUDIT OBJECTION WAS RAISE D BY THE AUDIT PARTY AND THE AO REOPENED THE 2 ITA NO.1799/MUM/2012 RAMESH CHOTELAL GUPTA . ASSESSMENT U/S.147 OF THE ACT.THE AO ISSUED NOTICES U/S 148, 143(2) AND 142(1) ALONG WITH QUESTIONNAIRE. AS PER THE AO THERE WAS NON-COMPLIAN CE ON PART OF THE ASSESSEE, SO HE ISSUED A NOTICE DIRECTING THE ASSESSEE TO APPEAR ON 12.11.20 10.ON THAT DAY ASSESSEE SOUGHT AN ADJOURNMENT FOR 25.11.2010, BUT NOBODY APPEARED BEFORE THE AO O N THE APPOINTED DATE.AO FOUND THAT IN THE BOOKS OF ACCOUNTS ASSESSEE HAD SHOWN CONTRACT RECEI PT OF RS. 1,66,35,826/- AS PER THE TAX DEDUCTED AT SOURCE (TDS) CERTIFICATE ON RECORD, THA T THE ASSESSEE DID NOT FILE AUDIT REPORT BEFORE HIM.HE MADE AN ADDITION OF RS. 1.63 CRORES TO THE I NCOME OF THE ASSESSEE. 3. THE ASSESSEE FILED AN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY(FAA).BEFORE HIM IT WAS ARGUED THAT THE ASSESSEE HAD DEDUCTED TDS ON FULL A MOUNT PAID TO VEHICLE OWNERS AGAINST THE TRIP AND HAD CREDITED IT TO BOOKS OF ACCOUNTS,THAT THE A SSESSEE WAS NOT RECEIVING THE SAME EXCEPT THE COMMISSION/TDS AND PART PAYMENT AS A TRIP EXPENSES, THAT THE GROSS COMMISSION DURING THE YEAR WAS 8.90 LAKHS AND NOT 1.66 CRORES, THAT THE TOTAL TURNOVER OF RS. 1,66,35,826/- INCLUDED TURNOVER OF HIS TWO VEHICLES ALSO,THAT THE AO DIRECTLY ADDED THE SAID AMOUNT WITHOUT DEDUCTING THE FREIGHT PAID TO THE VEHICLE OWNERS, THAT HE HAD SHOWN FULL CONTRACT RECEIPTS TDS IN HIS RETURN OF INCOME AGAINST THE COMMISSION RECEIVED, THAT HIS TURNOVER WAS BELOW THE TURNOVER LIMITS,THAT HE DID NOT GET THE ACCOUNTS AUDITED U/S 44AB OF THE ACT, THAT HE WAS RECEIVING COMMISSION ONLY FROM WHOM THE TRANSPORTATION JOB WAS DONE,THAT OTHER TRANSPOR TERS OWNED THE TRUCKS,THAT HE WAS ARRANGING THE JOB FOR TRANSPORTERS,THAT THE CERTIFICATES WERE ISS UED IN HIS NAME,THAT HIS EARNING WAS ONLY COMMISSION. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, ASSESSMENT ORDER AND THE DETAILS OF CLAIM BY HIM ABOUT THE TRANSPORTATION-JOB DONE FOR DIFFERENT PARTIES THE FAA HELD THAT THE PAYMENTS WERE MADE TO THOSE PARTIES WHO HAD DONE JOB,THAT THE RAT E, WEIGHT COMMISSION AMOUNT AND AMOUNT PAID TO LORRY DRIVER AND HAMALI HAD BEEN MENTIONED IN TH E DOCUMENTS. IT WAS FURTHER HELD THAT AGAINST THE TDS CERTIFICATE SHOWING THE RECEIPT OF RS. 1.66 CRORES, THAT IF TRADING LOSS WAS PREPARED AS PER THE STATEMENT OF A PROFIT OF RS. 8.98 WAS ARRIVED A T,THAT SAID PROFIT WAS ONLY REFLECTED UNDER THE HEAD COMMISSION/HAMALI AT RS. 1.98 LAKHS, THAT THE ASSESSEE HAD NOT INCURRED ANY EXPENSES PERTAINING TO THE TRANSPORTATION DONE BY OTHER PART IES, THAT NO OTHER EXPENSES WERE ALLOWABLE FROM THE PROFIT. FINALLY, THE FAA DIRECTED THE AO TO ASC ERTAIN IF THE RECEIPTS OF RS. 1.66 CRORES, AS PER THE TDS CERTIFICATES,WERE INCLUDED IN THE FREIGHT R ECEIPT AMOUNT OF RS. 4,08,70,571/-, THAT IF THE SAID FACT WAS TRUE THE INCOME HAD TO BE WORKED OUT AS ABOVE, THAT IN CASE THE TDS RECEIPTS WERE NOT INCLUDED IN THE FIGURE OF FREIGHT RECEIPTS NO A DDITION SHOULD BE MADE. 4 .BEFORE US,DEPARTMENTAL REPRESENTATIVE (DR) SUPPORT ED THE ORDER OF THE AO AND STATED THAT FAA HAD NOT CALLED FOR A REMAND REPORT ON THE DETAIL SU BMITTED BY THE ASSESSEE.WE HAVE PERUSED THE MATERIAL BEFORE US.WE FIND THAT ASSESSMENT WAS REOP ENED BY THE AO ON THE BASIS OF AN AUDIT OBJECTION.WHILE DECIDING THE ISSUE THE AO HAD NO MA TERIAL,BEFORE HIM,TO TAKE A DECISION ABOUT DEDUCTION OF TDS AND TOTAL RECEIPTS.THE ASSESSEE HA D FILED THE DETAILS,BEFORE THE FAA,DURING THE APPELLATE PROCEEDINGS.AFTER CONSIDERING THE AVAILAB LE MATERIAL,THE FAA HAD DIRECTED THE AO TO VERIFY THE CORRECTNESS OF THE CLAIM MADE BY HIM.SHE HAS GIVEN CLEAR CUT DIRECTIONS AS TO WHEN TO ASSESS THE INCOME IN THE HANDS OF THE ASSESSEE AND IN WHAT CIRCUMSTANCES TAX LIABILITY IS NOT TO BE FASTENED TO THE ASSESSEE.IN OUR OPINION,HER DIRECTI ONS ARE REASONABLE AND PASSED ON THE BASIS OF RELEVANT FACTS OF THE CASE.THE AO HAS BEEN GIVEN A DISCRETION OF DECIDING THE ISSUE AFTER CONSIDERING THE AVAILABLE MATERIAL.IN THESE CIRCUMS TANCES,WE ARE OF THE OPINION THAT THE ORDER OF THE FAA DOES NOT SUFFER FROM ANY LEGAL INFIRMITY. T HEREFORE, UPHOLDING HER ORDER, WE DECIDE THE EFFECTIVE GROUND OF APPEAL AGAINST THE AO. AS A RESULT,APPEA L FILED BY THE AO STANDS DISMISSED. 9.: % -. VF/KDKJH ; < + 7 UK = + . >?. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH AUGUST,2014 . 8 + /0& @ A% 4 VXLR , 201 4 0 + 7 B 3 ITA NO.1799/MUM/2012 RAMESH CHOTELAL GUPTA . SD/- SD/- ( . .. .! # ! # ! # ! # . .. .$ $ $ $ . .. .! # ! # ! # ! # . .. .% % % % / DR. S.T.M.PAVALAN) ( / RAJENDRA) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, A% /DATE: 04.08.2014. SK 8 8 8 8 + ++ + ) . C ) . C ) . C ) . C DC&. DC&. DC&. DC&. / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / '( 2. RESPONDENT / )*'( 22 3. THE CONCERNED CIT(A)/ E F , 4. THE CONCERNED CIT / E F 5. DR D BENCH, ITAT, MUMBAI / CG7 ) . % MH MHMH MH , . . . 6. GUARD FILE/ 7 9 *C. *C. *C. *C. ) . ) .) . ) . //TRUE COPY// 8% / BY ORDER, H / > DY./ASST. REGISTRAR , /ITAT, MUMBAI