Shri Abhinav Payarelal Purwar, Ahmedabad V. The Income Tax Officer, Ward-2(1), Ahmedabad

ITA 2809/AHD/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0978 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-07-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 06-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P MEENA
• Keywords: Depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA.NO.2809/AHD/2015 / ASSTT. YEAR: 2009-2010 SHRI ABHINAV PAYARELAL PURWAR 2263, HOLICHAKLA, BHANDERI POLE KALUPUR, AHMEDABAD 380 001. PAN : ANIPP 8853 F VS ITO, WARD - 291) AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI ABHIMANYU SINGH WITH SHRI U.S. BHATTI REVENUE BY : SHRI O.P. MEENA, SR.DR / DATE OF HEARING : 21/07/2016 / DATE OF PRONOUNCEMENT: 01/08/2016 $%/ O R D E R ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST T HE ORDER OF THE LD.CIT(A)-10, AHMEDABAD DATED 5.8.2015 PASSED FOR T HE ASSTT.YEAR 2009-10. 2. SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE L D.CIT(A) HAS ERRED IN CONFIRMING ADDITIONS MADE BY THE AO. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE AT THE RELEVANT TIME WAS ENGAGED IN THE BUSINESS OF TRANSPORTATION OF GOODS BY ROAD. HE HAS FILED HIS RETURN OF INCOME ON 9.11.2009 DECLARING TOTAL INCOM E AT RS.2,01,475/-. WHILE SCRUTINIZING THE ACCOUNTS, IT REVEALED TO THE AO TH AT AS PER FORM NO.26AS, THE AGGREGATE RECEIPTS DURING THE YEAR IS OF RS.22,30,2 49/-, WHEREAS THE ASSESSEE HAS SHOWN ONLY RS.16,59,494/- IN THE PROFIT & LOSS ACCOUNT. THE LD.AO HAS CALLED FOR THE EXPLANATION OF THE ASSESSEE WITH REG ARD TO THE ABOVE DISCREPANCY. IN RESPONSE TO THE QUERY OF THE AO, I T WAS CONTENDED THAT ITA NO.2809/AHD/2015 2 ACCOUNTANT OF THE ASSESSEE HAS MAINTAINED TWO ACCOU NTS, ONE FOR COMMISSION INCOME ON TRANSPORTATION AND OTHER COMMISSION EXPEN DITURE INCURRED FOR TRANSPORTATION. AN INCOME OF RS.5,02,726/- HAS BEE N CREDITED IN THE EXPENDITURE ACCOUNT. THIS ITEM WAS ACTUALLY MEANT FOR LEDGER MAINTAINED FOR COMMISSION INCOME. SIMILARLY, THE ASSESSEE HAD INC URRED TOTAL EXPENDITURE OF RS.14,66,171/-. SINCE THE INCOME OF RS.5,02,726/- WAS CREDITED TO THIS ACCOUNT, THE NET EXPENDITURE HAS BEEN CLAIMED AT RS .9,63,445/-. HAD THE ASSESSEE CLAIMED TOTAL EXPENDITURE OF RS.14,66,171/ - AND CREDITED THIS INCOME OF RS.5,02,726/- TO THE INCOME ACCOUNT, WHERE RS.16 ,59,494/- HAS BEEN SHOWN BY THE ASSESSEE, THEN IN THE COMMISSION INCOME TOTA L AMOUNT WOULD BE RS.21,62,220/-. THE LD.AO DID NOT SCRUTINIZE THESE DETAILS, BUT MADE ADDITION OF RS.5,70,755/- (WHICH IS DIFFERENCE BETWEEN RS.22 ,30,249/- MINUS RS.16,59,494/-). 4. ON APPEAL, THE LD.CIT(A), IN PRINCIPLE, HAS AGRE ED WITH THE EXPLANATION OF THE ASSESSEE, BUT CONSTRUED, AS IF THE TOTAL AMO UNT SHOWN BY THE ASSESSEE HAS AN INCOME ELEMENT. THE DISCUSSION MADE BY THE LD.CIT(A) READS AS UNDER: 4.1. ON GOING THROUGH THE CALCULATIONS SUBMITTED O N BEHALF OF THE APPELLANT, ACTUAL TOTAL INCOME AFTER ADDING RS. 5,0 2,726/- COMES TO RS. 21,62,220/-WHEREAS ACTUAL EXPENSES AFTER ADDING SAM E AMOUNT OF RS.5,02,726/- COMES TO RS. 14,66,171/-. THIS STILL LEAVE DIFFERENCE OF RS.6,96,049/- (21,62,220 -14,66,171). THE APPELLANT FILED RETURN SHOWING INCOME OF RS.2,01,475/-. THEREFORE AFTER GI VING CREDIT OF THE INCOME RETURNED BY THE APPELLANT RS.4,94,574/- (6,9 6,049 - 2,01,475), STILL REMAINS UNEXPLAINED. THEREFORE THE SECTIONS M ADE BY THE AO ARE CONFIRMED TO THE EXTENT OF RS.4,94,574/- AND THE AP PELLANT GETS RELIEF OF RS.76,181/- ON THIS GROUND. THIS GROUND OF APPEAL I S PARTLY ALLOWED. 5. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, I HAVE GONE THROUGH THE RECORD CAREFULLY. THE ASSESSEE HAS NOT ONLY THE EX PENDITURE OF RS.14,66,171/-, HE HAS OTHER EXPENDITURE ALSO, WHICH ARE TO BE DEBI TED FROM THE GROSS RECEIPTS, AND THEREAFTER, NET INCOME HAS TO BE OFFERED. THE LD.CIT(A) HAS ERRED IN ITA NO.2809/AHD/2015 3 APPRECIATING THE FACTS, AS IF, THE ASSESSEE HAS TOT AL EXPENDITURE OF RS.14,66,171/-. THESE ARE THE DIRECT EXPENSES. AP ART FROM THIS, THE ASSESSEE MUST HAVE SALARY EXPENDITURE, DEPRECIATION, INTERES T ETC. THUS, THE TOTAL DIFFERENCE WHICH SHOULD HAVE BEEN WORKED OUT FOR MA KING THE ADDITION IS AS UNDER: A) GROSS RECEIPTS AS PER FORM NO.26AS RS.22,30,249/- B) COMMISSION INCOME SHOWN BY THE ASSESSEE RS.16,59,494/- C) COMMISSION INCOME CREDITED IN EXPENDITURE ACCOUNT RS.05,02,726/- NET DIFFERENCE (A) MINUS (B) PLUS (C) RS.68,029/- I DELETE OTHER ADDITIONS MADE BY THE AO, AND DIRECT THE LD.AO TO MAKE ADDITION OF RS.68,029/-. THE APPEAL OF THE ASSESSE E IS PARTLY ALLOWED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 1 ST AUGUST, 2016 AT AHMEDABAD. SD/- (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 01/08/2016