ACIT, CHANDRAPUR CIRCLE, Chandrapur V. SHRI BHASKAR V. VALLIGATTA, Chandrapur

ITA 223/NAG/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3882 (ITAT-NAGPUR)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 14-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHAY MARATHE
• Assessee Lawyers: M MANI
• Keywords: Business expenditure

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR , BENCH , ( E - COURT), MUMBAI , BEFORE SHRI R.K.GUPTA , J M & SHRI D.KARUNA KAR RAO , A M ITA NO. 223 / N AG / 20 1 2 ( ASSESSMENT YEAR : 200 8 - 20 0 9 ) ACIT, CHANDRAPUR CIRCLE, AAYKAR BHAVAN, NEAR LIC OFFICE, JALNAGAR WARD, RAILWAY STATION ROAD, CHANDRAPUR - 442 401 VS. BHASKAR V. VALLIGATTA, GHUGUS ROAD, PADOLI, CHANDRAPUR - 442 406 PAN/GIR NO. : A DUPV 1790 M ( APPELLANT ) .. ( RESPONDENT ) /REVENUE BY : SHRI ABHAY MARATHE /ASSESSEE BY : MR. M.MANI DATE OF HEARING : 5 TH MARCH ., 201 3 DATE OF PRONOUNCEMENT : 3 RD APRIL, 201 3 O R D E R P ER SHRI R.K.G UPTA, JM : TH E DEPARTMENT HAS PREFERRED THIS APPEAL BEFORE THE ITAT NAGPUR BENCH, NAGPUR, AGAINST THE ORDER DATED 19 - 3 - 2012 OF LEANED CIT(A) - II , NAGPUR (MAHARASHTRA) RELA TING TO THE ASSESSMENT YEAR 200 8 - 0 9 , WHICH HAS BEEN HEARD THROUGH E - COURT, MUMBAI. 2 . THE DEPARTMENT IS OBJECTING THAT AS PER RULE 46A(3), THE CIT(A) CANNOT ENTERTAIN ANY EVIDENCES SUBMITTED BEFORE HIM BY THE ASSESSEE UNLESS THE AO BEEN GIVEN PROPER OPPORTUNITY TO EXAMINE THE EVIDENCE PRODUCED DURING THE PROCEEDINGS. ITA NO. 223 /20 1 2 2 3 . AN ADDITION OF RS. 22,79,205/ - WAS MADE BY THE AO UNDER SECTION 68. THE AO HAS STATED THAT DURING THE ASSESSMENT PROCEEDING, THE A SSESSEE WAS REQUIRED TO EXPLAIN ABOUT THE BANK DEPOSITS. IN REPLY, IT WAS STATED THAT THIS AMOUNT IS FROM TRANSPORTATION RECEIPTS HAD HE HAS NOT SHOWN THESE RECEIPTS IN RETURN OF INCOME . IN HIS REPLY ASSESSEE SAID THAT HE HAS NOT MAINTAINED THE BOOKS OF AC COUNTS REGARDING THE TRANSPORT RECEIPTS. THE ASSESSEE HAVING NO TRUCKS ON TRANSPOR T VEHICLE AND HE HAS ONLY DONE THE BUSINESS ON COMMISSION BASIS, I . E . MAXIMUM 2% PROFIT OUT OF THIS, HE HAD MAINTAINED HIS EXPENSES ALSO . AS PER THE ORDER OF THE AO, THE ASSE SSEE HAS NOT PRODUCED ANY EVIDENCE ON PROOF IN SUPPORT HIS EXPLANATION. THEREFORE, THE AO MADE ADDITION OF RS. 22,79,205/ - ON BASIS OF DEPOSIT IN BANK ACCOUNT MAINTAINED WITH STATE BANK OF HYDERABAD, CHANDRAPUR. 4 . BEING AGGRIEVED WITH THE ORDER OF THE AO , ASSESSEE PREFERRED AN APPEAL BEFORE THE LEARNED CIT(A) . D ETAIL SUBMISSIO NS WERE FILED BEFORE THE CIT(A). IT WAS CLAIMED THAT THE ASSESSEE WAS SELLING COAL , PURCHASER REQUESTED HIM TO ARRANGE FOR TRANSPORT AND APPELLANT HAD TO GIVE SOME ADVANCE TO DRIVERS AT THE TIME OF LIFTING OF COAL AND WHEN THE COAL REACHED THE DESTINATION, PURCHASER PAID BALANCE TRANSPORT TO TRUCK DRIVER AND THE ADVANCES PAID BY THE ASSESSEE WERE RETURNED BY PURCHASER OF COAL BY DEPOSITING IT IN THE BANK ACCOUNT AND ASSESSEE THEN WITH DREW IT OR AT TIMES WHEN NO ADVANCES WERE GIVEN ENTIRE TRANSPORTATION CASH WAS DEPOSITED IN BANK ACCOUNT AND THEN ASSESSEE ISSUED BEARER CHEQUE TO CONCERNED T R ANSPORTER WHO WAS LOCALLY STATIONED I . E. AT THE PLACE OF ASSESSEE AND ASSESSEE WAS NOT DOING ITA NO. 223 /20 1 2 3 TRAN SPORT BUSINESS BUT WAS JUST HELPING HIS CUSTOMERS . THE EXPLANATION OF THE ASSESSEE APPEARS TO BE PARTLY TRUE . HOWEVER, THE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED THAT HE IS MERELY CHARGING 2% OF THE TRANSPORT RECEIPTS AS INCOME AND KEEPING IN MIND THA T ALL BUSINESS EXPENSES ARE ALREADY DEBITED IN PROFIT AND LOSS ACCOUNT FOR RUNNING THE BUSINESS OF ASSESSEE. THEREFORE, HE ESTIMATED THE INCOME OF THE ASSESSEE AT THE RATE OF 5% INSTEAD OF 2% SHOWN BY THE ASSESSEE. THE CIT(A) HAS ALSO GIVEN A FINDING THAT THE AO IS FREE TO TAKE ACTION FOR OTHER YEARS I.E. EARLIER AND LATER YEAR (AS THE BANK ACCOUNT IS NOT A ONE YEAR AFFAIR AND BEFORE ME ONLY ONE YEAR ACCOUNT IS SUBMITTED BUT IT SHOWS BOTH OPENING BALANCE AND CLOSING BALANCE ) . THEREFORE, HE SUSTAINED AN ADD ITION OF RS. 1,13,965/ - AGAINST ADDITION OF RS. 22,79,205/ - . AGGRIEVED THEREBY THE DEPARTMENT IS IN APPEAL HERE BEFORE THE TRIBUNAL. 5 . ON A QUER Y FROM THE BENCH, LEARNED DR COULD NOT GIVE SATISFACTORY EXPLANATION THAT WHAT ADDITIONAL EXPENSES HAVE BEEN AC CEPTED BY THE LEARNED CIT(A) AS LEARNED CIT(A) HAS DECIDED THE ISSUE ON MERIT AFTER TAKING INTO CONSIDERATION THE EXPLANATION OF THE ASSESSEE. THEREAFTER LEARNED DR PLACED RELIANCE ON THE ORDER OF THE AO. 6 . ON THE OTHER HAND, LEARNED AR OF THE ASSESSEE PLACED RELIANCE ON THE ORDER OF THE CIT(A) . ITA NO. 223 /20 1 2 4 7 . AFTER CONSIDERING THE ORDER OF THE AO , WE FOUND NO INFIRMITY IN THE FINDING OF THE LEARNED CIT(A) . LEARNED CIT(A) HAS EXAMINED THE ISSUE AND HELD THAT 2% COMMISSION WAS NOT CORRECT AS SHOWN BY THE ASSESSEE. C IT(A) HAS GIVEN A FURTHER OBSERVATION IN HIS ORDER THAT AO IS FREE TO TAKE ACTION IN CASE OF EARLIER YEARS AS WELL AS IN SUBSEQUENT YEARS, IF HE FEELS THIS FIT. IN THIS OBSERVATION OF LEARNED CIT(A), WE SEE UNREASONABLENESS. NEITHER ANY ADDITIONAL EVIDENC E HAS BEEN SUPPLIED BY THE LEARNED DR NOR ANY OTHER MATERIAL HAS BEEN BROUGHT ON RECORD TO CONTROVERT THE FINDING OF THE LEARNED CIT(A) . ACCORDINGLY, WE CONFIRM THE ORDER OF THE LEARNED CIT(A) ON THE ISSUE INVOLVED. 8 . RESULTANTLY , APPEAL OF THE DEPARTME NT I S DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 3 RD DAY OF AP R .201 3 . 201 3 SD/ - SD/ - ( ) ( D.KARUNAKAR RAO ) ( ) ( R.K.GUPTA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 0 3 / 0 4 / 201 3 . /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI / NAGPUR . 4. / CIT 5. / DR, ITAT, MUMBAI / NAGPUR . 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( DY./ASSTT. REGISTRAR) / ITAT, MUMBAI