The Tamilnadu State Transport Corporation (Kum Div I) Limited, Kumbakonam V. JCIT, Kumbakonam

ITA 1933/CHNY/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5123 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-05-2011
• Assessment Year: 1994-1995
• Appeal Filed On: 24-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR
• Keywords: Bogus purchase

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCH B BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NO. 1933/MDS/2009 ASSESSMENT YEAR : 1994-95 TAMILNADU STATE TRANSPORT CORPORATION (KUM.DIV-I) LTD. RAILWAY STATION NEW ROAD, KUMBAKONAM-612 001. PAN AAACD 1269 K VS. THE JOINT COMMISSIONER OF INCOME-TAX, KUMBAKONAM RANGE, KUMBAKONAM. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S. SRIDHAR RESPONDENT BY : SHRI K.E.B.RENGARAJAN, JR. STANDING COUN SEL O R D E R PER DR. O.K.NARAYANAN, VICE PRESIDENT THIS APPEAL IS FILED BY THE ASSESSEE. THE RELEVAN T ASSESSMENT YEAR IS 1994-95. THE APPEAL IS DIRECT ED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), TIRUCHIRAPPALLI DATED 20.10.2009 AND ARISES OUT OF THE ITA 1933/09 :- 2 -: ASSESSMENT COMPLETED UNDER SEC.143[3] OF THE INCOM E-TAX ACT, 1961. 2. THE FIRST GROUND RAISED IN THIS APPEAL IS THAT T HE COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN C ONFIRMING THE ADDITION OF ` 1,28,95,000/- CLAIMED BY THE ASSESSEE TOWARDS NO FAULT LIABILITY CLAIMS. 3. AS PER SEC.140 OF THE MOTOR VEHICLES ACT, IN FAT AL ACCIDENT IT IS NECESSARY FOR THE OWNER OF THE VEHICLE TO GIVE I MMEDIATE RELIEF TO THE VICTIM EVEN THOUGH THE OWNER OF THE VEHICLE DOES NOT OWN THE RESPONSIBILITIES OF THE ACCIDENT. THE ASSESSEE , BEING A TRANSPORT CORPORATION IS THEREFORE, BOUND TO GIVE S UCH IMMEDIATE RELIEF AS NO FAULT LIABILITY CLAIMS TO THE VICTIMS OF ACCIDENTS INVOLVING THE BUSES PLIED BY THE ASSESSEE. SUCH AC CIDENTS INCLUDE BOTH CAUSALITIES AS WELL AS GRIEVOUS INJURI ES. THE CLAIM MADE BY THE ASSESSEE HAS BEEN DISMISSED BY THE LOWE R AUTHORITIES. 4. AT THE TIME OF HEARING, IT WAS MADE CLEAR THAT I N CASE OF INJURIES THE TRANSPORT CORPORATION IS DISCHARGING I TS LIABILITY TOWARDS PAYMENT OF IMMEDIATE RELIEF AS DIRECTED BY SEC.140 OF THE ITA 1933/09 :- 3 -: MOTOR VEHICLES ACT. IT IS ONLY IN RESPECT OF CAUSA LITIES THAT THE ASSESSEE WAS NOT IN A POSITION TO DISBURSE THE RELI EF IN ALL CASES. IN THE CASE OF CAUSALITIES, IN SOME CASES, IT MAY N OT BE POSSIBLE FOR THE ASSESSEE TO PAY OFF THE RELIEF AMOUNT IMMED IATELY. THIS IS BECAUSE IDENTITY OF THE DECEASED HAS TO BE ESTABLIS HED AND IN CERTAIN CASES, THE CLAIM OF THE LEGAL HEIRS HAS TO BE VERIFIED. ANYHOW, IT IS A STATUTORY LIABILITY OF THE ASSESSEE TO PROVIDE FOR SUCH NO FAULT LIABILITY CLAIMS. THERE MAY BE A LA XITY ON THE PART OF THE ASSESSEE-COMPANY, OBVIOUSLY, BEING A PUBLIC UND ERTAKING OWNED BY THE STATE GOVERNMENT. BUT IN SPITE OF THA T LAPSES, IT IS NOT FAIR ON THE PART OF THE TAXING AUTHORITY TO DIS ALLOW THE ALLOWABLE CLAIM ESPECIALLY WHEN IT IS COMMITTED TO A COMPASSI ONATE MEASURE INITIATED BY THE GOVERNMENTS FOR PROVIDING INSTANT RELIEF TO THE VICTIMS OR THE DEPENDENTS OF THE VICTIMS INV OLVING IN ROAD ACCIDENTS. 4. APART FROM THE QUESTION OF TIMELY DISCHARGE OF T HE LIABILITIES, THE LOWER AUTHORITIES HAVE NO CASE THAT THE ASSESSE E CORPORATION IS NOT BOUND BY SUCH LIABILITIES. THEREFORE, WE FI ND THAT THE CLAIM MADE BY THE ASSESSEE IS LEGITIMATE AND THAT HAS TO BE ALLOWED. ITA 1933/09 :- 4 -: ACCORDINGLY, WE DELETE THE DISALLOWANCE OF ` 1,28,95,000/- AND DIRECT THE ASSESSING OFFICER TO DEDUCT THE SAME IN COMPUTING ITS LOSS OR PROFIT. 6. THE SECOND GROUND RAISED IS THAT THE COMMISSIONE R OF INCOME-TAX (APPEALS) HAS ERRED IN CONFIRMING THE AD DITION OF ` 40 LAKHS TOWARDS PURCHASE OF TYRES, SPARES ETC. 7. THE ASSESSEE, BEING A TRANSPORT CORPORATION IS M AKING PURCHASES AT LARGE SCALE FROM DIFFERENT SUPPLIERS. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS DIRECTED TO RECONCILE THE ACCOUNTS OF THE SUPPLIERS SELECTED ON RANDOM BA SIS. DISPARITIES WERE FOUND IN SUCH RECONCILIATIONS. ON THAT GROUND, THE ASSESSING OFFICER MADE AN ESTIMATED LUMP SUM AD DITION OF ` 40 LAKHS. 7. WE CONSIDERED THE ISSUE. APART FROM THE TECHNI CAL DEFECT OF NON TALLY OF PERSONAL ACCOUNTS, THE LOWER AUTHOR ITIES HAVE NOT FOUND OUT ANY SINGLE CASE OF BOGUS PURCHASE OR ANY INFIRMITIES IN THE PURCHASE ACCOUNT. THE RECONCILIATION ITSELF WA S EXAMINED BY THE ASSESSING OFFICER ON THE BASIS OF THE STATEMENT S FURNISHED BY THE SUPPLIERS AND NOT ON THE BASIS OF ANY CROSS VER IFICATION. WE ITA 1933/09 :- 5 -: FIND THAT THERE IS NO JUSTIFICATION IN MAKING SUCH A LUMP SUM ADDITION OF ` 40 LAKHS ON AN ESTIMATED BASIS. THEREFORE, THIS ADDITION IS DELETED. 8. IN RESULT, THIS APPEAL FILED BY THE ASSESSEE I S ALLOWED. ORDER PRONOUNCED ON WEDNESDAY, THE 4 TH DAY OF MAY, 2011 AT CHENNAI. SD/- SD/- (GEORGE MATHAN) JUDICIAL MEMBER (DR. O.K.NARAYANAN) VICE-PRESIDENT CHENNAI, DATED : 4 TH MAY, 2011 MPO* COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR