Shri Patel Dhirejbhai Galbabhai, Banaskantha V. The Income tax Officer,Ward-3, Palanpur

ITA 3350/AHD/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60306 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 26-04-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 18-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , !', #$ # % BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ I.T.A. NO.3350/AHD/2009 ( ( ( ( ( / / / / ASSESSMENT YEAR : 2006-07) PATEL DHIRAJBHAI GALBABHAI AT:JALOTRA TAL: VADGAM (B.K.) / VS. THE ITO WARD-3 PALANPUR ) #$ ./*+ ./ PAN/GIR NO. : AKKPP 8829 SL ( ), / // / APPELLANT ) .. ( -.), / RESPONDENT ) ), / # / APPELLANT BY : SHRI SAKAR SHARMA A.R. -.), 0 / # / RESPONDENT BY : SHRI SAMIR TEKRIWAL, SR.D.R. 1 0 '$ / / / / DATE OF HEARING : 26/04/2012 23( 0 '$ / DATE OF PRONOUNCEMENT : 30/4/2012 #4 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE WH ICH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-XV, AHMEDABAD DATED 04/11/2009 PASSED FOR A.Y.2006-07. INITIALLY , THE GROUNDS RAISED WERE ARGUMENTATIVE IN NATURE, HENCE THE SAME WERE C ONCISED AND THE SOLITARY GROUND ARGUED BEFORE US IS REPRODUCED BELO W:- 1. THE LD.CIT(A) ERRED ON FACTS AND IN LAW IN CONF IRMING PENALTY U/S 271(1)(C) ON DISALLOWANCE OF RS.7,16,000/- FOR FURNISHING INACCURATE PARTICULARS OF INCOME. ITA NO.3350/AHD /2009 PATEL DHIRAJBHAI GALBABHAI VS. ITO ASST.YEAR - 2006-07 - 2 - 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING PENALTY ORDER PASSED U/S.271(1)(C) OF THE I.T.ACT DATED 31/03/200 9 AND THE ASSESSMENT ORDER PASSED U/S.143(3) OF THE I.T. ACT, 1961 DAT ED 30/01/2008 WERE THAT THE ASSESSEE IN INDIVIDUAL CAPACITY IS IN THE BUSINESS OF HIRING OF VEHICLES. THE MAIN HIRING SERVICES WERE STATED TO BE PROVID ED TO B.K.DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LTD ., PALANPUR (BANAS DAIRY). 3. DURING THE ASSESSMENT PROCEEDINGS, IT WAS NOTICE D BY THE ASSESSING OFFICER THAT THERE WAS UNPAID TRUCK RENT EXPENSES OF RS.8,51,600/-, SHOWN AS LIABILITY IN THE BALANCE-SH EET . IN COMPLIANCE OF THE SHOW-CAUSE, THE ASSESSEE HAS FURNISHED A DET AILED LIST OF UNPAID HIRE EXPENSES. THE ASSESSEE HAS FURNISHED DATE OF HIRING OF VEHICLE, NAME OF THE VEHICLE OWNER, VEHICLE REGISTRATION NUMBER, DESTINATION, AMOUNT OF RENT PAYABLE IN RESPECT OF EACH ROUTE, NAME OF THE DRIVER AND SIGNATURE OF THE DRIVER. IT WAS EXPLAINED THAT THE ASSESSEE HAS TRANSPORTED CATTLE FEED (BANAS DANA) FROM BANAS DAIRY PALANPUR TO VA RIOUS DEPOTS OF BANAS DAIRY IN GUJARAT AND AT KANPUR. ON THE BASIS OF THE SAID DETAILS, THE ASSESSING OFFICER HAS CALLED FOR CERTAIN INFORM ATION FROM RTO PALANPUR AND MEHSANA TO ENQUIRE ABOUT VEHICLE OWNER AND THE VEHICLE REGISTRATION NUMBER. THE RTO HAS GIVEN CERTAIN INF ORMATION AND ON THAT BASIS THE ASSESSING OFFICER HAS NOTED THAT THE NAME S OF THE TRUCK OWNERS WAS DIFFERENT FROM THE NAMES AS PROVIDED BY THE ASS ESSEE. THE ASSESSING OFFICER HAS GIVEN THE NAMES OF THE OWNER OF THE VEH ICLES AS MENTIONED IN THE REGISTER MAINTAINED BY THE ASSESSEE AND ALSO SI MULTANEOUSLY NOTED THE NAMES OF THE OWNERS OF THOSE VEHICLES AS PER THE IN FORMATION GIVEN BY THE RTO AUTHORITY. A DETAILED ENQUIRY WAS MADE BY THE ASSESSING OFFICER ITA NO.3350/AHD /2009 PATEL DHIRAJBHAI GALBABHAI VS. ITO ASST.YEAR - 2006-07 - 3 - AND SUMMONS WERE ISSUED. ON ONE HAND, THE ASSESSEE HAS CLAIMED THAT THE IMPUGNED PAY-BILL AMOUNT WAS PERTAINING TO 29 T RUCKS, BUT ON THE OTHER HAND, THE SAID BANAS DAIRY HAS REVEALED THAT TWO TRUCKS AND TWO TANKERS WERE PLIED OR PUT TO USE BY THE ASSESSEE. AS PER THE INFORMATION FROM BANAS DAIRY, BILLS RAISED BY THE ASSESSEE WERE LIMITED TO FOUR VEHICLES ONLY. HOWEVER, FEW TRUCK OWNERS HAVE APPE ARED BEFORE THE ASSESSING OFFICER. ON THE BASIS OF THE ENQUIRY MAD E AND FEW OWNERS OF THE TRUCKS APPEARED BEFORE THE ASSESSING OFFICER, I T WAS HELD THAT OUT OF THE TOTAL CLAIM OF RS.8,51,600/-, AN AMOUNT OF RS.5 ,19,400/- REMAINED UNSUBSTANTIATED. ACCORDINGLY, A DISALLOWANCE OF RS .5,19,400/- WAS MADE. THE MATTER WAS CARRIED BEFORE THE FIRST APPE LLATE AUTHORITY, WHO HAS AFFIRMED THE ADDITION. 4. DURING THE COURSE OF PENALTY PROCEEDINGS, IT WAS VEHEMENTLY CONTESTED THAT THE INFORMATION ABOUT THE HIRING OF THE TRUCKS WAS MADE AVAILABLE TO THE ASSESSING OFFICER. SOME OF THE TR UCK OWNERS HAVE ALSO APPEARED BEFORE THE ASSESSING OFFICER, THEREFORE PA RT RELIEF WAS GRANTED BY THE ASSESSING OFFICER HIMSELF. BEFORE THE ASSES SING OFFICER, SUBMISSIONS WERE MADE IN RESPECT OF THE EACH TRUCK BY MENTIONING THE NAMES OF THE TRUCK OWNERS AND SOME OF THEM HAVE ADM ITTED THAT THE TRUCKS WERE GIVEN ON RENT TO THE ASSESSEE. HOWEVER , THE ASSESSING OFFICER WAS NOT CONVINCED AND LEVIED A PENALTY OF R S.2,13,605/-. LEVY OF PENALTY WAS ALSO CHALLENGED. HOWEVER, LD.CIT(A) HAS HELD THAT THE AMOUNT PAYABLE SHOWN AS OUTSTANDING WAS NOT PROVED BY THE ASSESSEE AND ONLY THOSE OUTSTANDING HIRE CHARGES WHICH WERE FOUND GENUINE WERE ALLOWED. THE LEARNED CIT(APPEALS) HAS CONCLUDED TH AT PENALTY WITH ITA NO.3350/AHD /2009 PATEL DHIRAJBHAI GALBABHAI VS. ITO ASST.YEAR - 2006-07 - 4 - RESPECT TO HIRE CHARGES FOUND UNPROVED STOOD CONFIR MED. BEING AGGRIEVED NOW THE ASSESSEE IS FURTHER IN APPEAL. 5. ASSESSEES COUNSEL MR. SAKAR SHARMA APPEARED AND ARGUED THAT THE DETAILS OF EXPENSES WERE VERY MUCH FURNISHED ALONGW ITH THE RETURN. HE HAS ALSO PLACED CHART THROUGH WHICH HE HAS DEMONSTR ATED THAT THE RTO HAS NOT INTIMATED THAT THE TRUCK NUMBERS WERE INCOR RECT OR THE INFORMATION ABOUT TRUCK NUMBERS WAS NOT GENUINE. R ATHER, IN RESPECT OF THE NAMES OF THE OWNERS OF THE TRUCKS, LD.AR HAS VE HEMENTLY ARGUED THAT IN MOST OF THE CASES THE INFORMATION ABOUT THE OWNE RS OF THE TRUCK WAS CORRECTLY FORWARDED BY THE RTO. HE HAS MENTIONED T HAT WHILE RECORDING THE NAMES OF THE OWNERS SOMETIMES NAME OF ONE OF T HE RELATIVES IS NOTED FOR THE PURPOSE OF MAKING THE PAYMENT BUT THE VEHIC LE NUMBERS WERE CORRECTLY MENTIONED AND THE NAMES OF THE PERSONS DI D NOT MATTER MUCH TO THE ASSESSEE. HE HAS PLEADED THAT THIS IS THE CASE OF PURE DISALLOWANCE OF EXPENSES, THEREFORE FOLLOWING THE DECISION OF HON'B LE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS (P) LTD . 322 ITR 158(SC). HE HAS ALSO PLEADED THAT NO CONCEALMENT SHOULD BE L EVIED EITHER FOR CONCEALING THE PARTICULARS OF INCOME OR FOR FURNISH ING THE INACCURATE PARTICULARS. FOR THIS LEGAL PROPOSITION, RELIANCE WAS PLACED ON NEW SORATHIA ENGG.CO. VS. CIT 282 ITR 642 (GUJ.). ABO UT THE INFORMATION GIVEN BY BANAS DAIRY, LD. A.R. HAS INFORMED, THAT A S PER ONE OF THE TERMS OF THE CONTRACT GIVEN OF TRANSPORTATION THE VEHICLES MUST BE OWNED BY THE CONTRACTOR, HENCE ONLY THOSE TRUCKS NOS. WER E INFORMED AND THE BILLS WERE RAISED WHICH ARE REGISTERED IN THE NAME OF THE ASSESSEE. HE HAS VEHEMENTLY PLEADED THAT VOLUMINOUS FODDER WAS TRANS PORTED AND THAT ITA NO.3350/AHD /2009 PATEL DHIRAJBHAI GALBABHAI VS. ITO ASST.YEAR - 2006-07 - 5 - VOLUME COULD ONLY BE TRANSPORTED BY INVOLVING NUMBE R OF TRUCKS AS TRULY REPORTED TO THE A.O. 6. FROM THE SIDE OF THE REVENUE, LD.SR.DR MR.SAMIR TEKRIWAL APPEARED AND INFORMED THAT SOME OF THE PERSONS WHO HAVE APPEARED BEFORE THE ASSESSING OFFICER HAVE DENIED ANY FINANC E CONNECTION WITH THE ASSESSEE. THOSE PERSONS WERE HAVING TRUCK MEANT FO R THE PURPOSE OF TRANSPORTATION OF BRICKS AND SAND. LD.DR HAS ALSO ARGUED THAT THE ASSESSEE HAS SHOWN ANY WILLINGNESS TO CROSS-EXAMINE THOSE PERSONS, HE HAS THEREFORE PLEADED TO CONFIRM THE PENALTY. 7. THIS IS A CASE WHERE RIVAL CLAIMS HAVE BEEN MADE , ONE FROM THE SIDE OF THE APPELLANT-ASSESSEE AND THE OTHER FROM T HE SIDE OF THE REVENUE PERTAINING TO A DISALLOWANCE OF EXPENSES OF RS.8,51 ,600/- UNDER THE HEAD UNPAID TRUCK RENT EXPENSES. MEANING THEREBY THAT THE ASSESSEE HAS CLAIMED EXPENSES OF TRUCK HIRE CHARGES, HOWEVER AS PER THE ALLEGATION OF THE REVENUE DEPARTMENT THOSE EXPENSES COULD NOT BE FULLY SUBSTANTIATED. THERE IS NO DENIAL OF THIS FACT AS WELL THAT IN THE QUANTUM PROCEEDINGS THE FIRST APPELLATE AUTHORITY HAS PARTLY ALLOWED THE CL AIM OF EXPENDITURE ONLY IN RESPECT OF THE PERSONS WHO HAVE CONFIRMED THE UN PAID LIABILITY. THERE WAS ONE FACT WHICH WAS HELD AGAINST THE ASSESSEE TH AT THE SAID DIARY HAD REVEALED THAT ONLY FOUR VEHICLES WERE PLIED BY THIS ASSESSEE. TO CONTROVERT THIS STATEMENT OF THE SAID DIARY A VEHEM ENT CONTENTION HAS BEEN RAISED THAT THE VOLUMINOUS SIZE OF THE CONSIGN MENTS WHICH WERE TRANSPORTED BY THE ASSESSEE FROM ONE STATION TO ANO THER STATION COULD NOT HAVE BEEN POSSIBLY CARRIED IN FOUR TRUCKS ONLY. FO R TRANSPORTING THE ENTIRE VOLUMINOUS CONSIGNMENT OF BANAS DANA NUMBER OF TR UCKS WERE ITA NO.3350/AHD /2009 PATEL DHIRAJBHAI GALBABHAI VS. ITO ASST.YEAR - 2006-07 - 6 - REQUIRED AND IN FACT THE ASSESSEE HAS TAKEN THE TRU CKS ON HIRE TO FULFILL COMMITMENT. THERE WAS A LIMITATION ON THE PART OF THE SAID DIARY TO CERTIFY ONLY THE FOUR TRUCKS BECAUSE OF THEIR INTER NAL REGULATIONS THAT THE CONTRACT SHOULD BE GIVEN ONLY TO THE TRUCK OWNERS. THE ASSESSEE HAS OWNED FOUR TRUCKS, AS STATED DURING THE PROCEEDINGS AND INFORMED THAT THOSE TRUCKS WERE USED FOR THE TRANSPORTATION OF GO ODS, BUT THE FACT WAS THAT NUMBER OF TRUCKS WERE USED AND THE LIST OF THE TRUCK NUMBERS WERE DULY ACKNOWLEDGED AS PER THE BILLS RAISED. THERE W AS AN ANOTHER REASON FOR THE DISALLOWANCE THAT IN SOME OF THE CASES, THO UGH THE TRUCK REGISTRATION NUMBERS HAVE TALLIED WITH THE INFORMAT ION RECEIVED FROM THE RTO BUT THE NAMES OF THE OWNERS HAVE DIFFERED. THI S HAPPENED BECAUSE OF THE REASON THAT THE ASSESSEE HAS INTIMATED THE N AMES OF THE PERSONS WHO HAVE EITHER PLIED THE TRUCKS OR THE NAMES OF TH E KNOWN PERSONS OF THE SAID FAMILY WITHOUT KNOWING THE EXACT NAME OF T HE PERSON WHOSE NAME WAS RECORDED IN THE RTO OFFICE. BUT ONE FACT REMAINED UNDISPUTED THAT THE REGISTRATION NUMBER OF THE TRUC KS USED BY THE ASSESSEE WAS NOT DENIED OR OBJECTED EITHER BY THE ASSESSING OFFICER OR BY THE RTO OFFICE. AN ANOTHER FACT ALSO GOES IN FAVOUR OF THE ASSESSEE THAT AS PER THE LIST PLACED ON RECORD, FIVE PERSONS HAVE APPEARED A ND CONFIRMED THE PLYING OF TRUCKS. SOME OF THE PERSONS COULD NOT BE PRODUCED BECAUSE OF THE NON-AVAILABILITY AT THAT POINT OF TIME AS PLEAD ED BY THE LD.AR BEFORE US. HOWEVER, THERE WERE CERTAIN FACTORS WHICH WERE DULY PLACED ON RECORD BY THE ASSESSEE WHICH ARE IMPORTANT TO DECID E THE CONCEALMENT PROCEEDINGS AND THOSE FACTORS ARE THAT THE ASSESSEE HAS GIVEN (I) DATED OF HIRING OF VEHICLE, (II) NAME OF THE VEHICLE OWNE R, (III) REGISTRATION NUMBER OF VEHICLES, (IV) DETAILS OF DESTINATION OF TRANSPORTATION OF GOODS, ITA NO.3350/AHD /2009 PATEL DHIRAJBHAI GALBABHAI VS. ITO ASST.YEAR - 2006-07 - 7 - (V) AMOUNT OF RENT PAYABLE IN RESPECT OF EACH ROUTE , (VI) NAME OF THE DRIVER & (VII) SIGNATURE OF THE DRIVER. IT IS PLE ADED THAT THE ASSESSEE HAPPENED TO BE IN A POSITION TO GIVE ALL SUCH DETAI LS, BUT MERELY ON TWO REASONS THE GENUINENESS OF THE CLAIM OF EXPENDITURE WAS DOUBTED BY THE REVENUE DEPARTMENT. IN THIS CONNECTION, OUR ATTENT ION HAS BEEN DRAWN ON AN EXPLANATION ANNEXED TO SECTION 271(1)(C) OF T HE I.T.ACT; FOR READY REFERENCE, REPRODUCED BELOW:- FAILURE TO FURNISH RETURNS, COMPLY WITH NOTICES, CO NCEALMENT OF INCOME, ETC. 271 (1) IF THE [ASSESSING] OFFICER OR THE [COMMISSI ONER (APPEALS)] [OR THE COMMISSIONER] IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISFIED THAT ANY PERSON (A) . (B) . (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF [SUCH INCOME, OR] (D).. HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY, - (I) . (II). (III) IN