Shri Babulal, JODHPUR V. ITO, JODHPUR

ITA 303/JODH/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74934 (ITAT-JODHPUR)
• Duration Of Justice: 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-03-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 09-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Section: 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NO. 303/JU/2013 ASSESSMENT YEAR: 2009-10 SHRI BABU LAL VS. THE INCOME-TAX OF FICER M/S RANDEV TRANSPORT CO. WARD 3(4) VILLAGE BORUNDA, TEHSIL BILARA JODHPUR JODHPUR PAN NO. ACSPL 7670 B (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AMIT KOTHARI DEPARTMENT BY : SHRI N.A JOSHI, DR DATE OF HEARING : 07.03.2014 DATE OF PRONOUNCEMENT : 13.03.2014 ORDER PER HARI OM MARATHA, J.M. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE CIT(A), JODHPUR, DATED 25.03.2013 FOR A.Y 2009-2010. 2 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS PROPRIETOR OF M/S RANDEV TRANSPORT COMP ANY, VILLAGE BORUNDA AND CARRIES ON THE BUSINESS OF TRAN SPORT ON COMMISSION BASIS. FOR A.Y. 2009-10, HE FILED THE R ETURN OF INCOME ON 29-9-2009 DECLARING TOTAL INCOME OF RS. 2,76,680 /-. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE INCOME-T AX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT', FOR SHORT] O N 9-12-2011 BY DETERMINING TOTAL INCOME AT RS. 67,43,303/-, THEREB Y MAKING ADDITION OF RS. 64,66,323/-. ON PERUSAL OF PROFIT A ND LOSS ACCOUNT, THE ASSESSING OFFICER NOTICED THAT DURING THE YEAR THE GROSS RECEIPTS FROM THE TRANSPORT BUSINESS HAVE BEEN DECLARED AT R S. 2,48,52,413/- WHEREAS FREIGHT PAID HAS BEEN SHOWN AT RS. 2,45,57, 290/- AND IN THIS WAY N.P. HAS BEEN SHOWN AT RS. 2,95,123/-. THE ASSESSEE HAS ALSO SHOWN THE BILTY COMMISSION INCOME AT RS. 1,85, 880/-. THE ASSESSING OFFICER VERIFIED THE DETAILS AVAILABLE ON 26AS DATA WHICH REVEALED THAT THE GROSS RECEIPTS OF THE ASSESSEE WE RE AT RS. 3,13,19,036/- WHEREAS THE RECEIPT AS DECLARED IN TH E PROFIT AND LOSS ACCOUNT WERE AT RS. 2,48,52,413/-. THE ASSESSEE EXP LAINED BEFORE THE A.O THE REASONS OF DISCREPANCY, THAT THE AMOUNT HAD BEEN PAID BY CONSIGNEE DIRECTLY TO THE TRUCK DRIVER/ OWNER AN D THE AMOUNT 3 WAS NOT RECEIVED BY HIM AND HE HAS ONLY RECEIVED CO MMISSION. THE ASSESSING OFFICER OBSERVED THAT WHEN THE ASSESSEE H AS SHOWN RECEIPT OF RS. 2,48,52,413/-, THERE IS NO LOGIC TO DISCLOSE ONLY THE COMMISSION ON THE REMAINING AMOUNT OF RECEIPT. SINC E THE ACCOUNTS OF THE ASSESSEE ARE AUDITED THE ASSESSEE HAS CLAIME D ALL EXPENSES BUT THE RECEIPTS HAVE BEEN SUPPRESSED TO THE TUNE O F RS. 64,66,623/-, THEREFORE, THE ASSESSING OFFICER CONSI DERED THE RECEIPT OF AMOUNT OF RS. 3,13,19,036/- AS SHOWN IN 29AS A ND AMOUNT OF RS. 64,66,323/- WAS ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF SUPPRESSION OF RECEIPTS. IN FIRST AP PEAL, THE LD. CIT(A) CONFIRMED THE IMPUGNED ADDITION. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAR EFULLY PERUSED THE ENTIRE MATERIAL ON RECORD. THE LD. A.R. SUBMITTED THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING T HE ADDITION OF RS. 64,66,323/- ON ACCOUNT OF ALLEGED SUPPRESSION OF RE CEIPTS. THE ASSESSEE WAS A TRANSPORT AGENT AND WAS PROVIDING FA CILITY OF TRANSPORTATION TO VARIOUS PERSONS AND WAS RECEIVING COMMISSION FOR THE SAME. HE ALSO ARRANGED VEHICLES FOR CERTAIN PAR TIES FROM WHOM PAYMENTS WERE RECEIVED AND THE FREIGHT WAS PAID ON THEIR BEHALF 4 AND THE ASSESSEE RECEIVED COMMISSION IN THE TRANSAC TION. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD SHOWN GR OSS RECEIPTS FROM TRANSPORTATION BUSINESS AT RS. 2,48,52,413/- A ND AGAINST WHICH THE PAYMENT OF FREIGHT WAS MADE AT RS. 2,45,57,219/ - AND THE NET FREIGHT IN THE FORM OF COMMISSION OF THE ASSESSEE W AS RS. 2,95,132/. BESIDES THIS, THE ASSESSEE HAD RECEIVED BILTY COMMI SSION OF RS. 1,85,880/-. HOWEVER, THE ASSESSING OFFICER AS PER 2 6AS STATED THAT GROSS RECEIPT SHOULD BE RS. 3,13,19,036/- WHEREAS T HE ASSESSEE HAD DECLARED RECEIPT OF RS. 2,48,52,413/- ONLY. SO ACCO RDING TO THE ASSESSING OFFICER THERE WAS DIFFERENCE IN RECEIPT T O THE EXTENT OF RS. 64,66,323/-. FURTHER THE ASSESSING OFFICER ALSO OBSERVED THAT THE EXPENDITURE CLAIMED WERE NOT PROPERLY VOUCHED, SO THE DIFFERENCE AMOUNT OF GROSS RECEIPT WAS REQUIRED TO BE INCLUDED IN THE INCOME OF ASSESSEE. THE APPELLANT FURTHER SUBMI TTED THAT THE ASSESSING OFFICER HAD NOT PROPERLY APPRECIATED THE FACTS AND CIRCUMSTANCES OF THE ASSESSEE'S BUSINESS. THE THE ASSESSEE ARRANGED VEHICLE FOR THE PARTIES AND IS ONLY A COMMISSION AG ENT. CERTAIN PARTIES PAID FREIGHT DIRECTLY TO THE ASSESSEE AND I N SUCH CASES THE ASSESSEE, IN TURNS, PAYS THE FREIGHT TO THE TRUCK O WNERS. IN CERTAIN CASES THE TRUCK FREIGHT WAS NOT BEING PAID BY THE A SSESSEE BUT THE 5 BILTY ARE PREPARED TO PAY IN WHICH THE FREIGHT IS B EING PAID BY THE RECIPIENT OF THE GOODS. THE ASSESSEE CHARGED HIS CO MMISSION FROM THE VEHICLE OWNER AND THE DRIVER IN TURN COLLECTS T HE AMOUNT OF FREIGHT FROM THE CONSIGNEE. IN SUCH CASE ALSO, THE CONSIGNEE WHILE DEDUCTING THE TDS MENTIONED THE NAME OF THE AGENT W HILE DEDUCTING THE TDS WHEREAS THE INCOME OF THE ASSESSE E IS ONLY FOR THE COMMISSION CHARGED FOR VEHICLE OWNER. THE ASSES SEE HAD SHOWN THE SAID COMMISSION INCOME IN HIS RETURN OF INCOME. SO IT WAS ARGUED THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS. 64,66,323/-. IN THE ALTERNATIVE, T HE LD. A.R. HAS CONTENDED THAT ONLY NET PROFIT CAN BE INCLUDED IN T HE INCOME OF THE ASSESSEE. DURING THE YEAR, THE NET PROFIT CAME TO 1 .19% ON WHICH FIGURE WORKED OUT WAS RS. 76,915/- AS AGAINST WHICH THE APPELLANT HAD SHOWN BILTY COMMISSION OF RS. 1,85,880/-. AT BE ST, ONLY THE DIFFERENTIAL AMOUNT OF RS. 64,66,323/- ONLY CAN BE ADDED IN RESPECT OF THE TDS DATA AS HAS BEEN RELIED ON BY THE A.O. ALTHOUGH HE STATED THAT THE ASSESSEE HAS DISCLOSED ALL COMMISSI ON RECEIPTS OTHERWISE. 6 4. PER CONTRA, THE LD. D.R. HAS STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. HOWEVER, HE COULD NOT EXPLAIN AS TO WHY THE A.O. HAS TREATED FREIGHT OF R S. 2,45,57,290/- DECLARED BY THE ASSESSEE AS FREIGHT PERTAINING TO THE OWNERS OF THE TRUCKS WHICH HAS AL SO BEEN PAID TO THEM BY THE ASSESSEE. 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE HAVE FOUND THAT THE A.O. AFTER MAKING VARIOUS OBSERVATIO NS HAS FINALLY ACCEPTED THE AMOUNT DECLARED AT RS. 2,45,57 ,290/- IN THE PROFIT AND LOSS ACCOUNT AS FREIGHT PAID BY T HE ASSESSEE AND THE REMAINING AMOUNT HAS BEEN TREATED AS COMMISSION RECEIPT BY THE A.O. HIMSELF. THE A.O. H AS NOT DENIED THE CONTENTION RAISED BY THE ASSESSEE THAT T HE PAYMENT OF FREIGHT IS, IN FACT, MADE TO THE DRIVER/ OWNER OF THE TRUCK AND NOT TO THE ASSESSEE. IN ANY EXTREME CASE, EVEN IF THE DIFFERENCE AMOUNT OF RS. 64,66,623/- IS TREATED AS RECEIPT OF THE ASSESSEE RELATABLE TO THIS VERY T RANSPORT BUSINESS, AS THERE IS NO WHISPER IN THE ORDER ABOUT ANY OTHER TRANSPORT BUSINESS BEING CARRIED ON BY THE AS SESSEE, 7 ONLY NET PROFIT EARNED AS COMMISSION ON SUCH RECEIP TS CAN BE ADDED AND NOT THE ENTIRE RECEIPT OF RS. 64,66,3 23/-. SINCE THE ASSESSEE HAS DISCLOSED NET PROFIT RATE ON SUCH FREIGHT RECEIPTS AT 1.19%, IT WOULD BE JUSTIFIED IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE THAT AFTER APPL YING THIS RATE OF DIFFERENCE AMOUNT ONLY ADDITION CAN BE SUSTAINED TO THAT EXTENT. THEREFORE, WE DIRECT THE A.O. TO ONLY SUSTAIN THE ADDITION BY APPLYING NET PROFIT RA TE OF 1.19% TO DIFFERENTIAL GROSS RECEIPT OF RS. 64,66,62 3/- IN PLACE OF ENTIRE AMOUNT. 6. GROUND NO. 1 OF THIS APPEAL WAS NOT SUPPORTED BY WAY OF ARGUMENTS AND GROUND NOS. 4 AND 5 ARE SIMPLY FOR MAL IN NATURE. THEREFORE, ALL THESE GROUNDS STAND DISMISS ED. 7. GROUND NO. 3 WHICH PERTAINS TO CHARGING OF INTER EST U/S 234B OF THE ACT IS MANDATORY, ONLY CONSEQUENTIA L RELIEF CAN BE ALLOWED TO THE ASSESSEE. THEREFORE, THIS GR OUND 8 ALSO STANDS PARTLY ALLOWED IN VIEW OF OUR DECISION REGARDING GROUND NO. 2 ABOVE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 13.03.2014. SD/- SD/- (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13 TH MARCH, 2014 VL/- COPY TO: THE APPELLANT THE RESPONDENT THE CIT BY ORDER THE CIT(A) THE DR ASSISTANT REGISTRAR ITAT, JODHPUR