ACIT, Circle-1(1), Cuttack, Cuttack V. Maa Tarini Transport Pvt. Ltd., Jajpur

ITA 326/CTK/2014

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8329 (ITAT-CUTTACK)
• Duration Of Justice: 5 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2020
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 11-08-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAAD KIDWAI
• Assessee Lawyers: P R MOHANTY
• Section: 201; 13

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI C.M. GARG, JM & SHRI L.P. SAHU, AM . / ITA NO. 324 /CTK/201 4 ( / ASSESSMENT YEAR : 201 0 - 201 1 ) M/S MAA TARINI TRANSPORT PVT LTD ., AT - KANCHIPUR, PO - JAJPUR ROAD, DISTRICT - JAJPUR - 755019 VS. ACIT, CIRCLE - 1(1), CUTTACK ./ PANNO. : A A FCM 0416 L AND . / ITA NO. 326 /CTK/201 4 ( / ASSESSMENT YEAR : 2010 - 2011 ) ACIT, CIRCLE - 1(1), CUTTACK VS. M/S MAA TARINI TRANSPORT PVT LTD., AT - KANCHIPUR, PO - JAJPUR ROAD, DISTRICT - JAJPUR - 755019 ./ PANNO. : A AFCM 0416 L ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI P.R.MOHANTY, ADVOCATE /REVENUE BY : SHRI SAAD KIDWAI, CIT - DR / DATE OF HEARING : 09 / 01 /20 20 / DATE OF PRONOUNCEMENT : 16 / 01 /20 20 / O R D E R PER L.P.SAHU , A M : ITA NO.324/CTK/2014 HAS BEEN FILED BY THE ASSESSEE AND ITA NO.326/CTK/2014 HAS B EEN FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A), CUTTACK , BOTH DATED 13.05.2014 FOR ASSESSMENT YEAR 201 0 - 201 1 . ITA NO S . 324&326 /CTK/201 4 2 2. THE ASSESSEE IN ITS APPEAL (ITA NO.324/CTK/2014) HAS RAISED THE FOLLOWING GROUNDS : - 1. THAT, THE ORDER PASSED BY THE LEARNED C1T(A), CU TTACK IS HIGHLY ARBITRARY, WITHOUT ANY BASIS, WITHOUT PROPER APPLICATION OF MIND, CONTRARY TO WEIGHT OF EVIDENCE, BEYOND JURISDICTION AND OUGHT TO BE QUASHED AT ONCE. 2. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND FACTS IN RESTRICTING THE ADDITION TO RS. 50 LAKHS WITHOUT TAKING INTO CONSIDERATION THE NATURE AND TREND OF BUSINESS BEING QUITE CONTRARY TO WEIGHT OF EVIDENCE, BEYOND JURISDICTION AND OUGHT TO BE DELETED. 3. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND FACTS IN CONFIRMING THE DISALLOWANCE OF D IRECTORS SALARY OF RS.1 CRORE WITHOUT CONSIDERING HER INVOLVEMENT AND EXPERIENCE INTO CONSIDERATION IS HIGHLY ILLEGAL, ARBITRARY, EXCESSIVE, CONTRARY TO WEIGHT OF EVIDENCE AND THEREFORE IS LIABLE TO BE DELETED. 4. THAT OTHER GROUNDS OF APPEAL, IF ANY, SHA LL BE PRESSED FOR HAVING AT THE TIME OF THE APPEAL. 3 . THE REVENUE IN ITS APPEAL (ITA NO.326/CTK/2014) HAS RAISED THE FOLLOWING GROUNDS : - 01. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER THE LD. CIT (A) IS JUSTIFIED IN RESTRICTING THE TRANSPO RTATION CHARGES OF RS 8,88,88,082/ - TO RS 50,00,000/ - WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE. 02. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND ONE OR MORE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD. 4 . ON PERUSAL OF THE GROUNDS OF APPE AL IN BOTH THE APPEALS OF ASSESSEE AND REVENUE, WE FIND THAT THE GROUND NOS.1 & 4 IN THE APPEAL OF THE ASSESSEE AND GROUND NO.2 IN THE APPEAL OF THE REVENUE ARE GENERAL IN NATURE, THEREFORE, DO NOT REQUIRE FOR ADJUDICATION. AND GROUND NO.2 IN THE APPEAL OF THE ASSESSEE AND GROUND NO.1 IN THE ITA NO S . 324&326 /CTK/201 4 3 APPEAL OF THE REVENUE ARE LINKED WITH EACH OTHER, THEREFORE, WE DECIDE THIS ISSUE IN A CONSOLIDATED MANNER. 5 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY WAS DERIVING INCOME FROM TRANSPORTATION LOADING & UNLO ADING OF IRON ORES UNDER THE NAME & STYLE AS M/S MAA TARINI TRANSPORT PVT. LTD. RETURN OF INCOME OF THE ASSESSEE WAS FILED ON 26.09.2010 DECLARING TOTAL INCOME AT RS.1,37,28,500/ - ON TOTAL GROSS TURNOVER OF RS.55,54,05,354/ - . THE CASE OF THE ASSESSEE WAS S ELECTED FOR SCRUTINY AND STATUTORY NOTICES WERE ISSUED TO THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE AO THAT THE ASSESSEE HAS DEBITED A SUM OF RS.44,44,40,408/ - UNDER THE HEAD TRANSPORTATION PAYMENTS IN HIS PROFIT AND LOSS ACCOUNT. ACCORDINGLY, THE AO ISSUED QUESTIONNAIRE ON 9.11.2012 ASKING THE ASSESSEE TO FILE DETAILS OF TRANSPORTATION PAYMENTS IN THE FOLLOWING FORMATS : - SL.NO NAME & ADDRESS OF THE PARTY TO WHOM PAYMENT MADE PAN OF THE PARTY, IF ANY DATE OF PAYMENT A MOUNT PAID MODE OF PAYMENT REGISTRATION OF THE TRUCKS AGAINST WHICH PAYMENT MADE 1 2 3 4 5 6 7 IN RESPONSE TO THE ABOVE QUERY, THE ASSESSEE DID NOT FILE ANY DETAILS, THEREFORE, THE AO RECORDED HIS FINDINGS IN THIS REGARD, ARE AS UNDER : - THE AR OF THE A SSESSEE HAS NOT BEEN ABLE TO FURNISH THE DETAILS AS PER THE ABOVE TABLE AND HAS SUBMITTED THE LEDGER COPY OF THE DETAILS OF TRANSPORTATION CHARGES PAID. HOWEVER, THE VERIFICATION WHICH WAS INTENDED TO BE CARRIED OUT BY CALLING FOR THE INFORMATION AS PER TH E ABOVE TABLE CANNOT BE CARRIED OUT ON THE BASIS OF TEST CHECK OF THE BOOKS OF ACCOUNT. THE ASSESSEE COULD NOT COMPILE THE INFORMATION EVEN AFTER ITA NO S . 324&326 /CTK/201 4 4 BEING GIVEN ALMOST A FOUR MONTH'S TIME. IN THE ABSENCE OF THE REQUIRED DETAILS, THE GENUINENESS OF THE TRANSPO RTATION PAYMENTS OF A SUBSTANTIAL AMOUNT AS HIGH AS RS.44,44,40,408/ - CANNOT BE SUBJECTED TO SCRUTINY AND EXAMINATION. MOREOVER IN THE LEDGER ACCOUNT OF 'TRANSPORTATION CHARGES' ON EACH AND EVERY PAYMENTS THE FOLLOWING LANGUAGE HAS BEEN USED BY THE ASSESS EE COMPANY FOR EACH AND EVERY ENTRY MADE IN THE TOTAL LEDGER. ' BEING THE EXPENSES INCURRED TOWARDS TRANSPORTATION PAYMENT OF DIFFERENT TRUCK OWNERS' FOR ALL THESE REASONS, THE CLAIM OF TRANSPORTATION EXPENSES CANNOT BE CONSIDERED TO BE FULLY GENUINE. KEE PING IN VIEW THAT THE REQUIRED DETAILS AND PARTICULARS WHICH COULD HAVE ENABLED THE ASSESSING OFFICER TO VERIFY THE GENUINENESS OF THE EXPENSES UNDER THIS HEAD HAVE NOT BEEN FILED, A DISALLOWANCE @20% ON TOTAL TRANSPORTATION CHARGES PAID AT RS.44,44,40,408 / - WHICH COMES TO RS.8,88,88,082/ - AND THE SAME IS ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. PENALTY U/S.271(1) ( C) IS INITIATED. ADDITION: RS.8,88,88,082/ - FURTHER, THE AO NOTICED THAT THE ASSESSEE HAD DEBITED DIRECTORS REMUNERATION OF RS .3 CRORES IN THE PROFIT AND LOSS ACCOUNT. IN THIS CONTEXT THE AO SOUGHT DETAILS FROM THE ASSESSEE AND THE ASSESSEE SUBMITTED REPLY OUT OF WHICH THE AO NOTICED THAT THE THERE WERE TWO DIRECTORS IN THE COMPANY, WHO ARE HUSBAND AND WIFE, NAMELY, (I) SRIMANTA KUMAR TRIPATHY, ( HOLDING 93% OF SHARES ) AND (II) ANUSUYA TRIPATHY , ( HOLDING 7% SHARES OF THE COMPANY ) . SRIMANTA KUMAR TRIPATHY WAS PAID RS.2 CRORES AND SMT. ANUSUYA TRIPATHY WAS PAD BALANCE OF RS.1 CRORE AS DIRECTOR REMUNERATION AND OTHER DETAILS WERE AL SO SOUGHT BY THE AO REGARDING THEIR SERVICES RENDERED BY SMT. ANUSUYA TRIPATHY. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE THE AO NOTICED THAT THE REMUNERATION PAID TO SMT. ANUSUYA TRIPATHY WAS EXCESSIVE DUE TO NON - SUBSTANTIATING BY THE LD.AR OF THE ASSESSEE ITA NO S . 324&326 /CTK/201 4 5 THAT ANY SERVICES HAS BEEN RENDERED BY THE DIRECTOR SMT. ANUSUYA TRIPATHY TO M/S MAA TARINI PVT. LTD. THEREAFTER THE AO AFTER REFERRING THE RELEVANT PROVISIONS OF THE INCOME TAX ACT, HE DISALLOWED THE ENTIRE REMUNERATION PAID TO THE DIRECTORS AND MADE ADDITION OF RS.1 CRORE IN THE HANDS OF THE ASSESSEE. 6 . FEELING AGGRIEVED FROM THE ASSESSMENT ORDER, THE ASSESSEE APPEALED BEFORE THE LD. CIT(A). THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND COMPARING TO THE PREVIOUS YEARS DATA AN D BUSINESS CARRIED ON BY THE ASSESSEE FROM SEVERAL YEARS RESTRICTING TO RS.50 LAKHS ADDITION IN RESPECT OF TRANSACTIONS CHARGES DISALLOWED BY THE AO. FURTHER IN RESPECT OF DIRECTORS REMUNERATION THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E AND RELYING SOME CASE LAWS, HE UPHELD THE ACTION OF THE AO. 7 . IN RESPECT OF GROUND NO.1 OF THE ASSESSEE AND GR OUND NO.2 OF THE REVENUE, LD. AR OF THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES AND SUBMITTED THAT THE CIT(A) WAS NOT JUSTIFIED TO RESTRICTING THE ADDITION TO RS.50 LAKHS, HE SHOULD HAVE BEEN ALLOWED COMPLETELY TO THE TRANSPORTATION CHARGES IN THE HANDS OF THE ASSESSEE. HE ALSO SUBMITTED THAT IF THE TRANSPORTATION CHARGES HAS BEEN DISALLOWED THEN CORRESPONDING REVENU E SHOULD HAVE ALSO BEEN DISALLOWED BY THE REVENUE AUTHORITIES AND HE FURTHER SUBMITTED THAT IN THE TRANSPORTATION BUSINESS MANY JUDICIAL FORUM HAS RENDERED DECISION ITA NO S . 324&326 /CTK/201 4 6 THAT 1% PROFIT IS SUFFICIENT IN THE BUSINESS OF TRANSPORTATION. THE FACTS OF THE CASE ARE R EMAINED SAME AS COMPARED TO THE PREVIOUS YEARS AND NO ANY NEW BUSINESS HAS BEEN UNDERTAKEN BY THE ASSESSEE. THE RATE OF PROFITABILITY FROM THE PREVIOUS YEARS ARE INCREASING WHICH IS EVIDENT FROM THE TABLE QUOTED BY THE CIT(A) AT PAGE 3. FURTHER IN RESPECT OF GROUND NO.3 OF ASSESSEES APPEAL, HE SUBMITTED THAT HE PRODUCED THE COMPARATIVE CHARGE REGARDING DIRECTORS REMUNERATION PAID IN PREVIOUS TWO FINANCIAL YEARS, WHICH IS AS UNDER : - DIRECTOR REMUNERATION F.Y. SRIMANTA KU. TRIPATHY ANUSAYA TRIPATHY TOTAL AMOUNT 2007 - 08 6000000.00 1200000.00 7200000.00 2008 - 09 14400000.00 4800000.00 19200000.00 2009 - 10 20000000.00 10000000.00 30000000.00 IT WAS ALSO SUBMITTED BY THE LD. AR OF THE ASSESSEE THAT BOTH THE HUSBAND AND WIFE WERE ENGAGED IN THE DAY - TO - DAY B USINESS OF THE ASSESSEE AND THE BUSINESS CAN BE CARRIED ON FROM ANYWHERE. HE ALSO SUBMITTED THAT BUSINESS OF THE ASSESSEE HAS BEEN CLOSED DOWN, THEREFORE, IT IS DIFFICULT FOR SUBMISSIONS OF DOCUMENTS. THE LD. AR SUBMITTED THAT THE ASSESSEE HAS PAID DUE TAX ES ON THE REMUNERATION RECEIVED BY HER. IN SUPPORT OF HIS ARGUMENTS, LD. AR RELIED ON SOME CASE LAWS, WHICH READ AS UNDER: - I) EXPO MECHANIQUE P. LTD., ITA NOS.243 & 3376/DEL/2009, ORDER DATED 21.04.2011; ITA NO S . 324&326 /CTK/201 4 7 II) M/S PATEL ALLOY STEEL PVT. LTD., ITA NOS.1961/ AHD/2012 & CO NO.210/AHD/2012, ORDER DATED 08.04.2016; AND II) M/S PATEL ALLOY STEEL (P) LTD., ITA NO.2817/AHD/2016, ORDER DATED 19.04.2018 8 . IN RESPECT OF TRANSPORTATION CHARGES, LD. DR SUBMITTED THAT THE CIT(A) WAS NOT JUSTIFIED TO RESTRICT THE ADDITI ON MADE BY THE AO UPTO RS.50 LAKHS. HE SHOULD HAVE BEEN UPHELD THE ACTION OF AO. THE ASSESSEE WAS UNABLE TO PROVIDE THE DETAILS AS DESIRED BY THE AO IN A SPECIFIED FORM , WHICH COULD BE NECESSARY TO EXAMINE THE GENUINENESS OF THE TRANSPORTATION EXPENDITURE S DEBITED BY THE ASSESSEE. EVEN THE ASSESSEE COULD NOT PRODUCE THE COMPLETE VOUCHERS SO THAT THE EXPENDITURE CAN BE VERIFIED BY THE AO. LD. DR FURTHER SUBMITTED THAT THE CONTENTION OF LD. AR THAT IF EXPENDITURE HAS BEEN DISALLOWED THEREFORE , THE CORRESPONDI NG REVENUE SHOULD ALSO BE REDUCED FROM THE TURNOVER , THIS ARGUMENT OF THE LD. AR IS NOT SUITABLE BECAUSE THE ASSESSEE HAS MADE PAYMENT IN CASH AND/OR THROUGH BANK AND LOOKING TO THE HUGE QUANTUM OF EXPENSES DEBITED BY THE ASSESSEE . THE ASSESSEE HAS ALSO P AID IN CASH TO THE TRANSPORTERS, THEREFORE, THE LEAKAGE OF REVENUE CANNOT BE DENIED. THE CIT(A) WITHOUT GIVING ANY REASONABLE FINDINGS, RESTRICTED THE ADDITIONS. THE ASSESSEE COMPANY HAS FORMED ON 29.03.2007 I.E. THIS IS THE THIRD YEAR OF THE BUSINESS . T HEREFORE, THE ORDER OF THE AO SHOULD BE RESTORED. ALTHOUGH MANY JUDICIAL FORUMS HAVE ACCEPTED 1% IN MANY CASES, HOWEVER, THE FACTS AND CIRCUMSTANCES ITA NO S . 324&326 /CTK/201 4 8 OF EVERY CASE IS DIFFERENT, THEREFORE, LD.ARS SUBMISSION IN THIS REGARD IS NOT APPLICABLE. IT IS IMPORTAN T TO NOTE THAT THE LD. AR OF THE ASSESSEE HAS ALSO NOT FURNISHED ANY DETAILS. I N RESPECT OF GROUND NO.3 IN THE ASSESSEES APPEAL , THE LD. DR RELIED ON THE ORDERS OF LOWER AUTHORITIES AND SUBMITTED THAT BEFORE THE AO THE ASSESSEE COULD NOT SUBSTANTIATE THE NATURE OF SERVICES RENDERED BY HER TO THE COMPANY AND THE COMPANY HAS PAID AMOUNT TO THE DIRECTOR SMT. ANUSAYA TRIPATHY TOWARDS DIRECTORS REMUNERATION . THE REMUNERATION HAS BEEN PAID IN PREVIOUS YEARS WAS IN THE RATIO OF 5:1 & 3:1 IN THE PREVIOUS TWO FINA NCIAL YEARS WHEREAS THE IMPUGNED YEARS RATIO IS 2:1 BETWEEN BOTH THE DIRECTORS. LD. AR OF THE ASSESSEE ALSO COULD NOT PROVE THAT THESE PREVIOUS YEARS THE CASE WAS UNDER SCRUTINY OR NOT. THEREFORE, HE REQUESTED TO REMAND THE MATTER BACK TO THE FILE OF AO F OR SUBSTANTIATING THE REASONABLENESS OF THE DIRECTORS REMUNERATION TO SMT. ANUSAYA TRIPATHY IN LIEU OF THEIR SERVICES RENDERED. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CASE LAWS RELIED ON BY THE LD. AR IS NOT APPLICABLE IN THE PRESENT FACTS OF THE CASE. 9 . AFTER HEARING BOTH THE SIDES AND PERUSING THE ENTIRE MATERIAL AVAILABLE ON RECORD AND THE ORDERS OF AUTHORITIES BELOW, IN RESPECT OF GROUND NO.2 OF THE ASSESSEE AND THE GROUND NO.1 OF THE REVENUES APPEAL, IT IS CLEAR FROM THE ORDER OF THE AO TH AT THE ASSESSEE DID NOT FURNISH THE DETAILS REQUIRED BY THE AO TO EXAMINE THE VERACITY OF THE ITA NO S . 324&326 /CTK/201 4 9 EXPENSES DEBITED INTO THE PROFIT AND LOSS ACCOUNT AND PAID TO THE RESPECTIVE PARTIES IN LIEU OF THEIR SERVICES RENDERED. ON PERUSAL OF THE ORDER OF CIT(A), THE CI T(A) HAS DECIDED THE ISSUE AS UNDER : - REASONS FOR THE DECISION I HAVE CAREFULLY PERUSED THE FINDING OF THE AO, HIS DECISION AND THE CONTENTION OF THE APPELLANT. THE TURNOVER OF THE APPELLANT FROM THE TRANSPORTATION CONTRACT WORK IS RS.55,45,02,059/ - FOR T HE IMPUGNED YEAR WHEREAS THE SAME FOR THE PRECEDING YEAR IS RS.75,46,18,063/ - . AS AGAINST THE SAME THE TRANSPORTATION AND RECK LOADING AND HANDLING CHARGES SHOWN BY THE APPELLANT HAVE BEEN RS.44,44,40,408/ - AND RS.64,80,39,614/ - RESPECTIVELY. THE APPELLANT HAD PRODUCED AUDIT REPORTS INCLUDING SCHEDULES OF ALL THE EXPENDITURE. DURING THE COURSE OF APPEAL THE APPELLANT SUBMITTED THAT THE CLAIM OF TRANSPORTATION CHARGES AS PERCENTAGE OF GROSS TURNOVER REMAINS ALMOST THE SAME OVER YEARS. IT IS A FACT THAT THE A PPELLANT COULD NOT PRODUCE THE DETAILS AS PER THE REQUIREMENT OF THE AO. DURING APPEAL HEARING IT SUBMITTED THAT FOR HUGE TRANSPORTATION EXPENSES AS ABOVE FOR THE APPELLANT COMPANY IT IS HIGHLY TIME CONSUMING TO TABULATE THE DATA AS PER THE REQUIREMENT OF THE AO. IN ABSENCE OF THE DETAILS CALLED FOR BY THE AO, THE AO FELT THAT HE DID NOT HAVE ANY SCOPE TO VERIFY THE ACTUAL EXPENDITURE UNDER THE HEAD TRANSPORTATION AND HANDLING CHARGES ETC. BUT SINCE THE APPELLANT HAS BEEN FOR SEVERAL YEARS INTO THE TRANSPO RTATION BUSINESS WITH HUGE TURNOVER AND THAT IT HAS TO HIRE A NUMBER OF VEHICLES FROM THE OPEN MARKET, IT WOULD NOT BE FAIR TO DISALLOW 20% OF THE TRANSPORTATION CHARGES ETC. CLAIMED BY THE APPELLANT. I THEREFORE RESTRICT THIS ADDITION TO RS.50,00,000/ - . T HE AO IS DIRECTED ACCORDINGLY. 10 . FROM THE ABOVE ORDER, IT IS CLEAR THAT THE CIT(A) HAS DECIDED THE ISSUE IN CASUAL MANNER WITHOUT DISCUSSING IN DETAILS. WE OBSERVE FROM THE ORDER OF THE AO THAT THE ASSESSEE HAS NOT SUPPLIED INFORMATION TO THE AO IN THE DESIRED FORMANT WHICH WOULD ENABLE THE AO FO R COMPLETING THE ASSESSMENT AFTER EXAMINATION TO THE SATISFACTION OF THE AO. THE AO HAS DISALLOWED FLAT RATE OF 20% OF THE TRANSPORT EXPENSES DEBITED INTO THE PROFIT AND LOSS ACCOUNT. ITA NO S . 324&326 /CTK/201 4 10 11 . DURING THE COURSE OF THE ARGUMENTS, LD. AR OF THE ASSESSEE FAIRLY ACCEPTED THAT SOME PAYMENTS MIGHT HAVE BEEN DONE BY CASH BUT HE COULD NOT QUANTIFY OF CASH PAYMENTS, THEREFORE, THE LEAKAGE OF THE REVENUE CANNOT BE DENIED. FURTHER THE AR OF THE ASSESSEE SUBMITTED THAT MANY JUD ICIAL FORUM HAS CONSIDERED THE NET PROFIT RATE @1% IN TRANSPORT BUSINESS , HOWEVER, THIS CONTENTION OF THE LD. AR IS ALSO NOT CORRECT BECAUSE THE FACTS OF THE EACH CASE COULD NOT BE APPLIED IN MUTATIS MUTANDIS TO OTHER CASES. IN THE IMPUGNED CASE, THE AO HA S ALLOWED THE ASSESSEE TO SUBMIT THE INFORMATION IN DESIRED FORMAT AND IN SPITE OF THAT THE ASSESSEE DID NOT SUBMIT THE SAME. HE ALSO DID NOT COMPLY THE REQUIREMENT OF THE AO BEFORE THE CIT(A) AS WELL AS BEFORE US. AS PER THE ORDER OF THE AUTHORITIES BELOW THERE IS NO DOUBT THAT THE ASSESSEE IS ENGAGED IN THE TRANSPORT BUSINESS. IT IS ALSO NOT CLEAR THAT THE ASSESSEE HAS DEPLOYED SOME OWN VEHICLES , WHAT WAS THE TERMS AND CONDITIONS FOR TRANSPORTATIONS OF THE GOODS , DISTANCE BETWEEN THE LOADING & UNLOADING P OINTS , WHETHER THERE WAS ANY LABOUR WAS DEPLOYED F OR THE LOADING & UNLOADING WORKS OR LOADING AND UNLOADING WERE DISCHARGED WITH THE HELP OF THE MACHINERY. THE ASSESSEE HAS ALSO NOT SUBMITTED ANY COPY OF WORK ORDER S RECEIVED BY HIM AND ISSUED TO THE TRUCK OWNERS FOR TRANSPORTING OF GOODS. PAN AND ADDRESS OF THE PAYEES, SERVICES TAX RETURNS WERE ALSO NOT SUBMITTED. IT WAS THE DUTY OF THE ASSESSEE TO SUBSTANTIATE HIS CASE WITH THE C OGENT MATERIALS ITA NO S . 324&326 /CTK/201 4 11 BEFORE THE AUTHORITIES BELOW BUT THERE IS NO ANY EVIDENCE THA T ANY OF THE ABOVE NOTED DOCUMENTS WERE SUBMITTED. THE LD. CIT ( A) OUGHT TO HAVE EXAMINE D THE ISSUE WITH THE HELP OF ABOVE NOTED DOCUMENTS BUT HE DID NOT CALL FOR ANY SUCH DOCUMENTS. THE CIT (A) HAS STATED THAT THE ASSESSEE IS ENGAGED IN THIS LINE OF BUSI NESS FROM SEVERAL YEARS IS ALSO NOT CORRECT BECAUSE THE COMPANY HAS GOT REGISTERED ON 29.03.2007 JUST TWO YEARS BACK. WE ALSO GONE THROUGH THE ASSESSMENT ORDER. IN THE LAST PARA NO.4, THE AO HAS OBSERVED THAT M/S MAA TARINI TRANSPORT PVT. LTD. HAS ACCEPTE D CASH DEPOSIT FROM SHRI SRIMANTA K UMAR TRIPATHY , MANAGING DIRECTOR OF THE COMPANY, THEREFORE, HE HAS OBSERVED THAT THE ASSESSEE HAS VIOLATED THE PROVISIONS OF SECTION 269SS OF THE INCOME TAX ACT, 1961. THE ARGUMENTS ADVANCED BY THE LD. AR IS ALSO NOT ACCE PTABLE THAT THE CORRESPONDING TURNOVER SHOULD BE REDUCED BECAUSE THE ASSESSEE HAS NOT SUPPLIED THE INFORMATION AS REQUIRED BY THE ASSESSING OFFICER , W E FURTHER NOTED THAT THE ASSESSING OFFICER HAS NOT DISPUTED THE TURNOVER SHOWN BY THE ASSESSEE. C ONSIDERIN G TO THE ABOVE FACTS AND THE CIRCUMSTANCES AND SHORTCOMINGS AS NOTED ABOVE BY US AND TO COVER ALL POSSIBLE LEAKAGE OF REVENUE , WE UPHOLD 5% OF RS.44,44,40,408/ - I.E. RS.2,22,22,020/ - OF THE TOTAL TRANSPORT EXPENSES DEBITED BY THE ASSESSEE IN HIS PROFIT AND LOSS ACCOUNT IN LIEU OF 20% OF THE TRANSPORTATION EXPENSES DISALLOWED BY THE AO AND RESTRICTED TO ITA NO S . 324&326 /CTK/201 4 12 RS.50,00,000/ - BY THE CIT(A) . IN THE RESULT, THE GROUND NO.2 OF THE ASSESSEE IS DISMISSED AND GROUND NO.1 OF THE REVENUE IS PARTLY ALLOWED. 12 . FURTHER IN RE SPECT OF GROUND NO.3 OF THE ASSESSEE REGARDING DIRECTORS REMUNERATION TO SMT. ANUSAYA TRIPATHY, THE OBSERVATIONS OF THE AO AS WELL AS CIT(A) THAT THE AR OF THE ASSESSEE COULD NOT SUBSTANTIATE ANY SERVICES RENDERED BY HER TO THE ASSESSEE COMPANY WHEREAS TH E REMUNERATION HAS BEEN PAID OF RS.1 CRORE. AS PER THE COMPARATIVE CHART SUBMITTED BY THE LD. AR OF THE ASSESSEE DURING THE COURSE OF HEARING, THE RATIO IN THE PREVIOUS TWO FINANCIAL YEAS IS COMPUTED AS UNDER : - F.Y. SRIMANTA KU. TRIPATHY ANUSAYA TRIPATHY TOTAL AMOUNT RATIO 2007 - 08 6000000.00 1200000.00 7200000.00 5:1 2008 - 09 14400000.00 4800000.00 19200000.00 3:1 2009 - 10 20000000.00 10000000.00 30000000.00 2 :1 FROM THE ABOVE TABLE, IT IS CLEAR THAT THE RATIO OF THE REMUNERATION IS NOT IN CHRONOLOGICA L ORDER. IT IS ALSO NOT CLEAR FROM THE SUBMISSIONS OF BOTH THE SIDES THAT THE PREVIOUS TWO FINANCIAL YEARS CASE S WERE ASSESSED U/S.143(3) OF THE I.T.ACT OR NOT FOR ACCEPTING THE ABOVE REMUNERATIONS PAID . BOTH THE AUTHORITIES BELOW HAVE NOT DISPUTED THE DIR ECTORSHIP OF SHRI SRIMANTA TRIPATHY AND SMT. ANUSUYA TRIPATHY. IN THE ASSESSEE - COMPANY BOTH THE HUSBAND AND WIFE ARE DIRECTORS IN LIVING JOINTLY TOGETHER. THEREFORE, FOR WANT OF POOF OF ANY SERVICES RENDERED IS ALSO NOT ACCEPTABLE OF THE REVENUES ARGUMENT S. THE CONTENTION RAISED ITA NO S . 324&326 /CTK/201 4 13 BY THE LD. AR OF THE ASSESSEE THAT SMT. ANUSUYA TRIPATHY HAS PAID TAX ON THE ENTIRE REMUNERATION RECEIVED BY HER, IS NOT ACCEPTABLE. IN THE PREVIOUS TWO FINANCIAL YEARS, THE REMUNERATIONS HAVE BEEN PAID TO SMT. ANUSUYA TRIPATHY AS WELL AS IN THE IMPUGNED YEAR ALSO. THE RES JUDICATA DOES NOT APPLY IN THE INCOME TAX PROCEEDINGS BUT CONSISTENCY MAY BE FOLLOWED AS PER THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF RADHASOAMI SATSANG (1992) 193 ITR 321 (SC) . T HEREFORE, AS PER OUR O PINION, CONSIDERING THE FACTS OF THE CASE ALONG WITH THE CASE LAWS RELIED ON BY BOTH THE SIDES, WE ARE TAKING THE BASIS FOR CALCULATION OF CURRENT YEARS REMUNERATION AS PER THE REMUNERATION PAID IN PREVIOUS TWO FINANCIAL YEARS. THEREFORE, WE AFTER CALCULA TING THE AVERAGE OF TWO PREVIOUS FINANCIAL YEARS REMUNERATION PAID TO SMT. ANUSUYA TRIPATHY, FOUND THAT THE RATIO OF AVERAGE REMUNERATION IS 4:1 (5:1+3:1/2) . DURING THE IMPUGNED FINANCIAL YEAR IN 2009 - 2010 SHRI SRIMANTA KUMAR TRIPATHY HAS BEEN PAID RS.2 C RORES WHICH HAS NOT BEEN DISPUTED BY THE AO AND SMT. ANUSUYA TRIPATHY HAS BEEN PAID RS.1 CRORE WHICH IS IN DISPUTE ONLY . C ONSIDERING THE AVERAGE RATIO CALCULATED BY US AS NOTED ABOVE , WHICH IS 4:1, THE REMUNERATION PAID TO ANUSUYA TRIPATHY COMES TO RS.50 L AKHS. ACCORDINGLY, THE ASSESSEE GETS RELIEF OF RS.50 LAKHS FOR THE DIRECTORS REMUNERATION. THUS, THE GROUND NO. 3 IN APPEAL OF ASSESSEE IS PARTLY ALLOWED. ITA NO S . 324&326 /CTK/201 4 14 13 . IN THE RESULT, APPEAL OF THE ASSESSEE AND REVENUE, BOTH ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 / 01 /20 20 . SD/ - ( C.M.GARG ) SD/ - (L.P.SAHU) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK; DATED 16 / 01 /20 20 PRAKASH KUMAR MISHRA, SR.P.S. / COPY OF THE ORDER FORWARDED TO : / BY OR DER, ( SENIOR PRIVATE SECRETARY ) ITAT CUTTACK BENCH, CUTTACK 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//