New India Construction Co, Bulandshahr V. ITO, Ward- 3(3), Bulandshahr

ITA 3130/DEL/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 2593 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 10-07-2022
• Assessment Year: 2015-2016
• Appeal Filed On: 09-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 44AB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘SMC’ NEW DELHI SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA No.3130/Del/2019 Assessment Year: 2015-16 New India Construction Co., 15/380, Kailashpuri Railway Road, Bulandshahr (UP) PIN: 203001 Vs. ITO- Ward 3(3), Bulandshahr PAN :AAEFN8453E (Appellant) (Respondent) ORDER This is an appeal by the assessee against order dated 27.02.2019 of learned Commissioner of Income-Tax (Appeals), Ghaziabad for the assessment year 2015-16. 2. The first issue relates to disallowance of freight expenses amounting to Rs.27,72,110. 3. Briefly, the facts are, the assessee is a resident partnership firm engaged in the business of construction. For the assessment year under Appellant by Shri V. Rajakumar, Adv. Respondent by Shri Om Parkash, Sr. DR Date of hearing 11.07.2022 Date of pronouncement 04.09.2022 2 ITA No.1250/Del./2018 dispute, assessee filed its return of income on 30.10.2015 declaring income of Rs.7,49,626. 4. In course of assessment proceedings, the assessing officer noticed that assessee has debited an amount of Rs.27,72,110 towards freight expenses. Noticing this, assessing officer called upon the assessee to furnish the details of expenses including the name of the parties to whom the payment was made and whether tax was deducted at source. 5. After considering the submissions of the assessee, assessing officer observed that assessee has made the entire payment in cash, whereas, no documentary evidence was filed to prove the genuineness of such expenditure. Accordingly, he disallowed the amount of Rs.27,72,110. Though, the assessee contested the aforesaid disallowance before learned Commissioner (Appeals), however, the disallowance was sustained. 6. I have considered rival submissions and perused the material on record. 7. It is observed, in response to the query raised by the assessing officer, assessee had specifically submitted that the payments were 3 ITA No.1250/Del./2018 made to different persons and none of the payments exceeded the amount of Rs.10,000. Therefore, there is no liability to deduct tax at source. The assessee has further explained that the payments were made to truck drivers for transportation of construction material and such payments made were deducted from the purchase price paid to sellers. It is observed, assessee’s accounts are under statutory audit under Section 44AB of the Act. Further, copy of the ledger account of freight in clear terms describes the datawise payment made to truck drivers with vehicle number and the amount paid. However, neither the assessing officer nor learned Commissioner (Appeals) appear to have examined the details furnished by the assessee. In fact, the observations of learned Commissioner (Appeals) are without proper reasoning. When the ledger account as well as other material placed by the assessee disclosed in detail the nature of payment made with other details like vehicle numbers, it is difficult to understand what more evidence was required to be furnished by the assessee to establish that the expenditure was incurred for the purpose of business. 8. In view of the aforesaid, I delete the disallowance made by the assessing officer. 4 ITA No.1250/Del./2018 9. In ground no.2, the assessee has raised the issue of wrongful determination of income at Rs.7,49,626. 10. I have heard the parties and perused the material available on record. 11. It is the submission of the assessee before me that while computing income of the assessee, the assessing officer has inadvertently taken the net profit as per profit and loss account at Rs.7,49,626 as income of the assessee without allowing the partners’ remuneration of Rs.5,39,778. 12. Drawing my attention to the return of income, he submitted, the total income returned by assessee is Rs.2,09,848. He submitted, learned Commissioner (Appeals) has not decided this issue, though, the assessee had raised a ground. 13. Having considered the submissions of the parties, I deem it appropriate to restore the issue to the assessing officer for examining assessee’s claim after verifying the facts on record. 14. Needless to mention, the assessing officer must provide an opportunity of being heard to the assessee before deciding the issue. This ground is allowed for statistical purposes. 5 ITA No.1250/Del./2018 15. In the result, the appeal is partly allowed. Order pronounced in the open court on September, 2022. Sd/- (SAKTIJIT DEY) JUDICIAL MEMBER Dated: 4 th September, 2022. Mohan Lal Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi Sl. No. Particulars Date 1. Date of dictation (Order drafted through Dragon software): 29.09.2022 2. Date on which the draft of order is placed before the Dictating Member: 30.09.2022 3. Date on which the draft of order is placed before the other Member: 4. Date on which the approved draft of order comes to the Sr. PS/PS: 06.10.2022 5. Date of which the fair order is placed before the Dictating Member for pronouncement: 30.09.2022 6. Date on which the final order received after having been singed/pronounced by the Members: 04.10.2022 7. Date on which the final order is uploaded on the website of ITAT: 06.10.2022 8. Date on which the file goes to the Bench Clerk 06.10.2022 9. Date on which files goes to the Head Clerk: 10. Date on which file goes to the Assistant Registrar for signature on the order: 11. Date of dispatch of order: