The ITO, Ward-6(1), Surat V. Shri Devilal R. Gehlot, Dist.Surat

ITA 290/AHD/2009

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5326 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 23-01-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 30-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS
• Assessee Lawyers: S B VAIDYA
• Keywords: Unexplained investment; Business income

Judgement Text

, , , , D, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, D BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) ' )* + ) ' )* + ) ' )* + ) ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO.290/AHD/2009 WITH CO NO.57/AHD/2009 [ASSTT.YEAR : 2005-2006] ITO, WARD-6(1) SURAT. /VS. SHRI DEVILAL R. GEHLOT PROP. M/S.CHAUDHARY ROADLINES SAI ASHIRVAD COMPLEX KADODARA, DIST. SURAT. PAN : AELPG 7142 L ITA NO.291/AHD/2009 WITH CO NO.58/AHD/2009 [ASSTT.YEAR : 2005-2006] ITO, WARD-6(1) SURAT. /VS. SHRI DEVENDRA J. SONI PROP. M/S.MAHESH ROADLINES 13, LADKAWALA BUILDING KADODARA, DIST. SURAT. PAN : ANLPS 7028 Q ( (( (-. -. -. -. / APPELLANT) ( (( (/0 /0 /0 /0-. -.-. -. / RESPONDENT) + 1 2 )/ REVENUE BY : SHRI K.C. MATHEWS, SR.DR 4& 1 2 )/ ASSESSEE BY : SHRI S.B. VAIDYA 5 1 &(*/ DATE OF HEARING : 23 RD JANUARY, 2014 678 1 &(*/ DATE OF PRONOUNCEMENT : 7.2.2014 )9 / O R D E R PER BENCH: THESE APPEALS BY THE REVENUE AND COS. BY THE ASSESS EES FOR THE ASSESSMENT YEAR 2005-06 ARE DIRECTED AGAINST THE OR DER OF THE CIT(A). SINCE ITA NO.290 AND 291/AHD/2009 WITH CO NO.57 AND 58/AHD/2009 -2- IDENTICAL ISSUE IS INVOLVED IN THESE APPEALS, THESE ARE BEING DISPOSED OF WITH THIS CONSOLIDATED ORDER: ITA NO.290/AHD/2009 (REVENUES APPEAL SHRI DEVILA L R. GEHLOT) 2. THE GROUND NO.1 OF THIS APPEAL OF THE REVENUE IS AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 7,00,000/- MADE BY THE AO ON PROTECTIVE BASIS AND RS.1,75,000/- ON SUBSTAN TIVE BASIS. 3. THE LEARNED DR HAS RELIED ON THE ORDER OF THE AO . THE LEARNED COUNSEL FOR THE ASSESSEE HAS RELIED ON THE ORDER OF THE CIT (A). WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND TH E CIT(A). WE FIND THAT THE ASSSESSEE IS RECEIVING ONLY COMMISSION INCOME ON BO OKING OF THE TRUCKS AND NO TRUCKS BELONGED TO THE ASSESSEE. THE BUSINESS OF T HE ASSESSEE IS ONLY TO ARRANGE VEHICLES/TRUCKS FOR THE PARTIES WHO MAKE ENTIRE PAY MENT TO THE TRUCK OWNERS. THE CIT(A) HAS RECORDED IN HIS APPELLATE ORDER THAT THE AO IN THE ENTIRE ASSESSMENT ORDER IS ACCEPTING THE FACT THAT THE ASS ESSEE RECEIVES COMMISSION ONLY AND THE RECEIPTS AND EXPENSES IN THE PROFIT & LOSS ACCOUNT ARE IN RESPECT OF THE TRANSPORTERS ONLY. THE CIT(A) HAS FURTHER RECO RDED THAT THE COMMISSION INCOME HAS ALREADY BEEN ESTIMATED BY HIM, AND THERE FORE, THERE IS ABSOLUTELY NO JUSTIFICATION IN ESTIMATING THE SAME AMOUNT AGAIN A S BUSINESS RECEIPTS OF THE ASSESSEE, AND THIS ACTION OF THE AO IS JUST A MATTE R OF CONJECTURE AND SURMISES AND DELETED ENTIRE ADDITION. WE FIND THAT THE BAS IC FACTS THAT THE ASSESSEE IS MERELY RECEIVING COMMISSION INCOME ON BOOKING OF TR UCKS FROM ITS CLIENTS AND THE FREIGHT PAYMENTS WERE MADE BY THE CLIENTS TO TH E TRUCK OWNERS AND THAT THE COMMISSION INCOME HAS ALREADY BEEN ESTIMATED BY THE REVENUE, COULD NOT BE CONTROVERTED BY REVENUE, AND THEREFORE, THE SAME AM OUNT COULD NOT BE TAXED AS BUSINESS RECEIPTS IN THE HANDS OF THE ASSESSEE, AND ACCORDINGLY, WE HOLD THAT THERE IS NO MISTAKE IN THE ORDER OF THE CIT(A) IN D ELETING THE ADDITION ON THIS ISSUE, WHICH IS CONFIRMED AND THE GROUND NO.L OF TH E REVENUE IS DISMISSED. ITA NO.290 AND 291/AHD/2009 WITH CO NO.57 AND 58/AHD/2009 -3- 4. THE GROUND NO.2 OF THE REVENUES APPEAL IS AS UN DER: 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 42,550/- MADE BY THE AO ON ACCOUNT OF LOW HOUSEHOLD EXPENSES. 5. THE LEARNED DR RELIED ON THE ORDER OF THE AO AND THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF THE CIT(A). WE HAVE CONSIDERED RIVAL SUBMISSIONS. WE FIND THAT THE CIT(A) HAS RECORDED THAT THE ASSESSEE IS LIVING A SIMPLE LIFE IN VILLAGE AND DID NOT HAVE ANY CAR OR MEMBERSHIP OF CLUB AND HAS SHOWN WITHDRAWAL OF RS.77,450/- FOR FAMILY OF FIVE MEMBERS IN THE ACCOUNTING YEAR 2004-2005, WHICH WERE SUFFICIENT FOR MEETING H OUSEHOLD EXPENSES, AND THEREFORE, THERE IS NO JUSTIFICATION FOR MAKING ANY ADDITION ON ACCOUNT OF LOW HOUSEHOLD EXPENSES. IN THESE FACTS, WE CONFIRM THE ORDER OF THE CIT(A) ON THIS ISSUE AND THE GROUND NO.2 OF THE REVENUE IS DISMISS ED. CO NO.57/AHD/2009 (ASSESSEES CO) 6. THE GROUND NO.1 OF THE CO OF THE ASSESSEE IS AS UNDER: 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE A S WELL AS LAW ON THE SUBJECT, THE LD.CIT(A) HAS ERRED IN CONFIRMING THE AOS ESTIMATED COMMISSION INCOME AT RS.10,00,000/- INSTEAD OF RS.6 ,19,625/- AS SHOWN BY ASSESSEE AND MAKING ADDITION OF RS.3,83,075/- 7. WE HAVE HEARD THE PARTIES. WE FIND THAT THE CIT (A) HAS PASSED A WELL REASONED SPEAKING ORDER ON THIS ISSUE. THE CIT(A) HAS RECORDED THAT THE ASSESSEE RECEIVES COMMON INCOME FROM THE TRUCK OWNE RS, BUT THE ASSESSEE WAS NOT ABLE TO FURNISH ANY DETAILS ABOUT THE OWNERS N AMES AND ADDRESSES, AND THEREFORE, THERE IS NO WAY TO FIND OUT THE EXACT AM OUNT OF COMMISSION EARNED BY THE ASSESSEE. THE CIT(A) HAS CONCLUDED THAT THE AO IS LEFT WITH NO ALTERNATIVE BUT TO ESTIMATE THE COMMISSION INCOME EARNED BY THE ASSESSEE, AND THERE IS NO REASON TO INTERFERE WITH THE ORDER OF THE AO. WE F IND THAT THE ESTIMATE OF ITA NO.290 AND 291/AHD/2009 WITH CO NO.57 AND 58/AHD/2009 -4- COMMISSION INCOME OF THE ASSESSEE AT RS.10,00,000/- INSTEAD OF RS.6,19,625/- AS SHOWN BY THE ASSESSEE COULD NOT BE SAID TO BE ARBIT RARY. THERE BEING NO REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) ON THIS I SSUE, THE SAME IS CONFIRMED AND THE GROUND NO.1 OF THE CO OF THE ASSESSEE IS DI SMISSED. 8. THE GROUND NO.2 OF THE CO IS AS UNDER: 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 42,550/- MADE BY THE AO ON ACCOUNT OF LOW HOUSEHOLD EXPENSES. 9. WE HAVE HEARD THE PARTIES. WE FIND THAT THE ADD ITION OF RS.42,550/- ON ACCOUNT OF LOW HOUSEHOLD EXPENSES HAS BEEN DELETED BY THE CIT(A), AND WE HAVE CONFIRMED THE ORDER OF THE CIT(A) ON THIS ISSU E IN THE FOREGOING PARAS OF THIS ORDER IN THE REVENUES APPEAL IN THE CASE OF S HRI DEVILAL R. GEHLOT. ACCORDINGLY, THERE IS NO MERIT IN THE GROUND NO.2 O F THE CO OF THE ASSESSEE, WHICH IS ACCORDINGLY DISMISSED. ITA NO.291/AHD/2009 (REVENUES APPEAL SHRI DEVEND RA J. SONI) 10. THE GROUND NO.1 OF THE APPEAL OF THE REVENUE IS AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.2,7 5,000/- MADE BY THE AO ON PROTECTIVE BASIS AND RS.75,000/- ON SUBSTANTI VE BASIS. 11. BOTH THE PARTIES SUBMITTED BEFORE US THAT THE I SSUE IN THIS GROUND OF THE APPEAL OF THE REVENUE IS IDENTICAL WITH THE ISSUE I N THE GROUND NO.1 OF THE REVENUE IN THE CASE OF SHRI DEVILAL R. GEHLOT FOR T HE SAME ASSESSMENT YEAR 2005-06. WE HAVE CONSIDERED RIVAL SUBMISSIONS. F OR THE REASONS RECORDED WHILE DISPOSING OF GROUND NO.1 IN THE APPEAL OF THE REVENUE IN THE FOREGOING PARAS OF THIS ORDER IN THE CASE OF SHRI DEVILAL R. GEHLOT, WE HOLD THAT THERE IS NO MERIT IN THE GROUND NO.1 OF THE REVENUE WHICH IS AC CORDINGLY DISMISSED. 12. THE GROUND NO.2 OF THE REVENUES APPEAL IS AS U NDER: ITA NO.290 AND 291/AHD/2009 WITH CO NO.57 AND 58/AHD/2009 -5- 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 57,600/- MADE BY THE AO ON ACCOUNT OF LOW HOUSEHOLD EXPENSES. 13. BOTH THE PARTIES SUBMITTED BEFORE US THAT THE I SSUE IN THIS GROUND OF THE APPEAL OF THE REVENUE IS IDENTICAL WITH THE ISSUE I N THE GROUND NO.2 OF THE REVENUE IN THE CASE OF SHRI DEVILAL R. GEHLOT FOR T HE SAME ASSESSMENT YEAR 2005-06. WE HAVE CONSIDERED RIVAL SUBMISSIONS. F OR THE REASONS RECORDED WHILE DISPOSING OF GROUND NO.2 IN THE APPEAL OF THE REVENUE IN THE FOREGOING PARAS OF THIS ORDER IN THE CASE OF SHRI DEVILAL R. GEHLOT, WE HOLD THAT THERE IS NO MERIT IN THE GROUND NO.2 OF THE REVENUE WHICH IS AC CORDINGLY DISMISSED. 14. THE GROUND NO.3 OF THE REVENUES APPEAL IS AS U NDER: 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 6,00,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT. 15. WE HAVE HEARD THE PARTIES. WE FIND THAT THE CI T(A) HAS RECORDED THAT NO ADDITION ON THIS ACCOUNT IS CALLED FOR SINCE THE IN VESTMENT IN TRUCKS IS DULY REFLECTED IN THE ACCOUNTS OF TWO LADIES AS ALSO THE INCOME THEREFROM, AND THEREFORE, THERE IS NO JUSTIFICATION IN MAKING THE ADDITION IN THE HANDS OF THE ASSESSEE. THE TRUCKS WERE COMPLETELY FINANCED BY M /S.KOTAK MAHINDRA AND NO DEPOSITS OR ADVANCE WAS REQUIRED TO BE PAID BY THE ASSESSEE. THE TWO LADIES WERE EXISTING INCOME TAX ASSESSES, AND THERE IS NO MATERIAL BROUGHT ON RECORD TO JUSTIFY THE ADDITION MADE IN THE HANDS OF THE ASSES SEE. ACCORDINGLY, THE ORDER OF THE CIT(A) ON THIS ISSUE IS CONFIRMED, AND THE GROU ND NO.3 OF THE REVENUE IS DISMISSED. 16. THE GROUND NO.4 OF THE REVENUE IS AS UNDER: 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 94,500/- MADE BY THE AO ON ACCOUNT OF INCOME WORKED OUT U/S.44AE. ITA NO.290 AND 291/AHD/2009 WITH CO NO.57 AND 58/AHD/2009 -6- 17. WE HAVE HEARD THE PARTIES. WE FIND THAT THE AD DITION MADE BY ESTIMATING THE INCOME FROM TRUCKS UNDER SECTION 44AE OF THE AC T WAS DELETED BY THE CIT(A) ON THE GROUND THAT THE TRUCKS DID NOT BELONG TO THE ASSESSEE, BUT BELONGED TO TWO LADIES, AND THEREFORE, INCOME FROM THE TRUCKS COULD NOT BE CONSIDERED IN THE HANDS OF THE ASSESSEE. WE CONFI RM THE ORDER OF THE CIT(A) ON THIS ISSUE THAT THE TRUCKS WERE REFLECTED IN THE AC COUNTS OF THE TWO LADIES, WHO WERE EXISTING INCOME TAX ASSESSES. THEREFORE, THE INCOME FROM THE TRUCKS IN QUESTION COULD NOT BE ASSESSED IN THE HANDS OF THE ASSESSEE, AND THE GROUND NO.4 OF THE REVENUE, BEING WITHOUT ANY MERIT, IS DISMISS ED. CO NO.58/AHD/2009 (ASSESSEES CO SHRI DEVENDRA J. SONI) 18. THE GROUND NO.1 OF THE CO IS AS UNDER: 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) HAS ERRED IN CONFIRMING THE AOS ESTIMATE D COMMISSION INCOME AT RS.11,00,000/- INSTEAD OF RS.8,51,727/- AS SHOWN BY THE ASSESSEE AND MAKING ADDITION OF RS.3,26,309/- 19. BOTH THE PARTIES SUBMITTED BEFORE US THAT THE I SSUE IN THIS GROUND OF THE CO OF THE ASSESSEE IS IDENTICAL WITH THE ISSUE IN T HE GROUND NO.1 OF THE CO IN THE CASE OF SHRI DEVILAL R. GEHLOT FOR THE SAME ASSESSM ENT YEAR 2005-06. WE HAVE CONSIDERED RIVAL SUBMISSIONS. FOR THE REASONS RECO RDED WHILE DISPOSING OF GROUND NO.1 OF THE CO IN THE CASE OF SHRI DEVILAL R . GEHLOT, IN THE FOREGOING PARAS OF THIS ORDER, WE HOLD THAT THERE IS NO MERIT IN THE GROUND NO.1 OF THE CO WHICH IS ACCORDINGLY DISMISSED. 20. THE GROUND NO.2 OF THE CO OF THE ASSESSEE IS AS UNDER: 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) HAS ERRED IN NOT DELETING THE ADDITION OF RS.57,600/- MADE ON ACCOUNT OF LOW HOUSE HOLD EXPENSES ON THE MERITS O F THE GROUND BUT BY ALLOWING TELESCOPING AGAINST THE ADDITION SUSTAINED ON ACCOUNT OF COMMISSION INCOME. ITA NO.290 AND 291/AHD/2009 WITH CO NO.57 AND 58/AHD/2009 -7- 21. BOTH THE PARTIES SUBMITTED BEFORE US THAT THE I SSUE IN THIS GROUND OF THE APPEAL OF THE REVENUE IS IDENTICAL WITH THE ISSUE I N THE GROUND NO.2 OF THE CO IN THE CASE OF SHRI DEVILAL R. GEHLOT FOR THE SAME ASS ESSMENT YEAR 2005-06. WE HAVE CONSIDERED RIVAL SUBMISSIONS. FOR THE REASONS RECORDED WHILE DISPOSING OF GROUND NO.2 IN THE CO IN THE FOREGOING PARAS OF THI S ORDER IN THE CASE OF SHRI DEVILAL R. GEHLOT, WE HOLD THAT THERE IS NO MERIT I N THE GROUND NO.2 OF THE ASSESSEES CO., WHICH IS ACCORDINGLY DISMISSED. 22. IN THE RESULT, THE APPEALS OF THE REVENUE AND B OTH THE COS. OF THE ASSESSEES ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD