ITO, Ward-1(1), Jodhpur V. M/s. Ashok Transport Co. , Jodhpur

ITA 336/JODH/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4359 (ITAT-JODHPUR)
• Duration Of Justice: 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 29-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Question of law; Assessment record
• Section: 205; 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI N.K.SAINI, VICE PRESIDENT AND SHRI A. T. VARKEY, JUDICIAL MEMBER ITA NO.336/JODH/2018 (ASSESSMENT YEAR-2014-15) INCOME-TAX OFFICER, WD-1(1), JODHPUR, RAJASTHAN VS M/S. ASHOK TRANSPORT CO. UDAI SERVICE STATION, KUDI BHAGTASNI, NEW PALI ROAD, JODHPUR, RAJASTHAN (PAN: AAVFA0055E) (APPELLANT) (RESPONDENT) APPELLANT BY SH. P.K. SINGI, DR RESPONDENT BY SHRI RAJENDRA JAIN, ADVOCATE DATE OF HEARING 08.05.2019 DATE OF PRONOUNCEMENT 10.05.2019 O R D E R PER A. T. VARKEY, J.M. THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-1, JODHPUR DAT ED 18.04.2018 FOR AY 2014-15. 2. THE FIRST GROUND OF APPEAL OF THE REVENUE IS A S UNDER: 1. THE CIT(A) HAS ERRED IN LAW AND IN FACTS IN DEL ETING THE ADDITION OF RS.78,22,863/- MADE BY AO ON ACCOUNT OF UNEXPLAINED PAYABLE SUNDRY CREDITORS IGNORING THE FACT THAT IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS HAD NOT BEEN PROVED DURING ASSESSMENT PROCEEDINGS. 2 ITA NO.336/JODH/2018 M/S. ASHOK TRANSPORT CO, AY 2014-15 3. BRIEF FACTS OF THE CASE ARE THAT DURING THE A SSESSMENT PROCEEDINGS THE AO NOTED THAT THE ASSESSEE HAS SUBMITTED ONLY LIST OF SUNDRY CREDITORS WHICH WAS SHOWN AS PAYABLE IN THE AUDIT REPORT OF RS.78,22,863/-. ACCORDING TO THE AO, THE ASSESSEE HAS FAILED TO GIVE SUPPORTING DOCUMENTARY EVIDENCE I.E. COPY OF ITR, CAPITAL ACCOUNT, BALANCE SHEET, BANK STATEMENT TO PROVE THE CREDITWO RTHINESS, IDENTITY AND GENUINENESS OF THE SUNDRY CREDITORS WHICH IS SHOWN AS PAYABLE IN THE AUDIT REPORT. ACCORDING TO AO, THE ASSESSEE ALSO FAILED TO PRODUC E CASH BOOK, LEDGER, BILTY, REGISTERED LOG BOOK ETC. AND IN THE ABSENCE OF BOOK S OF ACCOUNT AND RELEVANT DOCUMENTS IT COULD NOT BE VERIFIED THE VERACITY OF THE OUTSTANDING SHOWN AS CREDITORS IN THE BALANCE SHEET AND, THEREFORE, THE AO MADE AN ADDITION OF RS.78,22,863/- ON ACCOUNT OF UNEXPLAINED PAYABLE SUNDRY CREDITOR U/S. 68 OF THE ACT. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO WAS PLEASED TO DELETE THE SAME. AGGRIEVED, THE ASSESSEE IS BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROU GH THE FACTS AND CIRCUMSTANCES OF THE CASE. IT WAS BROUGHT TO OUR N OTICE THAT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE HAS EXPLAINED NOT ONLY BEF ORE THE AO BUT ALSO BEFORE THE JCIT, RANGE-1 THAT THE OUTSTANDING AMOUNT OF RS.78, 22,863/- IS IN RESPECT OF OUTSTANDING LIABILITY SHOWN IN RESPECT OF FREIGHT P AYABLE AS ON 31.03.2014 AND IT WAS CLEARLY BROUGHT TO THE NOTICE OF THE AUTHORITIES BE LOW THAT THE OUTSTANDING AMOUNT TO ITS PARTIES ARE NOT IN THE FORM OF CREDITS OR LOAN AT ANY GIVEN POINT OF TIME. IT WAS ALSO BROUGHT TO THE NOTICE OF THE AUTHORITIES BELOW THAT THE OUTSTANDING AMOUNT/BALANCES WERE IN THE NATURE OF AMOUNT DUE AGAINST TRUCK OWNE RS WHO HAD TRANSPORTED THE GOODS FOR THE ASSESSEE; AND WHEN THE ASSESSEE RECEI VES THE PAYMENTS FROM PRINCIPAL ON BEHALF OF SUCH TRANSFEREE IT IS PAID TO THE TRUC K OWNERS. IT WAS BROUGHT TO OUR NOTICE THAT THE ASSESSEE IS ONLY A CONDUIT FOR DISB URSING THE FREIGHT TO INDIVIDUAL TRUCK OWNERS AND THAT THE TRUCK OWNERS GOT THE ENTIRE FRE IGHT RECEIVED FROM THE RESPECTIVE 3 ITA NO.336/JODH/2018 M/S. ASHOK TRANSPORT CO, AY 2014-15 PARTIES AFTER DEDUCTING BOOKING CHARGES OF EACH BOO KING WHICH IS THE ASSESSEES INCOME FROM THE TRANSPORTATION. THEREFORE, ACCORDI NG TO THE ASSESSEE, THE TEMPORARY BALANCE IN THE ACCOUNT OF THE ABOVE PARTI ES FOR A NOMINAL PERIOD CANNOT BE TERMED AS CASH CREDIT. IT WAS ALSO BROUGHT TO O UR NOTICE THAT THE ENTIRE DETAILS OF THE TRADE CREDITORS (FREIGHT PAYABLE AS ON 31.03.2 014) AND LIST SHOWING NAMES OF THE TRUCK OWNERS, TRUCK NUMBER, G.I.R. NO., PAN OF THE TRUCK OWNERS, AMOUNT OF FREIGHT PAYABLE AND DATE ON WHICH SAME WAS PAID BY THE ASSE SSEE WERE PLACED ON RECORD OF THE AO & JCIT DURING ASSESSMENT PROCEEDING ITSELF. HOWEVER, THE AO HAS TURNED A BLIND EYE ON THESE DOCUMENTS AND HAS WRONGLY STATED THAT NO DOCUMENTS WERE PRODUCED AND ON THAT PRETEXT HAS MADE THE ADDITION. WE NOTE THAT DURING APPEAL THE LD. CIT(A) APPRECIATING THE AFORESAID FACTS HAS RIGHTLY OBSERVED THAT THESE CREDITORS ARE TRADE CREDITORS AS THESE PAYMENTS ARE MADE ON REGULAR BASIS AFTER THESE TRUCK OWNERS DELIVER THE GOODS AS PER INSTRUCTION O F ASSESSEE. ON THIS ISSUE, WE NOTE THAT THE SPECIAL BENCH OF THIS TRIBUNAL COMPRISING OF FIVE MEMBERS IN THE CASE OF MANOJ AGARWAL VS DCIT REPORTED AS 113 ITD 377 HAS E XPLAINED BY THE TRIBUNAL AS UNDER: THE ARGUMENT THAT SECTION 68 IS NOT APPLICABLE WH ERE AN ASSET IS SOLD AND THE SALE PROCEEDS ARE CREDITED IN THE BOOKS OF ACCOUNT CANNO T BE ACCEPTED HAVING REGARD TO THE SETTLED LEGAL POSITION THAT IT IS ALWAYS FOR THE AS SESSEE TO EXPLAIN THE NATURE AND SOURCE OF THE SUMS CREDITED IN HIS BOOKS OF ACCOUNT. THE S ECTION DOES NOT RECOGNIZE ANY DISTINCTION BETWEEN AMOUNTS CREDITED IN THE BOOKS A S GIFTS OR LOANS OR PURE RECEIPTS, ON THE ONE HAND, AND AMOUNTS CREDITED AS SALE PROCEEDS . IN EITHER CASE, WHEN CALLED UPON, THE ASSESSEE IS BOUND TO EXPLAIN THE NATURE AND SOU RCE OF THE AMOUNTS CREDITED. THERE MAY BE A FEW EXCEPTIONS TO THIS GENERAL RULE. FOR E XAMPLE, IN THE CASE OF CREDIT PURCHASES, THE ACCOUNT OF THE SUPPLIER IS CREDITED WITH THE AMOUNT PAYABLE. IN SUCH A CASE, WHERE THE PURCHASE IS ALLOWED AS EXPENDITURE, IT MAY NOT BE POSSIBLE FOR THE ASSESSING OFFICER TO AGAIN CALL UPON THE ASSESSEE T O PROVE THE NATURE AND SOURCE OF THE CREDIT, FOR THE REASON THAT THE PURCHASE ITSELF WAS ALLOWED AS EXPENDITURE ONLY ON BEING SATISFIED THAT IT WAS A GENUINE PURCHASE ON CREDIT. IMPLICITLY, THE NATURE AND SOURCE OF THE AMOUNT CREDITED HAS ALSO TO BE TAKEN AS HAVING BEEN EXPLAINED SATISFACTORILY. ANOTHER POSSIBLE ARGUMENT CAN BE THAT IN SUCH A CASE, THE A MOUNT CREDITED IS NOT A CASH CREDIT IN THE SENSE THAT SOME MONIES HAVE BEEN RECEIVED BY TH E ASSESSEE, BUT THE CREDIT REPRESENTS A MERE LIABILITY PAYABLE BY THE ASSESSEE IN FUTURE. UNDER ACCOUNTING PRINCIPLES, A LIABILITY CAN ONLY BE BROUGHT INTO AC COUNT BY MAKING A CREDIT ENTRY IN THE BOOKS OF ACCOUNT IN FAVOUR OF THE PERSON TO WHOM TH E MONEY IS PAYABLE. THUS, THERE IS MARKED DIFFERENCE BETWEEN A CREDIT REPRESENTING ALI ABILITY PAYABLE BY THE ASSESSEE AND A CREDIT REPRESENTING MONIES RECEIVED FROM ANOTHER PE RSON. IT IS BECAUSE OF THIS DISTINCTION, 4 ITA NO.336/JODH/2018 M/S. ASHOK TRANSPORT CO, AY 2014-15 A LIABILITY FOR PURCHASE WHICH HAS BEEN CREDITED IN THE ACCOUNT OF THE SUPPLIER CANNOT BE ADDED UNDER SECTION 68 OF THE ACT, MORE SO WHEN THE PURCHASE HAS BEEN ACCEPTED AS GENUINE AND A DEDUCTION THEREFOR HAS BEEN ALLOWED. IN ALL OTHER CASES INCLUDING THE CASE OF A CREDIT REPRESENTING THE SALE PROCEEDS OF AN AS SET, THE PROVISIONS OF SECTION 68 ARE APPLICABLE AND IT IS FOR THE ASSESSEE TO PROVE SATI SFACTORILY THE NATURE AND SOURCE OF THE MONIES.. 5. FROM A BARE READING OF THE AFORESAID DICTUM OF L AW AS MADE BY THE SPECIAL BENCH, WE NOTE THAT THERE IS A DIFFERENCE BETWEEN C REDIT REPRESENTING A LIABILITY PAYABLE BY THE ASSESSEE AND A CREDIT REPRESENTING M ONIES RECEIVED FROM ANOTHER PERSON. IT IS BECAUSE OF THIS DISTINCTION A LIABIL ITY WHICH ARISES AS A CONSEQUENCE OF ANY PURCHASE RESULTING IN A CORRESPONDING CREDIT TO THE ACCOUNT OF THE SUPPLIER CANNOT BE ADDED U/S. 68 OF THE ACT, MORE SO, WHEN T HE PURCHASE HAS BEEN ACCEPTED AS GENUINE. IN OTHER CASES INVOLVING ACTUAL RECEIP T OF MONEY, THE PROVISIONS OF SEC. 68 ARE APPLICABLE AND THEN THE ONUS IS ON THE ASSES SEE TO PROVE SATISFACTORILY THE NATURE AND SOURCE OF THE MONIES. IN THE PRESENT CA SE WE NOTE THAT THE TRANSACTION BETWEEN THE ASSESSEE AND THE TRUCK OWNERS IS A LIAB ILITY WHICH ASSESSEE HAD TO PAY ARISING FROM THE TRADE TRANSACTION OF RS.78,22,863/ - WHICH IS REFLECTED UNDER THE HEAD OTHER PAYABLE HAS ARISEN AS A CONSEQUENCE OF THE AFORESAID TRADE TRANSACTION AND THE SUM OF RS.78,22,863/- REPRESENTED THE LIABI LITY TO PAY THE TRUCK OWNERS BY THE ASSESSEE ONCE HE RECEIVES FROM THE PRINCIPAL. W E NOTE THE ENTIRE TURNOVER ON TRANSPORTATION OF RS.11,70,63,030/- HAS BEEN ACCEPT ED BY THE AO AS GENUINE, SO QUESTION OF ADDITION OF THE SUM OF RS.78,22,863/- W HICH REPRESENTED THE LIABILITY TO PAY THE TRUCK OWNERS BY ASSESSEE CANNOT BE ADDED U/ S. 68 OF THE ACT. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A ) AND WE AGREE THAT SECTION 68 OF THE ACT WAS WRONGLY INVOKED IN THE PRESENT CASE IN RESPECT OF THE OUTSTANDING LIABILITY PAYABLE BY THE ASSESSEE TO THE TRUCK OWNERS. 6. SIMILAR VIEW WAS ALSO TAKEN BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT US. RITU ANURAG AGARWAL REPORTED AS 2009 (7) TM I 1247WHEREIN THE HONBLE HIGH COURT HELD: 5 ITA NO.336/JODH/2018 M/S. ASHOK TRANSPORT CO, AY 2014-15 'THIS FINDING OF AO REMAINED UNDISTURBED BEFORE THE CIT(A) AS WELL AND HAS BEEN ACCEPTED BY THE ITAT. PROCEEDING ON THIS BASIS , THE ITAT OBSERVED THAT THE SOLES, PURCHASES AS WELL AS GROSS PROFITS AS DI SCLOSED BY THE ASSESSEE HAVE BEEN ACCEPTED BY THE ASSESSING OFFICER. ONCE THIS I S ACCEPTED, WE ARE OF THE OPINION THAT THE APPROACH OF THE ITAT WAS CORRECT I NASMUCH AS THE ASSESSING OFFICER DID NOT CONSIDER THIS ASPECT WHILE MAKING A DDITIONS OF SUNDRY CREDITORS UNDER SECTION 68 OF THE INCOME TAX ACT. AS THERE WA S NO CASE FOR DISALLOWANCE FOR CORRESPONDING PURCHASE, NO ADDITION COULD BE MA DE UNDER SECTION 68 INASMUCH AS IT IS NOT IN DISPUTE THAT THE CREDITORS OUTSTANDING RELATED TO PURCHASES AND THE TRADING RESULTS WERE ACCEPTED BY THE AO. WE ARE, THEREFORE, OF THE OPINION THAT NO SUBSTANTIAL QUESTION OF LAW ARISES FOR CONSIDERATION IN THIS CASE. THE APPEAL IS ACCORDINGLY DISMISSED. ' 7. WE ALSO RELY ON THE DECISION OF THE HON'BLE ALLA HABAD HIGH COURT IN THE CASE OF CIT -VS.- PANCHAM DAS JAIN (205 CTR 444) WHEREIN IT WAS HELD AS UNDER: 6. WE HAVE HEARD SRI SHAMBHOO CHOPRA, LEARNED STAND ING COUNSEL FOR THE REVENUE. 7. HE SUBMITTED THAT AS THE RESPONDENT-ASSESSEE WAS UNABLE TO PRODUCE THE ALLEGED CREDITORS THE PROVISIONS OF SECTION 68 OF T HE ACT WAS SQUARELY ATTRACTED IN THE PRESENT CASE AND THE ASSESSING AUTHORITY HAS RIGHTLY ADDED THE TWO AMOUNTS AT THE HANDS OF THE RESPONDENT-ASSESSEE. AC CORDING TO HIM SECTION 68 OF THE ACT ALSO COVERS UP THE CASE OF PURCHASES MAD E ON CREDIT. 8. THE SUBMISSION IS MISCONCEIVED. THE TRIBUNAL HAS RECORDED A CATEGORICAL FINDING OF FACT BASED ON APPRECIATION OF MATERIALS AND EVIDENCE ON RECORD THAT THE ASSESSING OFFICER HAD ACCEPTED THE PURCHASES, S ALES AS ALSO THE TRADING RESULT DISCLOSED BY THE RESPONDENT-ASSESSEE. IT HAD RECORDED A FINDING THAT THE AFORESAID TWO ACCOUNTS REPRESENTED THE PURCHASES MA DE BY THE ASSESSEE ON CREDIT AND, THEREFORE, THE PROVISIONS OF SECTION 68 OF THE ACT COULD NOT BE ATTRACTED IN THE PRESENT CASE. WE FULLY AGREE WITH THE VIEW TAKEN BY THE TRIBUNAL ON THIS ISSUE, INASMUCH AS, ON THE BO.SIS OF THE FINDINGS RECORDED BY IT THAT THESE TWO AMOUNTS REPRESENTED PURCHASES MADE B Y THE RESPONDENT- ASSESSEE ON CREDIT AND THE PURCHASES AND SALES HAVI NG BEEN ACCEPTED BY THE DEPARTMENT, THE QUESTION OF ADDITION OF THE AFORESA ID TWO AMOUNTS UNDER SECTION 68 OF THE ACT DID NOT ARISE INASMUCH AS THE PROVISIONS OF SECTION 68 OF THE ACT WOULD NOT BE ATTRACTED ON THE PURCHASES MAD E ON CREDIT. 6 ITA NO.336/JODH/2018 M/S. ASHOK TRANSPORT CO, AY 2014-15 9. WE, ACCORDINGLY, ANSWER THE QUESTION REFERRED TO US IN AFFIRMATIVE, I,E., IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE RE WILL BE NO ORDER AS TO COSTS. 8. WE ALSO RELY ON THE FINDINGS RECORDED IN THE DEC ISION OF THE HON'BLE PUNJAB HIGH COURT IN THE CASE OF PCIT VS SH. KULWINDER SINGH 2017 (7) TMI 957 WHEREIN THE HONBLE COURT HELD AS UNDER: 4. A PERUSAL OF THE ORDER PASSED BY THE TRIBUNAL SH OWS THAT THE ASSESSEE HAD SHOWN NUMEROUS SUNDRY CREDITORS ALONG WITH DETAILS IN HIS BALANCE SHEET. THE ASSESSEE BEING A ROAD CONTRACTOR RECEIVED MATERIAL FOR THE CONSTRU CTION OF THE ROAD. THE AMOUNTS IN QUESTION REPRESENTED PURCHASES MADE ON CREDITS. ACC ORDING TO SECTION 68 OF THE ACT, WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF ACC OUNT OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR AND THE ASSESSEE OFFERS NO EX PLANATION ABOUT THE NATURE AND SOURCE OF THE SAME OR THE EXPLANATION OFFERED BY HI M IS NOT SATISFACTORY IN THE OPINION OF THE ASSESSING OFFICER, THE SUM SO CREDITED MAY B E CHARGED TO INCOME TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. IT HA S BEEN CATEGORICALLY RECORDED BY THE TRIBUNAL THAT THE PROVISIONS OF SECTION 68 OF THE A CT U)ERE CLEARLY NOT ATTRACTED TO THE AMOUNT REPRESENTING PURCHASES MADE ON CREDITS. FURT HER THE TRADE CREDITORS IN THE EARLIER GEARS I.E. ASSESSMENT YEARS 2007-08 AND 200 8-09 STOOD ACCEPTED IN SCRUTINY ASSESSMENTS. THUS, THE GENUINENESS OF EXPENSES UNDE R CONSIDERATION COULD NOT BE DOUBTED. THE RELEVANT FINDINGS RECORDED BY THE TRIB UNAL IN THIS REGARD READ THUS:- 'HAVING HEARD THE RIVAL CONTENTIONS IN THE LIGHT OF THE MATERIAL AVAILABLE ON RECORD, IT IS SEEN THAT IN PARA-3 OF THE ASSESSMENT ORDER, THE AO OBSERVED THAT THE ASSESSEE HAD SHOWN NUMEROUS SUNDRY CREDITORS AL ONG WITH DETAILS AS WAS AVAILABLE FROM THE EXAMINATION OF THE ASSESSEE'S BO OKS OF ACCOUNT VIS-A-VIS HIS BALANCE SHEET. THE ASSESSEE IS A ROAD CONTRACTOR. H E RECEIVED MATERIAL FOR THE CONSTRUCTION OF THE ROAD. THE AMOUNTS IN QUESTION R EPRESENTED PURCHASES MADE ON CREDITS. THE PROVISIONS OF SECTION 68 OF THE ACT ARE CLEARLY NOT ATTRACTED TO AMOUNT REPRESENTING PURCHASES MADE ON CREDITS, AS I S ALSO HELD IN 'CIT VS. PANCHAMDASS JAIN', 205 CTR 444 (ALL). THE ASSESSEE RAISED THIS ISSUE BY WAY OF WRITTEN SUBMISSIONS (APB 37 TO 160, RELEVANT POR TION AT PARA-5, ON PAGE 43) DATED 10.05.2014 FILED BEFORE THE CIT(A). THE LD. CIT(A) HAS, HOWEVER, NOT ADDRESSED THIS GRIEVANT AT ALL AND MERELY UPHELD TH E ADDITION MADE UNDER SECTION 68 OF THE ACT ON BEHALF OF THE ASSESSEE, A COMPARATIVE CHART OF NET PROFIT RATE OF THE ASSESSEE FOR THE ASSESSMENT YEAR S 2005-06 TO 2011-2012 HAS BEEN FILED BEFORE US. IN THE EARLIER YEARS ALSO, NO SUCH ADDITION WAS MADE. FOR THE ASSESSMENT YEAR 2007-08, UNDER SCRUTINY ASSESSM ENT, THE ASSESSMENT WAS MADE AT 8%. THE POSITION REMAINED MUCH THE SAME FOR THE ASSESSMENT YEAR 2008-09. THE YEAR UNDER CONSIDERATION IS ASSESSMENT YEAR 2009-10. THE MATERIAL SUPPLIED TO THE ASSESSEE BY THE CONCERNED DEPARTMENT IS PART OF THE ASSESSEE'S TURNOVER. THE NET PROFIT RATE OF THE ASS ESSEE FOR THE YEAR UNDER 7 ITA NO.336/JODH/2018 M/S. ASHOK TRANSPORT CO, AY 2014-15 CONSIDERATION U)AS IN LINE WITH THE PRECEDING ASSES SMENT YEAR. FURTHER, THE TRADE CREDITORS IN THE EARLIER YEARS, I.E. ASSESSME NT YEARS 2007-08 AND 2008-09 STANDS ACCEPTED IN SCRUTINY ASSESSMENTS. THUS, THE GENUINENESS OF THE EXPENSES UNDER CONSIDERATION CANNOT BE DOUBTED. MOREOVER, TH E GENUINENESS OF THE EXPENDITURE WAS NOT AT ALL CALLED INTO QUESTION. IT WAS ONLY THAT NO-VERIFICATION THEREOF RAISED DOUBT OF THE INCURRENCE THEREOF. THE N, EVEN IF THE CREDITS CONCERNING THE PURCHASES AND TRANSPORTATION OF THE MATERIAL ARE NOT TO BE ACCEPTED, AS DISCUSSED, STILL, THE PROVISIONS OF SE CTION 68 OF THE ACT CANNOT BE INVOKED TO MAKE THE ADDITION. 5. LEARNED COUNSEL FOR THE APPELLANT-REVENUE HAS NO T BEEN ABLE TO SHOW THAT THE FINDINGS RECORDED BY THE TRIBUNAL ARE ILLEGAL OR PE RVERSE OR BASED ON MISREADING OF ANY MATERIAL ONRECORD, WARRANTING INTERFERENCE BY T HIS COURT. THUS, NO SUBSTANTIAL QUESTION OF LAW ARISES. CONSEQUENTLY, THE APPEAL ST ANDS DISMISSED. 9. IN THE LIGHT OF THE ABOVE JUDICIAL PRECEDENTS, W E CONFIRM THE ORDER OF THE LD. CIT(A) THAT THE ADDITION U/S. 68 OF THE ACT WAS ERR ONEOUSLY MADE BY AO AGAINST THE SUNDRY CREDITORS OF RS.78,22,863/- TO WHOM THE ASSE SSEE HAD TO PAY THE TRUCK OWNERS WHICH IS A LIABILITY FOR DELIVERING GOODS AND THE L D. CIT(A) HAS RIGHTLY DELETED THE SAME. THEREFORE, WE DISMISS THIS GROUND OF APPEAL OF THE REVENUE. 10. SECOND GROUND OF APPEAL OF THE REVENUE IS AGAIN ST THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS.11,86,100/- ON ACCOU NT OF SHOWING LOW BILTY CHARGES. 11. BRIEF FACTS OF THE CASE ARE THAT THE AO NOTED T HAT AFTER RECEIVING DIRECTION FROM THE JCIT, RANGE-1, JODHPUR HE ASKED THE LD. AR IN RESPECT OF CERTAIN DETAILS ABOUT BILTY CHARGES RECEIVED BY THE ASSESSEE. ACCORDING TO THE AO, IT WAS ASKED SPECIFICALLY ASKED AS TO WHETHER BILTY CHARGES IS INCLUSIVE IN T HE RECEIPT FROM THE COMPANY OR WHETHER IT IS COLLECTED SEPARATELY FROM THE TRUCK O WNERS. ACCORDING TO AO, THE LD. AR OF THE ASSESSEE FAILED TO GIVE REPLY ON THIS ISSUE AND THE WRITTEN REPLY GIVEN BY THE ASSESSEE WAS FOUND INADEQUATE AND IMPROPER AND TAKI NG NOTE THAT THE ASSESSEE FAILED TO GIVE THE LIST OF BILTY RECEIVED AMOUNT OF RS.11,55,100/-, THE AO ESTIMATED THE BILITY CHARGES RECEIVED DURING YEAR AT 2% OF RS .11,70,63,030/- WHICH COMES TO RS.23,41,260/- AND SINCE THE ASSESSEE HAS ALREADY D ECLARED BILTY CHARGES OF RS.11,55,100/- THE DIFFERENCE OF RS.11,86,160/- ON ACCOUNT OF SHOWING LOW BILTLY 8 ITA NO.336/JODH/2018 M/S. ASHOK TRANSPORT CO, AY 2014-15 CHARGES WAS ADDED IN THE HANDS OF THE ASSESSEE. AG GRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A), WHO WAS PLEASED TO DE LETE THE SAME. AGGRIEVED, THE REVENUE IS BEFORE US. 12. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUG H THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE AO HAD ASKED THE LD. AR OF THE ASSESSEE WHETHER THE BILTY CHARGES WAS INCLUSIVE IN THE RECE IPT FROM THE COMPANY OR WHETHER IT IS COLLECTED SEPARATELY FROM THE TRUCK OWNER AND SINCE THE LD. AR OF THE ASSESSEE FAILED TO GIVE SATISFACTORY ANSWER, HE HAD PROCEEDE D TO MAKE THE ADDITION AS AFORESAID. WE NOTE THAT THE LD. CIT(A) HAS CALLED FOR THE ASSESSMENT RECORDS AND THE LD. CIT(A) HAS MADE A FINDING OF FACT THAT BILITY C HARGES WERE INCLUSIVE IN THE RECEIPT FROM THE COMPANY, WHICH FINDING OF FACT HAS NOT BEE N CHALLENGED BY THE REVENUE, SO, THIS FINDING OF FACT BY LD. CIT(A) CRYSTALISES. MOR EOVER, WE NOTE THAT THE ASSESSEE HAD PRODUCED THE BOOKS OF ACCOUNT DURING THE ASSESSMENT PROCEEDINGS. HOWEVER, THE AO FOR REASONS BEST KNOWN TO HIM HAS STATED THAT TH E ASSESSEE FAILED TO PRODUCE ANY BOOKS OF ACCOUNT. IT WAS SUBMITTED BEFORE US THAT DURING THE ASSESSMENT PROCEEDING THE BOOKS OF ACCOUNT WERE ALSO PRODUCED BEFORE THE JCIT, RANGE-1, JODHPUR IN THE PROCEEDINGS U/S. 144A OF THE ACT AND IT WAS ALSO BR OUGHT TO OUR NOTICE THAT THE JCIT, RANGE-1 AFTER DUE VERIFICATION FROM THE DOCUMENTARY EVIDENCE, MATERIAL INFORMATION SUBMITTED BY THE ASSESSEE HAD GIVEN LIMITED DIRECT IONS TO THE AO FOR VERIFICATION. WE NOTE THAT THE ASSESSEE HAD ALREADY DECLARED BILT Y CHARGES TO THE TUNE OF RS.11,55,100/- WHICH IS 0.98% OF THE TOTAL RECEIPT. IT WAS BROUGHT TO OUR NOTICE THAT IN THE PREVIOUS ASSESSMENT YEAR 2013-14 WHEN THE FR EIGHT RECEIPT WAS RS.8,.10,32,496/- BILTY CHARGES WAS RS.8,65,025/- W HICH WAS 1.06% WHEREAS IN THIS ASSESSMENT YEAR 2014-15 FREIGHT RECEIPT WAS RS.11,7 0,63,030/- BILTY CHARGES WAS REFLECTED BY THE ASSESSEE AT RS.11,55,100/- WHICH I S 0.99%. WE NOTE THAT SINCE THE ASSESSEE HAS PRODUCED ALL THE BOOKS OF ACCOUNT ETC. WITHOUT FINDING ANY DEFECT OR IRREGULARITIES THEREIN, THE AO OUGHT NOT TO HAVE GO NE FOR ESTIMATION OF INCOME, WITHOUT REJECTING THE BOOKS AS PER THE PROCEDURE PR ESCRIBED U/S. 145(3) READ WITH 9 ITA NO.336/JODH/2018 M/S. ASHOK TRANSPORT CO, AY 2014-15 SEC. 144 OF THE ACT, AND, THEREFORE, THE ACTION OF THE AO WAS ARBITRARY IN NATURE AND SO VITIATED, THEREFORE, THE ACTION OF THE LD. CIT(A ) WHO AFTER DUE VERIFICATION MADE BY HIM DOES NOT REQUIRE ANY INTERFERENCE FROM OUR PART AND, THEREFORE, WE CONFIRM THE ACTION OF LD. CIT(A) AND DISMISS THIS GROUND OF APP EAL OF REVENUE. 13. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 10TH MAY, 2019 SD/- SD/- (N.K. SAINI) (A. T. VARKEY) VICE PRESIDENT JUDICIAL MEMBER DATED : 10.05.2019 J.D. SR. PS. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. $ / CIT 4. $ ()/ THE CIT(A) 5. - , /- , DR, ITAT, JODHPUR 6. 3/ GUARD FILE / BY ORDER / ASSISTANT REGISTRAR