AMRIT GARG PROP. M/S MAHADEV COTTON FACTORY, MANSA V. INCOME TAX OFICER WARD-1(5), MANSA

ITA 26/ASR/2018

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 7755 (ITAT-AMRITSAR)
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 19-09-2018
• Assessment Year: 2014-2015
• Appeal Filed On: 22-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA
• Keywords: Depreciation; Business expenditure; Opportunity of being heard; Onus to prove
• Section: 69C; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (SMC) BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER I.T.A. NO. 26/ASR/2018 AS SESSMENT YEAR: 2014-15 AMRIT GARG, PROP. MAHADEV COTTON FACTORY, BARETA, TEHSIL BUDHLADA, DISTT. MANSA [PAN: AJXPG 3871B] VS. INCOME TAX OFFICER, WARD-1(5), MANSA (APPELLANT) (RESPONDENT) APPELLANT BY : SH. P. N. ARORA (ADV.) RESPONDENT BY: SH. CHARAN DASS (D.R.) DATE OF HEARING: 19.09.2018 DATE OF PRONOUNCEMENT: 27.09.2018 ORDER PER SANJAY ARORA, AM: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS), BATHINDA ('CI T(A)' FOR SHORT) DATED 30.11.2017, DISMISSING THE ASSESSEES APPEAL CONTES TING HIS ASSESSMENT U/S. 143(3) OF THE INCOME TAX ACT, 1961 ('THE ACT' HEREINAFTER) DATED 19.12.2016 FOR THE ASSESSMENT YEAR (AY) 2014-15. 2. THE APPEAL RAISES, IN EFFECT, THREE GROUNDS; THE FIRST GROUND BEING GENERAL IN NATURE WARRANTING NO ADJUDICATION AND WHICH WE SHAL L TAKE UP IN SERIATIM. 3.1 GROUNDS 2 READS AS UNDER: ITA NO. 26/ASR/2018 (AY 2014-15) AMIT GARG V. ITO 2 2. THE LD. CIT(A) ERRED ON FACTS AND LAW IN CONFIRMING THE ADDITIONS OF RS.15,09,609/-, MADE BY THE AO ON ACCOUNT OF FREIGHT OF TRUCK OWNED BY THE ASSESSEE. THE EXPLANATION OF THE ASSESSEE BEFORE THE AO AND CIT(A) THAT THE ASSESSEE WAS ENTITLED TO EXPENSES AGAINST RECEIPTS OF TRUCK HAS BEEN REJECTED WITHOUT REBUTTING THE SA ME BECAUSE IT IS SETTLED PRINCIPLE OF LAW THAT ONLY THE PROFITS EMBEDDED AND NOT THE WHOLE OF GROSS RECEIPTS ARE TAXABLE. 3.2 THE FACTS OF THE CASE QUA THE SAID GROUND ARE THAT THE ASSESSEE, IN THE BUSINESS OF GINNING COTTON (NARMA), WAS DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS FOUND TO BE, ON THE BASIS OF FORM 26AS (REFLECTING, QUA EACH DEDUCTEE, THE PARTICULARS OF RECEIPTS SUBJECT TO TA X DEDUCTION AT SOURCE DURING THE YEAR, AND THE DEPOSIT OF THE TAX DEDUCTED TO THE CR EDIT OF THE CENTRAL GOVERNMENT), TO BE IN RECEIPT OF A SUM OF RS.15,09,609/- BY WAY OF FREIGHT CHARGES. THE SAME NOT FINDING REFLECTION IN THE ASSESSEES FINAL ACCOUNTS OR OTHERWISE DISCLOSED PER HIS RETURN OF INCOME FOR THE YEAR, FILED ON 29.11.2014 AT AN INCOME OF RS.2.05 LACS, HE WAS SHOW CAUSED IN THE MATTER. THE ASSESSEE, WHILE ADMITTING THE SAID INCOME, NOT DISCLOSED, CLAIMED, AS HE DOES PER HIS GD. 2 BEFORE THE TRIBUNAL, ALLOWANCE OF EXPENDITURE THERE-AGAINST, VIZ., ON FUEL; SALARY TO DRIVER AND CLEANER; REPAIR AND MAINTENANCE. THE ASSESSEE, HOWEVER, FAILING TO PROV E THE INCURRING OF THE SAID EXPENDITURE WITH ANY EVIDENCE, NO DEDUCTION FOR THE SAME COULD, IN THE VIEW OF THE ASSESSING OFFICER (AO), BE ALLOWED AND, ACCORDINGLY , THE ENTIRE UNDISCLOSED FREIGHT RECEIPT OF RS.15.10 LACS WAS BROUGHT TO TAX BY HIM, FURTHER NOTING THAT SECTION 44AE IS ALSO NOT APPLICABLE IN THE INSTANT CASE. IN FIRST APPEAL, THE LD. CIT(A) PROCEEDED BY FIRST NOTING THE BASIC, UNDISPUTED FAC TS OF THE CASE, AS UNDER (PER PARA 2.2 OF HIS ORDER): (A) THE APPELLANT DID NOT DISCLOSE FREIGHT RECEIPT S TO THE EXTENT OF RS. 1,509,609/- IN THE PROFIT AND LOSS ACCOUNT; (B) DEPRECIATION OF RS. 1,57,077/- HAS BEEN CLAIMED (WHICH MEANS TH AT THE TRUCK HAS BEEN TREATED AS A BUSINESS ASSET); (C) THE TAX DEDUCTED AT SOURCE HAS BEEN CLAIMED IN THE RETURN; ITA NO. 26/ASR/2018 (AY 2014-15) AMIT GARG V. ITO 3 (D) THE ASSESSING OFFICER PROVIDED OPPORTUNITY TO T HE APPELLANT TO PRODUCE THE DETAILS OF EXPENSES WHICH MIGHT HAVE BEEN INCURRED IN EARNING THIS INCOME: THE APPELLANT FAILED TO PROVIDE THE DETAILS AND NECESSARY EVIDENCES; (E) A SPECIFIC REQUEST WAS MADE TO FURNISH DETAILS OF EXPENSES UNDER THE HEAD DIESEL, SALARY OF DRIVER AND CLEANER, THE REPAIR AND MAINTENANCE E XPENSES. THIS INFORMATION WAS NOT PROVIDED. (EMPHASIS, SUPPLIED) THEREAFTER, HE OBSERVED THAT THE ASSESSEE HAD NOT B ROUGHT ON RECORD A SHRED OF EVIDENCE IN SUPPORT OF HIS CLAIM OF HAVING ANY INCU RRED EXPENDITURE TOWARD EARNING THE SAID UNDISCLOSED INCOME. IN FACT, HE CONTINUES FURTHER TO STATE THAT IT MAY BE THAT THE EXPENDITURE CLAIMED TO HAVE BEEN INCURRED HAD A LREADY BEEN CLAIMED PER THE ASSESSEES OPERATING STATEMENT (PROFIT AND LOSS ACC OUNT), SO THAT ENTERTAINING ANY FURTHER CLAIM (FOR EXPENDITURE) WOULD AMOUNT TO A D OUBLE DEDUCTION (PARA 2.2.1). HE, THEN, PROCEEDED TO EXAMINE THE EXPENDITURE CLAI MED AND ALLOWED PER THE ASSESSEES ACCOUNTS, FINDING IT TO HAVE BEEN CLAIME D IN THE FOLLOWING SUMS AND UNDER THE FOLLOWING HEADS, I.E., APART FROM DEPRECI ATION, TO THEREFORE CONCLUDE THAT THE ASSESSEE HAD IN FACT ALREADY CLAIMED EXPENDITUR E UNDER ALL THE RELEVANT HEADS OF ACCOUNT UNDER WHICH EXPENDITURE COULD POSSIBLY BE I NCURRED (PARA 2.2.2): HEAD OF ACCOUNT (AMT. RS.) (I) SALARY EXPENSES 15,87,000/- (II) INTEREST EXPENSES 49,05,989/- (III) MACHINERY REPAIR 2,79,272/- (IV) DIESEL EXPENSES 7,62,539/- THE ONUS TO ESTABLISH THE CLAIM FOR EXPENDITURE, WH ICH IS ON THE ASSESSEE, AND TOWARD WHICH NO DETAIL OR OTHERWISE ANY EVIDENCE ST ANDS FURNISHED, THUS, HE WOULD ADD, STANDS COMPLETELY