Sh. Ashok Kumar Mittal, Narnaul V. ITO, Narnaul

ITA 2037/DEL/2014

• Counselvise Citation: 203720114 RSA 2014
• Duration Of Justice: 1 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 29-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 07-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P D TAN EJA
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH :SMC: NEW DELHI BEFORE SHRI I.C. SUDHIR: JUDICIAL MEMBER ITA NO.2037/DEL /2014 ASSESSMENT YEAR : 2009-2010 SHRI ASHOK KUMAR MITTAL VS. ITO, WARD-1, PROP M/S DEVASNH ROAD LINES NARNAUL RAILWAY ROAD, NARNAUL (HARYANA) (APPELLANT) (RESPONDENT) DATE OF HEARING : 29.06.2015 DATE OF PRONOUNCEMENT : 30.07.2015 ASSESSEE BY : SRI GAUTAM JAIN, CA RESPONDENT BY: SRI P.D. TANEJA, SR. D.R. ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A), ROHTAK PASSED ON 10.02.2014 FOR THE ASSESSM ENT YEAR 2009-10 WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUN DS OF APPEAL:- 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) ROHTAK HAS ERRED BOTH IN LAW AND ON FACTS IN SUSTAINING AN ADDITION OF RS.4,01,841/- OUT OF SUNDRY CREDITORS OUTSTANDING AT THE CLOSE OF THE INSTANT A SSESSMENT YEAR. 1.1 THAT THE FINDING OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) THAT THE AO HAS DEMONSTRATED THAT THE ASSESSEE HAS NOT DISCHARGED ITS ONUS IN PROVIDING THE DETAILS, PROVING THE IDENTITY OF THE SUNDRY CREDITORS ON ACCOUNT OF FREIGHT GIVING THE REGISTRATION NUMBER OF TRUCKS AN D COPIES OF GR DOES NOT PROVE THE GENUINENESS OF THE CLAIM IS NOT BASED ON CORRE CT APPRECIATION OF FACTS AND PROVISIONS OF LAW AND THEREFORE UNTENABLE. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS FURTHER ERRED BOTH IN LAW AND ON FACTS IN SUSTAINING AN ADDITION OF RS.63,523/- ON ACCOUNT OF ALLEGED NON VERIFICATION OF SUNDRY CREDITORS AT THE CLOSE OF THE INSTANT YEAR. 2 2.1 THAT THE FINDING OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) THAT THE APPELLANT COULD NOT PROVE THE IDENTITY AND GENUINENESS OF THE CREDITORS IS INCORRECT, CONTRARY TO LAW AND UNSUSTAINABLE. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS WORK ING AS TRANSPORT AGENT OF M/S. GRASIM CEMENT & FREIGHT RECEIVED FROM THE COMP ANY WAS DULY SHOWN AS FREIGHT RECEIVED AMOUNTING TO RS.1,32,55,455.15. AGAINST THE FREIGHT RECEIVED, THE ASSESSEE HAS PAID FREIGHT TO VARIOUS TRUCKS AT RS.1,27,07,725 WHICH WAS DULY REFLECTED IN THE AUDITED BOOKS OF AC COUNT. OUT OF THE ABOVE RS.1,27,07,725, THE FREIGHT OF RS.10,80,660 WAS OUT STANDING AS ON 31.3.2009 AND SHOWN UNDER THE HEAD SUNDRY CREDITORS IN THE BALANCE SHEET FILED WITH THE RETURN OF INCOME. DURING THE COURSE OF ASSESSME NT PROCEEDINGS, THE ASSESSING OFFICER REQUIRED COMPLETE NAME AND ADDRES S OF THE SUNDRY CREDITORS AND SINCE THE ASSESSEE DID NOT COMPLY WIT H THE SAME, THE ASSESSING OFFICER MADE ADDITION OF RS.4,01,841 AND RS.63,523 ON ACCOUNT OF SUNDRY CREDITORS OUTSTANDING AT THE CLOSE OF THE ASSESSMEN T YEAR AND ALLEGED NON- VERIFICATION OF SUNDRY CREDITORS. THE LEARNED CIT(A PPEALS) HAS ALSO UPHELD THE ADDITIONS. 