ITO, Ward 1(3), Nashik V. Smt. Swati Sanjay Jadhav, Nashik

ITA 1873/PUN/2012

• Counselvise Citation: 187324514 RSA 2012
• Duration Of Justice: 1 year(s) 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-02-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 01-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Business expenditure
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.1873/PN/2012 (A.Y: 2009-10) ITO, WARD 1(3), NASHIK APPELLANT VS. SMT. SWATI SANJAY JADHAV HOUSE NO.787, BEHIND POST OFFICE, AT-SINNER, DIST: NASHIK. PAN: ADHPJ1320Q RESPONDENT CO NO.79/PN/2013 (A.Y: 2009-10) SMT. SWATI SANJAY JADHAV HOUSE NO.787, BEHIND POST OFFICE, AT-SINNER, DIST: NASHIK. PAN: ADHPJ1320Q CROSS OBJECTOR VS ITO, WARD 1(3), NASHIK RESPONDENT ASSESSEE BY : SHRI PRAMOD S . SHINGTE DEPARTMENT BY : SHRI RAJE SH DAMOR DATE OF HEARING: 12.08.2014 DATE OF ORDER : 28.08.2014 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THE APPEAL HAS BEEN FILED BY THE REVENUE AND THE C ROSS OBJECTION FILED BY THE ASSESSEE AGAINST THE ORDER O F COMMISSIONER OF INCOME TAX (APPEAL)-I, NASHIK, DATED 26.07.2012 FOR A.Y. 2009-10. 2 ITA NO.1873 OF 12 & CO NO.79/13 SMT. SWATI SANJAY JADHAV 2. IN ITA NO.1873/PN/2012, THE REVENUE HAS FILED TH E APPEAL ON THE FOLLOWING GROUNDS. 1. ON THE FACTS & CIRCUMSTANCES OF THE CASE & IN LAW, WHETHER THE HON. CIT(A) WAS JUSTIFIED IN DELETING T HE ADDITION OF RS.34,27,211/- MADE BY A.O. 2. THE HONORABLE CIT(A)-I, NASIK HAS ERRED IN ACCEPTIN G THE ASSESSEE CONTENTION THAT THE APPELLANT IS NOT E NGAGED IN THE BUSINESS OF TRANSPORTATION BUT HE WAS A PRIMARI LY A COMMISSION AGENT / BROKER AND HENCE THE PAYMENTS DISALLOWED U/S. 40A (3) OF THE IT. ACT, 1961 WERE N OT APPLICABLE AS IT IS NOT A BUSINESS EXPENSES OF THE APPELLANT, BY RELYING UPON THE DECISION IN THE CASE OF G.A. RO AD CARRIERS V/S. ITO (2011) 44 SOT 145 (HYD.) THE FACT S AND CIRCUMSTANCES OF THE PRESENT CASE ARE DIFFERENT. 3. THE HONORABLE CIT(A)-I, NASIK HAS ERRED IN THE TREA TING THE ASSESSEE AS A COMMISSION AGENT NOT A TRANSPORT CONTRACTOR. FROM THE TRANSACTIONS OF THE ASSESSEE'S BUSINESS IT IS SEEN THAT THE ASSESSEE HAS ACCEPTED THE RECEIPTS FROM THE CONCERNED PARTIES AS A TRANSPORT CONTRACTOR. THE TAX HAS BEEN DEDUCTED AT SOURCE U/S .194C BY THE PARTIES WHO ARE MAKING THE PAYMENTS TO THE A SSESSEE AS TRANSPORT CONTRACTOR AND NOT A COMMISSION AGENT, BECAUSE THE RATE APPLIED FOR TDS WAS @ 2% AND NOT @ 10% AS PER THE RECORD. THUS, IT IS A EVIDENCE THAT THE ASSESSEE IS A TRANSPORT CONTRACTOR BUT NOT A TRANSPORT AGENT. T HEREFORE THE FACTS OF THE CASE ARE NOT SIMILAR TO THE ABOVE CITED CASE. 4. THE HONORABLE CIT(A)-I, NASIK HAS NOT APPRECIATED T HE FACTS BROUGHT DOWN BY THE A.O. IN THE ASSESSMENT OR DER SUBMITTED. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE I T IS THEREFORE REQUESTED TO CANCEL THE ORDER OF THE HONO RABLE CIT(A)-I, NASIK AND RESTORE THE ORDER OF THE ASSESS ING OFFICER. 6. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, MODIFY TH E GROUNDS OF APPEAL, IF CONSIDERED NECESSARY SUBSEQUE NTLY. 2.1 IN CO NO.79/PN/2013, THE ASSESSEE HAS FILED THE FOLLOWING OBJECTION. 3 ITA NO.1873 OF 12 & CO NO.79/13 SMT. SWATI SANJAY JADHAV ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN REJECTING THE BOOKS OF ACCOUNTS BY INVOKIN G THE PROVISIONS OF SECTION 145 OF THE INCOME TAX ACT, 19 61 AND HAS FURTHER ERRED IN ESTIMATING THE PROFIT AND MAKI NG THE ADDITION OF RS.4,52,189/-. 3. THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUS INESS OF TRANSPORT AGENT. THE ASSESSEE HAS FILED A RETURN O F INCOME DECLARING TOTAL INCOME OF RS.9,70,810/-. THE ASSES SING OFFICER HAS ASSESSED THE INCOME OF THE ASSESSEE U/S.143(3) OF THE ACT AT RS.48,54,594/-. THE ASSESSING OFFICER HAS MADE ADD ITION OF RS.15,76,400/- TOWARDS ALLEGED UNACCOUNTED CASH HEL D BY THE ASSESSEE, RS.23,03,000/- TOWARDS DISALLOWANCE U/S. 40A(3) AND RS.4,380/- TOWARDS PERSONAL USE OF VEHICLE. 3.1 AT THE OUTSET OF HEARING, THE LEARNED AUTHORIZE D REPRESENTATIVE HAS STATED THAT HE IS NOT PRESSING T HE GROUNDS RAISED IN CROSS OBJECTION, SO THE SAME ARE DISMISSE D AS NOT PRESSED. 4. THE FIRST ISSUE IN REVENUES APPEAL IS WITH REGA RD TO THE ADDITION OF RS.15,76,400/- ON ACCOUNT OF ALLEGED UN DISCLOSED INCOME. THE ASSESSING OFFICER HAS MADE THIS ADDITI ON FOR THE FOLLOWING REASONS. (I) DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE AO HAS NOTICED THAT THE APPELLANT HAS RECEIVED TRANSPO RTATION RECEIPTS DURING THE PERIOD 05/03/2009 TO 30/03/2009 AMOUNTING TO RS.15,76,400/-, HOWEVER, THE EXPENSES IN RESPECT OF THESE RECEIPTS HAVE NOT BEEN RECORDED IN THE BOOKS OF ACCOUNTS AS THE CHEQUES ISSUED TO TRANSPOR TERS IN RESPECT OF THE EXPENDITURE WERE EN-CASHED IN THE MO NTH OF APRIL 2009. IF THE ABOVE FACT OF NOT RECORDING EXPE NDITURE OF RS.15,76,400/- IS CONSIDERED, THEN, AS PER PROFIT A ND LOSS ACCOUNT THERE WOULD HAVE BEEN ABNORMALLY HIGH PROFI T; HOWEVER, AS THE ASSESSEE HAS BOOKED BOGUS EXPENSES THE AMOUNT OF PROFIT DECLARED BY THE APPELLANT HAS BEEN REDUCED. 4 ITA NO.1873 OF 12 & CO NO.79/13 SMT. SWATI SANJAY JADHAV (II) THE AO HAS ALSO STATED IN PARA 4 OF THE IMPUGN ED ASSESSMENT ORDER THAT THE APPELLANT COULD NOT CO-RE LATE THE EXACT ENTRIES FOR EXPENDITURE INCURRED AGAINST EXAC T ENTRIES OF FREIGHT CHARGES RECEIVED. THE AO HAS ALSO POINTE D OUT THAT ON FEW DAYS DURING THE YEAR UNDER APPEAL THE APPELL ANT HAS BOOKED EXPENSES, HOWEVER, ON THE SAID DATES RECEIPT S WERE EITHER SHOWN ON LOWER SIDE OR HAS NOT BEEN SHOWN AT ALL. (III) THE AO HAS FURTHER POINTED OUT IN PARA 5 OF T HE IMPUGNED ASSESSMENT ORDER THAT ON PERUSAL OF THE CH EQUES TOWARDS EXPENSES OF RS.15,76,400/- ENCASHED IN APRI L 2009, OBTAINED FROM THE CONCERNED BANK, IT HAS BEEN NOTICED THAT THE SAID CHEQUES WERE SIGNED BY THE SA ME PERSON ON THE BACK SIDE OF THE CHEQUES; THE PERSON SIGNING THE CHEQUE APPEARS TO BE ASSESSEE'S REPRESENTATIVE. (IV) THE AO HAS FURTHER ALLEGED THAT THE MODUS OPER ANDI OF THE ASSESSEE IS TO MAKE CASH PAYMENT TOWARDS EXPENS ES TO TRANSPORTERS AND THEREAFTER, AS AND WHEN BALANCE IS AVAILABLE IN THE BANK, THE SAID CHEQUES ARE BEING E NCASHED. (V) THE AO, HAS REJECTED THE CONTENTION OF THE APPE LLANT THAT THE SAID BEARER CHEQUES WERE SIGNED BY TWO PER SONS ON THE BACK SIDE OF THE SAME, ONE OF WHOM IS A TRANSPO RTER AND THE ANOTHER PERSON SIGNING THE CHEQUE IS A TRANSPOR T GUIDE, WHO ACCOMPANIED THE DRIVERS OF THE TRANSPORTERS AND PUT HIS SIGNATURE FOR IDENTIFICATION OF THE HOLDER OF T HE BEARER CHEQUES. FOR REJECTING THE CONTENTION OF THE APPELL ANT THE AO HAS STATED THAT MOST OF THE SAID TRANSPORTERS AR E FROM OUTSTATION AND HENCE THEY WOULD INSIST ON CASH PAYM ENT AND IN VIEW OF THEIR NATURE OF WORK, THEY WERE NOT SURE WHEN THEY SHALL RETURN BACK TO THE SINNAR I.E. THE PLACE OF OPERATION OF THE ASSESSEE. (VI) THE AO AFTER REJECTING THE CONTENTION OF THE A PPELLANT HAS HELD IN PARA 6 OF THE IMPUGNED ASSESSMENT ORDER THAT THE APPELLANT HAS ACTUALLY PAID THE TRANSPORT EXPE NSES IN CASH OUT OF UNACCOUNTED CASH AVAILABLE WITH HE R AND SUBSEQUENTLY WITHDRAWN THE AMOUNT FROM BANK A/C AS AND WHEN FUNDS WERE AVAILABLE IN THE BANK ACCOUNT. (VII) THE AO HAS ALSO NOT ACCEPTED THE CONTENTION O F THE APPELLANT THAT THE APPELLANT HAS NOT PAID ANY UNDIS CLOSED CASH TO THE DRIVERS/TRANSPORTERS AS ALLEGED BY THE AO AND HENCE, IN FACT, AS THE EXPENDITURE IS NOT RECORDED, IN THE BOOKS OF ACCOUNT IN THE YEAR UNDER APPEAL BUT IN SUBSEQUENT YEAR THE INCOME OF THE APPELLANT IS OVER ASSESSED. 5 ITA NO.1873 OF 12 & CO NO.79/13 SMT. SWATI SANJAY JADHAV THE AO STATING ABOVE OBSERVATIONS AND REASONS HELD THAT THE AMOUNT OF RS.15,76,400/- IS UNACCOUNTED CA SH HELD BY THE ASSESSEE WHICH IS IN CIRCULATION IN HER BUSINESS ACTIVITY. 