UNDISCHARGED. HE, ACCORDINGL Y, CONFIRMED THE ASSESSMENT ITA NO. 26/ASR/2018 (AY 2014-15) AMIT GARG V. ITO 4 OF THE ENTIRE RECEIPT AS THE ASSESSEES UNDISCLOSED INCOME. AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL. 4. DURING HEARING, THE ASSESSEES PRINCIPAL ARGUMEN T, THROUGH HIS COUNSEL, SH. P.N. ARORA, WAS THAT IT IS ONLY THE NET INCOME, I.E ., GROSS RECEIPT LESS EXPENDITURE INCURRED FOR EARNING THE SAME, THAT COULD BE BROUGH T TO TAX AS INCOME. THE REVENUE HAS NOT IN ANY MANNER REBUTTED THE ASSESSEES CLAIM OF HAVING INCURRED EXPENDITURE AGAINST HIS STATED UNDISCLOSED GROSS RECEIPT OF RS. 15.10 LACS. THE INCOME, ACCORDINGLY, HAD TO BE ESTIMATED, AND TOWARD WHICH THE LD. COUNSEL WOULD DRAW ATTENTION TO THE FOLLOWING DECISIONS, PLACED ON REC ORD: (A) AMRIT GARG (ASSESSEE) FOR AY 2011-12 (BY THE FIRST APPELLATE AUTHORITY) (B) ASST. CIT V. VIJAY ROADWAYS (IN ITA NO. 72/ASR/2010, DATED 30.08.2010). (C) ITO V. THE BATHINDA TRUCK OPERATORS UNION (IN ITA NO. 188/ASR/2005, DATED 13.04.2007) ON GOING THROUGH THE SAME DURING HEARING, IT TRANSP IRED THAT THE BASE DECISION IS IN THE CASE OF THE BATHINDA TRUCK OPERATORS UNION (SUPRA), WHICH IS A CASE OF A TRUCK UNION (ASSOCIATION OF PERSONS), WHEREIN THE V ERY BASIS OF THE ESTIMATION OF THE INCOME FROM FREIGHT RECEIPT, MADE AT 3% OF THE GROSS INCOME, IS THAT THE UNION HAD NO TRUCKS OF ITS OWN AND ACTS ONLY AS A CONDUI T FOR ENTERING INTO FREIGHT CONTRACTS, PASSING THE ENTIRE FREIGHT RECEIPT TO TH E INDIVIDUAL TRUCK OPERATORS, WHO UNDERTAKE THE SHIPMENT AT THEIR OWN COST (REFER PAR A 3 OF THE ORDER, READ OUT DURING HEARING). IT WAS ON THIS BASIS THAT THE TRIBUNAL OP INED THAT SOME RETENTION BY THE UNION WAS INEVITABLE, AS FOR MEETING ITS EXPENSES; THE TAX DEDUCTION AT SOURCE ITSELF BEING AT 2% OF THE GROSS RECEIPT, AND ESTIMA TED THE INCOME AT 3% THEREOF IN VIEW OF THE ACCOUNTS BEING NOT CORRECT OR COMPLETE. THE SAID DECISION, WHICH STANDS FOLLOWED BY THE TRIBUNAL (SMC BENCH) IN VIJAY ROADWAYS (SUPRA), AND WHICH IN TURN STANDS FOLLOWED BY THE FIRST APPELLAT E AUTHORITY IN THE ASSESSEES CASE ITA NO. 26/ASR/2018 (AY 2014-15) AMIT GARG V. ITO 5 FOR AY 2011-12, IS THUS ON AN ENTIRELY DIFFERENT FO OTING. ON THIS BEING THEREFORE OBSERVED BY THE BENCH DURING HEARING, SH. ARORA WOU LD FAIRLY STATE THAT THE ESTIMATE OF INCOME IS LEFT TO THE BEST JUDGMENT OF THE TRIBUNAL. ON A QUERY BY THE BENCH AS TO WHETHER THE ADMITTED GROSS INCOME OF RS .15.10 LACS STANDS RECEIVED DURING THE RELEVANT YEAR OR NOT, SH. ARORA WOULD, A FTER SEEKING TIME TO RESPOND WHICH WAS ALLOWED, SUBMIT THAT THE SAME STANDS RECE IVED IN CASH DURING THE YEAR, AND NO PART OF IT IS OUTSTANDING FOR PAYMENT AS AT THE RELEVANT YEAR-END. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) WOULD, ON THE OTHER HAND, SUBMIT THAT THE ASSESSEE HAS NO CASE IN VIEW OF THE COMPLE TE UNSUBSTANTIATION OF HIS CASE. THE DECISIONS RELIED UPON HAVE BEEN FOUND, AND IN F ACT CONCEDED, AS NOT APPLICABLE. 5. I HAVE HEARD THE PARTIES, AND GIVEN A CAREFUL CO NSIDERATION TO THE MATTER. THE UNDISCLOSED INCOME BEING ADMITTED, THE QUESTIO N ESSENTIALLY BOILS DOWN TO THE ALLOWANCE FOR EXPENDITURE THAT COULD BE REGA RDED, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, AS INCURRED AND, ACCORDI NGLY, MADE AGAINST OR IN RESPECT OF THE SAID FREIGHT INCOME/RECEIPT. THE ASSESSEES CLAIM FOR THE EXPENDITURE IS ON THE PREMISE OF IT BEING INCURRED IN CASH, NOT ACCOU NTED FOR. EXPENDITURE UNDER THE RELEVANT HEADS OF ACCOUNT, VI Z. - SALARY TO STAFF - FUEL - REPAIR & MAINTENANCE - INTEREST ON BORROWED CAPITAL - DEPRECIATION STANDS ALREADY CLAIMED (PER THE ASSESSEES REGULAR BOOKS OF ACCOUNT) AND ALLOWED (REFER PARA 3.2 OF THIS ORDER). IT WAS THEREFORE AL L THE MORE INCUMBENT ON THE ASSESSEE, ON WHOM THE BURDEN TO PROVE HIS CLAIM/S L IES, TO SHOW THAT EXPENDITURE OVER AND ABOVE THAT CLAIMED, HAD INDEED BEEN INCURR ED, AND TOWARD WHICH, AS ITA NO. 26/ASR/2018 (AY 2014-15) AMIT GARG V. ITO 6 STATED BY THE LD. CIT(A), NO SHRED OF EVIDENCE STAN DS FURNISHED BY THE ASSESSEE AT ANY STAGE. THE ASSESSEE CLAIMING THE EXPENDITURE, R ATHER, OUGHT TO HAVE GIVEN THE BASIC FACTS OF HIS CASE, I.E., THE BROAD CONTOURS O F THE TRANSPORT ACTIVITY UNDERTAKEN; THE TRANSPORT VEHICLE DEPLOYED FOR THE PURPOSE; WHE THER THE SAME IS ACCOUNTED FOR OR NOT; THE MANNER OF BILLING AND RECEIPT OF THE FR EIGHT; THE INCURRING OF THE EXPENDITURE THERE-AGAINST, ET. AL. FURTHER, ALSO, A S TO HOW AND WHY THE SAME IS NOT ACCOUNTED FOR (IN HIS REGULAR BOOKS OF ACCOUNT), WH ICH, AS IT TRANSPIRES, IS A REGULAR FEATURE. THERE IS, HOWEVER, NO MENTION OF ANY OF TH ESE, PRIMARY, FACTS OF THE CASE, NOT TO SPEAK OF ANY EVIDENCE WITH REGARD TO THE EXP ENDITURE BEING CLAIMED. IN FACT, THE ASSESSEE ADMITS TO THE ABSENCE OF SUCH EVIDENCE VIDE HIS REPLY DATED 15.12.2016 DURING THE ASSESSMENT PROCEEDINGS, THE R ELEVANT PART OF WHICH STANDS REPRODUCED AT PARA 2 (PG. 2) OF THE ASSESSMENT ORDE R. THAT IS, A COMPLETE ABSENCE OF ANY CASE BEING MADE OUT. IT IS THIS THAT FORMS THE BASIS OF, THE BACKGROUND FACTS UNDER WHICH, THE REVENUE DENIES THE ASSESSEES IMPU GNED CLAIM. THE TRUCK, QUA WHICH THE FREIGHT RECEIPT ARISES, AS IT APPEARS, AN D AS NOTED BY THE LD. CIT(A), IS BEING USED QUA THE ASSESSEES MANUFACTURING BUSINESS. THIS GETS, IN FACT, FURTHER REINFORCED BY THE FACT OF THE ASSESSEE HAVING CLAIM ED EXPENDITURE ON INTEREST ON BORROWED CAPITAL AND