3. IN SUPPORT OF THE GROUND, THE LEARNED AR SUBMITT ED THAT IN THE TRANSPORT AGENT BUSINESS, IT WAS NOT POSSIBLE FOR A N ASSESSEE TO FILE COMPLETE NAMES AND ADDRESSES OF THE TRUCK OWNERS, DRIVERS TO FREIGHTS WERE PAID BY THE 3 ASSESSEE INSTEAD THE ASSESSEE WAS MAINTAINING THEIR ACCOUNTS ON THE BASIS OF TRUCK MEMBERS AS GIVEN IN THE GR WHERE ONLY REGISTR ATION NUMBER OF TRUCK ARE GIVEN AND NOT THE NAME OF THE OWNER OF THE TRUC KS. HE SUBMITTED THAT IN THE TRANSPORTATION BUSINESS, THE IDENTITY OF THE PE RSONS IS KNOWN BY THE R.C. NUMBER OF THE VEHICLE THROUGH WHICH GOODS ARE TRANS PORTED AND THE PAYMENTS WERE ALSO MADE TO THOSE TRUCK DRIVERS. HE SUBMITTED THAT THE PAYMENT OUTSTANDING AS ON 31.3.2009 WERE MADE IN AP RIL-MAY, 2009 AND THE DETAILS OF THE SAME WERE ALSO FILED BEFORE THE ASSE SSING OFFICER. THUS, IT IS NOT CORRECT TO SAY ON THE PART OF THE AUTHORITIES B ELOW THAT IN SUPPORT OF THE GENUINENESS OF THE CLAIM THE ASSESSEE HAD NOT DISCH ARGED ITS ONUS. HE CITED FOLLOWING DECISIONS: I) ANNA MARIA TRAVELS & TOURS (P) LTD. VS. DCIT- 95 TTJ 71 (DELHI); II) CIT VS. PANCHAM DASS JAIN 205 CTR 444 (ALL.) ; III) SMT. HARSHILLA CHORDIA VS. ITO 298 ITR 349 ( RAJ.); 4. THE LEARNED DR ON THE OTHER HAND PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW WITH THIS SUBMISSION THAT THE ASS ESSEE HAD NOT FILED DETAILS OF THE SUNDRY CREDITORS WITH THEIR ADDRESSES HENCE IT WAS NOT POSSIBLE FOR THE ASSESSING OFFICER TO EXAMINE THE VERACITY OF THE PA YMENT OF FREIGHT CLAIMED TO HAVE BEEN MADE BY THE ASSESSEE TO THEM. 4 5. CONSIDERING THE ABOVE SUBMISSION, I FIND THAT FR EIGHT PAYMENT DURING THE YEAR WERE OF RS.1,27,07,725 AND OUT OF CREDITS OF RS.10,80,660 AN ADDITION OF RS.4,01,841 AND RS.63,523 REPRESENTING ALLEGED UNEXPLAINED SUNDRY CREDITORS HAS BEEN MADE WHICH IS LESS THAN 5 % OF THE TOTAL FREIGHT PAYMENT DURING THE YEAR. THE AUTHORITIES BELOW HAVE MADE AND UPHELD THE ADDITION IN QUESTION MERELY ON THE BASIS THAT THE A SSESSEE, A TRANSPORT AGENT HAD FURNISHED REGISTRATION NUMBER OF TRUCKS WITH TH E DETAIL OF AMOUNT PAID AGAINST EACH OF THE TRUCK NUMBERS WITHOUT APPRECIAT ING THAT THE ASSESSEE WAS MAINTAIN THEIR ACCOUNT ON THE BASIS OF TRUCK NUMBER S AS GIVEN IN THE GR WHERE ONLY REGISTRATION NUMBER OF TRUCKS ARE GIVEN AND NOT THE NAME OF THE OWNER OF THE TRUCKS. IN THE BUSINESS OF TRANSPORTA TION, THE IDENTITY OF THE PERSON IS USUALLY KNOWN BY THE RC NUMBER OF THE VEH ICLE THROUGH WHICH THE GOODS ARE TRANSPORTED AND THE PAYMENTS WERE ALSO MA DE TO THOSE TRUCK DRIVERS. NO EFFORT HAS BEEN MADE BY THE ASSESSING OFFICER TO VERIFY THE CLAIM ON THE BASIS OF TRUCK REGISTRATION NUMBERS FU RNISHED BY THE ASSESSEE KEEPING IN MIND THE VERY NATURE OF THE BUSINESS IN WHICH ASSESSEE IS. IT IS AN ADMITTED FACT THAT THE ASSESSEE MAINTAINS ITS BOOKS OF ACCOUNT IN THE REGULAR COURSE OF BUSINESS WHICH IS AUDITED AS WELL AND THE SAME HAS NOT BEEN REJECTED UNDER SEC. 155(3) OF THE ACT. IN OTHER WOR DS, THE ASSESSING OFFICER 5 HAS ACCEPTED THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE. AND ABOVE ALL, THE DISALLOWANCE MADE IS LESS THAN 5% OF THE T OTAL FREIGHT PAYMENTS MADE DURING THE YEAR. IT IS AN UNDISPUTED FACT THAT THE PAYMENT OUTSTANDING AS ON 31.3.2009 WERE MADE IN APRIL-MAY 2009 AND THE DETAI LS OF THE SAME WERE ALSO FILED BEFORE THE ASSESSING OFFICER WHICH HAVE BEEN ACCEPTED BY THE ASSESSING OFFICER AS IT IS EVIDENT FROM THE CONTENT S OF PAGE NO. 3 OF THE ASSESSMENT ORDER. THE THIRD MEMBER BENCH OF THE ITA T IN THE CASE OF ITO VS. ZAZSONS EXPORTS LTD. (SUPRA) WHEREIN IT HAS BEE N HELD THAT SINCE ASSESSING OFFICER HAD DRAWN AN ADVERSE CONCLUSION O NLY ON ACCOUNT OF NON- VERIFIABILITY OF SUNDRY CREDITORS BUT THERE WAS NO DISPUTE AS REGARDS PURCHASES AND TRADING RESULTS, ADDITION MADE UNDER SEC. 68 OF THE ACT WAS NOT SUSTAINABLE. THE LEARNED CIT(APPEALS) WAS THUS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS.4,01,841. THE SAME IS DIRECTED TO BE DELETED. GROUND NOS. 1 AND 1.1 ARE THUS ALLOWED. 6. IN GROUND NOS. 2 AND 2.1, THE ASSESSEE HAS QUEST IONED SUSTAINING OF ADDITION OF RS.63,523 ON ACCOUNT OF ALLEGED NON-VER IFICATION OF SUNDRY CREDITORS AT THE CLOSE OF THE YEAR. THE ASSESSING OFFICER HAS SUSTAINED THE ADDITION MADE ON ACCOUNT OF NON-VERIFICATION OF SUN DRY CREDITORS ON THE BASIS THAT THE LETTERS ISSUED TO THE PARTIES WERE RETURNE D UNSERVED AS THE PARTIES 6 WERE NOT FOUND ON THE GIVEN ADDRESS. THE LEARNED AR SUBMITTED THAT THE AMOUNT IN TOTAL WAS RS.62,523 WHICH WERE PAYMENTS M ADE TO THREE PARTIES, MUNNA LAL (RS.29,873), SMT. SAROJ DEVI (RS.20,615) AND SHRI AJAY KUMAR (RS.13,035) MADE IN THE SUCCEEDING YEARS. HE SUBMIT TED THAT THEY WERE TRUCK OWNERS TO WHOM THE PAYMENTS WERE MADE. HE SUBMITTED THAT IN THE NATURE OF BUSINESS OF THE ASSESSEE, THE BURDEN OF THE ASSESSE E STANDS DISCHARGED AS NO INQUIRY HAS BEEN CONDUCTED FROM THE TRANSPORT REGIS TRATION AUTHORITY. IN THIS REGARD, HE PLACED RELIANCE ON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. GENESIS CEMENT (P) LTD. 16 3 TAXMAN 482 (DEL.) 7. THE LEARNED DR ON THE OTHER HAND PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW. 8. CONSIDERING THE ABOVE SUBMISSIONS AND THE NATURE OF BUSINESS OF THE ASSESSEE, I AM OF THE VIEW THAT THE ASSESSEE HAD FU RNISHED WHAT COULD HAVE FURNISHED IN THE NATURE OF BUSINESS IN WHICH ASSESS EE IS TO SUPPORT THE GENUINENESS OF THE CLAIMED PAYMENT TO THE TRUCK OWN ERS. THE ASSESSING OFFICER WAS THUS VERY MUCH EMPOWERED TO INVESTIGATE THE CLAIM ON THE BASIS OF INFORMATION AVAILABLE TO DISCHARGE THE ONUS SHIF TED UPON HIM TO WHICH HE HAS FAILED TO. UNDER THESE FACTS, I AM OF THE VIEW THAT THE ASSESSING OFFICER 7 WAS NOT JUSTIFIED IN MAKING THE ADDITION IN QUESTIO N. THE ASSESSING OFFICER IS DIRECTED TO DELETE THE SAME. THE GROUNDS ARE ACC ORDINGLY ALLOWED. 6. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.07.2015 SD/- ( I.C. SUDHIR ) JUDICIAL MEMBER DATED: 30 /07/2015 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR DATE DRAFT DICTATED ON COMPUTER 16.07.2015 DRAFT PLACED BEFORE AUTHOR 16.07.2015 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 30.7.2015 KEPT FOR PRONOUNCEMENT ON 30.7.2015 FILE SENT TO THE BENCH CLERK 31.7.2015 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.