4.1 THE MATTER WAS CARRIED BEFORE FIRST APPELLATE A UTHORITY, WHEREIN THE VARIOUS CONTENTIONS WERE RAISED ON BEHA LF OF THE ASSESSEE AND HAVING CONSIDERED THE SAME, THE CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE. THE SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF THE REVENUE, INTER ALIA, SUBMITTED THAT T HE CIT(A) HAS ERRED IN ACCEPTING THE ASSESSEE CONTENTION THAT TH E ASSESSEE IS NOT ENGAGED IN THE BUSINESS OF TRANSPORTATION BUT H E WAS A PRIMARILY A COMMISSION AGENT / BROKER AND HENCE THE PAYMENTS DISALLOWED U/S. 40A (3) OF THE IT. ACT, 1961 WERE N OT APPLICABLE AS IT WAS NOT A BUSINESS EXPENSE OF THE ASSESSEE. THE CIT(A) ERRED IN TREATING THE ASSESSEE AS COMMISSION AGENT NOT TRANSPORT CONTRACTOR. ACCORDING TO THE LEARNED DEPARTMENTAL REPRESENTATIVE, THE ASSESSEE HAS ACCEPTED RECEIPTS FROM THE CONCERNED PARTIES AS TRANSPORT CONTRACTOR. THE TAX HAS BEEN DEDUCTED AT SOURCE U/S.194C BY THE PARTIES WHO ARE MAKING THE PAYMENTS TO THE ASSESSEE AS TRANSPORT CONTRACTOR AN D NOT A COMMISSION AGENT, BECAUSE THE RATE APPLIED FOR TDS WAS @ 2% AND NOT @ 10% AS PER THE RECORD. ACCORDINGLY, THE ORDER OF CIT(A) BE SET ASIDE AND THAT OF ASSESSING OFFICER B E RESTORED. ON THE OTHER HAND, THE LEARNED AUTHORIZED REPRESENTATI VE HAS SUPPORTED THE ORDER OF CIT(A) AND RELIED ON THE DEC ISION OF HONBLE HIGH COURT OF ALLAHABAD IN THE CASE OF CIT VS. BANWARILAL BANSHIDHAR (1998) 229 ITR 229 (ALL), WHEREIN, THE I NCOME WAS ASSESSED AT G.P. RATE BY REJECTING THE BOOKS OF THE ASSESSEE U/S.145(1) PROVISO, SO NO DISALLOWANCE COULD BE MAD E SEPARATELY U/S.40A(3) OF THE ACT AND ULTIMATELY SUPPORTED THE ORDER OF CIT(A). 6 ITA NO.1873 OF 12 & CO NO.79/13 SMT. SWATI SANJAY JADHAV 4.2 AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND M ATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAS RECEIVED TRAN SPORTER CHARGES FROM THREE COMPANIES ENGAGED IN THE BUSINES S OF MANUFACTURING OF EMPTY GAS CYLINDERS. THE ASSESSEE HAS ARRANGED FOR TRANSPORTATION OF CYLINDERS FOR THE SA ID COMPANIES. THE ASSESSEE HAS EARNED CERTAIN INCOME FROM MAKING SUCH ARRANGEMENT WHICH WAS IN NATURE OF COMMISSION / BRO KERAGE AND THE ASSESSEE WAS NOT ENGAGED IN THE BUSINESS OF TRA NSPORTATION, THE EXPENDITURE ON TRANSPORTATION INCURRED BY THE A SSESSEE WAS NOT FOR HIS OWN BUSINESS BUT FOR OTHER PARTIES INVO LVED. IN THE CASE OF G.A. ROAD CARRIERS VS. ITO (2011) 44 SOT 14 5 (HYD.) RELIED ON BY THE CIT(A), WHEREIN THE ASSESSEE HAS E ARNED CERTAIN INCOME TOWARDS COMMISSION FOR ARRANGING TRANSPORTAT ION SERVICES, THE TRIBUNAL HELD THAT THE ASSESSEE DID N OT CARRY ON BUSINESS OF TRANSPORTATION OPERATION BUT ITS BUSINE SS WAS PRIMARILY OF COMMISSION AGENT / BROKER. IT ACTUALL Y FACILITATED THE PAYMENT OF HIRE CHARGES BY