Kodinar Taluka Roo Vechan Mandali Ltd., RAJKOT-GUJARAT V. The Joiont Commissioner of Income Tax, Range-1, JUNAGADH

ITA 180/RJT/2014

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 7773 (ITAT-RAJKOT)
• Duration Of Justice: 7 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 09-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “RAJKOT” BENCH, RAJKOT [Conducted through E-Court at Ahmedabad] BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR & SHRI WASEEM AHMED, ACCOUNTANT MEMEBR आयकर अपील सं./I.T.A. No. 180/Rjt/2014 ( Assess ment Ye ar : 2009-10) Ko di na r Ta lu ka R oo Vec h an M an da li L td. Nr. P an i Da rw aja , Ret i Of f ice, K od ina r ब म/ V s . Th e J. C.I .T . Ra nge - 1, J un aga dh यी ल सं./ ीआ आर सं./P A N / G IR N o . : A A A J K 1 1 1 1 E (अपील Appellant) . . ( य / Respondent) अपील र स /Appellant by : W ri tt en S ub mi ss io n य क र स / Respondent by : Shri B. D. Gupta, CIT D.R. स क र D a t e o f H e a r i n g 22/02/2022 !"# क र /D a t e o f P r o n o u n c e m e n t 28/02/2022 ORDER PER MAHAVIR PRASAD, JM: The captioned appeal has been filed at the instance of the assessee against the order of the C o mmissioner of Inco me Tax (Appeals)-IV, Rajkot (‘CIT( A) ’) , dated 23.12.2013 arising in the assessment order dated 17.11.2011 passed by the Assessing Officer (AO) under s. 143(3) of the Inco me Tax Act , 1961 (the Act) concerning AY. 2009-10. 2. The grounds of appeal raised b y ass essee read as under: ITA No. 180/Rjt/2014 [Kodinar Taluka Roo Vechan Mandali Ltd. vs.JCIT] AY 2009-10 - 2 - “ 1 . T h e L d . C I T ( A ) h a s e r r e d i n l a w a n d f a c t s i n c on f i r m i n g a s s e s s m e n t o r d e r p a s s e d b y t h e L d . A . O . T h e a s s e s s me n t n e e d s a n n u l m e n t s . 2 . T h e L d . C I T ( A ) h a s e r r e d i n l a w a n d f a c t s i n c o nf i r m i n g a d d i t i o n o f R s . 1 , 4 2 , 4 1 , 7 5 0 / - . T h e a d d i t i o n n e e d s de l e t i o n . 3 . T h e L d . C I T ( A ) h a s e r r e d i n l a w a n d f a c t s i n c o nf i r m i n g a d d i t i o n o f R s . 1 , 4 2 , 4 1 , 7 5 0 / - b a s e d o n p r e s u m p t i o n a n d c e r m i s e s . T h e a d d i t i o n n e e d s d e l e t i o n . 4 . T h e L d . C I T ( A ) h a s e r r e d i n l a w a n d f a c t s i n c o nf i r m i n g a d d i t i o n o f R s . 6 , 1 1 , 4 9 0 / - . T h e a d d i t i o n n e e d s d e l et i o n . 5 . T h e L d . C I T ( A ) h a s e r r e d i n l a w a n d f a c t s i n c o nf i r m i n g a d d i t i o n o f R s . 6 , 1 1 , 4 9 0 / - b a s e d o n p r e s u m p t i o n a n d c e r m i s e s . T h e a d d i t i o n n e e d s d e l e t i o n . 6 . T a k i n g i n t o c o n s i d e r a t i o n t h e l e g a l , s t a t u t o r y , f a c t u a l , a c c o u n t i n g a n d a d m i n i s t r a t i v e a s p e c t s , n o a d d i t i o n a m o u n t i n g t o R s . 1 , 4 2 , 4 1 , 7 5 0 / - a n d R s . 6 , 1 1 , 4 9 0 / - o u g h t t o h a v e be e n c o n f i r m e d . T h e a d d i t i o n n e e d s d e l e t i o n . 7 . T a k i n g i n t o c o n s i d e r a t i o n t h e l e g a l , s t a t u t o r y , f a c t u a l , a c c o u n t i n g a n d a d m i n i s t r a t i v e a s p e c t s , n o a d d i t i o n a m o u n t i n g t o R s . 1 , 4 2 , 4 1 , 7 5 0 / - a n d R s . 6 , 1 1 , 4 9 0 / - o u g h t t o h a v e be e n c o n f i r m e d . T h e a d d i t i o n n e e d s s u i t a b l e r e d u c t i o n . 8 . W i t h o u t p r e j u d i c e t h e L d . C I T ( A ) h a s e r r e d i n l a w a n d f a c t s i n c o n f i r m i n g a d d i t i o n o f R s . 1 , 4 2 , 4 1 , 7 5 0 / - r e s u l t in g i n d o u b l e t a x a t i o n . T h e a d d i t i o n n e e d s d e l e t i o n . 9 . W i t h o u t p r e j u d i c e t h e L d . C I T ( A ) h a s e r r e d i n l a w a n d f a c t s i n c o n f i r m i n g a d d i t i o n o f R s . 6 , 1 1 , 4 9 0 / - r e s u l t i n g i n d o u b l e t a x a t i o n . T h e a d d i t i o n n e e d s d e l e t i o n / s u i t a b l e r ed u c t i o n . 1 0 . W i t h o u t p r e j u d i c e, t h e a s s e s s m e n t m a d e i s b a d i n l a w a n d d e s e r v e s a n n u l m e n t . 1 1 . W i t h o u t p r e j u d i c e, n o a d e q u a t e , s u f f i c i e n t a n d r e a s o n a b l e o p p o r t u n i t y h a s b e e n p r o v i d e d w h i l e f r a m i n g a s s e s s me n t . T h e a s s e s s m e n t n e e d s a n n u l m e n t . 1 2 . W i t h o u t p r e j u d i c e, n o a d e q u a t e , s u f f i c i e n t a n d r e a s o n a b l e o p p o r t u n i t y h a s b e e n p r o v i d e d w h i l e p a s s i n g a p p e a l o r d e r . T h e a s s e s s m e n t n e e d s a n n u l m e n t . ” 3. The brief facts of the case are that the assessee is a co- operative society and during the ye ar under consideration it has ITA No. 180/Rjt/2014 [Kodinar Taluka Roo Vechan Mandali Ltd. vs.JCIT] AY 2009-10 - 3 - entered into an agree ment with Food Corporation of India (‘FCI ’ in short) for procure ment of wheat at mini mum support price ( ‘msp ’ in short) fro m far me rs and transportation of the so procured wheat to the godowns/specified places of FCI. The wheat was to be procured @Rs.1000/quintal for wh ich entire payment was to be made to far me rs by FC I through assessee society. The assessee society was e ntitled and paid co mmission @ 2.5% of the t otal purchases of wheat. The tra nsporation charges were reimbursed b y the FCI to assessee. Thus, purchase price and transportation cost of the procured wheat was the expenditure in the hands of FCI, a Govern ment of India agency. As per the agree ment gu nny bags for pac kaging the procured wheat were also supplied to the assessee by the FCI. Thus, assessee’s income fro m this contract was mainl y co mmission receipts which was @2.5% of the total purchases. 3.1 During the year assessee had made purchases of Rs. 1,02,60,24,177/- for FCI, on which assessee had received co mmission of Rs. 2,54,37,224/-. Apart f ro m c o mmission income , assessee had received contract receipts of Rs. 2,70,50,672/- (2,20,99,512/- + 49,51,160/-) from FCI, on account of transportation of the procured wheat. These receipts are verifiable from the for m No. 1 6A filed with the return of income . Ho wever against gross transport contract receipts of Rs. 2,70,50,672/- assessee had claimed transportation charges of Rs. 3,12,78,600/- besides other expenses on account of loading / unloading, packing expenses, Kata Tolai expenses and other expenses. Thus expenses claimed by assessee were more than the receipts from t ransportation contract. Against this backdrop; ITA No. 180/Rjt/2014 [Kodinar Taluka Roo Vechan Mandali Ltd. vs.JCIT] AY 2009-10 - 4 - assessee was asked to file separate expenditure account for co mmission receipts and for transportation receipts. 3.2 The assessee had filed separate inco me and expenditure account in respect of (i) Transportation contract receipts from FCI Ra jkot (ii) Transportation contract receipts fro m F CI Vadodara and (iii) Co mmission re ceipts of Rs. 2,5 4,37,224/- fro m FCI , Ra jkot and Vadodara. All these three state ments (Inco me & Expenditure Account) are made part of this order as Annexure-A, Annexure-B, and Ann exure-C respectivel y. Since assessee had clai med transportation expenditure of Rs. 1,42,41,750/- against co mmission re ceipts, another state ments (Inco me & Expenditure Account) in respect of co mmission receipts and transportation receipts were filed with letter dated 02.09.2011. 3.3 The explanation filed by the assessee vide letter dated 16.11.2021 is reproduced as under: " 1 ) C o m m i s s i o n i s p a i d a t R s . 2 . 5 % o f p r i c e o f w h e at i . e . 2 . 5 % o f R s . 1 , 0 0 0 / - R s . 2 5 = f o r p u r c h a s i n g , p a c k i n g , s t a c k i n g , s h i f t i n g , t r a n s p o r t i n g o f g o o d s f r o m p u r ch a s i n g c e n t r e s i . e . m a r k e t y a r d s a n d v i l l a g e s t o t r a n s i t go d o w n s o c c u p i e d b y t h e F C I . I t i s c l e a r l y m e n t i o n e d i n P a ra - 2 o f t h e a g r e e m e n t . F r o m t r a n s i t g o d o w n s t o p e r m a n e n t g o d o w ns o f F C I t h e t r a n s p o r t c h a r g e s a r e t o b e b o r n e d b y t h e FC I . I t i s a s e a s o n a l " p u r c h a s e . Wh o l e o p e r a t i o n w a s t o b e c o m p l e t e d i n w h e a t s e a s o n . F C I h a d p u r c h a s e d w h e a t t h r o u g h o u t t h e c o u n t r y . T h e r e w e r e n u m b e r s o f s u c h a g e n c i e s . A n d w e w e r e o n e o f s u c h a g e n c i e s . Wh e a t wa s p u r c h a s e d b y t h e G o v t . F C I i n v e r y b i g - b u l k q u a n t i ti e s f r o m m a r k e t y a r d s a n d v i l l a g e s . I n m a r k e t y a r d s F C I h a s n o o w n s p a c e - g o d o w n s e t c . I n s e a s o n t h e w h e a t w a s p r o c u r e d t h r o u g h s u c h a g e n c i e s a n d w e r e s t o r e d i n n e r e b y t em p o r a r y g o d o w n s ; b y F C I a n d t h e n a f t e r c o m p l e t i o n o f p r o c u re m e n t o f d e c i d e d q u a n t i t y t h e s a m e w e r e s t o r e d t o F C I ' s fi x e d s t o r a g e s a t v a r i o u s p l a c e s f o r s m o o t h s t o r a g e a n d mo v e m e n t ITA No. 180/Rjt/2014 [Kodinar Taluka Roo Vechan Mandali Ltd. vs.JCIT] AY 2009-10 - 5 - t h r o u g h o u t t h e y e a r . T h u s i n t h e a g r e e m e n t t r a n s po r t p a r t f r o m m a n d l i - m a r k e t y a r d - v i l l a g e t o t h e t r a n s i t g o d ow n s i n o u r s c o p e a l o n g w i t h o t h e r e x p e n s e s . We h a v e o c c u r r ed s u c h e x p e n s e s a s p e r t e r m s o f t h e a g r e e m e n t o n l y . C o p i e s o f b i l l s s u b m i t t e d t o F C I i n t h i s r e g a r d t o F C I i s p r o d u c e d . 2 ) A c c o u n t i n g m a t e r i a l i s p r o d u c e d 3 ) F C I h a s p a i d R s . 2 5 / - p e r M T (2 . 5 % o f R s . 1 , 0 0 0 /- ) f o r t h e w o r k - j o b - d u t y a s n a r r a t e d i n t h e a g r e e m e n t . T h is w o r k o r d e r i s r e c e i v e d i n k e e n c o m p e t i t i o n w i t h o t h e r s . We h a v e t o c o m p l e t e w h o l e s e a s o n a l w h e a t p r o c u r e m e n t w o r k on b e h a l f o f F C I . A s s t a t e d i n t h e a g r e e m e n t l a b o u r t ow a r d s a c q u i s i t i o n , t o t a l ( w e i g h m e n t ) , p a c k i n g , s h i f t i n g , s t a c k i n g , a n d l o a d i n g . We h a v e t o a r r a n g e a n d p a y t h e l a b o u r er s f o r w h o l e o p e r a t i o n . F C I h a s n o o t h e r e x p e n s e t o p a y i n t h i s r e g a r d . We h a d a r r a n g e d a n d p a i d t h e l a b o u r e r s f o r t h e w o r k d o w n b y t h e m . T h e y a r e p a i d c o n s i d e r i n g t h e i r p r e s en c e o n d a i l y - w e e k l y b a s i s . V o u c h e r s a r e p r o d u c e d f o r v e ri f i c a t i o n . T h i s i s a l a b o u r c u m t r a n s p o r t w o r k c o n t r a c t . A n d we a r e p a i d f o r t h e s e a c t i v i t i e s o n l y . S o n a t u r a l l y f i r s t w e h a v e t o p e r f o r m t h e d u t i e s a n d g e t t h e w o r k d o n e . P r e s e n c e r e g i s t e r , w a g e s h e e t s , v o u c h e r s e t c . a r e p r o d u c e d. I t w a s a t e m p o r a r y t i m e b o u n d l a b o u r - t r a n s p o r t w o r k c o n t r a c t . T h e n a f t e r n o s u c h w o r k o r d e r i s r e ce i v e d . A t p r e s e n t t u r n o v e r i s N I L N o E P F / E S I r e g i s t r a t i o n wa s a p p l i c a b l e a n d n o t p a i d . 4 ). G r o s s t r a n s p o r t a t i o n r e c e i p t i s R s . 2 , 7 0 , 5 0 , 6 7 2/ - . We w e r e t h e a e n c y a p p o i n t e d f o r c o m m i s s i o n / l a b o u r a nd t r a n s i t g o d o w n t r a n s p o r t a t i o n w o r k a n d h a v e f u r t h e r d o n e t h e t r a n s p o r t a t i o n o f t h e s e g o o d s f r o m t r a n s i t g o d ow n s t o F C I ' s r e g u l a r w a r e h o u s e s a n d a r e p a i d a s p e r r a t e s f i x e d b y t h e F C I . B i l l s w e r e r a i s e d t o F C I a s p e r q u a n t i t y t r a n s p o r t e d a n d a t t h e r a t e f i x e d b y t h e F C I . B i l l s w e r e r a i s e d t o F C I a s p e r q u a n t i t y t r a n s p o r t e d a n d a t t he r a t e f i x e d b y F C I . O n t h e o t h e r h a n d w e h a d p a i d t o t h e t r u c k o w n e r s f o r t h e q u a n t i t y t r a n s p o r t e d b y t h e m o n p r o du c t i o n o f e n d o r s e d L R s b y F C I . I t w a s j u s t a t r a n s p o r t c o nt r a c t . P a y m e n t r e g i s t e r s t o t h e t r u c k o w n e r s a n d c o p i e s o f b i l l s r a i s e d t o F C I f o r g o o d s t r a n s p o r t e d a r e p r o d u c e d . Ju s t l i k e l a b o u r c o m t r a n s p o r t c o n t r a c t a s d i s c u s s e d a b o v e t hi s w a s p u r e l y a t r a n s p o r t c o n t r a c t a n d o n t h e b a s i s o f w o rk d o n e w e w e r e p a i d t h e t r a n s p o r t c h a r g e s , o n t h e o t h e r h an d t r u c k o w n e r s w e r e p a i d a n d w e h a d e a r n e d o u r m a r g i n . " 3 . 4 A s p e r a g r e e m e n t d t . 8 . 0 3 . 2 0 0 8 b e t w e e n t h e F C I a n d t h e a s s e s s e e , t h e a s s e s s e e s o c i e t y i s t o ( a ) p r o c u r e w he a t f r o m f a r m e r s a t p u r c h a s e c e n t r e s ( b ) T h e e n t i r e o p e r a t i o n u n d e r t h e a g r e e m e n t i s t o b e c a r r i e d o u t u n d e r t h e s u p e r v i s i o n o f t h e of f i c e r s o f t h e S t a t e G o v e r n m e n t ( c ) D e l i v e r t h e w h e a t t o d e l i v e r y c e n t r e s s p e c i f i e d b y F C I ( d ) T h e w h e a t i s t o b e b a g g e d i n ne w g u n n y b a g s . ( e ) T h e b a g s w i l l b e s t e n c i l e d / m a r k e d / s t i c h e d in a c c o r d a n c e ITA No. 180/Rjt/2014 [Kodinar Taluka Roo Vechan Mandali Ltd. vs.JCIT] AY 2009-10 - 6 - w i t h t h e s p e c i f i c a t i o n s . T h e a g r e e m e n t a l s o p r o v i d es t h a t e x p e n s e s o n t r a n s p o r t a t i o n o f w h e a t r e i m b u r s e d b y t h e F C I . 3 . 5 T h u s a s i t t r a n s p i r e s f r o m t h e a g r e e m e n t , t h e as s e s s e e d o e s n o t h a v e t o i n c u r a n y e x p e n d i t u r e o n t r a n s p o r t a t i o n o f w h e a t ( F C I m a k i n g s e p a r a t e p a y m e n t t o a s s e s s e e f o r t r a n s p o r t a ti o n ) w h i c h c o u l d b e c l a i m e d a g a i n s t c o m m i s s i o n r e c e i p t s . H o w e ve r a s i s e v i d e n t f r o m T r a d i n g / P r o f i t & L o s s A c c o u n t , a s s e ss e e h a s c l a i m e d e x p e n d i t u r e o n t r a n s p o r t a t i o n w h i c h i s f a r m o r e t h a n t h e g r o s s r e c e i p t s f r o m F C I f o r t h i s p u r p o s e . 3 . 6 E x a m i n a t i o n o f A n n e x u r e - C ( I n c o m e & E x p e n d i t u r e a c c o u n t f o r c o m m i s s i o n i n c o m e ) o f t h i s o r d e r , r e v e a l s t h a t e x p e n d i t u r e o f R s . 1 , 4 2 , 4 1 , 7 5 0 7 - i s c l a i m e d a g a i n s t c o m m i s s i o n r e ce i p t s o f R s . 2 , 5 4 , 3 7 , 2 2 4 / - . A s p e r a g r e e m e n t , t r a n s p o r t a t i o n e x pe n d i t u r e w e r e s e p a r a t e l y r e i m b u r s e d b y F C I i n t h e f o r m o f t r a n s p or t a t i o n p a y m e n t s o f R s . 2 , 7 0 , 5 0 , 6 7 2 / - t o a s s e s s e e . I n f a c t a s s e s s e e h a s c l a i m e d i n f l a t e d , r a t h e r b o g u s e x p e n s e s o n t r a n s p o rt a t i o n t o r e d u c e i t s c o m m i s s i o n i n c o m e a n d t h e r e b y i t s t a x a b le i n c o m e . B o g u s c l a i m f o r t r a n s p o r t a t i o n e x p e n s e s i s p r o v e d wh e n A n n e x u r e - D a n d A n n e x u r e - A o f t h i s o r d e r a r e c o m p a r ed . A n n e x u r e - A i s c o m p u t a t i o n o f n e t p r o f i t f r o m t r a n s po r t a t i o n r e c e i p t s f r o m F C I , R a j k o t a n d A n n e x u r e - D i s c o m p u t at i o n o f n e t p r o f i t f r o m c o m m i s s i o n r e c e i p t s . F o l l o w i n g a r e c o m mo n i n t h e s e t w o a n n e x u r e s . ( i ) R s . 3 , 1 0 , 9 7 8 / - c h a d a i u t r a i ( l o a d i n g / u n l o a di n g ) ( i i ) R s . 3 7 , 1 0 , 1 1 8 / - p a c k i n g e x p e n s e s ( i i i ) R s . 1 1 , 2 9 , 1 1 0 / - s i l a i s u t l i & s u y a e x p e n s e s ( i v ) R s . 3 8 , 0 9 , 5 2 4 / - K a t a T o l a i e x p e n s e s 3 . 7 T h u s b o g u s c l a i m f o r t r a n s p o r t a t i o n e x p e n s e s a ga i n s t c o m m i s s i o n r e c e i p t s i s e s t a b l i s h e d a s e x a c t l y s i m i la r a m o u n t s h a v e b e e n c l a i m e d b y a s s e s s e e t w i c e , o n c e a g a i n s t c o m m i ss i o n r e c e i p t s a n d a g a i n a g a i n s t t r a n s p o r t a t i o n r e c e i p t s . F o r e g o i ng a n a l y s i s e s t a b l i s h e s a n o t h e r v e r y v i t a l p o i n t a g a i n s t a s s e s se e a n d t h a t i s t h a t l o a d i n g u n l o a d i n g e x p e n s e s , p a c k i n g e x p e n s e s , s i l a i e x p e n s e s , K a t a T o l a i e x p e n s e s a r e a l l t r a n s p o r t a t i o n e x p e n s e s a n d f o r t h a t r e a s o n t h e s e e x p e n s e s f i n d p l a c e i n A n n e x u r e - A a n d a s s e s s e e i s r e i m b u r s e d t h o s e t r a n s p o r t a t i o n r e c e i p t s f r o m F C I . 3 . 8 A s s e s s e e ' s m a i n a r g u m e n t a g a i n s t d i s a l l o w a n c e is t h a t F C I p a i d f o r t r a n s p o r t a t i o n o f w h e a t f r o m t r a n s i t g o d o wn s / p l a c e s t o w a r e h o u s e s o f t h e F C I a n d a s s e s s e e h a d t o i n c u r e x tr a e x p e n s e s f o r t r a n s p o r t a t i o n f r o m p u r c h a s e c e n t r e s t o t r a n s i t g o d o w n s / p l a c e s . T h i s a r g u m e n t i s n o t a c c e p t a b l e f o r r e a s o n s m e n t i o n e d i n p a r a - 3 . 6 & 3 . 7 , s u p r a . M o r e o v e r t h e a ss e s s 2 6 c o u l d n o t p r o d u c e a n y e v i d e n c e t o p r o v e t h a t i t i n c u r r e d e x p e n d i t u r e o n t r a n s p o r t a t i o n w h i c h e x c e e d e d t h e p a y m e n t r e c e i v e d b y i t f r o m F C I , f o r t h i s p u r p o s e . F u r t h e r a s s e s s e e c o u l d n o t pr o d u c e c l i n c h i n g e v i d e n c e a n d a u t h e n t i c v o u c h e r s f o r p a y m en t o f t r a n s p o r t a t i o n c h a r g e s . D e s p i t e s p e c i f i c a n d r e p e a te d r e q u i r e m e n t ITA No. 180/Rjt/2014 [Kodinar Taluka Roo Vechan Mandali Ltd. vs.JCIT] AY 2009-10 - 7 - a s s e s s e e d i d n o t f i l e d e t a i l s o f N a m e & a d d r e s s o f p a y e e s , t h e i r P A N , a m o u n t p a i d a n d T D S , o n t h e p l e a t h a t T r u c k o wn e r s / d r i v e r s w e r e p a i d o n L / R t o L ' R b a s i s a n d n o s i n g l e p a y m e n t w a s m o r e t h a n R s . 2 0 , 0 0 0 7 - a n d h e n c e T D S l i a b i l i t y d i d n o t ar i s e . A s s e s s e e h a s n o t b e e n a b l e t o s u b s t a n t i a t e h i s c l a i m f o r e x pe n d i t u r e o n t r a n s p o r t a t i o n , n e i t h e r i d e n t i t y o f p a y e e n o r g e n u in e n e s s o f t h e e x p e n d i t u r e i s e s t a b l i s h e d . 3 . 9 I n v i e w o f t h e a b o v e m e n t i o n e d f a c t s a n d c i r c u ms t a n c e s , e x p a n s e s o f R s . 1 , 4 2 , 4 1 , 7 5 0 / - c l a i m e d a s t r a n s p o r t at i o n e x p e n s e s a g a i n s t c o m m i s s i o n r e c e i p t s o f R s . 2 , 5 4 , 3 7 , 2 2 4 / - a r e h e l d t o b e b o g u s a s t h e s e e x p e n s e s h a v e a l s o b e e n c l a i m e d b y as s e s s e e a g a i n s t t r a n s p o r t a t i o n r e c e i p t s o f R s . 2 , 7 0 , 5 0 , 6 7 2 /- . A c c o r d i n g l y a n a d d i t i o n o f R s . 1 , 4 2 , 4 1 , 7 5 0 / - i s m a d e t o t h e d e cl a r e d i n c o m e b y d i s a l l o w i n g t h e s e e x p e n s e s a g a i n s t c o m m i s s i o n r e c e ip t s . ” “ 4 . D I S A L L O W A N C E O U T O F L A B O U R E X P E N S E S : A s p e r t h e T r a d i n g / P r o f i t & L o s s a c c o u n t , a s s e s s ee h a d c l a i m e d e x p e n d i t u r e o f R s . 