ABHUNIK TRANSPORT ORGANISATION LTD, MUMBAI V. ITO 9(1)-1, MUMBAI

ITA 3149/MUM/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71594 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 19-09-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 22-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C P PATHAK
• Assessee Lawyers: D V LAKHANI
• Keywords: Unexplained expenditure
• Section: 69C; 133A; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G, MUMBAI BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 3149/MUM/2010 ASSESSMENT YEAR: 2004-05 ADHUNIK TRANSPORT ORGANISATION LTD. 115, UDYOG BHAVAN, SONAWALA ROAD, GOREGAON (E), MUMBAI-400 063 PAN :AAACA 4457 G VS. ITO 9(1)-1 MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI D.V. LAKHANI RESPONDENT BY : SHRI C.P. PATHAK DATE OF HEARING : 19.09.2013 DATE OF PRONOUNCEMENT : 23.10.2013 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LD.CIT(A) -19, MUMBAI DATED 01.02.2010 FOR THE ASSE SSMENT YEAR 2004-05. 2. IN THIS APPEAL, THE ASSESSEE HAS AGITATED THE AC TION OF THE LD.CIT(A) CONFIRMING THE ADDITION OF RS.9,68,951/- MADE BY TH E AO TREATING THE SAME AS UNEXPLAINED EXPENDITURE UNDER THE PROVISION OF SECT ION 69(C) OF THE INCOME TAX ACT. 3. THE RELEVANT FACTS ARE THAT THE ASSESSEE, A COMP ANY ENGAGED IN THE BUSINESS OF RENDERING TRANSPORT SERVICES BY PROVIDING VEHICL ES SUCH AS TRUCKS, LORRIES, HYDRA CRANES ETC. FOR TRANSPORT OF GOODS HAD DECLARED A T OTAL INCOME AT RS.22,74,079/- DURING THE YEAR UNDER CONSIDERATION. IN A SURVEY AC TION U/S 133A CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE COMPANY, CERTAIN LOOSE SHEETS WERE FOUND WHICH ITA NO. 3149/MUM/2010 ADHUNIK TRANSPORT ORGANISATION LTD. ASSESSMENT YEAR : 2004-05 2 PERTAINS TO VARIOUS TRANSACTIONS INCURRED IN RESPEC T OF ONE OF THE DIRECTORS NAMELY SHRI R.K. AGARWAL. THE RELEVANT LOOSE SHEET, ORIGIN ALLY IN HINDI, THE TRANSLATED VERSION OF THE SAID LOOSE SHEET READS AS UNDER:- DAY SATURDAY & SUNDAY 18.06.2003 EXPENSES DEBIT-PAYMENT ACCOUNT 887900 THANE OFFICE HOTEL EXPENSES R.K. 2000 DEBIT 25000 EXPENSES-R.K. SAHAB 5351 CREDIT 2620 PICTURE R.K. 2100 22380 MASSAGE 200 VEHICLE CHARGES OF SANDEEPJI MATERIAL SENT TO SURAT 2600 R.K. AGARWALJI 14351 R.K. ROADLINES FREIGHT 3100 EXPENSES 5351 9000 VEHICLE CHARGES OF SHYAM BABU MATERIAL SENT TO HYDERABAD 4200 INJECTION FOR MEENA AGARWAL (WIFE) 500 LAPTOP COMPUTER 61000 DEBIT 12060 968951 ADD: VOUCHER 5940 18000 LESS: NARAYAN SAHEB HOTEL EXPENSES 10000 2000 PICTURE MOLISH (MASSAGE) 2100 200 3700 IN THE ASSESSMENT FRAMED U/S 143(3), THE AO TREATED THE IMPUGNED EXPENDITURE NOTICED FROM THE LOOSE SHEET AFOREMENTIONED AS UNEX PLAINED EXPENDITURE U/S 69C OF THE INCOME TAX ACT AND THEREBY ADDED RS.9,68,951/- TO THE TOTAL INCOME OF THE ASSESSEE. ACCORDING TO THE AO, NO SATISFACTORY EXPL ANATION HAD BEEN GIVEN BY THE ASSESSEE WITH REGARD TO THE UNEXPLAINED EXPENDITURE . ON APPEAL, THE LD.CIT(A) CONFIRMED THE ACTION OF THE AO. ACCORDING TO THE LD .CIT(A), THE SAID PAPER WAS DISCOVERED FROM THE ASSESSEE COMPANYS PREMISES AND HENCE IT PERTAINS TO THE ITA NO. 3149/MUM/2010 ADHUNIK TRANSPORT ORGANISATION LTD. ASSESSMENT YEAR : 2004-05 3 TRANSACTIONS OF THE COMPANY. AGGRIEVED BY THE IMPUG NED ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 4. BEFORE US, THE LD.AR FOR THE ASSESSEE HAS STATED THAT THE LOOSE SHEET FOUND DURING THE SEARCH CONSISTS OF ONLY THE PERSONAL EXP ENDITURE OF THE DIRECTOR AND NOT CONNECTED WITH THE EXPENDITURE OF THE ASSESSEES CO MPANY. THE SAID PAPER HAS NO RELEVANCE AT ALL WITH THE ASSESSEE BEING A COMPANY CARRYING ON THE BUSINESS OF THE TRANSPORTATION. THERE IS NOT EVEN A SINGLE RECORD O F ANY TRANSACTION RELATING TO FREIGHT INCOME AND THE EXPENDITURE RELATING TO THE BUSINESS ACTIVITY OF ASSESSEE. ALSO, THERE IS NO REFERENCE TO ANY NAME OF THE PARTY WITH WHOM THERE IS ANY TRANSACTION THAT THE INCOME IS EITHER INVOLVED/EARNED/RECEIVED BY THE AS SESSEE AND HENCE NO INCOME CAN BE CONSTRUED TO HAVE BEEN EARNED BY THE ASSESSEE AR ISING FROM THE NOTINGS OF THE LOOSE SHEETS. AS REGARDS THE FIGURES MAINTAINED ON THE LEFT HAND SIDE OF THE LOOSE SHEET THERE IS AN OPENING BALANCE AMOUNTING TO RS.9 ,97,626/- AGAINST WHICH THERE IS A NARRATION NAVE, THIS DESCRIPTION IN HINDI MEANS THE AMOUNT OF BALANCE. THE NARRATIONS ARE MADE UNDER NAVE CLEARLY SHOWS THAT THEY ARE THE PERSONAL EXPENSES INCURRED WITH DIRECTORS. FURTHER, THE LD.AR HAS PRA YED ALTERNATIVELY THAT ONLY THE EXPENDITURE FOR THE YEAR UNDER CONSIDERATION ALONE HAS TO BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE SINCE THE LOOSE SHEET OTHERW ISE CONSISTS THE EXPENDITURE SPREAD OVER SEVERAL ASSESSEE YEARS. ON THE OTHER HA ND THE LD.DR HAS DRAWN OUR ATTENTION TO THE SPECIFIC ENTRIES AS REGARDS THE EX PENSES IN RESPECT OF VEHICLE CHARGES OF SANDEEPJI MATERIAL SENT TO SURAT, F.K. ROADLIN E FREIGHT, VEHICLE CHARGE OF SHYAM BABU MATERIAL SENT TO HYDEABAD/ ETC. WHICH IN ITSEL F SHOW THAT IT IS NOT ENTIRELY IN THE NATURE OF PERSONAL EXPENSES, THOUGH THERE ARE EXPEN SES INCURRED FOR MASSAGE, INJECTION FOR MEENA AGARWAL (WIFE). THEREFORE, TH E LD.CIT(A) IS CORRECT IN CONFIRMING THE ADDITION MADE BY THE AO. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. IT IS RELEVANT TO STATE THAT THE PERUSAL OF SCHEDULE G AT TACHED TO THE P & L A/C AND THE BALANCE SHEET PERTAINS TO SUNDRY DEBTORS REVEALS TH AT THE DEBTORS OF THE ASSESSEE ARE ONLY COMPANIES AND CORPORATE WITH WHOM THE ASSE SSEE HAS THE BUSINESS. THE SPECIFIC ENTRIES IN THE LOOSE SHEET AS REGARDS THE EXPENSES IN RESPECT OF VEHICLE CHARGES OF SANDEEPJI MATERIAL SENT TO SURAT, F.K. ROADLINE FREIGHT, VEHICLE CHARGE ITA NO. 3149/MUM/2010 ADHUNIK TRANSPORT ORGANISATION LTD. ASSESSMENT YEAR : 2004-05 4 OF SHYAM BABU MATERIAL SENT TO HYDEABAD/ ETC, DO NO T CORROBORATE WITH SCHEDULE G ATTACHED TO THE P & L A/C AND THE BALANCE SHEET, WH ICH CONTAINS THE SUNDRY DEBTORS WITH WHOM THE ASSESSEE HAS THE BUSINESS DURING THE YEAR UNDER CONSIDERATION SO AS TO ESTABLISH THAT THE IMPUGNED EXPENSES ARE ON BEHA LF OF THE ASSESSEE COMPANY IN CONNECTION WITH THE BUSINESS. THE PERUSAL OF THE LO OSE SHEET INDICATES THAT THE IMPUGNED EXPENSES ARE MADE ON ACCOUNT OF PERSONAL E XPENDITURE OF THE DIRECTOR SINCE THE SAME ARE SPENT ON THE FAMILY MEMBERS OF T HE DIRECTOR AND NOTHING TO DO WITH THE ASSESSEE. IT IS ALSO PERTINENT TO MENTION THAT THE LOOSE PAPER DOES NOT CONTAIN THE SIGNATURE AND ALSO NOTHING HAS BEEN BRO UGHT ON RECORD AS TO THE AUTHOR WHO SCRIPTED THE ENTRIES CONTAINED IN THE LOOSE SHE ETS. IN VIEW OF THAT MATTER, WE DO NOT FIND ANY JUSTIFICATION FOR UPHOLDING THE ADDITI ON OF THE IMPUGNED AMOUNT MADE/CONFIRMED U/S 69 C BY THE AUTHORITIES BELOW AN D THEREFORE THE IMPUGNED ADDITION IS DELETED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF OCTOBER, 2013. SD/- SD/- (P.M. JAGTAP) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 23.10.2013. *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR G BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.