Baroda Goods Transport Company, Baroda V. The ACIT.,Circle-3, Baroda

ITA 3514/AHD/2010

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0210 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 18-10-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 31-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVA SEWAK
• Assessee Lawyers: M J SHAH
• Keywords: Assessment record
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI S. S. GODARA, JUDICIAL MEMBER) ITA. NO: 3514/AHD/2010 (ASSESSMENT YEAR: 2007-08) BARODA GOODS TRANSPORT COMPANY NR. NAVI NAGRI, DUMAD CHOKDI N.H. N. 8, SAVLI ROAD, BARODA V/S ACIT, CIRCLE-3, BARODA (APPELLANT) (RESPONDENT) PAN: AABFB5096N APPELLANT BY : SHRI M. J. SHAH, AR RESPONDENT BY : SHRI SHIVA SEWAK, SR. D.R. ( )/ ORDER DATE OF HEARING : 18 -10-201 6 DATE OF PRONOUNCEMENT : 21-10-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF LD. CIT(A)-II, BARODA DATED 22.09.2010 PERTAINING TO A.Y. 2007-08. ITA NO. 3514 /AHD/2010 . A.Y. 2007-08 2 2. THE SUBSTANTIVE GRIEVANCE OF THE ASSESSEE READS AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCE OF THE CASE AS WELL AS IN LAW THE ID. CIT(A)-II, BARODA WAS ERRED IN TREATING PAYMENT OF RS. 18,32,7 51/- TO SUB-CONTRACTOR AS BOGUS PAYMENT ON THE GROUND OF CIRCUMSTANTIAL EVIDE NCE IN SPITE OF NECESSARY DETAILS VIZ. DATEWISE LOADING RECEIPTS AN D ASSESSMENT RECORD OF A.U. PANDHER, GURUMUKHSING AND RAJPALSING WERE GIVE N AND DETAILS IS ON THE RECORD OF THE DEPARTMENT. 2. ON THE FACTS AND CIRCUMSTANCE OF THE CASE AS WEL L AS IN LAW THE ID. CIT(A)- II, BARODA WAS ERRED IN CONFIRMING 50% OF TRUCK TRI P EXPENSES OF RS. 11,81,557/- ON THE GROUND THAT GENUINENESS OF THE E XPENSES HAS NOT BEEN PROVED AND EXPENSES OF SUCH TRANSPORTATION HAS BEEN DEBITED INTO DIFFERENT HEADS WITHOUT VERIFYING THE SAME EVEN THOUGH THE SA ME IS INCURRED FOR THE PURPOSE OF BUSINESS. 3. ON THE FACTS AND CIRCUMSTANCE OF THE CASE AS WEL L AS IN LAW THE ID. CIT(A)- II, BARODA WAS ERRED IN CONFIRMING ADDITION OF RS. 23,84,105/- ON THE GROUND THAT NO EVIDENCE REGARDING PAYMENT OF MINAL SERVICE STATION WERE PRODUCED EVEN THOUGH SAME IS GIVEN TO THE ASSESSING OFFICER AS WELL AS CIT(A). APPELLANT HAS PREFERRED A RECTIFICATION APPLICATION IN THIS REGARD ON 25/11/2010. 3. THE ASSESSEE IS ENGAGED IN TRANSPORTATION BUSINESS. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEEDINGS, THE A.O. FOUND THAT PAYMENT OF RS. 18,32,751/- TO SUB-CONTRACTOR IS BOGUS. THE A.O. FU RTHER FOUND THAT THE TRUCK TRIP EXPENSES OF RS. 11,81,557/- ARE NOT GENU INE AND UNVERIFIABLE IN NATURE. THE A.O. FURTHER FOUND THAT FUEL EXPENSES O F RS. 23,84,105/- WERE NOT SUPPORTED BY PROPER BILLS AND VOUCHERS. THE A.O . MADE THE ADDITIONS ALONG WITH OTHER ADDITIONS. ITA NO. 3514 /AHD/2010 . A.Y. 2007-08 3 4. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A). THE LD. CIT(A) CONFIRMED THE ADDITION OF RS. 18,32,751/- TREATED AS BOGUS PA YMENT TO SUB-CONTRACTOR. THE LD. CIT(A) ALSO CONFIRMED THE ADDITION OF RS. 2 3,84,105/- ON ACCOUNT OF FUEL EXPENSES AND RESTRICTED THE ADDITION OF RS. 11 ,81,557/- TO 50%. 5. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. AT TH E VERY OUTSET, THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE ORDER OF THE LD. COMMISSIONER MADE U/S. 264 OF THE ACT AND THE SAME READS AS UNDER:- ORDER UNDER SECTION 264 OF THE INCOME-TAX ACT. 1961 THE PETITION IS FILED ON 30-12-2010 AGAINST THE OR DER U/S 143(3) DATED 23-12- 2009. SHRI RAJESH SETH, CHARTERED ACCOUNTANT ATTEND ED AND DISCUSSED. 2. THE ASSESSEE IS IN THE TRANSPORT BUSINESS. THE ASSESSING OFFICER HAS MADE A NUMBER OF INDIVIDUAL ADDITIONS SUCH AS DISALLOWANCE OF TRANSPORT CHARGES OF RS. 14.8 LACS, DISALLOWANCE U/S 40A(2)(B) OF RS. 2..9 L ACS AND ESTIMATED DISALLOWANCE OF RS. 12.64 LACS OUT OF TRUCK TRIP EXPENSES AND RS . 75,000 ESTIMATED AT 25% SPARE PARTS COST. 2.1. I HAVE GONE THROUGH THE DETAILS SUBMITTED AND EXAMINED THE DETAILS PRODUCED BY THE AUTHORIZED REPRESENTATIVE. THE ASSESSEES RE TURNED INCOME IS RS. 14.37 LACS AND THE ASSESSING OFFICER HAS ASSESSED AT RS. 45.54 LACS. THE ASSESSEE IS A SMALL TRANSPORTER AND IN SUCH BUSINESS THERE CANNOT BE SUCH A HIGHER PROFIT. AFTER CONSIDERING ALL ASPECTS, I WOULD DIRECT THE ASSESSI NG OFFICER TO ESTIMATE THE PROFIT AT 6%. SINCE THE PROFIT IS BEING ESTIMATED NO PROCE EDINGS FOR IMPOSITION OF PENALTY U/S. 271(1)(C) SHOULD BE INITIATED. 6. IT IS THE SAY OF THE LD. COUNSEL THAT IN SUBSEQUENT YEAR, THE LD. COMMISSIONER HAS ESTIMATED THE PROFIT AT 6% AND THE SAME VIEW SH OULD BE ADOPTED FOR ITA NO. 3514 /AHD/2010 . A.Y. 2007-08 4 THE YEAR UNDER CONSIDERATION. THE LD. COUNSEL FURTH ER STATED THAT IF THE PROFIT IS ESTIMATED AT 6%, ALL THE EXPENSES SHALL B E DEEMED TO BE ALLOWED. THE LD. D.R. FAIRLY CONCEDED TO THIS. 7. CONSIDERING THE ORDER OF THE LD. COMMISSIONER MADE U/S. 264 OF THE ACT (SUPRA), IN OUR CONSIDERED OPINION, NET PROFIT ESTI MATION SHOULD MEET THE ENDS OF JUSTICE. WE, ACCORDINGLY, DIRECT THE A.O. T O ASSESS THE INCOME OUT OF TRANSPORTATION BUSINESS @ 6% OF THE GROSS RECEIPTS. IT HAS BEEN MADE VERY CLEAR TO THE LD. COUNSEL THAT BANK INTEREST INCOME OF RS. 40,298/- AND PROFIT ON SALE OF TRUCK RS. 14,84,503/- SHALL BE SEPARATEL Y ADDED TO THE INCOME COMPUTED @ 6%. THE A.O. IS FURTHER DIRECTED TO VERI FY WHETHER REMUNERATION TO PARTNER AND INTEREST ON CAPITAL TO PARTNERS HAVE BEEN ALLOWED IN THE SUBSEQUENT YEARS PURSUANT TO THE ORD ER OF THE COMMISSIONER MADE U/S. 264 OF THE ACT. IF THE SAME ARE ALLOWED THEN THESE SHOULD BE ALLOWED DURING THE YEAR UNDER CONSIDERATION ALSO. 8. WITH THE ABOVE DIRECTIONS, THE APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 21- 10- 201 6. SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: -