Lakshmi Transport Forwarding Agency, Allahabad V. ITO, Allahabad

ITA 223/ALLD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63355 (ITAT-ALLAHABAD)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 02-11-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 05-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y P SRIVASTA VA
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ALLAHABAD BENCH, ALLAHABAD BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.223/ALLD/2011 ASSESSMENT YEAR : 2007-08 LAKSHMI TRANSPORT FORWARDING AGENCY, VS. INCOME-TAX OFFICER, 142/100, SOUTH MALAKA, ALLAHABAD. RANGE 1(2), ALL AHABAD. (PAN : AABFL 5890 Q) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHISH BANSAL, ADVOCATE RESPONDENT BY : SHRI Y.P. SRIVASTAVA, D.R. DATE OF HEARING : 02.11.2012 DATE OF PRONOUNCEMENT : 08.11.2012 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 02.08.2011 PASSED BY THE LD. CIT(A), ALLAHABAD FOR THE ASSESSM ENT YEAR 2007-08. 2. THE GROUNDS RAISED IN THE APPEAL PERTAIN TO ADDI TION OF RS.1,88,000/- ON ACCOUNT OF OUTSTANDING TRANSPORTATION. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E CARRIES ON BUSINESS OF TRANSPORT FORWARD AGENCY FOR THE LAST SEVERAL YEARS AND MAINTAINS REGULAR BOOKS OF ITA NO.223/ALLD/2011 A.Y. 2007-08 2 ACCOUNT. THE BOOKS OF ACCOUNT WAS SUBJECT TO AUDIT UNDER SECTION 44AB OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER). DURI NG THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN REGARDING OUTSTANDING TRANSPORTATION OF RS.1,88,000/- APPEARING IN THE BA LANCE SHEET. THE ASSESSEE SUBMITTED THAT THESE ARE THE OUTSTANDING TRANSPORTA TION AMOUNT PAYABLE TO TRUCK OWNERS AS ONLY PART AMOUNT OF THEIR BILLS WERE PAID DURING THE YEAR UNDER CONSIDERATION. THE A.O. WAS NOT SATISFIED WITH THE EXHALATION OF THE ASSESSEE. HE THUS MADE THE ADDITION OF RS.1,88,000/- UNDER SECTI ON 68 OF THE ACT. 4. THE CIT(A) CONFIRMED THE ORDER OF ASSESSING OFFI CER ON THE GROUND THAT THE ASSESSEE HAS FAILED TO FURNISH ORIGINAL DOCUMENTS A ND SATISFACTORY EXPLANATION. 5. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND RECORDS PERUSED. THE ADMITTED FACTS OF THE CASE ARE THAT T HE ASSESSEE HAS SHOWN RECEIPTS FROM TRANSPORTATION AT RS.1,58,73,812/- . THE ASSE SSEE HAS SHOWN TRANSPORTATION PAYMENT OF RS.1,52,46,556/-. THE CONTENTION OF THE ASSESSEE THAT THE AMOUNT OF RS.1,88,000/- IS OUTSTANDING PAYMENT TO BE MADE TO TRUCK OWNERS AGAINST THEIR BILLS. THE SAID AMOUNT HAS BEEN PAID IN SUBSEQUENT YEARS OF WHICH DETAILS HAVE BEEN FURNISHED. IT WAS ALSO SUBMISSION OF THE ASSE SSEE THAT THESE OUTSTANDING PAYMENTS WERE RELATED TO PARTNERS, FRIENDS OF PARTN ERS AND RELATIVES OF THE PARTNERS. ITA NO.223/ALLD/2011 A.Y. 2007-08 3 THE ASSESSEE PROVIDED COMPLETE DETAILS INCLUDING PA N ETC. A COPY OF SUBMISSION DATED 07.07.2011 MADE BEFORE THE CIT(A) HAS BEEN PL ACED AT PAGE NOS.1 TO 6 OF THE PAPER BOOK. ON PERUSAL OF THESE DETAILS, WE NOTICE THAT THE RELEVANT TOTAL TRANSPORTATION CHARGES PAYABLE WAS RS.2,52,090/- AN D PART PAYMENT WAS MADE DURING THE YEAR UNDER CONSIDERATION. BALANCE PAYAB LE AMOUNT WAS RS.1,88,000/- WHICH WAS PAID IN SUBSEQUENT YEAR. THE A.O. DID NO T DISPUTE ABOUT THE TOTAL AMOUNT OF THESE BILLS PAYABLE AND OUT OF WHICH PAID DURING THE YEAR UNDER CONSIDERATION. WHEN THE ASSESSING OFFICER HIMSELF ACCEPTED THE TRANSPORTATION CHARGES PAYABLE BY THE ASSESSEE AND SOME OF THE PAR T HAS BEEN PAID DURING THE YEAR, THERE IS NO QUESTION OF DISBELIEVING PART PAYMENT O F SAME BILL OUTSTANDING AS AT THE CLOSE OF THE YEAR. THESE OUTSTANDING ARE ON THE BA SIS OF PRINCIPLE OF ACCOUNTANCY. WHEN THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING, IN THAT CIRCUMSTANCES THE ASSESSEE HAS TO SHOW TOTAL EXPEND ITURE ON ACCRUAL BASIS AND OUTSTANDING BALANCE IS TO BE SHOWN IN THE BALANCE S HEET. THE ASSESSEE FOLLOWED SUCH ACCEPTED ACCOUNTING SYSTEM WHICH CANNOT BE DOU BTED MERELY ON THE BASIS THAT THERE WAS OUTSTANDING BALANCE. THIS OUTSTANDING BA LANCE ARE ROUTINE OUTSTANDING BALANCE OF THE BUSINESS OF THE ASSESSEE. IN THE LI GHT OF THE FACT THAT THE ASSESSEE MAINTAINED REGULAR BOOKS OF ACCOUNT WHICH IS SUBJEC T TO AUDIT, PARTICULARLY UNDER THE CIRCUMSTANCES WHEN THE ASSESSEE EXPLAINED OUTST ANDING AMOUNT BY REFERRING EACH BILL THEIR PAYMENT AND OUTSTANDING AMOUNT, WE ARE OF THE VIEW THAT SUCH ITA NO.223/ALLD/2011 A.Y. 2007-08 4 ADDITION IS NOT WARRANTED. IN THE LIGHT OF THE FAC T, WE DELETE THE ADDITION OF RS.1,88,000/-. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, ALLAHABAD BENCH, ALLAHABAD 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE T RIBUNAL, ALLAHABAD TRUE COPY