Income tax Officer Ward-7(2), Nagpur V. M/s Shivprakash Rajnarayan Mishra(HUF), Nagpur

ITA 238/NAG/2012

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4479 (ITAT-NAGPUR)
• Duration Of Justice: 6 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 09-06-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 22-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: U U KASAR
• Keywords: Additional evidence
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA NO.238/NAG./2012 ( ASSESSMENT YEAR : 200809 ) INCOME TAX OFFICER WARD7(2), NAGPUR APPELLANT V/S M/S. SHIVPRAKASH RAJNARAYAN MISHRA (HUF) HUF, PROP. S.S. TRANSPORT COMPANY P.NO.23, RAMESH SHARMA HOUSE WADDHAMANA, AMRAVATI ROAD NAGPUR 440 023 PAN AAOHS9053B .... RESPONDENT C.O. NO.17/NAG./2012 ARISING OUT OF ITA NO.238/NAG./2012 ( ASSESSMENT YEAR : 200809 ) M/S. SHIVPRAKASH RAJNARAYAN MISHRA (HUF) HUF, PROP. S.S. TRANSPORT COMPANY P.NO.23, RAMESH SHARMA HOUSE WADDHAMANA, AMRAVATI ROAD NAGPUR 440 023 PAN AAOHS9053B CROSS OBJECTOR (ORIGINAL RESPONDENT) V/S INCOME TAX OFFICER WARD7(2), NAGPUR .... RESPONDENT (ORIGINAL APPELLANT) REVENUE BY : SHRI U.U. KASAR ASSESSEE BY : SHRI RAJENDRA GUPTA A/W SHRI R.P. CHANDEKAR DATE OF HEARING 23.10.2018 DATE OF ORDER 25.10 .2018 2 M/S. SHIVPRAKASH RAJNARAYAN MISHRA (HUF) O R D E R PER G. MANJUNATHA, A.M. THIS APPEAL FILED BY THE REVENUE AND THE CROSSOBJE CTION FILED BY THE ASSESSEE ARE DIRECTED AGAINST ORDER DATED 28 TH MARCH 2012, PASSED BY THE LEARNED COMMISSIONER (APPEALS)II, NAGPUR, A ND THEY PERTAIN TO ASSESSMENT YEAR 200809. 2. SINCE THE APPEAL AND THE CROSSOBJECTION PERTAIN TO THE SAME ASSESSEE INVOLVING COMMON ISSUES ARISING OUT OF IDE NTICAL SET OF FACTS AND CIRCUMSTANCES, THEREFORE, AS A MATTER OF CONVEN IENCE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY WAY OF THIS CONSOLIDATED ORDER. ITA NO.238/NAG./2012 REVENUES APPEAL A.Y. 200809 3. THE GROUNDS RAISED BY THE REVENUE ARE REPRODUCED B ELOW: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT(A) ERRED IN HOLDING THAT ONLY THE T DS RECEIVED BY THE ASSESSEE TO THE EXTENT OF ` 74,33,739 IS HIS INCOME. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN NOT UPHOLDING THE DISAL LOWANCE OF UNDISCLOSED TRANSPORTATION RECEIPTS AT ` 1,04,73,178 MADE BY THE ASSESSING OFFICER THOUGH THE DEDUCTORS HAVE RIGHTLY DEBITED THE RECEIPTS IN THE ACCOUNT OF THE ASSESSEE AS FREIGHT CHARGES. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN CONSIDERING THAT IF ALL RECEIPTS ARE TAKEN TO THE ASSESSEES RECEIPTS THEN THE PAYMENTS MADE BY PRINCIPAL PURCHASERS SHOULD ALSO BE CONSIDERED AS A SSESSEES 3 M/S. SHIVPRAKASH RAJNARAYAN MISHRA (HUF) EXPENSES OUT OF THIS RECEIPT, IGNORING THE FACT THA T THE ASSESSEE HAS NOT CLAIMED ANY EXPENDITURE IN THIS REGARD IN H IS RETURN OF INCOME. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS HUF ENGAGED IN THE BUSINESS OF TRANSPORT COMMISSION AGENT UNDER TH E NAME AND STYLE OF S.S. TRANSPORT COMPANY . THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 200809 ON 26 TH MARCH 2009, DECLARING TOTAL INCOME OF ` 1,92,600. THE CASE WAS SELECTED FOR SCRUTINY. DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER NOTICED THAT THE ASSESSEE HAS CLAIMED TDS CREDIT OF ` 2,48,484, AGAINST GROSS TOTAL RECEIPTS OF ` 9,49,680 AND CLAIMED REFUND OF ` 2,35,590. IN ORDER TO ASCERTAIN THE CORRECTNESS OF CLAIM OF REFUND OF TDS CLAIMED, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO FILE NECESSARY EVIDENCES ALONG WITH ITS BOOKS OF ACCOUNT. IN RESPONSE TO THE NOTICE, THE ASSESSEE, VIDE ITS REPLY DATED 23 RD SEPTEMBER 2010, SUBMITTED THAT IT IS IN THE BUSINESS OF TRANSPORT COMMISSION AGENT FA CILITATE MOVEMENT OF GOODS FROM SOUTHERN STATES TO MADHYA PRADESH AND UTTAR PRADESH BY ARRANGING TRUCKS FROM NAGPUR, BECAUSE THE TRUCK OWNER OF SOUTHERN STATS IS HAVING TRANSPORT PERMIT UP TO NAGPUR. THE ASSESSEE FURTHER CONTENDED THAT THE TRANSPORT OPERATOR FROM SOUTHERN STATE PROVIDE TRANSPORTATION TILL NAGPUR AND THEREAFTER IT USED T O ENGAGE THE TRUCKS ON HIRE ON BEHALF OF PRINCIPAL PURCHASER (CONSIGNEE ) AT NAGPUR AND PREPARED THE BILTY FROM NAGPUR TO UTTAR PRADESH / MA DHYA PRADESH. 4 M/S. SHIVPRAKASH RAJNARAYAN MISHRA (HUF) THE CONSIGNEE HAVE DIRECTLY PAID THE TRANSPORTATION CHARGES TO THE TRUCK OWNERS, HOWEVER, IT HAS PAID TRANSPORTATION C HARGES FROM NAGPUR TO THE RESPECTIVE POINT OF DELIVERY BUT THE SAME HA S BEEN REIMBURSED BY THE CONSIGNEE. THE ASSESSING OFFICER AFTER CONSI DERING THE SUBMISSIONS OF THE ASSESSEE HELD THAT THOUGH THE AS SESSEE HAS RECEIVED TRANSPORTATION CHARGES OF ` 1,14,22,786, HAS CONSIDERED ONLY AN AMOUNT OF ` 9,49,680, IN ITS RETURN OF INCOME WITHOUT OFFERING ANY PROPER EXPLANATION ABOUT THE BALANCE TRANSPORTATION CHARGES. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE PARTIES HAVE DEDUCTED TDS UNDER SECTION 194C OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ) @ 2% AND THE ASSESSEE HAS CLAIMED CREDIT FOR TDS WI THOUT OFFERING CORRESPONDING RECEIPTS FOR TAXATION. THEREFORE, HE MADE AN ADDITION OF ` 1,04,73,178, AS UNDISCLOSED TRANSPORTATION RECEIPT S. AGGRIEVED BY THE ASSESSMENT ORDER SO PASSED BY THE ASSESSING OFF ICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORI TY. 5. THE ASSESSEE, BEFORE THE LEARNED COMMISSIONER (APPE ALS), FILED ELABORATE WRITTEN SUBMISSIONS WHICH HAVE BEEN REPRO DUCED FROM PAGE5 TO 17 OF THE ORDER OF THE LEARNED COMMISSION ER (APPEALS). THE ASSESSEE ALSO FILED CERTAIN ADDITIONAL EVIDENCES IN CLUDING CONFIRMATIONS FROM PARTIES TO PROVE THAT IT IS ACTED ONLY AS AN A GENT TO FACILITATE MOVEMENT OF GOODS FROM SOUTHERN STATES TO UTTAR PRAD ESH AND MADHYRA PRADESH FROM NAGPUR FOR WHICH THEY HAVE STA TED THAT THE 5 M/S. SHIVPRAKASH RAJNARAYAN MISHRA (HUF) ASSESSEE IS ACTING AS AN AGENT. THE LEARNED COMMISS IONER (APPEALS) HAS FORWARDED ADDITIONAL EVIDENCES FILED BY THE ASS ESSEE TO THE ASSESSING OFFICER FOR HIS COMMENTS. THE ASSESSING O FFICER, VIDE ITS REMAND REPORT DATED 19 TH AUGUST 2011, COMMENTED ON ADDITIONAL EVIDENCES FILED BY THE ASSESSEE AND ITS ADMISSIBILI TY IN THE LIGHT OF RULE 46A OF THE INCOME TAX (APPELLATE) TRIBUNAL RULES, 1 962. THE LEARNED COMMISSIONER (APPEALS) AFTER CONSIDERING THE SUBMIS SIONS OF THE ASSESSEE HELD THAT THE ASSESSEE IS A COMMISSION AGE NT AND HAS BEEN HELPING PARTIES IN UTTAR PRADESH FOR ARRANGING TRUCK AT NAGPUR FOR WHICH HE GETS HIS COMMISSION AND ALSO GETS HIS MONE Y REIMBURSED WHICH HE HAS PAID TO SOUTH INDIAN TRUCK OWNERS. THE LEARNED COMMISSIONER (APPEALS) FURTHER OBSERVED THAT THE PR INCIPAL PURCHASERS HAVE NOT ONLY REIMBURSED THE FREIGHT PAID BY THE AS SESSEE ON THEIR BEHALF AND ITS COMMISSION FOR SERVICES RENDERED. TH E PRINCIPAL PURCHASERS HAVE DEDUCTED TDS SINCE THEY HAVE MADE T HE PAYMENT TO THE ASSESSEE AS PER THE PROVISIONS OF SECTION 194C OF THE ACT WHICH MANDATES DEDUCTION OF TAX AT SOURCE ON ANY PAYMENT MADE TO ANY TRANSPORTER INCLUDING AGENT. THE ASSESSEE HAS FILED ALL THE DETAILS INCLUDING CONFIRMATION WHICH CLEARLY SHOWS THAT HE IS ACTING AS A COMMISSION AGENT FOR FACILITATING MOVEMENT OF GOODS FROM SOUTH INDIAN TRUCK OWNERS TO UTTAR PRADESH AND MADHYA PRAD ESH STATES BY ARRANGING TRUCKS AT NAGPUR. THEREFORE, HE OPINED TH AT THE ASSESSING OFFICER WAS ERRED IN MAKING ADDITIONS ON GROSS RECE IPTS. HOWEVER, THE 6 M/S. SHIVPRAKASH RAJNARAYAN MISHRA (HUF) LEARNED COMMISSIONER (APPEALS) FURTHER OBSERVED THA T IF AT ALL ANY ADDITION IS REQUIRED, THE ADDITION CAN BE MADE ONLY TO THE EXTENT OF TDS CLAIMED BY THE ASSESSEE BUT NOT THE TOTAL TRANS PORT RECEIPTS. ACCORDINGLY, HE HAS DELETED THE ADDITIONS MADE BY T HE ASSESSING OFFICER AND CONFIRMED THE ADDITION TO THE EXTENT OF ` 2,48,484. AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER (APPEALS), THE REVENUE IS IN APPEAL BEFORE US. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED B EFORE US THAT THE LEARNED COMMISSIONER (APPEALS) ERRED IN DE LETING THE ADDITIONS MADE BY THE ASSESSING OFFICER BY HOLDING THAT ONLY THE TDS ON GROSS RECEIPTS NEEDS TO BE ADDED BUT NOT THE TOT AL CONTRACT RECEIPT IGNORING THE FACT THAT THE DEDUCTORS HAVE RIGHTLY D EBITED THE AMOUNT PAID TO THE ASSESSEE AS FREIGHT CHARGES IN THEIR BO OKS OF ACCOUNT. THE LEARNED DEPARTMENTAL REPRESENTATIVE FURTHER SUBMITT ED THAT THE LEARNED COMMISSIONER (APPEALS) ERRED IN CONSIDERING THAT IF AT ALL THE RECEIPTS ARE TO BE TAKEN AS ASSESSEES RECEIPTS, TH EN THE PAYMENTS MADE BY THE PRINCIPAL PURCHASERS SHOULD ALSO TO BE CONSIDERED AS EXPENDITURE IGNORING THE FACT THAT THE ASSESSEE HAS NOT CLAIMED ANY EXPENDITURE IN THIS REGARD. THE ASSESSING OFFICER H AS BROUGHT OUT CLEAR FACTS TO THE EFFECT THAT THE ASSESSEE HAS OMITTED T O INCLUDE TRANSPORT RECEIPT IN HIS BOOKS OF ACCOUNT AND ACCORDINGLY HAS RIGHTLY MADE THE ADDITIONS AS UNDISCLOSED RECEIPTS AND HIS ORDER SHO ULD BE UPHELD. 7 M/S. SHIVPRAKASH RAJNARAYAN MISHRA (HUF) 7. THE LEARNED AUTHORISED REPRESENTATIVE, ON THE OTHER HAND, STRONGLY SUPPORTING THE ORDER OF THE LEARNED COMMIS SIONER (APPEALS) SUBMITTED THAT THE ASSESSEE HAS FILED NECESSARY DET AILS BEFORE THE LEARNED COMMISSIONER (APPEALS) TO PROVE THAT IT ACT ED ONLY AS AN AGENT FOR COMMISSION WHICH HAS BEEN RIGHTLY CONSIDE RED IN HIS BOOKS OF ACCOUNT, THEREFORE, THE ASSESSING OFFICER WAS INCOR RECT IN MAKING ADDITIONS TOWARDS GROSS RECEIPTS ON THE BASIS OF TD S CERTIFICATE IGNORING THE FACT THAT THE ASSESSEE HAS CONSIDERED THE AMOUNT PAID BY THE PRINCIPAL PURCHASERS AS REIMBURSEMENT OF EXPENS ES AFTER CONSIDERING ITS COMMISSION INCOME. THE ASSESSEE ALS O FILED CONFIRMATION FROM THE PARTIES WHERE THEY HAVE CATEG ORICALLY STATED THAT THEY HAVE PAID TRANSPORTATION CHARGES DIRECTLY TO THE TRUCK OWNERS AND THE ASSESSEE GETS ONLY COMMISSION. THE LEARNED COMMISSIONER (APPEALS) HAS APPRECIATED THESE FACTS IN RIGHT PERS PECTIVE TO DELETE THE ADDITIONS MADE BY THE ASSESSING OFFICER TO THE EXTE NT OF RECEIPTS EXCLUDING TDS. HOWEVER, IN RESPECT OF TDS CREDIT, T HE ASSESSEE HAS ALREADY CONSIDERED COMMISSION INCOME IN ITS BOOKS O F ACCOUNT WHICH INCLUDES TDS DEDUCTED BY THE PAYER, THEREFORE, FURT HER ADDITION TOWARDS TDS CREDIT AMOUNTS TO DOUBLE ADDITION WHICH IS INCORRECT. 8. WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE MATERIAL AVAILABLE ON REC ORD. THE ASSESSEE HAS CONSIDERED COMMISSION INCOME IN ITS BOOKS OF AC COUNT AFTER 8 M/S. SHIVPRAKASH RAJNARAYAN MISHRA (HUF) CLAIMING CERTAIN EXPENSES AND DECLARED INCOME OF ` 1,92,600. THE ASSESSEE CLAIMED TDS CREDIT OF ` 24,484, MAKING A CLAIM OF REFUND OF ` 2,35,590. THE ASSESSING OFFICER MADE ADDITIONS TOWA RDS TRANSPORTATION CHARGES ON THE GROUND THAT THE ASSESSEE CLAIMED CRE DIT FOR TDS, BUT FAILED TO CONSIDER CORRESPONDING RECEIPTS IN ITS BO OKS OF ACCOUNT. IT IS THE CLAIM OF THE ASSESSEE THAT IT HAS CONSIDERED CO MMISSION INCOME IN ITS BOOKS OF ACCOUNT AS IT IS WORKING AS A COMMISSI ON AGENT FOR FACILITATING MOVEMENT OF GOODS FROM SOUTHERN STATES TO UTTAR PRADESH AND MADHYA PRADESH BY ARRANGING THE TRUCKS FROM NAG PUR, BECAUSE THE TRUCK OWNERS FROM SOUTHERN STATES HAS TRANSPORT PERMIT UP TO NAGPUR AND THEY CANNOT TRAVEL BEYOND NAGPUR. THE AS SESSEE WAS FURTHER CLAIMED THAT IT HAS PAID TRANSPORT CHARGES FROM NAGPUR TO THE POINT OF DELIVERY ON BEHALF OF PRINCIPAL PURCHASER AND THE SAME HAS BEEN REIMBURSED BY THE PRINCIPAL PURCHASER, BUT TDS HAS BEEN DEDUCTED ON GROSS PAYMENT INCLUDING COMMISSION AND REIMBURSEMENT OF EXPENDITURE IN VIEW OF SPECIFIC PROVISIONS OF SE CTION 194C OF THE ACT. BUT, THE FACT REMAINS THAT IT HAS ACTED ONLY AS AN A GENT ON COMMISSION BASIS WHICH HAS BEEN RIGHTLY CONSIDERED IN ITS BOOK S OF ACCOUNT. 9. HAVING HEARD BOTH THE PARTIES, WE FIND MERIT IN THE ARGUMENTS OF THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSES SEE FOR THE REASON THAT THE ASSESSEE HAS FILED NECESSARY EVIDENCES INC LUDING CONFIRMATION FROM THE CONSIGNEE TO PROVE THAT IT HAS ACTED ONLY AS AN AGENT FOR 9 M/S. SHIVPRAKASH RAJNARAYAN MISHRA (HUF) FACILITATING MOVEMENT OF GOODS FROM NAGPUR TO UTTAR PRADESH AND MADHYA PRADESH STATES ON BEHALF OF PRINCIPAL PURCHA SER ON COMMISSION BASIS. THE ASSESSEE ALSO FILED CONFIRMATIONS FROM T HE CONSIGNEE WHERE THEY HAVE CATEGORICALLY STATED THAT THE ASSESSEE IS ONLY A COMMISSION AGENT. THE ASSESSEE ALSO FILED OTHER EVIDENCES TO P ROVE THAT THOUGH THE PRINCIPAL PURCHASERS HAVE DEDUCTED TDS ON GROSS PAYMENT WHICH INCLUDES REIMBURSEMENT OF TRANSPORTATION CHARGES PA ID BY THE ASSESSEE ON BEHALF OF PRINCIPAL PURCHASER. THE LEAR NED COMMISSIONER (APPEALS) HAS CONSIDERED ALL THESE FACTS TO COME TO THE CONCLUSION THAT THE ASSESSEE ACTED AS A COMMISSION AGENT AND ACCORD INGLY ALLOWED RELIEF BY DELETING THE ADDITION MADE BY THE ASSESSI NG OFFICER TOWARDS GROSS TRANSPORTATION CHARGES ON THE BASIS OF TDS CE RTIFICATE, EXCLUDING THE AMOUNT OF TDS CREDIT CLAIMED BY THE ASSESSEE. C ONSEQUENTLY, WE DO NOT FIND ANY ERROR OR INFIRMITY IN THE FINDINGS OF THE LEARNED COMMISSIONER (APPEALS) AND DISMISS THE GROUNDS RAIS ED BY THE REVENUE. 10. COMING TO THE CROSSOBJECTION FILED BY THE ASSESSEE , WE FIND THAT THE ASSESSEE HAS FILED THE PRESENT CROSSOBJECTION IN SUPPORT OF THE ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS). SINCE WE HAVE DISMISSED THE GROUNDS RAISED BY THE REVENUE IN ITS APPEAL AS AFORESAID, RESULTANTLY, THE CROSSOBJECTION FILED B Y THE ASSESSEE BECOMES INFRUCTUOUS AND, HENCE, LIABLE TO BE DISMIS SED. 10 M/S. SHIVPRAKASH RAJNARAYAN MISHRA (HUF) 11. IN THE RESULT, REVENUES APPEAL IS DISMISSED AND AS SESSEES CROSSOBJECTION IS ALSO DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25.10.2018 SD/- SANDEEP GOSAIN JUDICIAL MEMBER SD/- G. MANJUNATHA ACCOUNTANT MEMBER NAGPUR, DATED: 25.10.2018 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, NAGPUR CITY CONCERNED; (5) THE DR, ITAT, NAGPUR; (6) GUARD FILE. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (A.R./SR. P.S./P.S.) ITAT, NAGPUR