USING OF TRANSPORT VEHIC LES BEING BIDI MANUFACTURER TO ACTUAL OWNER OF THE VEHICLE. THERE FORE, THE TRIBUNAL HELD THAT CASH PAYMENTS WERE NOT BUSINESS EXPENDITURE OF THE ASSESSEE AND COULD NOT BE DISALLOWED U/S.40A (3) OF THE ACT. SO, APPLYING THE SAME RATIO, THE CIT(A) HELD THAT T HE PROVISIONS OF SECTION 40A(3) ARE NOT APPLICABLE. THEREFORE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN DISALLOWING THE AMOUNT OF RS.23,03,000/-. WE FIND THAT THE ASSESSING OFFICER HAS MADE ADDITION OF RS.15,76,400/- ON PRESUMPTION THAT THE ASSESSEE HAS PAID AN AMOUNT OF RS.15,76,400/- TO THE TRANSPORTER S / DRIVERS IN CASH OUT OF HER UNDISCLOSED INCOME. THE ASSESSI NG OFFICER HAS HOWEVER, NOT BROUGHT ON RECORD ANY CORROBORATIVE EV IDENCE TO SUPPORT HIS CONTENTION. THE ASSESSING OFFICER HAS NOT ESTABLISHED HIS CONTENTION BY BRINGING ON RECORD AN Y EVIDENCE SUCH AS STATEMENT OF DRIVER OR THE TRANSPORTERS, ET C. THE ASSESSEE HAS CLAIMED THAT IF THE EXPENDITURE OF RS. 15,76,400/- WHICH RELATES TO TRANSPORTATION RECEIPTS WHICH HAVE BEEN CREDITED 7 ITA NO.1873 OF 12 & CO NO.79/13 SMT. SWATI SANJAY JADHAV TO PROFIT AND LOSS ACCOUNT IS CONSIDERED, THEN HER PROFITS SHALL REDUCE TO THE EXTENT OF RS.15,76,400/-. THE ASSESS EE HAS ALSO CLAIMED THAT THE ADDITION OF RS.15,76,400/- WAS NOT JUSTIFIED WITHOUT REJECTING THE BOOK RESULTS U/S.145 OF THE A CT. IT WAS ALSO POINTED OUT ON BEHALF OF THE ASSESSEE THAT THE BOOK S OF ACCOUNT HAVE BEEN REGULARLY MAINTAINED AND AUDITED. CERTAI N DISCREPANCIES WERE FOUND BY THE ASSESSING OFFICER W ERE CONFIRMED BY THE CIT(A) WHICH IS AS UNDER: (I) THE ASSESSEE HAS NOT RECORDED EXPENSES ON ISSU E OF CHEQUES INSPITE OF THE FACT THAT INCOME IN RESPECT OF THE SAID EXPENSES HAVE ALREADY BEEN ACCOUNTED FOR. THIS IS I N CONTRAVENTION OF MATCHING PRINCIPLES OF ACCOUNTING. (II) THE ASSESSEE COULD NOT SUBMIT THE DETAILED INFORMATION REQUIRED BY THE AO AS REGARDS EXACT ENT RIES OF EXPENDITURE AGAINST EXACT RECEIPTS RECORDED IN THE BOOKS OF ACCOUNT. (III) SUBSTANTIAL PAYMENTS WERE MADE IN CASH OR BY BEARER CHEQUES. IN VIEW OF ABOVE, THE AUTHORITIES BELOW WAS JUSTIF IED IN OBSERVING THAT THE BOOKS OF ACCOUNT MAINTAINED BY T HE ASSESSEE DOES NOT REFLECT CORRECT PROFIT AND WERE LIABLE TO BE REJECTED U/S.145 OF THE ACT. IN VIEW OF ABOVE DISCREPANCIES , THE ASSESSEE WAS ASKED BY THE CIT(A) AS TO WHY THE BOOK RESULTS SHOULD NOT BE REJECTED AND THE PROFITS OF THE BUSINESS SHOULD NOT BE ESTIMATED AT REASONABLE PERCENTAGE OF BUSINESS RECEIPTS. IN THIS REGARD, THE STAND OF THE ASSESSEE HAS BEEN THAT THE ASSESSING O FFICER HAS NOT REJECTED BOOKS OF ACCOUNT AND THE CIT(A) HAS NO POW ER TO REJECT THE BOOK RESULTS PARTICULARLY WHERE THE BOOKS OF AC COUNT WERE REGULARLY MAINTAINED AND AUDITED. IN VIEW OF THE D ISCREPANCIES STATED ABOVE, THE BOOK RESULTS WERE REJECTED BY APP LYING PROVISIONS OF SECTION 145 OF THE ACT AND GROSS PROF IT OF THE ASSESSEE WAS ESTIMATED BY CONSIDERING THE TOTALITY OF THE FACTS. THE CONTENTION OF THE ASSESSEE HAS BEEN THAT THE GR OSS PROFIT OF 8 ITA NO.1873 OF 12 & CO NO.79/13 SMT. SWATI SANJAY JADHAV THE ASSESSEE FOR ARRANGING TRANSPORTATION FACILITIE S FOR COMPANIES MANUFACTURING GAS CYLINDERS WAS ESTIMATED AT 8% OF GROSS RECEIPTS OF RS.2,72,21,662/- AS AGAINST DECLARED BY THE ASSESSEE AT 6.24% AFTER CONSIDERING THE TOTALITY OF THE FACT S OF THE CASE. THE GROSS PROFIT WAS ACCORDINGLY WORKED OUT AT RS.2 1,77,733/- AS AGAINST DECLARED BY THE ASSESSEE AT RS.17,25,544/-. THE RESULTANT ADDITION WORKS OUT TO RS.4,52,189/-. ACC ORDINGLY, THE CIT(A) RIGHTLY SUSTAINED THE ADDITION OF RS.4,52,18 9/- AND GRANTED RELIEF OF RS.11,24,211/-. THIS REASONED FI NDING OF CIT(A) WHEREBY THE INCOME ASSESSED AT GROSS PROFIT BY REJE CTING THE BOOKS OF ACCOUNT UNDER THE PROVISO TO SECTION 145 O F THE ACT, NO FURTHER DISALLOWANCE COULD BE MADE SEPARATELY U/S.4 0A(3) OF THE ACT AS HELD BY THE HONBLE HIGH COURT OF ALLAHABAD IN THE CASE OF CIT VS. BANWARILAL BANSHIDHAR (SUPRA). THE RATIO L AID DOWN IN P.K. RAMASWAMY NADAR & BROS. VS. ITO (2014) 41 TAXM ANN.COM 538 (MAD) RELIED ON BY THE LEARNED DEPARTMENTAL REP RESENTATIVE IS NOT APPLICABLE TO THE FACTS OF PRESENT CASE IN L ETTER AND SPIRIT. THE SAME NEEDS NO INTERFERENCE FROM OUR SIDE. WE U PHOLD THE SAME. 5. THE NEXT ISSUE IS WITH REGARD TO MAKING ADDITION OF RS.23,03,000/- U/S.40A(3) OF THE ACT. THE ASSESSIN G OFFICER HAS MADE ADDITION IN PARA 7 OF ITS ORDER. THE ASSESSIN G OFFICER HAS NOTICED THAT THE ASSESSEE HAS MADE CASH PAYMENT TO THE DRIVERS/ TRANSPORTERS TO THE EXTENT OF RS.23,03,000/- IN EXC ESS OF RS.20,000/- AND HAS THEREFORE, DISALLOWED THE SAME U/S.40A(3) OF THE ACT. 5.1 THE MATTER WAS CARRIED BEFORE FIRST APPELLATE A UTHORITY, WHEREIN THE VARIOUS CONTENTIONS WERE RAISED ON BEHA LF OF THE ASSESSEE AND HAVING CONSIDERED THE SAME, THE CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE. THE SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF THE REVENUE, INTER ALIA, SUBMITTED THAT T HE CIT(A) WAS 9 ITA NO.1873 OF 12 & CO NO.79/13 SMT. SWATI SANJAY JADHAV NOT JUSTIFIED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER AND REQUESTED TO SET ASIDE THE ORDER OF CIT (A) AND THAT OF ASSESSING OFFICER BE RESTORED ON THE ISSUE. ON THE OTHER HAND, THE LEARNED AUTHORIZED REPRESENTATIVE HAS SUPPORTED THE ORDER OF CIT(A) ON THE ISSUE. 5.2 AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND M ATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAS RECEIVED TRAN SPORTATION CHARGES FROM THREE COMPANIES ENGAGED IN THE BUSINES S OF MANUFACTURING EMPTY GAS CYLINDERS. THE ASSESSEE HA S ARRANGED FOR THE TRANSPORTATION OF THE CYLINDERS BY ARRANGIN G THE TRANSPORTERS FOR THE TRANSPORTATION OF THE CYLINDER S FOR THE SAID CYLINDER MANUFACTURING COMPANIES. SHE HAS EARNED C ERTAIN INCOME FOR MAKING THE SAID ARRANGEMENT WHICH WAS IN THE NATURE OF COMMISSION / BROKERAGE. THE ASSESSEE IS NOT ENG AGED IN THE BUSINESS OF TRANSPORTATION. THE EXPENDITURE ON TRA NSPORTATION INCURRED BY THE ASSESSEE WAS NOT FOR HIS OWN BUSINE SS BUT FOR THE OTHER PARTIES INVOLVED. THE CIT(A) FOLLOWING THE R ATIO OF G.A. ROAD CARRIERS (SUPRA) GRANTED RELIEF TO THE ASSESSEE. I N THE CASE OF G.A. ROAD CARRIERS (SUPRA), THE ASSESSEE HAS ARRANGED FO R THE SIMILAR SERVICES OF TRANSPORTATION FOR BIDI MANUFACTURING C OMPANIES OF HIRING LORRIES AND MADE CASH PAYMENTS TO LORRY OWNE RS THROUGH THEIR DRIVERS AND THE ASSESSEE HAS EARNED CERTAIN A MOUNT TOWARDS COMMISSION FOR ARRANGING TRANSPORTATION SER VICES. ITAT, HYDERABAD BENCH HAS HELD THAT THE ASSESSEE DID NOT CARRY ON ANY BUSINESS OF TRANSPORT OPERATOR BUT ITS BUSINESS WAS PRIMARILY OF COMMISSION AGENT / BROKER AND IT ACTUALLY FACILI TATED PAYMENT OF HIRE CHARGES BY USERS OF TRANSPORT VEHICLES BEIN G BIDI MANUFACTURERS TO ACTUAL OWNERS OF VEHICLES. IN SUC H SITUATION, ITAT, HYDERABAD HAS HELD THAT THE CASH PAYMENTS WER E NOT BUSINESS EXPENDITURE OF THE ASSESSEE AND COULD NOT BE DISALLOWED U/S.40A(3) OF THE ACT. FACTS BEING SIMILAR, THE CI T(A) HAS HELD THAT THE PROVISIONS OF SECTION 40A(3) ARE NOT APPLI CABLE AND 10 ITA NO.1873 OF 12 & CO NO.79/13 SMT. SWATI SANJAY JADHAV THEREFORE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN DISALLOWING RS.23,03,000/- U/S.40A(3) OF THE ACT. ACCORDINGLY, THE SAME WAS RIGHTLY DELETED BY THE CIT(A). THIS REASONED FINDI NG OF CIT(A) NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 6. AS A RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 7. IN THE RESULT, APPEAL FILED BY THE REVENUE AS WE LL AS THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED . PRONOUNCED IN THE OPEN COURT ON THIS THE 28 TH DAY OF AUGUST, 2014. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 28 TH AUGUST, 2014 GCVSR COPY TO:- 1) DEPARTMENT 2) ASSESSEE 3) THE CIT(A)-I, NASHIK 4) THE CIT-I, NASHIK 5) THE DR, A BENCH, I.T.A.T., PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE