M/S GREEN CHANNEL FORWARDERS PVT. LTD., NAVI MUMBAI V. ITO - WARD - 6(3)-1, MUMBAI

ITA 2649/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2430 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 08-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 05-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK A PERAMPURNA
• Assessee Lawyers: BRIJMOHAN POORNAMAL AGARWAL
• Keywords: Unexplained expenditure; Additional evidence
• Section: 143(3)

Judgement Text

GREEN CHANNEL FORWARDERS PVT LTD ITA NO. 264 9 /MUM/20 1 3 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H , MUMBAI , , BEFORE SHRI AMIT SHUKLA , JUDICIAL MEMBER AND SHRI RAMIT KOCHAR , ACCOUNTAN T MEMBER ITA NO. : 264 9 /MUM/20 1 3 ( ASSESSMENT YEAR: 200 9 - 10 ) GREEN CHANN EL FORWARDERS PVT LTD , 308, HERMES ATRIUM, 3 RD FLOOR, SECTOR - 11, CBD BELAPUR, NAVI MUMBAI - 400 814 .: PAN: A A AC G 5655 Q VS INCOME TAX OFFICER - WARD - 8(3) - 1, AAYAKAR BHAVA N, M K ROAD, NEW MARINE LINES, MUMBAI - 400 020 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI BRIJMOHAN POORNAMAL AGARWAL RESPONDENT BY : SHRI VIVEK A PERAMPURNA /DATE OF HE ARING : 20 - 08 - 201 5 / DATE OF PRONOUNCEMENT : 16 - 11 - 201 5 ORDER , . . : PER AMIT SHUKLA, J M : THE AFORESAID APPEAL HA S BEEN FILED BY THE ASSESSEE AGAINST IMPUGNED ORDER DATED 06.03 .201 3 , PASSED BY CIT(A) - 1 2 , MUMBAI FOR THE QUANTUM OF ASSESSMENT PASSED U/S 143(3) FOR THE ASSESSMENT YEAR 200 9 - 1 0 , ON THE FOLLOWING GROUND : - 1. T HE LD. ASSESSING OFFICER { INCOME TAX OFFICER, WARD 6(3) - 1, MUMBAI ] HAS ERRED IN DISALLOWING EXPENDITURE AMOUNTING TO RS. 26,41, 405/ - AS UNEXPLAINED EXPENDITURE AND LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 12 HAS FURTHER ERRED IN CONFIRMING THE SAID DISALLOWANCE. 2. THE B RIEF FACTS OF THE CASE ARE THAT, ASSESSEE - COMPANY IS ENGAGED IN THE BUSINESS OF RENDERING SERVICES AS CLEARING AND FORWARDING AGENTS AND CUSTOM HOUSE AGENT FOR VARIOUS SHIPPING COMPANIES. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE GREEN CHANNEL FORWARDERS PVT LTD ITA NO. 264 9 /MUM/20 1 3 2 AO HAS TO EXAMINE THE GENUINENESS OF THE BUSINESS TRANSACTIONS OF THE PARTIES I.E. P RINCIPALS TO WHOM NOTICES U/S 133 (6) WERE ISSUED . IN RESPONSE, THESE PARTIES HAVE SUBMITTED THEIR REPLY ALONG WITH THE COP Y OF LEDGER ACCOUNTS OF THE ASSESSEE. ON PERUSAL OF THE LEDGER ACCOUNT, THE AO OBSERVED THE FOLLOWING DISCREPANCIES: - S. NO. NAME OF THE PARTY TOTAL TRANSACTION SHOWN BY THE ASSESSEE(IN RS) TOTAL TRANSACTION SHOWN BY THE PARTY (IN RS) DIFFERENCE REMARK (RS.) 1 AMRIT SEAIR EXPRESS PVT LTD 10,94,842 10,95,076 LESS CREDIT NOTE 48,872 = 10,46,204 48,638 2 MSC AGENCY (INDIA) PVT LTD 17,58,975 6,838 17, 5 2,137 3 MAERSK LINE (I) PVT LTD 60,89,264 65,64,856 LESS CREDIT MEMO RS.8,03,938 =RS.57,60,918 3,28,346 4 CAN CGN GLOBAL (INDIA) PVT LTD 27,02,599 21,90,315 5,12,284 TOTAL 26,41,405 IN RESPONSE TO THE SAID SHOW CAUSE NOTICE, THE ASSESSEE SUBMITTED THE RECONCILIATION OF THE TRANSACTION S OF THE ABOVE PARTIES ALONG WITH THE BANK STATEMENTS HIGHLIGHTING THE AMOUNT SHOWN IN THE LEDGER ACCOUNT S OF THE ASSESSEE AS W ELL AS THE OTHER PARTIES ALONG WITH THE COPY OF INVOICES. IT WAS FURTHER SUBMITTED THAT , ALL THESE PAYMENTS WERE MADE EITHER THROUGH ACCOUNT PAYEE CHEQUES OR DEMAND DRAFTS. AO HELD THAT ASSESSEE COULD NOT SUBSTANTIATE THE DIFFERENCE PROPERLY AND NOTED THAT IN THE CASE OF TWO PARTIES, CREDIT WAS GIVEN TO THE ASSESSEE FOR SUM OF RS. 48,638/ - AND RS. 8,03,938/ - WHICH HAS NOT BEEN CONSIDERED AS CREDIT NOTE BY THE ASSESSEE. THUS, HE ADDED THE ENTIRE DIFFERENCE OF RS. 26,41,408/ - AS UNEXPLAINED EXPENSES . 4. B EFORE THE LD. CIT(A), THE ASSESSEE AGAIN FILED THE CONFIRMATION FROM THE PARTIES AND ALSO CLARIFIED THE DIFFERENCE AS HIGHLIGHTED BY THE AO. THE ASSESSEES ENTIRE EXPLANATION HAVE BEEN DEALT BY THE LD. CIT(A) FR OM PAGES 7 TO 11 OF THE APPELLATE ORDER. IN S UM AN D SUBSTANCE, THE ASSESSEE HAS TRIED TO RECONCILE THE ENTIRE STATEMENT FROM THE PARTYS LEDGER ACCOUNT AND ITS OWN BOOKS OF GREEN CHANNEL FORWARDERS PVT LTD ITA NO. 264 9 /MUM/20 1 3 3 ACCOUNTS AND TRIED TO SHOW HOW THE ENTRIES HAVE BEEN MADE ALONG WITH THE SUPPORTING INVOICES. HOWEVER, THE LD. CIT(A) DOUBTED SO ME OF THE CONFIRMATION OF THE ACCOUNTS SENT BY THE PARTIES AND WHEN THE ASSESSEE HAD FILED ADDITIONAL EVIDENCES IN THE FORM OF CONFIRMATION CLARIFYING THE DISCREPANCY, THE SAME WAS NOT ACCEPTED BY HIM. THUS, HE UPHELD THE ACTION OF THE AO THAT THE DISCREPA NCY POINTED OUT BY HIM IS CORRECT. 5. BEFORE US, THE LD. COUNSEL DREW OUR ATTENTION TO THE VARIOUS DETAILS AS GIVEN IN THE LEDGER ACCOUNT ALONG WITH THE GENERAL VOUCHERS, CREDIT NOTES, INVOICES ETC. TO SHOW THAT ALL THE ENTRIES AS APPEARING IN THE BOOKS O F ACCOUNTS OF THE ASSESSEE ARE PERFECTLY CORRECT AND SUCH AN ADDITION ON ACCOUNT OF MINOR DIFFERENCE S WHICH ULTIMATELY HAS BEEN RECONCILED , CANNOT BE UPHELD. HE FURTHER SUBMITTED THAT , ALL THE TRANSACTION S OF THE ASSESSEE ARE FULLY VERIFIABLE FROM THE BANK STATEMENT AND ALSO THE COMMISSION INCOME WHICH HAS BEEN DIRECTLY CREDITED TO THE PROFIT AND LOSS ACCOUNT. THE OVERALL AMOUNT TRANSACTED FROM THE SAID PARTY MAY GET TALLIED BUT IT IS VERY DIFFICULT TO TALLY TRANSACTION - WISE DETAILS, BECAUSE IT DEPENDS UPON THE OTHER PARTY WH O PREPARES ITS ACCOUNTS AND THE MANNER THEY MAINTAIN AND ENTER THE AMOUNT . HERE IT IS NOT THE CASE WHERE THE ASSESSEE IS CLAIMING ANY EXPENDITURE RATHER IT HAS SHOWN ALL THE TRANSACTIONS UNDERTAKEN ON AND BEHALF OF THE PRINCIPAL AND ASSE SSEE ONLY GETS THE COMMISSION INCOME. 6. ON THE OTHER HAND, LD. DR SUBMITTED THAT, THE RECONCILIATION HAS TO BE DONE FROM THE BANK ACCOUNT AND THE LEDGER ACCOUNT OF THE PARTIES MAINTAINED BY THE ASSESSEE AND ALSO BY THE LEDGER ACCOUNT OF THE ASSESSEE IN T HE BOOKS OF THE PRINCIPALS. ONCE THE ENTIRE RECONCILIATION IS DONE , THEN ONLY THE ASSESSEES GENUINENESS OF THE TRANSACTION CAN BE ACCEPTED. 7. AFTER CONSIDERING THE RIVAL CONTENTION AND ON PERUSAL OF THE RELEVANT FINDING IN THE IMPUGNED ORDERS AND THE MA TERIAL PLACED BEFORE US, WE FIND THAT ASSESSEE IS A COMMISSION AGENT EARNING GREEN CHANNEL FORWARDERS PVT LTD ITA NO. 264 9 /MUM/20 1 3 4 COMMISSION INCOME FROM VARIOUS PRINCIPALS ENGAGED IN SHIPPING LINE FOR WHOM IT HAS BEEN ACTING AS AN AGENT. ALL THE TRANSACTIONS ARE DONE ON BEHALF OF THE PRINCIPALS AND ASSESSEE IS ONLY ENTITLED FOR A COMMISSION INCOME. THE ADDITION HAS BEEN MADE ON ACCOUNT OF DISCREPANCY BETWEEN THE FIGURES SHOWN IN THE LEDGER ACCOUNT MAINTAINED BY THE ASSESSEE FOR THE VARIOUS PRINCIPALS AND COPY OF THE LEDGER ACCOUNT OF THE ASSESSEE IN THE BOOKS OF THE PRINCIPALS. THE ASSESSEE HAS TRIED TO RECONCILE THE DIFFERENCE F IRSTLY , FROM ITS OWN LEDGER ACCOUNT DULY SUPPORTED BY INVOICES AND BILLS ; AND S ECONDLY , BY WAY OF BANK STATEMENT. DURING THE COURSE OF THE APPELLATE PROCEEDINGS, THE ASSESSEE HAS AGAIN FILED AUTHENTICATED DOCUMENTS OF CONFIRMATION BY PARTIES WHICH CIT(A) HAS DECLINED TO ACCEPT ON THE GROUND THAT EARLIER ASSESSEE HAD FILED UNSIGNED STATEMENTS . IF THE LEDGER ACCOUNT WERE NOT SIGNED INITIALLY , BUT IF THE SAME HAS BEEN FILED SUBSEQUENTLY DU LY SIGNED AND AUTHENTICATED THEN THE SAME COPY SHOULD HAVE BEEN ACCEPTED. THEREFORE, IN THE INTEREST OF JUSTICE, WE FEEL THAT THIS MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE AO TO VERIFY THE TRANSACTIONS FROM THE BANK ACCOUNTS AND THE COPY OF THE LE DGER ACCOUNTS OF THE PARTIES AND CONSIDERING ALL THE CONFIRMATION LETTERS, INVOICES AND RECONCILIATION. THE AO WILL PROVIDE REASONABLE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN ITS CASE & CAUSE . THUS, THE ISSUE RELATING TO DISALLOWANCE OF RS. 46,41,405/ - IS R EMANDED BACK TO THE FILE OF THE AO TO BE DECIDED AFRESH. THUS, GROUND RAISED BY THE ASSESSEE ON THIS ISSUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRON OUNCED IN THE OPEN COURT ON 16 TH NOVEMBER , 2015. SD/ - SD/ - ( ) ( ) (RAMIT KOCHAR ) ( AMIT SHUKLA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 16 TH NOVEMBER , 2015 GREEN CHANNEL FORWARDERS PVT LTD ITA NO. 264 9 /MUM/20 1 3 5 / COPY TO: - 1 ) / THE APPELLANT. 2 ) / THE RESPONDENT. 3) THE CIT (A) - 1 2 , MUMBAI. 4 ) THE CIT 6 , MUMBAI. 5 ) , , / THE D.R. H BENCH, MUMBAI. 6 ) \ COPY TO GUARD FILE. / BY ORDER / / TRUE COPY / / / , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * . . *CHAVAN, SR.PS