M/s Goodwill Transport Corporation, Indore V. The ACIT, Indore

ITA 294/IND/2010

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7106 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 18-08-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 12-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARUN DEWAN
• Keywords: Business expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARMA, A.M. PAN NO. : AABFG1019J I.T.A.NO. 294 / IND /20 10 A.Y. : 2004 - 05 M/S.GOODWILL TRANSPORT CORPORATION, ACIT , CIRCLE 3(1), INDORE. VS INDORE. APPELLANT RESPONDENT APPELLANT BY : SHRI GHANSHYAM KHANDELWAR (PARTNER IN ASSESSEE FIRM ) RESPONDENT BY : SHRI ARUN DEWAN, SR. DR O R D E R PER R. C. SHARMA, A.M. THIS APPEAL IS BY THE ASSESSEE AGAINST THE ORDER DATED 1 5.1.2010 OF THE LEARNED CIT(A) - II, INDORE ON THE FOLLOWING GROUNDS: - : 2 : - 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. FIRST APPELLATE AUTHORITY ERRED A) IN NOT PASSING A SPEAKING ORDER AS PER SECTION 250(6); B) IN NOT APPRECIATING THAT THE ASSESSMENT O RDER OF AO, BEING BASED ON DIRECTIONS OF THE CIT, WAS BAD IN LAW; C) IN NOT APPRECIATING THAT THE ASSESSING OFFICER ERRED IN LAW IN NOT ALLOWING CREDIT OF TDS OF RS.9,73,159/ - ; D) IN NOT APPRECIATING THAT THE ASSESSING OFFICER ERRED IN MAKING THE FOLLOWING ADD ITION AND DISALLOWANCES TO THE DECLARED TOTAL INCOME: I. ON A/C OF TRIAL BALANCE DIFFERENCE RS.365.71 II. OUT OF SHOP EXPENSES RS.5,500 III. OUT OF SCOOTER, MOTOR CAR REPAIR AND PETROL EXPENSES RS.23,000 IV. OUT OF TELEPHONE EXPENSES RS.40,000 V. OUT OF STAFF WELF ARE EXPENSES RS.5,000 - : 3 : - 3 E) IN REJECTING THE GROUND AGAINST LEVY OF INTEREST U/S 234D; F) IN REJECTING THE GROUND AGAINST WITHDRAWAL OF INTEREST U/S 244A; AND G) IN REJECTING THE GROUND AGAINST INITIATION OF PENALTY U/S 271(1)(C). 2. DURING HEARING, SHRI GHANSHYAM KHANDELWAL, PARTNER OF THE ASSESSEE FIRM PERSONALLY APPEARED AND CONTENDED THAT ADVOCATES ARE NOT COOPERATING HIM, THEREFORE, HE REQUESTED THE BENCH TO DECIDE THE ISSUE AS PER MERIT. ON THE OTHER HAND, THE LD. SENIOR D.R. RELIED ON THE ORDER OF THE LOWER A UTHORITIES. 3. WE HAVE GONE THROUGH THE ORDERS OF LOWER AUTHORITIES AND FOUND THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF TRANSPORTATION AND HAD CLAIMED TDS OF RS. 16,08,032/ - IN ITS RETURN OF INCOME . THE AO ASKED THE DETAILS OF INCOME TO WHICH SUCH TDS PERTAINS. T HE ASSESSEE SUBMITTED TOTAL RECEIPTS OF RS. 2,66,19,250/ - , ON WHICH TDS WORKS OUT TO BE RS. 6,35,173/ - . ACCORDINGLY, THE AO DID NOT GIVE CREDIT FOR BALANCE TDS OF RS. 9,73,159/ - . THE AO ALSO MADE CERTAIN DISALLOWANCES OUT OF BUSINESS EXPENDITURE . BOTH THE ACTIONS OF - : 4 : - 4 THE AO WERE CONFIRMED BY THE LD. CIT(A) AND THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. FROM THE RECORD, WE FOUND THAT SOME OF THE TDS WAS DEDUCTED BY THE CONSIGNEE OF THE GOODS ON THE PAYMENT, WHICH WAS MADE TO THE TRUCK OWNER AND V ERY SMALL PORTION WAS PAID TO THE ASSESSEE. HOWEVER, THE ASSESSEE HAS CLAIMED ENTIRE TDS IN ITS RETURN OF INCOME. THE ASSESSEE COULD NOT EXPLAIN THE INCOME TO WHICH SUCH TDS WAS RELATED. THEREFORE, BY INVOKING PROVISIONS OF SECTION 194, THE AO DID NOT ALLO W THE CREDIT OF TDS IN RESPECT OF INCOME NOT OFFERED FOR TAXATION. CONTENTION OF THE ASSESSEE BEFORE THE LOWER AUTHORITIES WAS THAT IN RESPECT OF SOME OF THE TRANSACTIONS , HIRE CHARGES WERE PAID DIRECTLY BY THE CONSIGNEE TO THE TRANSPORT OPERATOR , SINCE TH E BILLS WERE RAISED BY THE ASSESSEE, IN RESPECT OF THE FREIGHT CHARGES TDS WAS DEDUCTED BY THE CONSIGNEE ON THE ENTIRE AMOUNT. AS PER ASSESSEE , ONLY PART OF SUCH TRANSPORTATION CHARGES WERE RECEIVED BY IT AS A COMMISSION AND NOT THE ENTIRE AMOUNT. IT APPEA RS THAT TDS WAS DEDUCTED BY THE CONSIGNEE ON THE ENTIRE AMOUNT PAID BY THEM, MAJOR PORTION OF WHICH GOES TO THE TRUCK OWNERS, WHO DELIVER THE GOODS TO THE CONSIGNEE AND ONLY PART OF THE - : 5 : - 5 TRANSPORTATION CHARGES IN THE FORM OF TDS WAS ISSUED TO THE ASSESSEE, WHICH IT HAS CLAIMED IN ITS RETURN AGAINST THE TOTAL TAX LIABILITY WORKED OUT ON ITS INCOME. 4. SO FAR AS THE RECEIPTS WAS OFFERED BY THE ASSESSEE TO THE TUNE OF RS.2,66,90,250/ - , THERE IS NO DISPUTE FOR THE AMOUNT OF TDS DEDUCTED AND CLAIMED. ONLY DISPUTE RE LATES TO THE TRANSPORTATION CHARGES, WHICH WAS NOT RECEIVED BY THE ASSESSEE ENTIRELY , THEREFORE, NOT OFFERED BY ASSESSEE IN ITS RETURN OF INCOME . HOWEVER, SOME PART OF SUCH TRANSPORTATION CHARGES WAS RECEIVED BY THE ASSESSEE AS COMMISSION, WHICH, NO DOUBT, CONSTITUTES ITS INCOME. THEREFORE, WE DIRECT THE AO TO VERIFY THE COMMISSION INCOME , WHICH HAS BEEN CREDITED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT AN D TO WORK OUT PROPER TAX THEREON. ASSESSEE IS ALSO DIRECTED TO FURNISH DETAILS OF SUCH COMMISSION INCOME AND THE TDS PERTAINING TO SUCH COMMISSION, SO THAT THE AO CAN ALLOW CREDIT FOR THE SA ME WHILE COMPUTING INCOME TAX ON SUCH TOTAL COMMISSION INCOME OFFERED FOR TAX. WE DIRECT ACCORDINGLY. 5. DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF TRIAL BAL ANCE DIFFERENCE, SHO P EXPENSES APPEARS TO - : 6 : - 6 BE REASONABLE. HOWEVER, L OOKING TO THE QUANTUM AND NATURE OF ASSESSEE S BUSINESS, WE DIRECT THE AO TO RESTRICT THIS DISALLOWANCE ON ACCOUNT OF SCOOTER, MOTOR CAR REPAIRS AND PETROL EXPENSES TO THE EXTENT OF RS. 15, 000/ - IN PLACE OF DISALLOWANCE OF RS. 23,000/ - MADE BY THE ASSESSING OFFICER. SIMILARLY, IN VIEW OF NATURE AND QUANTUM OF ASSESSEE S BUSINESS, DISALLOWANCE OF TELEPHONE EXPENSES TO THE EXTENT OF RS. 20,000/ - IN PLACE OF RS. 40,000/ - , WILL SERVE THE END OF JUSTICE. WE DIRECT ACCORDINGLY. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED IN PART. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 19 TH AUGUST, 2011. SD/ - SD/ - (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 19 TH AUGUST , 2011 . CPU*