The ITO, Ward-1(2), RAJKOT-GUJARAT V. Nanjibhai Devdanbhai Virda, RAJKOT-GUJARAT

ITA 380/RJT/2011

• Counselvise Citation: [2012] 120 COUNSELVISE.COM (IT) 0064 (ITAT-RAJKOT)
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 19-07-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 07-10-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Assessee Lawyers: DM RINDANI
• Keywords: Business expenditure

Judgement Text

: : IN THE INCOME TAX APPELLATE TRIBULAL: RAJKOT BENCH: RAJKOT . .. . . . . . , , , , . .. . . . . . , , , , $ $ $ $ BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K. SR IVASTAVA, AM ITA NO.380/RJT/2011 / ASSESSMENT YEAR 2006-07 INCOME TAX OFFICER V. SHRI NANJIBHAI DEVDANBHAI VIRDA WARD 1(2) NR. RAJKAMA L PETROL PUMP RAJKOT GONDAL ROAD , AT: KOTHARIYA RAJKOT PAN: AAWPV45 89R DATE OF HEARING : 19.7.2012 DATE OF PRONOUNCEMENT : 31.8.2012 REVENUE BY : SHRI AVINASH KUMAR ASSESSEE BY : SHRI D.M.RINDANI. / // / ORDER . .. . . . . . /D. K. SRIVASTAVA: THE APPEAL FILED BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 18.7.2011, ON THE FOLLOWING GROUNDS: 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS I N DELETING THE DISALLOWANCE OF TRANSPORTATION EXPENSES OF RS.16,07,529/- 2. THAT ON THE FACTS OF THE CASE, THE LD. CIT(A), RAJKOT OUGHT TO HAVE UPHELD THE ORDER OF THE AO. 3 IT IS THEREFORE, PRAYED THAT THE ORDER OF THE CIT (A); MAY BE SET ASIDE AND THAT OF THE AO BE RESTORED 2. THE ASSESSEE IS AN INDIVIDUAL. THE ASSESSEE FILE D HIS RETURN OF INCOME FOR 2 ITA NO.380/RJT/2011 THE YEAR UNDER APPEAL ON 18.7.2006 RETUNING TOTAL I NCOME AT RS.94,790/-. AFTER PROCESSING, THE RETURN WAS SELECTED FOR SCRUTINY. H E IS ENGAGED IN THE BUSINESS OF TRADING IN PETROLEUM PRODUCTS IN THE NAME AND ST YLE OF YADAV FILING STATION. BESIDES, HE IS ALSO HAVING CONTRACT WITH INDIAN OIL CORPORATION FOR TRANSPORTATION OF PETROLEUM PRODUCTS TO THEIR FINAL DESTINATION. I N ORDER TO CARRY OUT THE AFORESAID JOB, THE ASSESSEE HIRED TANKERS FROM PRIVATE TANKER OPERATORS AND ACCORDINGLY PAID A SUM OF RS.16,07,529/- TO THEM DURING THE YEA R UNDER APPEAL. THE SAID AMOUNT WAS CLAIMED AS BUSINESS EXPENDITURE. ON BEIN G ASKED BY THE AO AS TO WHETHER TAX WAS DEDUCTED BY THE ASSESSEE AT SOURCE OUT OF THE AFORESAID PAYMENTS AS REQUIRED BY SECTION 194C, THE ASSESSEE SUBMITTED THAT TAX WAS NOT DEDUCTED AT SOURCE OUT OF THE AFORESAID PAYMENTS AS THE PAYEES HAD FURNISHED FORM NO.15-I. AFTER EXAMINING THE CLAIM OF THE ASSE SSEE, THE AO, FOR THE DETAILED REASONS GIVEN IN THE ASSESSMENT ORDER, CAM E TO THE CONCLUSION THAT FORM NO. 15-I FILED BY THE PAYEES WERE NOT GENUINE. HE THEREFORE DISALLOWED THE IMPUGNED EXPENDITURE U/S 40(A)(IA). ON APPEAL, THE LD. CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE. 4. AGGRIEVED BY THE ORDER PASSED BY THE LD. CIT(A), THE DEPARTMENT IS IN APPEAL BEFORE THIS TRIBUNAL. 5. AT THE TIME OF HEARING BOTH THE PARTIES SUBMITTE D THAT THE ISSUE UNDER APPEAL WAS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE SPECIAL BENCH OF THIS TRIBUNAL IN MERILYN SHIPPING & TRANSP ORT V. ACIT [2012] 20 TAXMANN.COM 244 (VISAKHAPATNAM - TRIB.) (SB) IN WHI CH IT HAS BEEN HELD THAT THE PROVISIONS OF SECTION 40(A)(IA) APPLY ONLY TO T HAT AMOUNT OF EXPENDITURE WHICH IS FOUND PAYABLE AS ON 31 ST MARCH OF THE RELEVANT YEAR AND NOT TO THAT EXPENDITURE WHICH HAS ALREADY BEEN PAID DURING THE YEAR ITSELF. 3 ITA NO.380/RJT/2011 6. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY CONSID ERED THEIR SUBMISSIONS. IN MERILYN SHIPPING & TRANSPORT V. ACI T (SUPRA), A SPECIAL BENCH OF THIS TRIBUNAL HAS TAKEN THE VIEW THAT SECTION 40 (A)(IA) WOULD APPLY ONLY TO THAT EXPENDITURE WHICH IS PAYABLE AS OF 31ST MARCH AND N OT TO EXPENDITURE WHICH HAS ALREADY BEEN PAID DURING THE YEAR ITSELF. AT THE TI ME OF HEARING, THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ENTIRE EXPENDITURE WAS FULLY PAID BY THE ASSESSEE DURING THE YEAR ITSELF AND HEN CE THE AFORESAID ORDER PASSED BY THE SPECIAL BENCH WOULD SQUARELY COVER THE ISSUE AGAINST THE DEPARTMENT. HOWEVER, THE SUBMISSION OF THE ASSESSEE THAT ENTIRE EXPENDITURE WAS ACTUALLY PAID BY THE ASSESSEE DURING THE PREVIOUS YEAR ITSEL F NEEDS VERIFICATION. IN THIS VIEW OF THE MATTER, THE ORDER PASSED BY THE CIT(A) IS SET ASIDE AND THE MATTER IS RESTORED TO HIS FILE FOR A FRESH DECISION IN CONFOR MITY WITH LAW AFTER BRINGING RELEVANT FACTS ON RECORD. REASONABLE OPPORTUNITY OF HEARING SHALL BE GIVEN TO BOTH THE PARTIES. APPEAL FILED BY THE DEPARTMENT IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ) + 31-08-2012 ) ORDER PRONOUNCED ON 31-08-2012 SD SD ( .. / T. K. SHARMA) ( .. / D. K. SRIVASTAVA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER +/ DATE 31-08-2012. /RAJKOT SRL/- ) )) ) ./ ./ ./ ./ 0/ 0/ 0/ 0/ / COPY OF ORDER FORWARDED TO:- 1. 3 / APPELLANT-. 2. .53 / RESPONDENT-. 3. 9 / CONCERNED CIT 4. 9- / CIT (A). 5. / ., , / DR, ITAT, RAJKOT 4 ITA NO.380/RJT/2011 6. / GUARD FILE. / BY ORDER , SENIOR PRIVATE SECRETARY TRUE COPY INCOME TAX APPELLATE TRIBUNAL, RAJKOT