M/s. Frontline Corporation Ltd., Ahmedabad V. The ACIT.,Circle-4, Ahmedabad

ITA 2883/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89610 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 21-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Assessee Lawyers: PF JAIN

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD. BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER I.T.A. NO.2883/AHD/2011 / ASSESSMENT YEAR: 2008-09 FRONTLINE CORPORATION LTD., 4 TH FLOOR, SHALIN BUILDING NEHRU BRIDGE CORNER,ASHRAM ROAD, AHMEDABAD. PAN AAACF 2403 M VS DEPUTY COMMISIONER OF INCOME TAX, CIRCLE-4, AHMEDABAD. / (APPELLANT) / (RESPONDENT) APPELLANT BY : SHRI P.F. JAIN. RESPONDENT BY : SHRI DINESH SINGH, SR.D.R. / DATE OF HEARING : 15/06/2015 / DATE OF PRONOUNCEMENT: 19/06/2015 / O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER: IT A NO.2883/AHD/2011 ASSESS MENT YEAR 2008-09 2 THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE CIT (A)-VIII, AHMEDABAD DATED 4-7-2011. 2. GROUND NO.1 OF THE APPEAL READS AS UNDER:- 1. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS I N UPHOLDING THE DISALLOWANCE OF RS.13,82,433/- FROM THE EXPENSE RELATING TO DIESEL AND TRIP BHATTA WITHOUT PROPERLY APPRECIATIN G THE FACTS OF THE APPELLANT. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSING O FFICER OBSERVED THAT THE ASSESSEE HAS SHOWN DIESEL EXPENSES OF RS.2 99.93 LACS AND TRIP AND BHATTA EXPENSES OF RS.114.80 LACS AS COMPARED T O THE CORRESPONDING FIGURES OF F.Y. 2006-07 OF RS.306.78 LACS AND RS.96.82 LACS RESPECTIVELY. THE ASSESSING OFFICER FOLLOWING HIS ORDER FOR EARLIER YEAR WHERE HE HAD MADE DISALLOWANCE OF DIESEL AND T RIP & BHATTA EXPENSES OF 10% OUT OF THE TOTAL EXPENDITURE MADE T HE DISALLOWANCE OF RS.41,47,300/-. 4. ON APPEAL, THE CIT (A) RESTRICTED THE DISALLOWAN CE TO RS.13,82,433/- BEING 1/3 RD OF THE DISALLOWANCE MADE OF RS.41,47,300/- AND DELETED THE BALANCE AMOUNT OF RS.27,64,867/- BY FOLLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF ASSESSEE IT SELF IN I.T.A.NO.2226 & 2527/AHD/2007 FOR ASSESSMENT YEAR 2003-04. 5. THE ONLY ARGUMENT OF THE ASSESSEE IS THAT IN A.Y .2010-11,THE CIT (A)-II, AHMEDABAD VIDE HIS ORDER DATED27-1-2015 HAD RESTRICTED THE DISALLOWANCE TO 1/3 RD OF THE DISALLOWANCE MADE BY FOLLOWING THE ORDERS OF THE TRIBUNAL FOR A.Y.2004-05 & A.Y.2006-07 WHICH COMES TO 1.11% OF THE TRIP BHATTA AND DIESEL EXPENSES ON THE GROUN D THAT THE RATIO OF THE EXPENDITURE TO TRANSPORT HAS COME DOWN FROM 62. 47% TO 52.39% AND THE GROSS PROFIT HAS ALSO INCREASED FROM 37.53% TO 46.61. IT A NO.2883/AHD/2011 ASSESS MENT YEAR 2008-09 3 THEREFORE, IN THE PRESENT YEAR OF APPEAL. THE DISAL LOWANCE SHOULD BE RESTRICTED TO 1.11% OF THE EXPENDITURE OF TRIP BHAT TA AND DIESEL. 6. ON THE OTHER HAND, DEPARTMENTAL REPRESENTATIVE S UPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD . THE UNDISPUTED FACTS OF THE CASE ARE THAT THE A.O. DISALLOWED 10% OUT OF THE TOTAL EXPENDITURE INCURRED ON DIESEL OF RS.299.93 LACS AN D ON TRIP AND BHATTA OF RS.114.80 LACS BY FOLLOWING HIS ORDER OF THE EAR LIER YEARS AND THEREBY MADE ADDITION OF RS.41,47,300/- TO THE INCOME OF TH E ASSESSEE. 8. ON THE APPEAL, THE CIT (A) BY FOLLOWING THE ORDE R OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE ITSELF FOR A.Y. 2004-05 AND 2006-07 HAS RESTRICTED THE DISALLOWANCE OF 1/3 RD OF THE DISALLOWANCE MADE BY THE A.O. WHICH WORKED OUT TO RS.13,83,433/- AND EFFECT RATE OF DISALLOWANCE OF TOTAL EXPENDITURE WORKED OUT TO 3.33%. 9. THE TRIBUNAL IN THE ASSESSMENT YEAR 2006-07 THE TRIBUNAL IN THE CASE OF THE ASSESSEE ITSELF IN ITA NO.1029/AHD/2010 VIDE ORDER DATED 21-02-2013 FOLLOWING THE ORDER OF THE TRIBUNAL IN T HE ASSESSEES OWN CASE FOR A.Y.2004-05 DISMISSED THE APPEAL OF THE RE VENUE BY OBSERVING AS UNDER:- AT THE OUTSET, WE WOULD LIKE TO REITERATE THAT SIMI LAR ISSUES TO THAT OF THE ISSUES GROUND NOS.2 AND 3 UNDER CO NSIDERATION HAVE CROPPED UP BEFORE THE EARLIER BENCH OF THIS TR IBUNAL IN THE ASSESSEES OWN CASE FOR A.Y. 2004-05 CITED SUPRA. A FTER DUE IT A NO.2883/AHD/2011 ASSESS MENT YEAR 2008-09 4 CONSIDERATION OF THE ISSUES AS DELIBERATED UPON THE REIN, THE FINDINGS RECORDED BY THE HONBLE EARLIER BENCH ARE EXTRACTED, CHORONOLOGICALLY, AS UNDER:- RESTRICTING THE DISALLOWANCE OUT OF TRIP BHATTA AND DIESEL EXPENSES: 22. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUG H THE FACTS OF THE CASE. AS ALREADY MENTIONED, THE ONUS SQUAREL Y RESTED UPON THE ASSESSEE TO SATISFY THE REVENUE AUTHORITIES IN RESPECT OF THE PURPOSE FOR WHICH THE EXPENDITURE CONCERNED WAS INC URRED. IN THE INSTANT CASE, THE ASSESSEE DID NOT PRODUCE LOG BOOK /TRIP REGISTER OR ANY CORROBORATIVE EVIDENCE IN SUPPORT OF THEIR C LAM EITHER BEFORE THE A.O./LD. CIT (A) AND EVEN BEFORE US WHIL E THERE IS NO JUSTIFICATION FOR DISPROPORTIONATE INCREASE IN EXPE NDITURE VIS-A-VIS EXPENDITURE INCURRED IN THE PRECEDING YEARS. THEREF ORE, THE LD. CIT (A), CONSIDERING THE FACT THAT INPUT COST HAS G ONE UP DUE TO RISE IN DIESEL PRICES AND OTHER INFLATION COST, OBS ERVED THAT CURRENT YEAR OPERATIONAL RESULTS ARE FOUND TO BE DIFFERENT FROM THE PRECEDING YEAR. TAKING INTO CONSIDERING THE FACT TH AT MOST OF THE FREIGHT RATES WERE ON RATE CONTRACT BASIS WHICH COU LD NOT BE INCREASED COMMENSURATE WITH DIESEL EXPENSES, THE LD . CIT (A) RESTRICTED THE DISALLOWANCE TO THE 1/3 RD OF THE TOTAL DISALLOWANCE OF RS.56.52 LACS. THOUGH THE LD. AR RELIED UPON A DECI SION IN THE CASE OF 77 TTJ (AHD) TM 490, IT HAS NOT BEEN DEMONS TRATED AS TO HOW THE FACTS OF THE CITED CASE WERE PARALLEL TO TH E FACTS AND CIRCUMSTANCES IN THE INSTANT CASE, ESPECIALLY WHEN THE ASSESSEE DID NOT DISCHARGE ONUS LAID DOWN UPON THEM BEFORE A NY OF THE AUTHORITIES AND EVEN BEFORE US. IN THESE CIRCUMSTAN CES, ESPECIALLY WHEN NEITHER THE LD. AR NOR THE LD. DR REFERRED US TO ANY MATERIAL SO AS TO ENABLE US TO TAKE A DIFFERENT VIEW IN THE MATTER WHILE UNDISPUTEDLY FACTS RELATING TO THE YEAR UNDER CONSI DERATION ARE DIFFERENT FROM THE FACTS OBTAINING IN THE PRECEDING YEARS AS NOTED BY THE LD. CIT (A), WE ARE NOT INCLINED TO INTERFER E. THUS, GROUND NO.1 IN THE APPEAL OF THE ASSESSEE AND GROUND NO.1 IN THE APPEAL OF THE REVENUE ARE DISMISSED. 6.1. IN CONFORMITY WITH THE FINDINGS OF THE EARLIER CO-ORDINATE BENCH OF THIS TRIBUNAL (SUPRA), GROUND NOS.2 AND 3 RAISED BY THE REVENUE ARE DECIDED IN FAVOUR OF THE ASSESSEE. IN E SSENCE, BOTH THE GROUNDS OF THE REVENUE ARE DISMISSED. IT A NO.2883/AHD/2011 ASSESS MENT YEAR 2008-09 5 10. THE ONLY ARGUMENT OF THE A.R. OF THE ASSESSEE I S THAT IN A.Y. 2010-11, THE CIT (A) HAS SUSTAINED THE DISALLOWANCE AT 1.11% AND THEREFORE, IN THE YEAR UNDER APPEAL THE DISALLOWANC E SHOULD BE SCALED DOWN TO1.11% OF THE TOTAL EXPENDITURE. 11. WE FIND THAT IN THE ASSESSMENT YEAR 2010-11, TH E CIT (A) GIVEN A FINDING THAT THE RATIO OF EXPENDITURE TO TRANSPORT INCOME HAS COME DOWN FROM 62.47% TO 52.39% AND THE GROSS PROFIT HAS ALSO INCREASED TO 37.53% AND 47.61%. 12. BEFORE US THE A.R. OF THE ASSESSEE HAS NOT BROU GHT ANY MATERIAL ON RECORD TO SHOW THAT THE RATIO OF EXPENDITURE TO TRANSPORT INCOME HAS COME DOWN DRASTICALLY AND THE GROSS PROFIT HAS ALSO INCREASED SUBSTANTIALLY AS WAS THE CASE BEFORE THE CIT(A) IN THE ASSESSMENT YEAR 2010-11. IN ABSENCE OF THE SAME, THE CONTENTION OF THE A.R. OF THE ASSESSEE CANNOT BE ACCEPTED. WE THEREFORE, DISMISS THIS GROUND OF APPEAL. 13. GROUND NO.2 OF THE APPEAL READS AS UNDER:- CIT (A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDIN G THE ADDITION OF RS.1,00,000/- ON ADHOC AND ESTIMATED BA SIS TOWARDS R.T.O. PENALTY WITHOUT PROPERLY APPRECIATING THE FA CTS OF THE APPELLANT. 14. AT THE TIME OF THE HEARING OF THE APPEAL, A.R. OF THE APPELLANT HAS STATED THAT HE IS NOT PRESSING THIS GROUND OF APPEA L AND HENCE THE SAME IS DISMISSED FOR WANT OF PROSECUTION. IT A NO.2883/AHD/2011 ASSESS MENT YEAR 2008-09 6 15. IN THE RESULT APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE COURT ON FRIDAY THE 19 TH DAY OF JUNE, 2015 AT AHMEDABAD. SD/- (S.S. GODARA) JUDICIAL MEMBER SD/- ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD. DATED 19 /06/ 2015 PATKI !'# $# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-VIII, AHMEDABAD. 5. !' ## , / DR, ITAT, 6. '$% & / GUARD FILE. % & ' / BY ORDER, ( / ' )* ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD IT A NO.2883/AHD/2011 ASSESS MENT YEAR 2008-09 7 1. DATE OF DICTATION : 15-6-2015 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 15-6-2015 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S. 15-6-2015 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 19-6-2015. 5 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 19- 6-2015 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 8. DATE OF DESPATCH OF THE ORDER