Anil Kumar Choubey, Mayurbhanj V. ITO, Baripada

ITA 302/CTK/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77537 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-04-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 13-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: D K SHETH
• Keywords: Onus to prove
• Section: 133(6); 194C; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH, CUTTACK BEFORE SHRI P.K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 302/CTK/2013 : (ASST. YEAR : 2009 - 10) SHRI ANIL KUMAR CHOUBEY WARD NO. 9, RAIRANGPUR, MAYURBHANJ, ODISHA (APPELLANT) PAN : ABWPC9318G VS. INCOME TAX OFFICER, WARD - 1, BARIPADA ( RESPONDENT ) ASSESSEE BY : D.K. SHETH REVENUE BY : S.C. MOHANTY , DR DATE OF HEARING : 30 /04/2014 DATE OF PRONOUNCEMENT : 30 /05/2014 O R D E R PER P.K. BANSAL : 1. THIS A PPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DT. 27.2.2013 BY TAKING THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL : 1. THAT, THE LD. CIT(A), CUTTACK WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF R S .5,67,427/ - U/S 68. 2. THAT, THE LD. CIT(A), CUTTACK WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.46,301/ - AS UNEXPLAINED LIABILITY. 3. THAT, THE LD. CIT(A), CUTTACK WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.7,52,732/ - AS UNEXPLAINED LIABILITY. 4. THAT, THE LD. CIT(A), CUTTACK WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.10,13,628/ - U/S 40(A)(IA). 2. GROUND NO. 1 RELATES TO ADDITION OF RS.5,67,427/ - SHOWN OUTSTANDING AGAINST CREDIT OR SHIV SHAKTI SPONGE IRON LTD. THE AO MADE ADDITION AS THE 2 ITA NO. 302/CTK/2013 (ASST. YEAR : 2009 - 10) NOTICE SENT BY THE AO FOR SEEKING INFORMATION U/S 133(6) RETURNED UNSERVED. WHEN THE MATTER WENT BEFORE CIT(A), CIT(A) CONFIRMED THE ADDITION. 2.1 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CARE FULLY CONSIDERED THE SAME. WE NOTED THAT THE SAID LIABILITY HAS ARISEN ON ACCOUNT OF PURCHASES MADE BY THE ASSESSEE ON 30.4.2008 FOR RS.5,45,047/ - AND RS. 22,380/ - ON 31.5.2008. THE PURCHASES MADE BY THE ASSESSEE HAS DULY BEEN ACCEPTED BY THE AO. THE AO HAS NOT TREATED THE PURCHASES MADE TO BE NON - GENUINE OR BOGUS. THE LIABILITY HAS ARISEN BY DEBITING THE PURCHASES AND CREDITING THE PARTY. WE NOTED THAT THE ASSESSEE HAS DULY SUBMITTED THE CONFIRMATION IN RESPECT OF SHIV SHAKTI SPONGE IRON LTD. WHO IS A SSESSED TO INCOME TAX. ITS PAN NO. AAFCS 3682J HAS ALSO BEEN GIVEN. IT IS NOT A CASE WHERE THE ASSESSEE HAS RECEIVED THE MONEY FROM THE PARTY. IT IS A CASE WHERE THE ASSESSEE MADE PURCHASES ON CREDIT BASIS. IN VIEW OF THIS FACT, WE ARE OF THE VIEW THAT THE PROVISIONS OF SEC. 68 ARE NOT APPLICABLE AND WE, THEREFORE, DELETE THE ADDITION MADE. THUS, GROUND NO. 1 STANDS ALLOWED. 3. GROUND NO. 2 RELATES TO THE SUSTENANCE OF THE ADDITION OF RS.46,301/ - . THE AO NOTED THAT A SUM OF RS.46,301/ - IS SHOWN AS OUTSTANDING AGAINST CREDITOR DEBABRATA TRADERS. THE ASSESSEE MADE PURCHASES OF IRON ORE FROM THE SAID CREDITOR. THE AO NOTED THAT THE PURCHASES OF IRON ORE REVEALED THAT THE ASSESSEE MADE CASH PAYMENT ON 30.6.2008 AND THEREFORE NO DUES WERE OUTSTANDING ON 31.3.2009. THEREFORE, AN ADDITION OF RS. 46,301/ - WAS MADE. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), IT WAS SUBMITTED THAT THIS PARTY HAS CONFIRMED THE LIABILITY AND THEREFORE NO ADDITION SHOULD BE MADE. CIT(A) NOTED THAT T HE AO CALLED FOR THE INFORMATION FROM THE SAID PARTY AND THE PARTY HAS CONFIRMED THAT THE ASSESSEE HAS PURCHASED THE IRON ORE BY PAYMENT OF CASH ON 30.6.2008. THUS, THERE WAS NO DUES PAYABLE. THEREFORE, THE ADDITION WAS MADE. 3 ITA NO. 302/CTK/2013 (ASST. YEAR : 2009 - 10) 3.1 BEFORE US, THE LD. AR EVEN THOUGH VEHEMENTLY CONTENDED THAT THE LIABILITY WAS IN EXISTENCE AS ON 31 ST MARCH, BUT COULD NOT PRODUCE ANY EVIDENCE. IN OUR OPINION, THE ONUS IS ON THE ASSESSEE TO PROVE THAT THE LIABILITY WAS IN EXISTENCE. IN THE ABSENCE OF ANY EVIDENCE BEING PRODUCED BY THE ASSESSEE, WE CONFIRM THE ACTION OF CIT(A) SUSTAINING THE ADDITION OF RS.46,301/ - . THUS, THIS GROUND STANDS DISMISSED. 4. GROUND NO. 3 RELATES TO THE ADDITION OF RS.7,52,732/ - . THE AO NOTED UNDER THE HEAD SUNDRY CREDITORS IN THE BALANCE - SHEET A SUM OF RS.9,13,017/ - REPRESENTING TRANSPORT CHARGES PAYABLE. THE AO, THEREFORE, ASKED THE ASSESSEE TO PRODUCE THE REGISTER OF TRANSPORT CHARGES. THE ASSESSEE PRODUCED THE COPY OF THE REGISTER OF TRANSPORT CHARGES PAID AND TRANSPORT CHARGES PAYAB LE . THE AO NOTED THAT IN THIS REGISTER THE TRANSPORT ACCOUNTS HAVE BEEN SHOWN AS PAID AGAINST TRUCK NUMBERS AND SIGNATURE OF THE PERSONS RECEIVING THE PAYMENTS HAVE BEEN OBTAINED. HOWEVER, NOWHERE THE RECEIVER HAS PUT ANY DATE TO INDICATE THE DATE OF REC EIPT OF THE PAYMENT. SAME THING WAS NOTED BY THE AO IN RESPECT OF TRANSPORTATION CHARGES PAYABLE. NOT BEING SATISFIED WITH THE EVIDENCE PRODUCED BY THE ASSESSEE, THE AO MADE THE ADDITION IN RESPECT OF THE AMOUNT OUTSTANDING FROM SEPTEMBER, 2008 TO JANUAR Y, 2009 TOTALLING TO RS.7,52,732/ - . THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A) THE ASSESSEE CONTENDED THAT THE ASSESSEE HAS NOT MAINTAINED THE CASH BOOK. IN THE ABSENCE OF CASH BOOK BEING MAINTAINED, THE CIT(A) WAS OF THE VIEW THAT THE ASSESSEE COULD NOT DISCHARGE HIS BURDEN OF PROOF AND ACCORDINGLY HE CONFIRMED THE ACTION OF THE AO. 4.1 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. WE NOTED THAT THIS LIABILITY HAS ARISEN ON ACCOUNT OF TRANSPORTATION CHA RGES PAYABLE. THE AO DID NOT DISPUTE THE TRANSPORTATION CHARGES INCURRED BY THE ASSESSEE. THE EXPENSES INCURRED BY THE ASSESSEE WERE DULY ALLOWED. WHEN THE 4 ITA NO. 302/CTK/2013 (ASST. YEAR : 2009 - 10) GENUINENESS OF THE EXPENDITURE HAS DULY BEEN ACCEPTED BY THE AO DURING THE YEAR, IN OUR OPINION, NO ADDITION CAN BE MADE ON ACCOUNT OF TRANSPORTATION CHARGES PAYABLE. THE BEST COURSE OF ACTION ON THE PART OF THE AO WAS TO ASK FROM THE ASSESSEE WHETHER THIS LIABILITY HAS BEEN PAID IN THE SUBSEQUENT YEAR OR NOT SO THAT THE PROVISIONS OF SEC. 41(1) CAN BE APPLIED. THE ADDITION, IN OUR OPINION, HAS MERELY BEEN MADE ON PRESUMPTION BASIS THAT THE LIABILITY FOR TRANSPORTATION CHARGES, WHICH HAS BEEN SHOWN BY THE ASSESSEE AS PAYABLE, DOES NOT IN FACT REPRESENT THE TRANSPORTATION CHARGES PAYABLE FOR THE MONTH OF SEPTEMBER TO JANUARY, 2009. THE AO ACCEPTED PART OF THE TRANSPORTATION CHARGES PAYABLE FOR THE MONTH OF FEBRUARY AND MARCH TO BE GENUINE. IN OUR OPINION, THE AO CANNOT PICK AND CHOOSE PART OF THE EXPENSES TO BE GENUINE AND PART OF THE EXPENSES TO BE NON - GENUINE. WE, THEREFORE, DELETE THE ADDITION. THUS, THIS GROUND STANDS ALLOWED. 5. GROUND NO. 4 RELATES TO THE SUSTENANCE OF THE ADDITION MADE U/S 40(A)(IA). THE BRIEF FACTS RELATING TO THIS GROUND ARE THAT THE AO NOTED THAT THE ASSESSEE HAD PAID TR ANSPORTATION CHARGES EXCEEDING RS. 20,000/ - TO THE FOLLOWING PERSONS THROUGH CHEQUES. NAME OF PAYEE DATE OF PAYMENT AMOUNT PAID IN (RS.) GOURA HARI SHAW 08/08/2008 ` 5,00,898/ - RAJESH SHARMA 14/01/2009 ` 5,12,730/ - TOTAL ` 10,13,628/ - SINCE NO TDS WAS DEDUCTED, THEREFORE, THE ADDITION WAS MADE U/S 40(A)(IA) FOR RS.10,13,628/ - . THE ASSESSEE WENT IN APPEAL BEFORE CIT(A). BEFORE CIT(A), THE ASSESSEE RELIED ON THE ORDER OF ITAT, SPECIAL BENCH IN THE CASE OF MERILYN SHIPPING & TRANSPORT VS. ADDL . CIT, 20 TAXMANN.COM 244 IN THIS REGARD. CIT(A) NOTED THAT THE HON'BLE AP HIGH COURT IN MISCELLANEOUS APPLICATION FILED IN CONNECTION WITH REGULAR APPEAL (ITTA MP NO. 908 OF 2012 AND ITTA NO. 384 OF 2012) VIDE ORDER DT. 8.10.2012 DIRECTED FOR INTERIM SUS PENSION OF THE 5 ITA NO. 302/CTK/2013 (ASST. YEAR : 2009 - 10) ABOVE ORDER OF THE SPECIAL BENCH AND TOOK THE VIEW THAT PROVISION OF SEC. 40(A)(IA) IS APPLICABLE TO THE AMOUNT ALREADY PAID DURING THE YEAR. THEREFORE, ADDITION OF RS.10,13,628/ - IS CONFIRMED. 5.1 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. WE NOTED THAT THE DECISION IN MERILYN SHIPPING & TRANSPORT VS. ADDL. CIT, 20 TAXMANN.COM 244 ( SUPRA ) RENDERED BY THE SPECIAL BENCH HAS BEEN OVERRULED BY THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SIKANDAR K HAN N.TUNVAR, 357 ITR 312 IN WHICH IT WAS HELD THAT SEC. 40(A)(IA) WOULD COVER NOT ONLY AMOUNTS WHICH ARE PAYABLE AS ON 31 ST MARCH OF A PARTICULAR YEAR BUT ALSO WHICH ARE PAYABLE AT ANY TIME DURING THE RELEVANT YEAR. SIMILAR VIEW HAS BEEN TAKEN BY THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. CRESCENT EXPORT SYNDICATE , 33 TAXMAN. C OM 250 (CAL.). THE HON'BLE P&H HIGH COURT IN THE CASE OF MILK SPECIALTIES LTD. VS. CIT, 21 TAXMANN.COM 327 HAS TAKEN THE VIEW THAT PAYMENT MADE FOR HIRING OF VEHICLES WITHOU T DEDUCTING TDS U/S 194C ARE NOT ALLOWABLE AS EXPENDITURE IN VIEW OF THE PROVISIONS OF SEC. 40(A)(IA). IT IS NOT THE CASE OF THE ASSESSEE THAT THE PROVISIONS OF SEC. 194C WERE NOT APPLICABLE. WE, THEREFORE, CONFIRM THE ORDER OF CIT(A) DISALLOWING THE SUM OF RS. 10,13,628/ - . 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. 7. ORDER PRONOUNCED IN PURSUANCE OF RULE 34(4) OF ITAT RULES, 1963 BY PUTTING ON NOTICE BOARD OF THE BENCH AT CUTTACK ON 30 / 05 /201 4 . SD/ - ( D.T.GARASIA) JUDICIAL MEMBER SD/ - (P.K. BANSAL) ACCOUNTANT MEMBER PLACE : PANAJI DATED : 30 / 05 /201 4 *SSL* 6 ITA NO. 302/CTK/2013 (ASST. YEAR : 2009 - 10) COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT CONCERNED (4) CIT(A) CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER