Shri Keshri Navratandas Jain, Surat V. The Income Tax Officer, Ward-3(2), Surat

ITA 2528/AHD/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6216 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 30-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 28-10-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA NO.2528/AHD/2013 (ASSESSMENT YEAR: 2009-10) SHRI KESHRI NAVRATANDAS JAIN M/S. JAIN FREIGHT CARRIER 101, SARITA NAGAR APT., ANAND MAHAL ROAD, SURAT APPELLANT VS. INCOME-TAX OFFICER, WARD-3(2), SURAT RES PONDENT PAN: AEHPJ9128B /BY ASSESSEE : MS. IRA KAPOOR, A.R. /BY REVENUE : SHRI RAJDEEP SINGH, SR. D.R. /DATE OF HEARING : 30.03.2017 /DATE OF PRONOUNCEMENT : 12.04.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2009-10 ARISES AGAINST THE CIT(A)-IV, SURATS ORDER DATED 02.09.2013, PASSED I N APPEAL NO. CAS- IV/II/298/11-12, RESTRICTING DISALLOWANCE/ADDITION OF LORRY FREIGHT EXPENSES ITA NO. 2528/AHD/2013 (SHRI KESHRI N. JAIN VS. ITO) A.Y. 2009-10 - 2 - OF RS.64,82,780/- I.E. @25% OF THE TOTAL FIGURE OF RS.2,59,31,118/- MADE BY THE ASSESSING OFFICER IN ASSESSMENT ORDER DATED 29. 12.2011 TO THAT @3%, IN HIS LOWER APPELLATE ORDER, IN PROCEEDINGS U/S.143( 3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH SIDES REITERATING THEIR RESPECTIVE STAN DS. CASE FILE PERUSED. 2. RELEVANT FACTS INVOLVED HEREIN ARE IN A NARROW C OMPASS. THIS ASSESSEE IS A TRANSPORT CONTRACTOR. HE DEBITED / PAID LORRY EXPENSES OF RS.2.90CRORES AS DIRECT EXPENDITURE IN THE RELEVANT PREVIOUS YEAR. THE ASSESSING OFFICER SOUGHT ALL RELEVANT DETAILS IN THE COURSE OF SCRUTI NY. THE ASSESSEE APPEARS TO HAVE PRODUCED COPY OF ACCOUNTS ALONG WITH SOME FORM -15I IN A FEW PAYEES CASES. THE ASSESSING OFFICER NOTICED THAT ALMOST A LL THE PAYMENTS HAVE BEEN MADE IN CASE. HE THEREFORE PROCEEDED TO RECORD ASS ESSEES CONSENT TO DISALLOW 25% OF RS.2.59CRORES(SUPRA) IN CASES INVOL VING NON PRODUCTION OF BILLS/VOUCHERS. THE SAME RESULTED IN DISALLOWANCE/ ADDITION OF RS.64,82,780/- IN QUESTION. 3. THE ASSESSEE PREFERRED APPEAL. HE CHOSE TO FILE ADDITIONAL SUBMISSIONS. THE CIT(A) SOUGHT REMAND REPORT. THE ASSESSING OFF ICER FILED THE SAME ON 28.01.2013 STATING THAT ALTHOUGH THE ASSESSEE HAD A GREED FOR THE IMPUGNED DISALLOWANCE, HOWEVER, ON THE BASIS OF ORIGINAL VOU CHERS PRODUCED AND FOUND TO BE TALLIED WITH LEDGER IN THE COURSE OF REMAND PROCEEDINGS, AN AD HOC DISALLOWANCE OF 2 TO 3% WOULD MEET ENDS OF JUSTICE OF NON GENUINE LORRY EXPENSES. THE CIT(A) THEREAFTER PARTLY ACCEPTS ASS ESSEES ARGUMENTS AS UNDER: 2.4 I HAVE GONE THROUGH THE FACTS OF THE CASE, THE ASSESSMENT ORDER, AND SUBMISSIONS OF THE APPELLANT, REMAND REPORT AND COU NTER COMMENTS TO THE REMAND ITA NO. 2528/AHD/2013 (SHRI KESHRI N. JAIN VS. ITO) A.Y. 2009-10 - 3 - REPORT. THE A.O. IS, IN THE ASSESSMENT ORDER, NOT C LEAR AS TO THE REASONS WHY THE DISALLOWANCE IS BEING MADE. ALTHOUGH HE DISCUSSES I N THE BODY OF THE ORDER ISSUE OF DEFICIENCY IN MAKING TDS, THE DISALLOWANCE IS ACTUA LLY MADE FOR THE EXPENSES BEING NON-GENUINE AND FOR NON-BUSINESS PURPOSE. HOW EVER, IN THE COMPUTATION OF INCOME THE A.O. ONCE AGAIN MENTIONS THAT ADDITION I S ON ACCOUNT OF NON-DEDUCTION OF TDS, THE TOTAL DISALLOWANCE MADE IS 25% OF FREIG HT EXPENSES INCURRED, ON LUMP SUM BASIS, ON THE ALLEGED ADMISSION OF THE APPELLAN T AND NO PARTICULAR INSTANCE OF NON-DEDUCTION OF TDS IS HIGHLIGHTED. THE APPELLANT ON THE OTHER HAND HAS MENTIONED THAT THE ADMISSION WAS TAKEN UNDER PRESSU RE, THAT NO INSTANCE OF NON- BUSINESS PURPOSE HAS BEEN POINTED OUT, THAT FULL DE TAILS WITH BILLS, VOUCHERS, L/R NO., TRUCK NO., NAME AND ADDRESS OF THE TRUCK OWNER S, ETC. WAS AVAILABLE. IT WAS ALSO MENTIONED THAT FORM NO. 151 WAS PRODUCED BEFOR E THE A.O. WHO HAS REJECTED THEM SIMPLY BECAUSE THE SAME FILE CONTAINED FORM 15 1 FOR THE PREVIOUS YEAR. IT IS ALSO EXPLAINED THAT PAYMENT IN CASH IS REQUIRED TO BE MADE TO TRUCK DRIVERS FOR LORRY CHARGES AS CASH PAYMENT IS INSISTED TO MEET E XPENSES LIKE FUEL TAXES, FOOD, ETC. IN THE REMAND REPORT THE A.O. HAS ACCEPTED THA T FORM NO.L5H WAS SUBMITTED. HE HAS FURTHER STATED THAT ALTHOUGH THE APPELLANT H AD AGREED TO THE ADDITION AT THE TIME OF ASSESSMENT HOWEVER ON BASIS OF ORIGINAL VOU CHERS PRODUCED AND FOUND TO BE TALLIED WITH LEDGER DURING REMAND PROCEEDINGS TH E AMOUNT OF DISALLOWANCE SHOULD BE 2% TO 3% ON ACCOUNT OF NON-GENUINE LORRY FREIGHT EXPENSES. IN THEIR COUNTER COMMENTS THE APPELLANT HAS ASKED THAT SINCE THE A.O. HAS FOUND ALL EXPENSES TO BE GENUINE ALL ADDITION MADE ON ACCOUNT OF LORRY FREIGHT EXPENSE SHOULD BE DELETED. LOOKING TO THE ABOVE FACTS, IN M Y CONSIDERED OPINION THE DISALLOWANCE IS REQUIRED TO BE RESTRICTED TO 3% OF FREIGHT EXPENSES FOR WANT OF VERIFICATION. THE APPELLANT GETS RELIEF ACCORDINGLY . THIS GROUND IS PARTLY ALLOWED. 4. WE HAVE HEARD RIVAL SUBMISSIONS. LD. DEPARTMEN TAL REPRESENTATIVE SUBMITS THAT THE ASSESSEE HAD HIMSELF AGREED FOR TH E IMPUGNED DISALLOWANCE IN COURSE OF SCRUTINY. WE HOWEVER SEE NO REASON TO AGREE WITH THIS PLEA SINCE ORIGINAL VOUCHERS PRODUCED IN THE COURSE OF REMAND PROCEEDINGS HAVE ALREADY BEEN FOUND TO BE TALLYING WITH THE RESPECTIVE LEDGE RS. THE FACT HOWEVER ALSO REMAINS THAT BOTH THE LOWER AUTHORITIES HAVE NOT BE EN ABLE TO VERIFY ALL OF THE ASSESSEES EXPENSES. THIS HAS MADE THE CIT(A) TO I NVOKE THE IMPUGNED DISALLOWANCE @3% IN QUESTION. WE OBSERVE IN THESE PECULIAR FACTS THAT SUCH A DISALLOWANCE PARTICULARLY IN CASE WHERE ASSESSEE S VOUCHERS HAVE TALLIED WITH LEDGERS; IS A BIT ON HIGHER SIDE. WE THUS PA RTLY REVERSE LD.CIT(A)S DISALLOWANCE FROM 3% OF THE TOTAL FREIGHT EXPENSES IN QUESTION TO THAT @1% WITH A RIDER THAT OUR INSTANT ADJUDICATION SHALL NO T BE TREATED AS A PRECEDENT IN ITA NO. 2528/AHD/2013 (SHRI KESHRI N. JAIN VS. ITO) A.Y. 2009-10 - 4 - ANY PRECEDING OR SUCCEEDING ASSESSMENT YEAR. THE A SSESSING OFFICER SHALL FINALIZE NECESSARY COMPUTATION. 5. THIS ASSESSEES APPEAL IS PARTLY ALLOWED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 12 TH DAY OF APRIL, 2017.] SD/- SD/- ( AMARJIT SINGH ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 12/04/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 45 / GUARD FILE. BY ORDER / . // . /0