Anand Exports, Bhubaneswar V. ACIT, Bhubaneswar

ITA 214/CTK/2014

• Counselvise Citation: 21422114 RSA 2014
• Duration Of Justice: 1 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 26-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RABIN CHOUDHURI
• Section: 40A(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK B ENCH, CUTTACK , . . , BEFORE SHRI SUNIL KUMAR YADAV, JM & SHRI B.P.JAIN, AM ./ ITA NO. 214/CTK/2014 ( ! ! ! ! / ASSESSMENT YEAR :2009-2010) ANAND EXPORTS, PLOT NO.428/3818, JAYDEV NAGAR, BHUBANESWAR. VS. ACIT, CIRCLE-1(1), AAYAKAR BHAWAN, BHUBANESWAR. ' ./ # ./ PAN/GIR NO. AALFA 4275 A ( '$ / APPELLANT ) .. ( %&'$ / RESPONDENT ) ( * * * * /ASSESSEE BY : SHRI SUNIL MISHRA * * * * /REVENUE BY : SHRI RABIN CHOUDHURI + ( / DATE OF HEARING : 28 TH MAY, 2015 -.! ( / DATE OF PRONOUNCEMENT 29 TH MAY,2015 / / / / / O R D E R PER B.P.JAIN, AM THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER O F THE LD CIT(A) -1, BHUBANESWAR DATED 12.3.2014 FOR THE ASSESSMENT YE AR 2009-2010. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. 1. FOR THAT ON THE FACTS AND IN THE CIRCUMSTAN CES OF THE CASE THE LEARNED CIT(A) OUGHT TO HAVE ALLOWED THE ENTIRE CLA IM OF RS.1,36,61,510/- UNDER TRANSPORTING CHARGES AS NO EXPENDITURE IN CON TRAVENTION TO THE PROVISION OF SECTIORI 40A(3) O F THE INCOME TAX ACT,1961 AND THE RULES MADE THERERMDER WAS RFFADE. 2. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE LEARNED CIT(A) OUGHT TO HAVE ALLOWED ENTIRE CLAIM OF RS.1,3 6,61,510/- UNDER TRANSPORTING CHARGES INSTEAD OF DISALLOWING 10% OF THE CLAIM OF RS.1,36,61,510/- AMOUNTING TO RS.13,66,151/-TO MEET THE END OF JUSTICE ITA NO. 214/CTK/2014 ASSESSMENT YEAR :2009-2010 2 WITHOUT APPRECIATING THAT IN THE REMAND REPORT THE AO HAS FAILED TO SINGLE OUT ANY PAYMENT IN VIOLATION OF SECTION 40A(3) OF THE I .T.ACT INSPITE OF ADMITTING THE LEDGER COPY OF ACCOUNT ALONG WITH DETAILED TRAN SPORTATION INWARDS WAS CALLED AND VERIFIED. 3. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS BY MAKING DISALLOW ANCE OUT OF TRANSPORTING CHARGES ON ESTIMATE BASIS WITHOUT APPRECIATING THAT THE BOOKS OF ACCOUNT WAS DULY AUDITED U/S 44AB OF THE INCOME TAX ACT,196 1 AND NO ADVERSE FINDING ON CASH PAYMENT EXCEEDING RS.20,000/- WAS R EPORTED IN THE FORM- 3CD TO THE AUDIT REPORT IN FORM-3CB. 4. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS BY MAKING DISALLOW ANCE OUT OF TRANSPORTING CHARGES ON ESTIMATE BASIS WITHOUT APPRECIATING THAT THE BOOKS OF ACCOUNT WAS DULY AUDITED U/S 44AB OF THE INCOME TAX ACT,196 1 WHICH WAS ALSO DULY ACCEPTED BY THE AO. 5. FOR THAT ANY OF THE GROUNDS INCIDENTAL TO THE GR OUNDS OF THE CASE MAY KINDLY BE PERMITTED TO URGE AT THE TIME OF HEARING OF THE CASE. 3. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT TH E ASSESSEE HAS MADE CASH PAYMENTS TOWARDS TRANSPORT EXCEEDING RS.20,000/- IN CASH. THE ASSESSEES EXPLANATION THAT NO CASH PAYMENT HAS BEEN MADE IN E XCESS OF RS.20,000/- FOR A SINGLE TRANSACTION, HAS NOT BEEN ACCEPTED BY THE AO . THE AO HAS TAKEN NOTE OF TWO SEPARATE TRANSACTIONS IN RESPECT OF TRUCK NO.11 52 AND TRUCK NO.2096 IN A SINGLE DAY WHERE TOTAL PAYMENT EXCEEDS RS.20,000/- EVEN THOUGH THE INDIVIDUAL PAYMENT IS LESS THAN RS.20,000/-. IN VIEW OF THE S AME, THE AO HAS DISALLOWED ON ESTIMATE 80% OF THE TOTAL TRANSPORT EXPENSES WHI CH COMES TO RS.1,09,29,208/-. ITA NO. 214/CTK/2014 ASSESSMENT YEAR :2009-2010 3 4. THE LD CIT(A) VIDE PARA 7.2 OF THE IMPUGNED ORDE R RESTRICTED THE DISALLOWANCE @ 10% OF TOTAL CLAIM OF RS.1,36,61,510 /- WHICH COMES TO RS.13,66,151/-. 5. THE LD COUNSEL FOR THE ASSESSEE ARGUED THAT THE AO HAS POINTED OUT ONLY TWO EXPENSES OF TRUCK NO.1152 AND TRUCK NO.2096 WHE RE EACH PAYMENT ON A SINGLE DAY THOUGH WAS BELOW RS.20,000/- BUT AFTER A GGREGATE THE EXPENSES IS LESS THAN RS.20,000/- AND THERE IS NO OTHER FACT PO INTED OUT BY THE AO OR THE LD CIT(A) AND, THEREFORE, NO ADDITION IS CALLED FOR. 6. THE LD D.R. RELIED UPON THE ORDERS OF THE BOTH T HE AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE UNDISPUTED FACTS IN THE PRESENT CASE ARE THAT T HE LD CIT(A) HAS GIVEN RELEVANT FINDING IN PARA 6.2 OF HIS ORDER THAT ESTI MATE MADE BY THE AO IS WILD AND CAPRICIOUS AND IN FACT THERE SHOULD BE NO ESTIMATE BUT SPECIFIC FINDINGS SHOULD HAVE BEEN MADE FOR DISALLOWANCE UNDER SECTION 40A(3 ) OF THE ACT. ON ONE HAND, THE LD CIT(A) IS HOLDING THE ORDER OF THE AO AS WIL D AND CAPRICIOUS AND NO ESTIMATE SHOULD HAVE BEEN MADE WHEREAS ON THE OTHER HAND, HE HIMSELF IS RESTRICTING THE DISALLOWANCE AT 10% OF TOTAL CLAIM, WHICH IS CONTRADICTING HIS DECISION. BUT THE FACT REMAINS THAT THE AO HAS POI NTED OUT ONLY TWO INSTANCES WITH RESPECT TO TRUCK NO.1152 AND TRUCK NO.2096 AT PAGE 22 OF HIS ORDER WHERE EACH PAYMENT IS LESS THAN RS.20,000/- AND, THEREFOR E, IN OUR VIEW NO VIOLATION OF PROVISIONS OF SECTION 40A(3) WITH RESPECT TO TWO IN STANCES HAVE BEEN MADE. UNDER THESE CIRCUMSTANCES AND FACTS OF THE PRESENT CASE, WE ARE OF THE OPINION ITA NO. 214/CTK/2014 ASSESSMENT YEAR :2009-2010 4 THAT NO ADDITION IS CALLED FOR AND ADDITION SO SUST AINED BY THE LD CIT(A) IS DIRECTED TO BE DELETED. THUS, ALL GROUNDS OF APPEA L RAISED BY THE ASSESSEE ARE ALLOWED. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 / 05/2015. SD/- SD/- ( ) (SUNIL KUMAR YADAV) ( . . ) (B.P.JAIN) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK; DATED 29 /05/2015 B.K.PARIDA, SPS / / / / %( %( %( %( 2 2 2 2!( !(!( !( / COPY OF THE ORDER FORWARDED TO : / / / / / BY ORDER, SR. PRIVATE SECRETARY, , / ITAT, CUTTACK 1. '$ / THE APPELLANT : ANAND EXPORTS, PLOT NO.428/3818, JAYDEV NAGAR, BHUBANESWAR. 2. %&'$ / THE RESPONDENT.: ACIT, CIRCLE-1(1), AAYAKAR BHAWAN, BHUBANESWAR 3. 3 ( ) / THE CIT(A), BHUBANESWAR, 4. 3 / CIT , BHUBANESWAR. 5. 4 %( , / DR, ITAT, CUTTACK 6. 6 7+ / GUARD FILE. &( %( //TRUE COPY//