The ITO,Vapi Ward-3, Vapi V. Stalin Chockkalingam Pillai, Vapi

ITA 2187/AHD/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0243 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 24-10-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 03-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ ITA NO. 2187/AHD/2012 / ASSESSMENT YEAR: 2008-09 THE INCOME-TAX OFFICER, VAPI WARD-3, VAPI VS. STALIN CHOCKKALINGAM PILLAI, M/S. NEW SOUTHERN ROADWAYS, FLAT NO. F-102, RAJMOTI COMPLEX, CHHARWADA ROAD, VAPI-396 191 PAN : AIPPP 1728 F ./ ITA NO. 2110/AHD/2012 / ASSESSMENT YEAR: 2008-09 STALIN CHOCKKALINGAM PILLAI, CHHARWADA ROAD, VAPI-396 191 PAN : AIPPP 1728 F VS. THE INCOME-TAX OFFICER, VAPI WARD-3, VAPI / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI M.K. PATEL, AR REVENUE BY : SHRI MUDIT NAGPAL, SR DR / DATE OF HEARING : 24/10/2016 / DATE OF PRONOUNCEMENT: 26/10/2016 / O R D E R PER N.K. BILLAIYA, ACCOUNTANT MEMBER: ITA NOS. 2187/AHD/2012 AND 2110/AHD/2012 ARE CROSS APPEALS BY THE REVENUE AND THE ASSESSEE DIRECTED AGAINST THE V ERY SAME ORDER OF THE CIT(A), VALSAD DATED 26.07.2010 PERTAINING TO AY 20 08-09. 2. THE SUBSTANTIVE GRIEVANCES OF THE REVENUE READ A S UNDER:- ITA NOS. 2110 & 2187/AHD/2012 ASSESSEE : STALIN CHOCKKALINGAM PILLAI AY 2008-2009 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE ADDITION TO RS. 8,25,155/- INSTEAD OF RS.16,94,894/- MADE BY THE AO ON ACCOUNT OF UNEXPLA INED CASH DEPOSIT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE ADDITION AT RS. 2,14,952/- BY ESTIMATING THE BROKERAGE INCOME @ 1.5% INSTEAD OF R S.1,43,30,247/- MADE BY THE AO ON THE BASIS OF RECEIPT AS APPEARING ON 26AS TREATING THE SAME AS TRANSPORTATION RECEIPT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE DISALLOWANCE OF RS .15,76,614/- MADE BY THE AO U/S 40(A)(IA) OF THE ACT. 3. AND, THE SUBSTANTIVE GRIEVANCE OF THE ASSESSEE R EADS AS UNDER:- ON APPRECIATION OF FACTS AND CIRCUMSTANCES OF THE C ASE AND LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN E STIMATING THE BROKERAGE INCOME OF THE APPELLANT AT RS.2,14,952/- BEING 1.5% OF RS.1,43,30,247/-. THE ACTION OF THE COMMISSIONER OF INCOME TAX (APPEALS) IS CONTRARY TO THE FACTS OF THE CASE AND HENCE DESERVES TO BE DELETED. 4. THE ASSESSEE IS EARNING BROKERAGE/COMMISSION FRO M TRANSPORT COMPANIES BY ARRANGING TRANSPORT VEHICLES FOR THEM. THE ASSESSEE ARRANGES TRANSPORT VEHICLES FOR THE TRANSPORT COMPANIES AS P ER THEIR REQUIREMENTS. THE TRANSPORT COMPANIES ARE MAKING PAYMENTS TO THE ASSESSEE WHO IN TURN TRANSMITTING PAYMENTS TO THE VEHICLE OWNERS/DRIVERS AND IN THIS PROCESS EARNING BROKERAGE/COMMISSION. 5. WHILE SCRUTINIZING THE RETURN OF INCOME, THE ASS ESSING OFFICER NOTICED THAT THERE ARE CASH DEPOSITS OF RS.16,94,893/- AND CHEQUE DEPOSITS OF RS.11,87,147/- IN THE ICICI BANK ACCOUNT OF THE ASS ESSEE. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF DEPOSITS. THE ASSES SEE EXPLAINED THAT THE VEHICLE OWNERS DEMAND MONEY IN ADVANCE IN ORDER TO MAKE THEIR OWN ROAD EXPENSES AND FUEL COST. ACCORDINGLY, THE ASSESSEE USED TO RECEIVE MONIES FROM THE TRANSPORT COMPANIES TO MAKE THE ONWARD PAY MENTS, SPECIFICALLY ITA NOS. 2110 & 2187/AHD/2012 ASSESSEE : STALIN CHOCKKALINGAM PILLAI AY 2008-2009 3 FOR THE PURPOSE OF MAKING PAYMENT TO THE OWNERS/DRI VERS OF THE VEHICLES. SUCH MONIES RECEIVED FROM THE TRANSPORT COMPANIES W ERE DEPOSITED IN THE ICICI BANK ACCOUNT AND THEREAFTER WITHDRAWING FROM THE SAME BANK ACCOUNT, PAYMENTS ARE MADE TO THE TRUCK OWNERS/DRIV ERS. 6. THIS EXPLANATION OF THE ASSESSEE DID NOT FIND AN Y FAVOUR WITH THE ASSESSING OFFICER WHO TREATED THE ENTIRE DEPOSITS O F RS.16,94,893/- IN CASH AS UNEXPLAINED INCOME OF THE ASSESSEE. 7. ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) AN D REITERATED WHAT HAS BEEN STATED BEFORE THE ASSESSING OFFICER. AFTER CO NSIDERING THE FACTS AND THE SUBMISSIONS, AND ALSO CALLING FOR THE REMAND REPORT FROM THE ASSESSING OFFICER, THE CIT(A) WAS OF THE OPINION THAT THE ASS ESSING OFFICER HAS ACCEPTED THE DEPOSITS OF CHEQUES OF RS.11,87,147/-. THEREFORE, LOGICALLY THE ASSESSING OFFICER SHOULD HAVE ALSO ACCEPTED THE NAT URE OF CASH DEPOSITS. THE CIT(A) WAS CONVINCED WITH THE EXPLANATION OF THE AS SESSEE, BUT AT THE SAME TIME WAS OF THE OPINION THAT OUT OF THE TOTAL DEPOS ITS OF RS.28,82,042/-, EXPLANATION AMOUNTING TO RS.22,11,264/- WAS ACCEPTA BLE. THE CIT(A) FURTHER OBSERVED THAT THE BALANCE OF RS.6,70,778/- ALONGWITH THE OPENING BALANCE OF RS.1,52,116/- AND RS.2,261/- IS THE INCO ME OF THE ASSESSEE. ACCORDINGLY, THE CIT(A) RESTRICTED THE ADDITION TO THE EXTENT OF RS.8,25,155 /- . 8. AGGRIEVED BY THIS, THE REVENUE IS NOW BEFORE US. 9. THE DR STRONGLY SUPPORTED THE FINDINGS OF THE AS SESSING OFFICER. THE COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN S TATED BEFORE THE LOWER AUTHORITIES. ITA NOS. 2110 & 2187/AHD/2012 ASSESSEE : STALIN CHOCKKALINGAM PILLAI AY 2008-2009 4 10. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW. THE UNDISPUTED FACT IS THAT THE SOURCE OF DEPOSITS OF RS.11,87,147/- BY CHEQUES HAS BEEN ACCEPTED BY THE ASSESSING OFFICER. ONCE THE ASSESSING OFFICER HAS ACCEPTED THE NATURE OF TR ANSACTIONS, WE DO NOT FIND ANY REASON WHY IT SHOULD NOT BE ACCEPTED FOR THE CA SH DEPOSITS OF RS.16,94,893/-. WE FIND THAT THE CIT(A) HAS GIVEN A FACTUAL FINDING AFTER APPRAISING THE FACTS AND ISSUES. WE ALSO FIND THAT THE ASSESSEE HAS ACCEPTED THE ADDITION TO THE EXTENT OF RS.8,25,155/-. WE, T HEREFORE, DO NOT FIND ANY ERROR AND INFIRMITY IN THE FINDINGS OF THE CIT(A). GROUND NO.1 OF REVENUES APPEAL IS ACCORDINGLY DISMISSED. 11. GROUND NO.2 OF THE REVENUES APPEAL RELATES TO THE RESTRICTION OF THE ADDITION AT RS.2,14,952/- BY ESTIMATING THE BROKERA GE INCOME @ 1.5%. 12. WHILE SCRUTINIZING THE RETURN OF INCOME AND TAK ING A LEAF OUT OF FORM NO.26AS, THE ASSESSING OFFICER NOTICED THAT THE ASS ESSEE HAS RECEIVED THE TRANSPORTATION INCOME OF RS.1,43,30,147/-. THE ASS ESSEE WAS ASKED TO EXPLAIN WHY THE SAME SHOULD NOT BE TREATED AS INCOM E RECEIVED BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION. THE ASSE SSEE FILED A DETAILED REPLY EXPLAINING THAT HE IS COLLECTING FORM NO.15-I FROM VARIOUS INDIVIDUAL TRUCK OWNERS/DRIVERS, SO THAT THERE IS NO LIABILITY FOR D EDUCTING TAX AT SOURCE BY THE TRANSPORT COMPANIES. WHEREVER THE ASSESSEE COU LD NOT GET FORM NO.15- I, THE TRANSPORT COMPANIES HAVE DEDUCTED TAX AT SOU RCE AND IN THEIR TDS RETURN, THEY HAVE MENTIONED THE PAN NUMBER OF THE A SSESSEE. IT WAS EXPLAINED THAT DUE TO NON-AVAILABILITY OF FORM NO.1 5-I, THE TAX HAS BEEN DEDUCTED AT SOURCE AND PAN OF THE ASSESSEE HAS BEEN PROVIDED. BUT, THIS DOES NOT MEAN THAT THE ASSESSEE HAS ACTUALLY RECEIV ED THE INCOME. THE CIT(A) CALLED FOR THE REMAND REPORT FROM THE ASSESS ING OFFICER. IN HIS ITA NOS. 2110 & 2187/AHD/2012 ASSESSEE : STALIN CHOCKKALINGAM PILLAI AY 2008-2009 5 REMAND REPORT, THE ASSESSING OFFICER MENTIONED THAT HE HAS ISSUED SUMMONS TO SOME TRANSPORTERS WHO HAVE CONFIRMED THA T THEY ARE DEDUCTING TAX AT SOURCE WHEREVER FROM NO.15-I IS NOT MADE AVA ILABLE TO THEM. THE ASSESSING OFFICER ALSO CONFIRMED THAT THE ASSESSEE HAS NOT TAKEN ANY CREDIT OF THE TDS MADE BY THE TRANSPORT COMPANIES. AFTER CONSIDERING THE FACTS AND SUBMISSIONS AND THE REMAND REPORT OF THE ASSESS ING OFFICER, THE CIT(A) ASKED THE ASSESSEE TO SHOW THAT THE TURNOVERS SHOWN BY HIM INCLUDES THE COMMISSION/BROKERAGE RECEIVED FROM THE AMOUNT CREDI TED IN FORM NO.26AS. ON RECEIVING NO PLAUSIBLE REPLY, THE CIT( A) COMPUTED THE BROKERAGE INCOME FROM SUCH TRANSPORT INCOME CREDITE D IN FORM NO.26AS @ 1.5% AND DIRECTED THE ASSESSING OFFICER TO MAKE THE ADDITION OF RS.2,14,952/- INSTEAD OF RS.1,43,30,247/-. 13. AGGRIEVED BY THIS, BOTH REVENUE AND ASSESSEE AR E IN APPEAL BEFORE US. 14. THE DR HEAVILY RELIED UPON THE FINDINGS OF THE ASSESSING OFFICER. THE COUNSEL FOR THE ASSESSEE ONCE AGAIN COULD NOT EXPLA IN THAT THE TURNOVER SHOWN BY HIM IN HIS RETURN OF INCOME INCLUDES THE C OMMISSION EARNED ON THE AMOUNT SHOWN IN FORM NO.26AS. 15. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW. ELSEWHERE WE HAVE EXPLAINED THE NATURE OF THE BUSINESS OF THE ASSESSEE. THE ASSESSING OFFICER IN HIS REMA ND REPORT HAS CATEGORICALLY ACCEPTED THAT THE ASSESSEE HAS NOT TAKEN ANY CREDIT OF THE TDS AS PER FORM NO.26AS. IT IS ALSO AN ADMITTED FACT THAT WHEREVER FORM NO.15-I WAS NOT MADE AVAILABLE BY THE ASSESSEE, THE TRANSPORT COMPA NIES HAVE DEDUCTED TAX AND HAVE GIVEN PAN OF THE ASSESSEE. IN OUR UNDERST ANDING OF THE FACTS, WE ARE OF THE OPINION THAT THE AMOUNT SHOWN CREDITED I N FORM NO.26AS IS NOT ITA NOS. 2110 & 2187/AHD/2012 ASSESSEE : STALIN CHOCKKALINGAM PILLAI AY 2008-2009 6 THE INCOME OF THE ASSESSEE. THE ASSESSEE MUST HAVE EARNED SOME BROKERAGES/COMMISSION OUT OF SUCH AMOUNT FOUND CRED ITED IN FORM NO.26AS. THE CIT(A) HAS VERY RIGHTLY ESTIMATED THE BROKERAGE INCOME OF THE ASSESSEE @ 1.5%. WE, THEREFORE, DO NOT FIND AN Y REASON TO INTERFERE WITH THE FINDINGS OF THE CIT(A). GROUND NO.2 OF THE REV ENUES APPEAL IS ACCORDINGLY DISMISSED AND THE SOLITARY GROUND OF TH E ASSESSEES APPEAL IS ALSO DISMISSED. 16. GROUND NO.3 OF THE REVENUES APPEAL RELATES TO THE DELETION OF ADDITION OF RS.15,76,614/- MADE BY THE ASSESSING OF FICER U/S 40(A)(IA) OF THE ACT. 17. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS DEBITED A SUM OF RS.15,76,614/-. THE ASSESSEE WAS ASKED TO FURNISH THE NAMES AND ADDRESS ES OF THE PERSONS TO WHOM SUCH PAYMENTS HAVE BEEN MADE. THE ASSESSEE FI LED COMPLETE DETAILS OF TRUCK OWNERS/DRIVERS TO WHOM SUCH COMMISSION WAS PAID. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS NOT D EDUCTED TAX AT SOURCE AND HAS VIOLATED THE PROVISIONS OF SECTION 194H OF THE ACT. THE ASSESSING OFFICER PROPOSED TO MAKE ADDITION U/S 40(A)(IA) OF THE ACT. THE ASSESSEE STRONGLY OBJECTED TO THIS PROPOSAL OF THE ASSESSING OFFICER STATING THAT HE HAS ONLY ARRANGED TRANSPORT VEHICLES FOR THE TRANSPORTA TION OF THE GOODS FOR TRANSPORT COMPANIES. THE PERSONS WHO IDENTIFIED TH E VEHICLE HAS NOT ACTED ON HIS BEHALF OR ANYBODYS BEHALF AND WAS RENDERING SERVICES WHICH CANNOT BE TERMED AS A COMMISSION/BROKERAGE WITHIN THE MEAN ING OF THE DEFINITION GIVEN U/S 194H OF THE ACT. THEREFORE, THERE IS NO L IABILITY FOR DEDUCTING TAX AT SOURCE. IN ALTERNATIVE, THE ASSESSEE BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER THAT THE PAYMENTS TO VARIOUS BROKERS DO NOT EXCEED RS.5,000/-. ITA NOS. 2110 & 2187/AHD/2012 ASSESSEE : STALIN CHOCKKALINGAM PILLAI AY 2008-2009 7 THEREFORE, THERE IS NO REQUIREMENT FOR MAKING TDS A S PER THE PROVISO TO SECTION 194H OF THE ACT. THIS EXPLANATION OF THE A SSESSEE DID NOT FIND ANY FAVOUR WITH THE ASSESSING OFFICER WHO MADE AN ADDIT ION OF RS.15,16,614/- BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 18. AGGRIEVED BY THIS, THE ASSESSEE CARRIED THE MAT TER BEFORE THE CIT(A) AND ONCE AGAIN MADE SIMILAR SUBMISSIONS AS MADE DUR ING THE COURSE OF THE ASSESSMENT PROCEEDINGS. THE CIT(A), AFTER CONSIDER ING THE FACTS AND THE SUBMISSIONS, CAREFULLY PERUSED THE LIST OF PARTIES TO WHOM THE PAYMENTS WERE MADE. THE CIT(A) FOUND THAT THE PAYMENTS MADE WERE BELOW RS.5,000/-. BECAUSE THE PAYMENTS MADE WERE MUCH BE LOW THE LIMIT PROVIDED IN THE PROVISIONS OF SECTION 40(A)(IA) REA D WITH SECTION 194H OF THE ACT, THE ADDITIONS MADE WERE DELETED. 19. BEFORE US, THE DR COULD NOT BRING ANY CONTRARY FACTS TO POINT OUT ANY ERROR IN THE FACTUAL FINDINGS OF THE CIT(A) AND AFT ER CONSIDERING THE FACTS AND THE SUBMISSIONS, WE FIND THAT THE PAYMENTS ARE MUCH BELOW RS.5,000/-; THEREFORE, THE PROVISION OF SECTION 194H READ WITH SECTION 40(A)(IA) OF THE ACT DO NOT APPLY ON THE FACTS OF THE CASE. WE DECL INE TO INTERFERE. GROUND NO.3 IS ACCORDINGLY DISMISSED. 20. IN THE RESULT, APPEAL OF THE REVENUE AND THAT O F THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 26 TH OCTOBER, 2016 AT AHMEDABAD. SD/- SD/- (MAHAVIR PRASAD) JUDICIAL MEMBER (N.K. BILLAIYA) ACCOUNTANT MEMBER AHMEDABAD; DATED 26/10/2016 BIJU T., PS ITA NOS. 2110 & 2187/AHD/2012 ASSESSEE : STALIN CHOCKKALINGAM PILLAI AY 2008-2009 8 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! # / CONCERNED CIT 4. # ( ) / THE CIT(A ) 5. & ! , ! , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) $ %, / ITAT, AHMEDABAD