Deputy Commissioner of INcome TAx Circle-5(2)(1), Bangalore V. Shri Rajashekar S NAargal , Bangalore

ITA 2128/BANG/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3660 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2021
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 11-10-2021
• Assessment Year: 2012-2013
• Appeal Filed On: 03-11-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S V RAVISHANKAR
• Section: 40A(3); 143(3); 44AB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO.2128/BANG/2017 ASSESSMENT YEAR : 2012-13 THE DY. COMMISSIONER OF INCOME- TAX, CIRCLE-5(2)(1), BENGALURU. VS. SHRI RAJASHEKAR S NAREGAL, NO.259, KIRANS COMPLEX, 1 ST FLOOR, 1 ST CROSS, 3 RD MAIN ROAD, CHAMRAJPET, BENGALURU-560 018. PAN ABMPN 5137 G APPELANT RESPONDENT ASSESSEE BY : SHRI S.V RAVISHANKAR, ADVOCATE REVENUE BY : SHRI PRADEEP KUMAR, CIT(DR) DATE OF HEARING : 11.10.2021 DATE OF PRONOUNCEMENT : 11.10.2021 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-5, DATED 31.07.2017. THE RELEVA NT ASSESSMENT YEAR IS 2012-2013. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- ITA NO.2128/BANG/2017 PAGE 2 OF 7 THE BRIEF FACTS OF THE CASE ARE AS UNDER:- 3. THE ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3) OF THE INCOME-TAX ACT VIDE ORDER DATED 30/3/ 2015. AT THE TIME OF ASSESSMENT, THE AO NOTICED THAT THE ASSESSEE INCURRED FREIGHT EXPENSES BY WAY OF CASH OTHER THAN BY THE CROSSED CHEQUE OR DD AMOUNTING TO RS.6,41,07,371/- PAID TO M/S SHANKAR TRANSPORT. T HE ASSESSEE FAILED TO EXPLAIN THE REASON FOR PAYMENT O F SUCH A HUGE AMOUNT BY WAY OF CASH. HENCE, THE AO INVOKE D ITA NO.2128/BANG/2017 PAGE 3 OF 7 THE PROVISIONS OF SEC.40A(3) OF THE INCOME-TAX ACT AND DISALLOWED THE ENTIRE AMOUNT OF RS.6,41,07,371/-. ON APPEAL BEFORE THE CIT(A), THE ASSESSEE SAID TO BE FURNISHED DETAILS OF FREIGHT LOADS DATE-WISE, LORRY NO. NET WEIGHT AND THE GROSS AMOUNT PAID ALONG WITH VOUCHER S FOR THE MONTH OF SEPTEMBER. ACCORDING TO THE CIT(A) H E HAS FORWARDED THESE VOUCHERS AND LEDGER COPIES TO AO CA LLING FOR HIS COMMENTS IN THE REMAND PROCEEDINGS. THERE WAS NO REPLY FROM THE AO. THE CIT(A) OBSERVED THAT ON VERIFICATION, HE FOUND THAT PAYMENTS MADE TOWARDS T HE FREIGHT TO THE RESPECTIVE VEHICLES IN A SINGLE DAY IS LESS THAN RS.20,000/- AND NOT IN EXCESS OF LIMIT PRESCRI BED IN SEC.40A(3) AND, THEREFORE, FOUND THAT THERE WAS NOT HING CONTRAVENTION OF SEC.40A(3). FURTHER HE OBSERVED T HAT THE ASSESSEE WAS FORCED TO MAKE PAYMENTS TO THE LORRY OWNERS/DRIVERS IN CASH AS THEY INSISTED FOR CASH PA YMENT ONLY AND HE HAD NO OTHER OPTION BUT TO MAKE PAYMENT IN CASH WHICH MAKES IT CLEAR THAT CONSIDERATION OF BUS INESS EXPEDIENCY FACTORS HAVE NOT BEEN DISPENSED WITHIN T HE AMENDED PROVISION OF SEC.40A(3) W.E.F 1/4/2009. FU RTHER HE OBSERVED THAT ALL THE PAYMENTS ARE GENUINE AND INVOKING PROVISIONS OF SEC.40A(3) ARE NOT WARRANTED . ACCORDINGLY, HE DELETED THE ADDITION MADE BY THE AO U/S 40A(3) OF THE INCOME-TAX ACT. ITA NO.2128/BANG/2017 PAGE 4 OF 7 4. AGAINST THIS, REVENUE IS IN APPEAL BEFORE US BY WAY OF ABOVE GROUNDS. 5. AT THE TIME OF HEARING, THE LD.DR MENTIONED THAT THERE WAS NO PROPER OPPORTUNITY AFFORDED TO THE AO TO EXAMINE THE BILLS AND VOUCHERS PRODUCED BY ASSESSE E BEFORE THE CIT(A) AND THE CIT(A) FAILED TO GIVE FAI R OPPORTUNITY OF HEARING TO THE AO. THE LD.DR, THUS, REQUESTED THAT THE ISSUE MAY BE REMITTED BACK TO T HE AO FOR FRESH CONSIDERATION TO EXAMINE ALL RELEVANT REC ORDS. THE AR STRONGLY OPPOSED THE ARGUMENT OF LD.DR AND SUBMITTED THAT ASSESSEE HAS NOT PRODUCED ANY BILLS AND VOUCHERS BEFORE THE CIT(A). FURTHER, HE SUBMITTED THAT THE CIT(A) CALLED FOR THE REMAND REPORT FROM THE AO AND SUBMITTED ALL THE LEDGER ACCOUNTS PRODUCED BY THE ASSESSEE BEFORE HIM TO THE AO. HOWEVER, THE AO FAI LED TO SUBMIT THE REMAND REPORT WITHIN THE REQUIRED TIME. AS SUCH, THE CIT(A) DECIDED THE ISSUE ON MERITS, IN FA VOUR OF THE ASSESSEE AND THERE IS NO NECESSITY OF REMANDING THE ISSUE BACK TO THE FILE OF AO, WHICH IS NOTHING BU T A MISCARRIAGE OF JUSTICE. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS. THE CIT(A) MENTIONED IN HIS ORDER THAT THE ITA NO.2128/BANG/2017 PAGE 5 OF 7 ASSESSEE HAS PRODUCED BILLS AND VOUCHERS, INVOICES AND BOOKS OF ACCOUNTS BEFORE HIM. HOWEVER THESE ARE N OT PRODUCED BEFORE THE AO IN THE REMAND PROCEEDINGS. FURTHER, THERE IS NO DISCUSSION OF OBSERVATION OF TAX AUDIT U/S 44AB OF THE ACT IN THE ORDER OF THE LOWER AUTHORITIES. HENCE, IT IS APPROPRIATE TO CONSIDER THE TAX AUDIT REPORT FILED BY THE ASSESSE BEFORE THE AUTHOR ITIES AND ALSO ALL THE RELEVANT RECORDS TO DECIDE THE ISS UE AFRESH. ACCORDINGLY IN THE INTEREST OF JUSTICE, WE REMIT THE ENTIRE ISSUE IN DISPUTE TO THE FILES OF THE AO FOR FRESH CONSIDERATION. THE ASSESSEE HAS TO FILE ALL THE NE CESSARY RECORDS TO SUPPORT HIS CASE INCLUDING TAX AUDIT REP ORT BEFORE THE AO. THE AO HAS TO DECIDE THE ISSUE AFRE SH IN THE LIGHT OF OUR OBSERVATIONS. 7. IN THE RESULT, THE REVENUES APPEAL IS ALLOWED F OR STATISTICAL PURPOSES. ORDER PRONOUNCED IN COURT ON 11 TH OCT, 2021 . SD/- SD/- (N.A VASUDEVAN) ( CHANDRA POOJARI) VICE PRESIDENT ACCOUN TANT MEMBER BANGALORE, DATED, 11 TH OCT , 2021 / VMS / ITA NO.2128/BANG/2017 PAGE 6 OF 7 COPY TO: COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE. ITA NO.2128/BANG/2017 PAGE 7 OF 7 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE.. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. ..