Navjot Frozen Food Carriers Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 3585/DEL/2011

• Counselvise Citation: 358520114 RSA 2011
• Duration Of Justice: 1 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 15-11-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 19-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS SHUMANA SEN
• Assessee Lawyers: R B MATHUR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E: NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI JOGINDER SINGH, JUDICIAL MEMBER ITA NO. 3585/DEL/2011 ASSESSMENT YEAR: 2008-09 NAVJOT FROZEN FOOD CARRIERS PVT. LTD., F-104, VISHNU GARDEN, NEW DELHI. PAN NO. AAACN4482A VS. ACIT, CIRCLE 13(1), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. R.B. MATHUR, CA RESPONDENT BY: MRS. SHUMANA SEN, SR. DR O R D E R PER S.V. MEHROTRA, A.M. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. CIT(A) DATED 31/03/2011 FOR A.Y. 2008-09. 2. BRIEF FACTS OF THE CASE ARE THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE COMPANY WAS ENGAGED IN THE BUSINESS OF TRA NSPORTING FROZEN FOODS. IT HAD FILED ITS RETURN OF INCOME DECLARING CURRENT YEAR LOSS OF RS. 42,94,670/-. DURING THE ASSESSMENT PROCEEDINGS, TH E AO GENERATED THE ITS DATA AND NOTED THAT FOLLOWING ENTRIES WERE NOT REFL ECTED IN THE BOOKS OF THE ASSESSEE: - ITA NO. 3585/D/2011 2 1. ABC TRANSPORT COMPANY P. LTD. FIGURE AS PER AIR REPORT RS. 41,000/- FIGURE AS PER ASSESSEES BOOKS RS. 33,000/- DIFFERENCE RS. 8,000/- 2. AL HUSSAIN FROZEN FOODS FIGURE AS PER AIR REPORT RS. 2,80,875/- FIGURE AS PER ASSESSEES BOOKS RS. 2,77,080/- DIFFERENCE RS. 3,795/- 3. ANNA EXPORTS FIGURE AS PER THE AIR INFORMATION RS. 3,40,500/- FIGURE AS PER THE ASSESSEES BOOKS RS. 2,65,080/- DIFFERENCE RS. 75,420/- 4. CTC FREIGHT CARRIERS P. LTD. FIGURE AS PER AIR REPORT RS. 2,12,000/- FIGURE AS PER ASSESSEES BOOKS RS. 1,88,797/- DIFFERENCE RS. 23,203/- 5. GHANSHYAM GOEL FREIGHT AS PER AIR REPORT RS. 24,275/- FREIGHT AS PER ASSESEES BOOKS RS. NIL DIFFERENCE RS. 24,275/- 6. KAILASH PATI TRADING CO. FREIGHT AS PER AIR REPORT RS. 18,750/- FREIGHT AS ASSESSEES BOOKS RS. NIL DIFFERENCE RS. 18,750/- 7. NARESH DUGAR FREIGHT AS PER THE AIR REPORT RS. 1,08,000/- FREIGHT AS PER ASSESSEES BOOKS RS. 1,05,774/- DIFFERENCE RS. 2,226/- 8. OM TRADING CORPORATION ITA NO. 3585/D/2011 3 FREIGHT AS PER THE AIR REPORT RS. 23,385/- FREIGHT AS PER THE ASSESSEES BOOKS RS. 22,740/- DIFFERENCE RS. 640/- 9. SAFE SPEED CARRIERS P. LTD. FREIGHT AS PER THE AIR REPORT RS. 34,000/- FREIGHT AS PER ASSESSEES BOOKS RS. NIL DIFFERENCE RS. 34,000/- 3. THE ASSESSEE IN ITS REPLY SUBMITTED AS UNDER: - THE GROSS RECEIPTS REPORTED BY THE AIR INFORMATION IS JUST RS. 2,43,53,812/- WHEREAS THE G ROSS RECEIPTS REPORTED BY THE ASSESEE IN THE PROFIT AND LOSS ACCOUNT IS RS. 5,48,14,275/-. THUS, IT IS APPARENT THAT THE INFORMATION CAPTURED BY THE AIR REPORT IS INCOMPLET E AND INCORRECT. THERE ARE MANY INSTANCES IN THE SAID RE PORT WHERE THE INCOME REPORTED IN THE AIR REPORT IS FAR SHORT OF THE INCOME REPORTED BY THE ASSESSEE FROM THAT PA RTY. A CASE IN THE POINT IS THE INCOME REPORTED UNDER THE NAME OF ALLANA SONS LTD. AS PER THE AIR REPORT IS ONLY R S. 1,42,856/- WHEREAS THE ASSESSEE HAS DONE BUSINESS W ORTH RS. 53,23,106/-WITH THE SAID PARTY. SIMILARLY IN RE SPECT OF M/S M.K. OVERSEAS P. LTD. THE AIR REPORT SHOWS INCO MES OF RS. 79,09,407/- WHILE THE ASSESSEE HAS ACTUALLY TRANSACTED BUSINESS OF RS. 1,01,43,766/- WITH THE S AID PARTY. THUS, THE AIR SHOWS SHORT RECEIPTS OF RS. 22,34,359/-. THE ASSESSEE HAS REGULAR PARTIES FOR WHOM IT CARRIES MEAT AND OTHER PERISHABLE PRODUCTS IN ITS REFRIGERATED TRUCKS PRIMARILY FROM DELHI TO MUMBAI. ON ITA NO. 3585/D/2011 4 ITS RETURN IT BOOKS FREIGHT THROUGH MARKET AGENTS W HO OFTEN DO NOT EVEN DISCLOSE THE NAME OF THE ACTUAL CUSTOMER FOR WHOM THE FREIGHT IS BEING BOOKED. IN SUCH CASES THE ASSESSEE IS PAID AFTER THE DEDUCTION OF T HE AGENTS COMMISSION BY THE AGENTS THROUGH WHOM THE FREIGHT IS BOOKED. 4. THE ASSESSING OFFICER MADE AN ADDITION OF RS. 1, 90,309/- OBSERVING AS UNDER: - THE ARGUMENT OF THE ASSESSEE HAS BEEN THAT THE TDS DIFFERENCES ARE ON ACCOUNT OF RETURN FREIGHT WH ICH IS BOOKED BY THE MARKET AGENTS. THE ASSESSEE COULD NO T FURNISH ANY INDEPENDENT EVIDENCE WHICH COULD SUBSTANTIATE THE SUBMISSION REGARDING THE SHORT DISCLOSURE OF INCOME IN THE CASES AS DISCUSSED ABOV E. SINCE THE ASSESSEE HAS FAILED TO FURNISH ANY EVIDEN CE THEREFORE, THE TOTAL AMOUNT OF UN-RECONCILED ENTRIE S OF RS. 1,90,309/- IS BEING ADDED BACK TO THE INCOME OF THE ASSESSEE. 5. LD. CIT(A) DISMISSED THE ASSESSEES APPEAL OBSER VING AS UNDER: - 2.3 I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE AUTHORIZED REPRESENTATIVE OF THE APPELLANT COMPANY. NEITHER AT THE ASSESSMENT STAGE NOR IN APPEAL BEFORE ME DID THE APPELLANT FURNISH ANY EVIDENCE IN SUPPORT OF ITS CONTENTION THAT THE FREI GHT SHOWN TO HAVE BEEN RECEIVED BY IT WAS THE ACTUAL FREIGHT AND NOT THE FIGURES TAKEN BY THE AO FROM TH E ITA NO. 3585/D/2011 5 AIR. IN SOME CASES THE PLEA HAS BEEN TAKEN THAT TH E PARTY PAYING THE FREIGHT HAS CLUBBED THE PAYMENTS MADE TO THE APPELLANT COMPANY WITH THE PAYMENTS MADE TO THE DIRECTORS OF THE APPELLANT. BUT NO PRO OF OF OWNERSHIP OF THESE VEHICLES BY THE DIRECTORS OF THE APPELLANT COMPANY, EXCEPT FOR VEHICLE NO. HR38L 1631, HAS BEEN FURNISHED, NEITHER HAS ANY EVIDENCE BEEN FILED TO SUBSTANTIATE THAT THE PAYMENTS MADE I N RESPECT OF VEHICLES ALLEGEDLY BELONGING TO THE DIRECTORS AND INCLUDED IN THE COMPANYS INCOME BY THE AO WERE INCLUDED BY THE DIRECTORS IN THEIR RESPECTIVE RETURNS OF INCOME. EVEN IN RESPECT OF VEHICLE NO. HR38L 1631, THE APPELLANT HAS NOT PRODUCED ANY BILL RAISED BY THE OWNER OF THE VEHICL E ON THE PERSON MAKING THE PAYMENT OF FREIGHT TO PROVE THAT THE DIFFERENCE IN THE FREIGHT RECEIVED B Y THE APPELLANT AS PER ITS BOOKS AND AS PER THE AIR DATA, WAS ATTRIBUTABLE TO SUCH VEHICLE OWNED BY THE DIRECTOR AND NOT BY THE APPELLANT COMPANY. IN THE OTHER CASES, APART FROM STATING THAT THE INCOME REPORTED BY THE APPELLANT WAS THE CORRECT INCOME RATHER THAN THAT SHOWN IN THE AIR, THE APPELLANTS AR HAS NOT GIVEN ANY CONVINCING EXPLANATION NOR FILED ANY EVIDENCE. IN SUCH CIRCUMSTANCES, THE ACTION OF THE AO IN TAKING THE FREIGHT RECEIVED FRO M PARTIES IN RESPECT OF WHICH THERE WAS DIFFERENCE IN THE FIGURES REPORTED BY THE APPELLANT AND THOSE APPEARING IN THE AIR DATA, AT THE HIGHER FIGURE WAS ITA NO. 3585/D/2011 6 JUSTIFIED. THE ADDITION TO INCOME MADE BY THE AO I S UPHELD. THIS GROUND OF APPEAL IS DISMISSED. THUS, ESSENTIALLY FOR WANT OF EVIDENCE THE ADDITION HAS BEEN CONFIRMED. 6. LD. COUNSEL REFERRED TO PAGE 7 TO 12 OF THE PAPE R BOOK TO DEMONSTRATE THAT DETAILS WERE AVAILABLE IN RESPECT OF THESE DIF FERENCES AND THE ADDITION HAS BEEN MADE WITHOUT VERIFYING THE INFORMATION FUR NISHED BY THE THIRD PARTY. THEREFORE, IF THERE IS ANY ERROR COMMITTED BY THIRD PARTY, THE ASSESSEE SHOULD NOT BE MADE TO SUFFER. HE SUBMITTED THAT THE AO HA S NOT CONSIDERED THE INSTANCES WHERE THE INCOMES REPORTED BY THE ASSESSE E ARE MORE THAN THE INCOMES AS PER AIR REPORT. IN ITS SUBMISSION BEFOR E LD. CIT(A), THE ASSESSEE HAS ALSO, INTER-ALIA, SUBMITTED THAT THE COMPANY IS A RETURN FREIGHT CUSTOMER. THE ASSESSEE HAS REGULAR PARTIES FOR WHO M IT CARRIES MEAT AND OTHER PERISHABLE PRODUCTS IN ITS REFRIGERATED TRUCK S PRIMARILY FROM DELHI TO MUMBAI. ON ITS RETURN, IT BOOKS FREIGHT THROUGH MA RKET AGENTS WHO OFTEN DO NOT EVEN DISCLOSE THE NAME OF THE ACTUAL CUSTOMER F OR WHOM THE FREIGHT IS BEING BOOKED. IN SUCH CASES THE ASSESSEE IS PAID A FTER THE DEDUCTION OF THE AGENTS COMMISSION BY THE AGENT THROUGH WHOM THE FR EIGHT IS BOOKED. THUS, PRIMARILY THE ASSESSEES CONTENTION IS THAT THE AIR INFORMATION NEEDS PROPER VERIFICATION. WE, THEREFORE, CONSIDER IT IN THE IN TEREST OF JUSTICE, TO RESTORE THE MATTER TO THE FILE OF AO FOR DECIDING THE ISSUE DEN OVO AFTER CONSIDERING THE ASSESSEES SUBMISSIONS. WE DIRECT ACCORDINGLY. ITA NO. 3585/D/2011 7 7. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14/12/2012 SD/- SD/- (JOGINDER SINGH) JUDICIAL MEMBER (S.V. MEHROTRA) ACCOUNTANT MEMBER DATED: 14/12/2012 *KAVITA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER ASSISTANT REGISTRAR