DEPRECIATION IN RESPECT OF THE RELEVANT VEHICLE, W HICH ADMITTEDLY STANDS REFLECTED IN THE ASSESSEES BOOKS OF ACCOUNT. THIS, OSTENSIBLY SO, IS EVEN OTHERWISE IMPLIED AS THE ASSESSEE HAS NOT M ADE ANY CLAIM AS TO THE RELEVANT VEHICLE BEING NOT ACCOUNTED FOR, OR CONTRADICTED TH E OBSERVATION OF THE REVENUE ON THE BASIS OF THE CLAIM FOR DEPRECIATION ON TRUCK , OF THE RELEVANT TRUCK AS A BUSINESS ASSET, OR EVEN STATED OF HIS CLAIM FOR THE DEPRECIATION (AND INTEREST ON BORROWING) THEREON AS NOT RELEVANT. FURTHER STILL, EVEN ASSUMING THE INCURRING OF SUCH EXPENDITURE, I.E., OUTSIDE BOOKS, WOULD RESULT IN THE SAME BEING DEEMED AS THE ASSESSEES INCOME U/S. 69C, READ OUT DURING HEARING AND, FURTHER, A BAR OF THE SAME BEING ALLOWED AS A ITA NO. 26/ASR/2018 (AY 2014-15) AMIT GARG V. ITO 7 DEDUCTION IN COMPUTING THE ASSESSEES INCOME OF HIS FREIGHT BUSINESS. THE ASSESSEES CLAIM OF THE SAID EXPENDITURE BEING INCU RRED OUT OF THE UNDISCLOSED FREIGHT RECEIPT, RECEIVED IN CASH DURING THE RELEVA NT YEAR, MADE BEFORE THE TRIBUNAL FOR THE FIRST TIME, PROVIDING THUS THE SOURCE OF TH E SAID EXPENDITURE, IS WHOLLY UNEVIDENCED. EXPENDITURE IS ORDINARILY INCURRED PRI OR TO THE RECEIPT OF INCOME, WHICH IS UPON THE DELIVERY OF THE CORRESPONDING SER VICE. TWO, MORE IMPORTANTLY, THE PAYER HAVING DEDUCTED TAX AT SOURCE, WHICH IS U PON THE CREDIT OR PAYMENT OF THE SUM/S UNDER REFERENCE, WHICHEVER IS EARLIER, AND PA ID IT TO THE CREDIT OF THE CENTRAL GOVERNMENT AND OF WHICH THE ASSESSEE CLAIMS AND I S ALLOWED CREDIT, WOULD HAVE ONLY ACCOUNTED FOR THE SAME IN-AS-MUCH AS THERE IS NO REASON FOR HIM NOT TO CLAIM THE CORRESPONDING EXPENDITURE, AND TO, CONSEQUENTIA LLY, SUFFER TAX THEREON. AS SUCH, ALL THAT THE ASSESSEE WAS REQUIRED TO DO IS TO PROD UCE THE COPY OF HIS ACCOUNT IN THE PAYERS BOOKS, WHICH WOULD AT ONCE PROVE HIS CONTEN TION TO THAT EXTENT, I.E., THE RECEIPT OF ENTIRE PAYMENT DURING THE YEAR IN CASH, ALONG WITH THE DATE/S THEREOF. WHY, THE PAYMENT/S BEING STATED TO BE IN CASH, WOUL D ONLY BE AGAINST CASH RECEIPTS, I.E., DULY EVIDENCED. AN ADVERSE INFERENCE WOULD TH EREFORE FOLLOW THE COMPLETE NON-FURNISHING OF ANY EVIDENCE BY THE ASSESSEE. RAT HER, IF THE ASSESSEE HAD INDEED INCURRED THE EXPENDITURE, AND AS CLAIMED, TO THE EX TENT OF 97%, WITH TAX DEDUCTED AT SOURCE, WHICH IS RETAINED AND PAID DIRECTLY TO THE CENTRAL GOVERNMENT, ITSELF BEING AT 2% OF THE GROSS RECEIPT, WHY, ONE WONDERS, SHOUL D THE ASSESSEE NOT DISCLOSE THE RECEIPT IN HIS ACCOUNTS, DULY DISCLOSED BY THE DEDU CTOR? WHY, THE VEHICLE BEING DULY ACCOUNTED FOR IN THE ASSESSEES ACCOUNTS, HE H AS CLEARLY CLAIMED THE EXPENDITURE IN RESPECT OF INTEREST, IF ANY, RELATAB LE TO THE SAID UNDISCLOSED INCOME, AS WELL AS DEPRECIATION ON THE RELEVANT VEHICLE/S. ITA NO. 26/ASR/2018 (AY 2014-15) AMIT GARG V. ITO 8 IN SUM 6. THE NON-DISCLOSURE OF FREIGHT RECEIPT (OF RS.15. 10 LACS) BEING ADMITTED, THE ONLY QUESTION THAT ARISES IS IF THE ASSESSEE IS, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, ELIGIBLE FOR BEING ALLOWED DEDUCTION IN RESPE CT OF THE EXPENDITURE CLAIMED TO HAVE BEEN INCURRED FOR EARNING THE SAME, IN CASH, O UT OF BOOKS, AND FROM THAT RECEIVED IN RESPECT OF THE SAID INCOME. FURTHER, TH E DETAILS OR OTHERWISE ANY EVIDENCE IN RESPECT THEREOF, I.E., THE SAID EXPENDI TURE, BEING ADMITTEDLY NOT AVAILABLE WITH THE ASSESSEE, HE PLEADS FOR AN ESTIM ATION THEREOF AND, THUS, OF THE INCOME ARISING ON THE SAID UNDISCLOSED RECEIPT, PLA CING RELIANCE ON SOME DECISIONS. THE SECOND QUESTION THEREFORE IS AS TO THE EXTENT O F SAID EXPENDITURE. THE OCCASION FOR THE SAME WOULD THOUGH ARISE ONLY WHERE THE FIRS T QUESTION IS ANSWERED IN THE AFFIRMATIVE. THE ASSESSEES ARGUMENT IS VALID IN PRINCIPLE. THI S IS AS IT IS ONLY THE NET INCOME FROM ANY SOURCE, OR THAT EMBEDDED IN ANY REC EIPT, I.E., AFTER DEDUCTING EXPENDITURE INCURRED IN ITS RESPECT, WHETHER ACCOUN TED FOR IN THE REGULAR BOOKS OF ACCOUNT OR NOT, IS LIABLE TO BE TAXED. WHERE THOUGH THE SOURCE IS NOT PROVED, SECTION 69C SHALL COME INTO PLAY, WITH PROVISO THERETO BARRING THE CLAIM FOR SUCH EXPENDITURE AS DEDUCTION. THE FIRST THING THAT THER EFORE THE ASSESSEE NEEDS TO SHOW IS THE RECEIPT OF THE INCOME IN CASH, PROVIDING THU S THE SOURCE OF THE EXPENDITURE CLAIMED TO BE INCURRED OUTSIDE BOOKS, WHICH IT SURP RISINGLY DOES NOT INASMUCH AS THE PAYMENT/S THERETO DURING THE YEAR WOULD ONLY BE DISCLOSED BY THE DEDUCTOR. IN FACT, EVEN IN THIS REGARD THE DATE/S OF PAYMENT ARE RELEVANT INASMUCH AS ONLY THE PAYMENT/S, IN CASH, PRIOR TO THE DATE/S OF THE EXPE NDITURE, WHICH MAY THOUGH BE ASSUMED TO BE INCURRED EVENLY DURING THE YEAR. THE NEXT ASPECT IS THE VEHICLE/S IN RESPECT OF WHICH THE FREIGHT RECEIPT ARISES, AND IN THE MANNER IN WHICH IT DOES, IN- AS-MUCH AS THE ASSESSEES CLAIM, IN EFFECT, IS OF I T BEING AN INDEPENDENT SOURCE OF INCOME, KEPT OUTSIDE THE BOOKS OF ACCOUNT. HE IS, A GAIN, RETICENT. THE ASSESSEES ITA NO. 26/ASR/2018 (AY 2014-15) AMIT GARG V. ITO 9 BOOKS OF ACCOUNT REFLECTING THE VEHICLE (TRUCK), TH E PRESUMPTION THEREFORE WOULD ONLY BE OF THE SAME BEING DEPLOYED FOR THE SAID ACT IVITY, AN INFERENCE FURTHER REFURBISHED BY THE FACT OF CLAIM OF DEPRECIATION AN D INTEREST ON BORROWED CAPITAL, IF ANY, TOWARD THE SAID VEHICLE/S. THIS IS AS, WHERE NOT SO, ON WHAT BASIS, ONE MAY ASK, IS THE SAID DEPRECIATION (RS.1.57 LACS) AND INTEREST ON BORROWED CAPITAL, CLAIMED ? FURTHER, IN THAT CASE, THE IMPLICATION OF THE TRU CK USED BEING NOT A DISCLOSED ASSET WOULD FOLLOW. IN FACT, THE SAID INF ERENCE, ALREADY DRAWN BY THE REVENUE, HAS NOT BEEN REBUTTED BY THE ASSESSEE. PRE SUMABLY, THE TRUCK/S USED IS THAT ACCOUNTED FOR, AND BEING USED FOR SHIPPING BIN OLA TO THE PURCHASERS, WHICH IS SEPARATELY BILLED BY THE ASSESSEE, RECEIVING CONSID ERATION IN CASH (REFER PARA 4 OF THE ORDER BY THE FIRST APPELLATE AUTHORITY IN THE A SSESSEES CASE FOR AY 2011-12, AT PB. PGS. 22-25). THE CLAIM FOR DEPRECIATION AND INT EREST ON BORROWED CAPITAL QUA THE SAID RECEIPT THEREFORE STANDS ALREADY ALLOWED T O THE ASSESSEE, AND WHICH OUGHT TO BE IN FACT ADJUSTED/RECKONED AGAINST THE SAME. T HE NEXT THING THAT THEREFORE THE ASSESSEE NEEDS TO SHOW IS THAT THE EXPENDITURE ON S ALARY, REPAIR & MAINTENANCE, AND DIESEL, I.E., THE OTHER EXPENDITURE HE CLAIMS TO HA VE INCURRED OUTSIDE BOOKS, AS ALREADY CLAIMED AND ALLOWED, DOES NOT INCLUDE ANY E XPENDITURE INCURRED IN RESPECT OF THE SAID RECEIPT. THE DETAILS OF THE SAID EXPEND ITURE, DULY RECORDED IN THE REGULAR BOOKS OF ACCOUNT AND, ACCORDINGLY, PRESUMABLY PROPE RLY VOUCHED, THE SAME SHOULD NOT POSE ANY PROBLEM, EVEN AS THE ASSESSEE HAS, AGA IN, PREFERRED TO BE SILENT ON THIS. THIS IS MOST SURPRISING AS THE ASSESSEE HAS INCURRE D AND CLAIMS THE SAID EXPENDITURE UNDER THE RELEVANT HEADS, SO THAT ONLY HE CAN TELL THE PURPOSE FOR WHAT, OR ON WHAT ACTIVITY/S, HAS THE SAME BEEN INCURRED? THE ONLY PR ESUMPTION, IN THE ABSENCE OF ANY CASE BEING MADE OUT BY THE ASSESSEE, IS THAT TH E SAME INCLUDES THAT RELATABLE TO THE SAID ACTIVITY THE EXPENDITURE UNDER THE AFORE SAID HEADS OF ACCOUNT AS BOOKED BEING BY NO MEANS IN-SIGNIFICANT WHICH AGAIN IS T O BE ASSESSED IN RELATION TO THE VOLUME OF ACTIVITY AS REFLECTED BY THE UNDISCLOSED RECEIPT UNDER REFERENCE. THE LD. ITA NO. 26/ASR/2018 (AY 2014-15) AMIT GARG V. ITO 10 CIT(A) HAS IN FACT UNDERTAKEN THIS EXERCISE, I.E., IN ARRIVING AT HIS CONCLUSION/S. COUPLE THIS WITH THE FACT THAT THE ASSESSEE HAS NOT LED AN IOTA OF EVIDENCE TOWARD INCURRING ANY EXPENDITURE, EVEN IF OUTSIDE BOOKS, W HICH RECORD THE TRANSACTIONS ENTERED INTO THE REGULAR COURSE OF BUSINESS. THE ASSESSEES ARGUMENT, VALID IN PRINCIPLE, THUS, FAILS COMPLETELY ON FACTS. IT WOULD BE, UNDER THE CIRCUMSTANCES, INCORRECT TO SAY THAT THE ASSESSEE HAS NOT BEEN ALLOWED ANY EXPENDITURE AGAINST THE SAID RECEIPT, B UT ONLY THAT THE SAME TO THE EXTENT ADMISSIBLE, STANDS ALREADY CLAIMED AND ALLOW ED AS A PART OF REGULAR BUSINESS EXPENDITURE. THERE IS NO NEED OR OCCASION TO, UNDER THE CIRCUMSTANCES, ENGAGE IN ANY ESTIMATION EXERCISE. THE CASE LAW RELIED UPON, EVEN AS INDICATED ABOVE, IS DISTINGUISHABLE. WHY, AS OBSERVED BY THE BENCH DURI NG HEARING, THE DEPRECIATION CLAIM ITSELF WORKS TO ABOUT 10% OF THE GROSS FREIGH T. THE CLAIM FOR TDS, DEDUCTIBLE AT 2%, AND NOT PAID TO THE ASSESSEE BUT TO THE CENT RAL GOVERNMENT, HAS BEEN ALREADY ALLOWED. TO CONCLUDE, NO EVIDENCE IN SUPPORT THEREOF BEING A DDUCED AT ANY STAGE, THE ASSESSEES CLAIMS, BOTH AS REGARDS THE INCURRING OF EXPENDITURE OVER AND ABOVE THAT ALLOWED, AS WELL AS THE SOURCE THEREOF, REMAIN UNPROVED, IF NOT DISPROVED; THE ASSESSEE, BY ALL AVAILABLE ACCOUNTS, HAVING BEEN AL READY ALLOWED HIS CLAIM FOR THE RELEVANT EXPENDITURE AGAINST HIS UNDISCLOSED RECEIP T, WHICH APPEARS TO BE ARISING TO HIM REGULARLY AND IN THE NORMAL COURSE OF HIS BUSIN ESS, THOUGH KEPT OUTSIDE BOOKS. THE ASSESSEES CASE, BEING WHOLLY UNSUBSTANTIATED A ND PRESUMPTUOUS, HAS THUS RIGHTLY BEEN NOT ACCEPTED BY THE REVENUE. THE MATTE R BEING OTHERWISE WHOLLY FACTUAL, THE ASSESSEES RELIANCE ON THE DECISIONS S UPRA, INCLUDING ON HIS OWN CASE FOR AY 2011-12, WHICH STANDS ALREADY MET, TO NO REB UTTAL AND, IN FACT, A TACIT ADMISSION OF ITS INAPPLICABILITY BY THE LD. COUNSEL , WOULD BE OF NO CONSEQUENCE. I THEREFORE FIND NO INFIRMITY IN THE REVENUES CAS E OR REASON TO INTERFERE AND, ACCORDINGLY, UPHOLD THE IMPUGNED ORDER. I DECIDE AC CORDINGLY, DISMISSING GD. 2. ITA NO. 26/ASR/2018 (AY 2014-15) AMIT GARG V. ITO 11 7. GROUNDS 3 AND 4 OF THE ASSESSEES APPEAL, I.E., OTHER TWO GROUNDS RAISED, DO NOT ARISE OUT OF THE IMPUGNED ORDER AND, THEREFORE, CANNOT BE ADJUDICATED. THE LD. COUNSEL WOULD, UPON THIS, SHOW THAT THE CORRESPONDI NG GROUNDS, BEING IN RELATION TO DISALLOWANCE OF NARMA LABOUR AND MISCELLANEOUS EXPE NSES, IN THE SUM OF RS.1 LAC AN RS.0.10 LACS RESPECTIVELY, WERE TAKEN BEFORE THE LD. CIT(A), WHO THOUGH OMITTED TO ADJUDICATE THEM, SO THAT A SUITABLE DIRECTION TH ERETO BE ISSUED. THOUGH THERE IS NOTHING ON RECORD TO SHOW THAT THE SAID GROUNDS WER E PRESSED BEFORE THE LD. CIT(A), THERE IS NO OBSERVATION BY HIM TO THAT EFFE CT. ACCORDINGLY, GIVING ASSESSEE THE BENEFIT OF DOUBT, THE LD. CIT(A) IS DIRECTED TO ADJUDICATE THE ASSESSEES RELEVANT GROUNDS BEFORE HIM ON MERITS AFTER ALLOWING HIM A R EASONABLE OPPORTUNITY OF BEING HEARD IN THE MATTER. THE ASSESSEES GROUNDS 3 AND 4 ARE DISPOSED ACCORDINGLY. 8. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN CO URT ON SEPTEMBER 27, 2018 SD/- (SANJAY ARORA) ACCOUNTANT MEMBER DATE: 27.09.2018 /GP/SR. PS. COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: AMRIT GARG PROP. MAHADEV COT TON FACTORY, BARETA, TEHSIL BUDHLADA, DISTT. MANSA (2) THE RESPONDENT: INCOME TAX OFFICER, WARD-1( 5), MANSA (3) THE CIT(APPEALS), BATHINDA (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T TRUE COPY BY ORDER