6 1 , 1 4 , 9 7 8 / - a s l a b o u r c ha r g e s . F u r t h e r d e t a i l s f i l e d b y t h e a s s e s s e e s h o w t h a t t h e s e e x p e ns e s w e r e c l a i m e d a g a i n s t c o m m i s s i o n r e c e i p t s o f R s . 2 , 5 4 , 3 7 , 2 2 4 / - ( Re f e r A n n e x u r e - C o f t h i s o r d e r ) . T h e b u s i n e s s o f a s s e s s e e i s e x c l us i v e l y t h a t o f p r o c u r e m e n t o f w h e a t f o r F C I f r o m f a r m e r s a t p u r c h as e c e n t r e s a n d d e l i v e r y o f t h e s a m e a t t h e g o d o w n 7 s p e c i f i e d p l a c e s o f , F C I . P r i m a f a c i a t h e h u g e e x p e n d i t u r e o f R s . 6 1 , 1 4 , 9 7 8 / - a s l a b o u r c h a r g e s a p p e a r s t o b e h i g h e r , m o r e p a r t i c u l a r l y w h en t h e a s s e s s e e h a s i n c u r r e d f u r t h e r e x p e n s e s o f R s . 3 3 , 7 8 , 6 5 0 7 / o n s a l a r y . $ o t h e a s s e s s e e w a s a s k e d t o s u b s t a n t i a t e t h e e x p e n s e s o n l a b o u r c h a r g e s o f R s . 6 1 , 1 4 , 9 7 8 / - . A s s e s s e e w a s a l s o a s k e d t o f i l e b r i e f r e a s o n s j u s t i f y i n g t h e q u a n t u m o f s u c h e x p e n s e s . N e c e s s a r y e v i d e n c e / r e c o r d s w e r e r e q u i r e d t o b e p r o d u c e d . H o w e v e r n o a u t h e n t i c r e c o r d o r r e l i a b l e e v i d e n c e w as f i l e d b y a s s e s s e e . I n t e r n a l v o u c h e r s w i t h n o a u t h e n t i c i t y w e r e o n l y m a i n t a i n e d a n d p r o d u c e d . N o i n d e p e n d e n t e v i d e n c e w as a v a i l a b l e . T h e r e f o r e 1 0 % o f t h e s e e x p e n s e s a r e d i s a l l o w e d , r e su l t i n g i n a n a d d i t i o n o f R s . 6 , 1 1 , 4 9 0 / - . ” Finally, an a mou nt of Rs.1,42,41,758/- was disallowed for transport expenses and an a mo unt of Rs.6,11,490/- was disallowed for labour charges. 4. Against the said appeal, assessee preferred first statutory appeal before the CIT( A), but, beca use of so me reaso ns it could ITA No. 180/Rjt/2014 [Kodinar Taluka Roo Vechan Mandali Ltd. vs.JCIT] AY 2009-10 - 8 - not file its submission. The lear ned CIT( A) conf irmed the action of the AO without going into the facts of the c a se. 5. Since, learned CI T(A) has not passed his order on merit of the case and sa me order was passed ex parte, therefo re, in the interest of justice, we set aside this matter back to the file of the CIT(A) who will decide this matter afr esh after giving opportunity of being hearing to the assessee to the subject to the cost of Rs.1000/- to be paid by the assessee to the depart ment as it has wasted precious time of the CIT( A) for non-fi ling of its submissions. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Sd/- Sd/- (WASEEM AHMED) (MAHAVIR PRASAD) ACC OUNTANT MEMB ER JUDICIAL MEMBER Ahmedabad: Dated 28/02/2022 True Copy S.K.SINHA आदेश े / Copy of Order Forwarded to:- $. र / Revenue 2. आ दक / Assessee '. सं(ं)* आयकर आय + / Concerned CIT 4. आयकर आय + - अपील / CIT (A) .. / 0 1ीय 2 2 )*3 आयकर अपील य अ)*कर#3 अ45द ( द / DR, ITAT, Ahmedabad 6. 1 78 फ ल / Guard file. By order/आद श स 3 D e p u t y / A s s t t . R e g i s t r a r I T A T , R a j k o t This Order pronounced in Open Court on 28/02/2022