The DCIT, Circle-4, Ahmedabad V. Globe Transport Company Pvt.Ltd., Ahmedabad

ITA 292/AHD/2010

• Counselvise Citation: 29220514 RSA 2010
• Duration Of Justice: 2 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 02-05-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 29-01-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT , JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ITA NO. 292/AHD/2010 ASSESSMENT YEAR :2006-07 THE DCIT, CIR-4, AHMEDABAD. NAVJIVAN TRUST BLDG. OFF. ASHRAM ROAD, AHMEDABAD. V/S . GLOBE TRANSPORT CO. PVT. LTD. 61, NEW YOUK TOWER-A, THALTEJ CIRCLE, S.G.HIGHWAY, AHMEDABAD PAN NO. AA ACG 3938J (APPELLANT) .. (RESPONDENT) BY APPELLANT SHRI SAMIR TEKRIWAL, SR.D.R. /BY RESPONDENT SHRI VINIT MOONDRA, A.R. /DATE OF HEARING 02.05.2012 /DATE OF PRONOUNCEMENT 25.05.2012 O R D E R PER : T.R.MEENA, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT (A)- VIII, AHMEDABAD, ORDER DATED 04.09.2009 FOR ASSESS MENT YEAR 2006-07 AND THE MAIN GROUNDS OF APPEAL ARE AS UNDER:- 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN RED UCING THE ADDITION TO RS. 14,85,680/-. 2. THE CIT(A) HAS NOT GIVEN ANY COGENT REASONING FO R REDUCING THE ADDITION MADE BY THE A.O. AT RS. 27,20,032/-. IN T HIS CASE THE ITA NO. 292/AHD/2010 A.Y.2006-07 PAGE 2 ASSESSING OFFICER HAS MADE THE ADDITION AFTER ANALY ZING THE ISSUE IN DEPTH. 3. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELE TING THE DISALLOWANCE OF RS. 85,612/- BEING THE CONTRIBUTION TO THE P.F. 2. THE FIRST AND SECOND GROUND OF REVENUE ARE AGAIN ST THE REDUCTION OF ADDITION OF RS. 14,85,680/- FROM RS. 27,20,032/- B Y THE CIT(A). 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS CLAIMED OPERATION EXPENSES OF RS. 1,23,80,666/- IN THE P&L ACCOUNT. THE A.O. ASKED TO FILE THE DETAILS OF OPERATIONS EXPENSES FROM THE ASSESSEE DU RING THE COURSE OF ASSESSMENT PROCEEDING. THE DETAILED DISCUSSION MAD E ON PAGE NOS. 2 TO 5 OF THE ASSESSMENT ORDER. THE A.O. FOUND THAT THE EXPL ANATION OFFERED BY THE ASSESSEE COMPANY WAS OF GENERAL NATURE. THE SAMPLE S MENTIONED IN THE TABLE OF PAGE NOS. 3 TO 5 OF ASSESSMENT ORDER WERE SELECTED BY THE REPRESENTATIVE OF THE ASSESSEE THEMSELVES ON RANDOM BASIS. CONSIDERING THE NUMBER OF VEHICLES OPERATED BY THE ASSESSEE COMPANY AND NUMBER OF TRIPS UNDERTAKEN. TO CHECK THE VOUCHERS OF EACH AND EVE RY TRIP IS NOT POSSIBLE AT THE FAG END OF THE YEAR. CONSIDERING THE TIME CONS TRAINT, THE ASSESSEES REQUEST FOR VERIFICATION OF THE VOUCHERS SELECTED B Y IT COULD NOT BE ACCEDED TO. THE ASSESSEE COMPANY ITSELF HAS WORKED OUT THE AVER AGE PERCENTAGE OF TOTAL EXPENDITURE AT 21.97%. THE SAME BASIS HAS BEEN TAK EN BY THE A.O. FOR DISALLOWANCE OF EXPENSES, WHICH WERE WORKED OUT AT RS. 27,20,032/-. 3. BEING AGGRIEVED BY THE ORDER OF A.O., THE ASSESS EE WAS BEFORE THE LD. CIT(A) WHO HAS CONCLUDED AS UNDER:- 4.5 I HAVE CONSIDERED THE FACTS AND SUBMISSION OF THE LD. A.R. CAREFULLY. I HAVE ALSO GONE THROUGH THE CASE LAWS RELIED UPON BY HIM. ITA NO. 292/AHD/2010 A.Y.2006-07 PAGE 3 THERE IS NO DISPUTE ABOUT THE FACT THAT THE APPELLA NT HAS NOT MAINTAINED COMPLETE VOUCHERS FOR THE TRIP EXPENSES. THE LD. A .R.S CONTENTION THAT THE VOUCHERS WERE CALLED FOR BY THE A.O. FOR EXAMIN ATION AT THE FAG END OF THE ASSESSMENT PROCEEDINGS THEREFORE, SOME OF TH EM COULD NOT BE PRESENTED DUE TO PAUCITY OF TIME, MERITS CONSIDERAT ION. HOWEVER, THE LD. A.R. HAS HIMSELF ACCEPTED THAT THE EXPENSES UND ER THIS HEAD ARE NOT ALWAYS SUPPORTED BY COMPLETE VOUCHERS. THE APP ELLANT HAS TO DEPEND UPON THE DRIVERS IN THIS REGARD WHO MAKE EXP ENSES IN DAY TO DAY OPERATIONS OF TRUCKS. NONETHELESS, IT HAS TO B E SEEN THAT IN ABSENCE OF COMPLETE SUPPORTING VOUCHERS, THE ALLOWA BILITY OF EXPENSES CLAIMED UNDER THIS HEAD CANNOT BE VERIFIED. 4.6 IT IS TO BE NOTED THAT IN THE TRANSPORTATION BU SINESS THERE ARE NUMBER OF EXPENSES WHICH ARE NOT ADMISSIBLE UNDER T HE ACT, THEREFORE, IN ABSENCE OF COMPLETE VOUCHERS IT IS VERY DIFFICUL T TO ASCERTAIN THE QUANTUM OF SUCH EXPENSES CLAIMED UNDER THIS HEAD. 4.7 THEREFORE KEEPING IN VIEW THE ENTIRETY OF FACTS THE ACCOUNTS PERTAINING TO TRIP EXPENSES OF THE APPELLANT REQUIR ED TO BE REJECTED AND SOME DISALLOWANCE OUT OF THE SAME IS CALLED FOR AS HAVING BEEN NOT SUPPORTED BY PROPER VOUCHERS. SINCE, THE APPELLANT HAS DISCLOSED HIGHER G.P. DURING THE RELEVANT PERIOD IN COMPARISO N TO THE PRECEDING YEAR THE DISALLOWANCE UNDER THIS HEAD MADE AT 21.97 % IS HELD TO BE EXCESSIVE THE SAME IS THEREFORE RESTRICTED TO 12% O F THE EXPENSES CLAIMED BY THE APPELLANT UNDER THIS HEAD. IN VIEW OF THIS, THE DISALLOWANCE OF RS. 14,85,680/- IS HEREBY CONFIRMED . THE APPELLANT WILL GET RELIEF OF RS. 12,34,352/- ACCORDINGLY. 4. THE ASSESSEE FILED SECOND APPEAL BEFORE US AND T HE LD. A.R. OF THE ASSESSEE CONTENDED THAT THERE WAS NO BASIS OF DISAL LOWANCE OF THE OPERATIONAL EXPENSES. HE ALSO RELIED UPON HIS OWN CASE FOR THE SAME ASSESSMENT YEAR IN ITA NO. 3277/AHD/2009, A.Y.-2006 -07 IN WHICH APPEAL FILED BY THE ASSESSEE, THE HONBLE B BENCH HAS HE LD AS UNDER:- ITA NO. 292/AHD/2010 A.Y.2006-07 PAGE 4 HEARD BOTH THE PARTIES AND PERUSED THE RECORD. WE FIND THAT THERE IS NO DISPUTE ABOUT THE FACT THAT ASSESSEE HA S NOT MAINTAINED COMPLETE VOUCHERS FOR THE EXPENSES CLAIMED BY HIM U NDER THE HEAD OPERATIONAL EXPENSES. THE ASSESSEE HAS ACCEPTED THAT EXPENSES UNDER THIS HEAD ARE NOT ALWAYS SUPPORTED BY COMPLET E VOUCHERS AND HE HAS TO DEPEND UPON THE DRIVERS IN THIS REGARD WHO M AKE EXPENSES IN DAY-TO-DAY OPERATIONS OF TRUCKS. IN THE ABSENCE OF SUPPORTING VOUCHERS THE ALLOWABILITY OF EXPENSES CLAIMED UNDER THIS HEA D OPERATIONAL EXPENSES HAS REMAINED UNVERIFIABLE. HOWEVER, KEEP ING THE TOTALITY OF THE CIRCUMSTANCES IN VIEW LIKE GP RATE SHOWN BY ASS ESSEE BEING MORE THAN IN EARLIER YEAR AND THE FACT THAT NO SUCH DISA LLOWANCE WAS MADE IN EARLIER YEARS ON THIS ACCOUNT WE ARE INCLINED TAKE A LENIENT VIEW IN THE MATTER AND FEEL THAT THIS DISALLOWANCE BE RESTRICTE D TO 10% OF THE TOTAL EXPENSES CLAIMED BY THE ASSESSEE UNDER THE HEAD OP ERATIONAL EXPENSES. WE HOLD ACCORDINGLY. 5. WE HAVE PERUSED THE FACTS OF THE CASE AND GONE T HROUGH THE ORDER OF B BENCH IN ASSESSEES CASE FOR THE SAME ASSESSMEN T YEAR. WE ALSO FEEL THAT 10% OF TOTAL EXPENSES CLAIMED BY THE ASSESSEE UNDER THE HEAD OPERATIONAL EXPENSES ARE REASONABLE DISALLOWANCE AS THE ASSESSEE DID NOT MAINTAIN THE COMPLETE VOUCHERS AND ALWAYS DEPENDS O N DRIVERS IN THIS REGARD WHO MAKES EXPENSES IN DAY-TO-DAY OPERATION OF TRUCK . 6. THE THIRD GROUND OF REVENUE IS AGAINST THE DISAL LOWANCE OF RS. 85,612/- BEING THE CONTRIBUTION TO THE PROVIDENT FUND. THE A.O. OBSERVED THAT THE PAYMENT OF CONTRIBUTION MADE BY THE EMPLOYEE WAS NO T PAID ON DUE DATE BUT PAID LATE. THE LD. CIT(A) ALLOWED THE APPEAL IN FA VOUR OF THE ASSESSEE BY CONSIDERING THE HONBLE ITAT, AHMEDABAD DECISION IN THE CASE OF GUJARAT CONTAINERS LIMITED IN ITA NO. 2609/AHD/2008. THE ASSESSEE HAD PAID THIS ITA NO. 292/AHD/2010 A.Y.2006-07 PAGE 5 EMPLOYEES CONTRIBUTION BEFORE DUE DATE OF FILING O F RETURN FOR THE YEAR UNDER CONSIDERATION. 7. WE HAVE PERUSED THE ORDER OF THE AUTHORITY BELOW AND FACT OF THE CASE, THE ASSESSEE PAID CONTRIBUTION TO PROVIDENT FUND BE FORE DUE DATE OF RETURN FOR THE YEAR UNDER CONSIDERATION. THUS, APPEAL IS ALLO WED IN FAVOUR OF THE ASSESSEE. 8. IN THE RESULT, THE REVENUES APPEAL IS PARTLY AL LOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE. SD/- SD/- ( MUKUL KR. SHRAWAT) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA ! ! ! ! '! '! '! '! / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '(' ) * / CONCERNED CIT 4. *- / CIT (A) 5. !./ ), ) , 12( / DR, ITAT, AHMEDABAD 6. /45 67 / GUARD FILE. BY ORDER/ , 8/ 1 ': ) , 12( ; ITA NO. 292/AHD/2010 A.Y.2006-07 PAGE 6 STRENGTHEN PREPARATION & DELIVERY OF ORDERS IN THE ITAT 1) DATE OF TAKING DICTATION 21.05.2012 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE XXXX 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 22.05.2012 4) DATE OF CORRECTION 22.05.2012 5) DATE OF FURTHER CORRECTION 6) DATE OF INITIAL SIGN BY MEMBERS 25.05.2012 7) ORDER UPLOADED ON 25.05.2012 8) ORIGINAL DICTATION PAD HAS BEEN ENCLOSED IN THIS FILE YES 9) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON 25.05.2012