THE CASES REFERRED IN CLAUSE (C) OR CLAUSE (D)], [IN ADDITION TO TAX, IF ANY, PAYABLE] BY HIM, A SUM WHICH SHALL NOT BE L ESS THAN, BUT WHICH SHALL NOT EXCEED [THREE TIMES], THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF THE CONCEALMENT OF PARTICULARS OF HIS IN COME [OR FRINGE BENEFITS] OR THE FURNISHING OF INACCURATE PARTICULA RS OF SUCH INCOME [OR FRINGE BENEFITS] EXPLANATION 1 :- WHERE IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT, (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR O FFERS AN EXPLANATION WHICH IS FOUND BY THE [ASSESSING] OFFICER OR THE [ COMMISSIONER (APPEALS)] [OR THE COMMISSIONER] TO BE FALSE, OR ITA NO.3350/AHD /2009 PATEL DHIRAJBHAI GALBABHAI VS. ITO ASST.YEAR - 2006-07 - 8 - (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE [AND FAILS TO PROVE THAT SUCH EXPLANAT ION IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MAT ERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM,] THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING T HE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FOR THE PURP OSES OF CLAUSE (C) OF THIS SUB-SECTION BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. 8. ON CAREFUL READING OF BOTH THE LIMBS OF EXPLANAT ION-1, WE ARE OF THE VIEW THAT IN THE PRESENT CASE THIS ASSESSEE HAS OFFERED AN EXPLANATION WHICH WAS NOT ALTOGETHER FALSE, PARTICULARLY WHEN ALL THE RELATED FACTS IN RESPECT OF THE IMPUGNED CLAIM OF EXPENDITURE WAS ON RECORD AND THAT THE MATERIAL FOR THE PURPOSE OF THE COMPUTATION OF THE TOTAL INCOME HAS ACTUALLY BEEN DISCLOSED BY THE ASSESSEE WHILE FILIN G THE RETURN OF INCOME. FACTUALLY SPEAKING, ON THE BASIS OF THE INFORMATION , SUCH AS, STATEMENT OF ACCOUNTS, ETC. THE PROCEEDINGS WERE INITIATED BY TH E ASSESSING OFFICER. THEREFORE PLACING RELIANCE ON RELIANCE PETROPRODUC TS (P) LTD.(SUPRA), WE HEREBY DIRECT TO DELETE THE PENALTY. GROUND IS ALL OWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. SD/- SD/- ( !' ) ( ) #$ ( ANIL CHATURVEDI ) ( MUKU L KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 30/ 04 /2012 5'.., .../ T.C. NAIR, SR. PS ITA NO.3350/AHD /2009 PATEL DHIRAJBHAI GALBABHAI VS. ITO ASST.YEAR - 2006-07 - 9 - #4 0 -6 7#6( #4 0 -6 7#6( #4 0 -6 7#6( #4 0 -6 7#6(/ COPY OF THE ORDER FORWARDED TO : 1. ), / THE APPELLANT 2. -.), / THE RESPONDENT. 3. 8 / CONCERNED CIT 4. 8() / THE CIT(A)-XV, AHMEDABAD 5. 6;< - , , / LEARNED DEPARTMENTAL REPRESENTATIVE, ITAT, AHMEDABAD 6. <= >1 / GUARD FILE. #4 #4 #4 #4 / BY ORDER, .6 - //TRUE COPY// ? ?? ?/ // / * * * * ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION..26.4.12 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 26.4.12 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S30/4/12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 30/4/12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER