M/s. Kandala Export Corporation, GANDHIDHAM V. The Assistant Commissioner of Income Tax, Gandhidham Circle, GANDHIDHAM

ITA 388/RJT/2011

• Counselvise Citation: [2012] 120 COUNSELVISE.COM (IT) 0211 (ITAT-RAJKOT)
• Duration Of Justice: 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-09-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 12-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANKUR GARG
• Assessee Lawyers: MANISH H VORA
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. . .. . . .. . , , , , . .. . . .. . , , , , $ $ $ $ BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K. SRIVASTAV A, AM ITA NO.388/RJT/2011. / ASSESSMENT YEAR 2006-07 M/S KANDLA EXPORT CORPORATION, PLOT NO.18, SECTOR-8, GANDHIDHAM-KUTCH. PAN: AACFK1906F ( * / APPELLANT) VS. ASSTT.COMMISSIONER OF INCOME TAX, GANDHIDHAM CIRCLE, PLOT NO.20/A, SECTOR -8A, GANDHIDHAM-KUTCHJ. +,* / RESPONDENT -. / ASSESSEE BY SHRI MANISH H VORA . / REVENUE BY SHRI. ANKUR GARG . / DATE OF HEARING 12.9.2012 . / DATE OF PRONOUNCEMENT 14.09.2012 / / / / ORDER . .. . . . . . , , , , / T. K. SHARMA, J. M. THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 8.7.2011 OF CIT(A)-X X, AHMEDABAD CONFIRMING ADDITION OF RS.1,03,100/- BEING 10% OF 1 0,30,999/- ON ACCOUNT OF TRANSPORTATION EXPENSES PAID FOR THE ASSESSMENT YEAR 2006-07. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE IS CARRYING ON THE BUSINESS OF MERCHANT EXPORTER AND TRANSPORT VARIOUS G OODS AND COMMODITIES, FILED RETURN OF INCOME ON 31.10.2006 DE CLARING TOTAL INCOME AT RS.1,43,43,890/-. THE CASE WAS SELECTED FOR SCRUTINY A ND NOTICE U/S 143(2) OF THE INCOME TAX ACT 1961 WAS ISSUED TO THE ASSESS EE. IN REPLY, ITA NO.388/RJT/2011. 2 THE REPRESENTATIVE OF THE ASSESSEE APPEARED BEFORE THE AO. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT RS. 10,30,999/- HAS BEEN PAID AS TRANSPORTATION EXPENSES IN CASH ON SELF PREPARED VOUCHERS. ON A TEST CHECK IT WAS FOUND THAT THERE ARE F OLLOWING DEFECTS : (I) COMPLETE ADDRESS WAS MISSING; (II) IN SOME CASE SIGNATURES WERE MISSING; (III) NO SERIAL NO, ON VOUCHERS; (IV) ILLEGIBLE NAMES WERE MAINTAINED AND (V) VOUCHERS WERE NEW AND CRISP. THEREFORE, THE AO CALLED AN EXPLANATION FROM THE ASSE SSEE TO SHOW CAUSE AS TO WHY 10% OF RS 10,30,999/- OF TRANSPORTATION E XPENSES BEING RS.1,03,100/- SHOULD NOT BE DISALLOWED AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. IN REPLY, THE ASSESSEE SUBMITTED TH AT ALL THE EXPENSES ARE FOR THE PURPOSE OF THE BUSINESS. THE AO A FTER CONSIDERING THE ABOVE SUBMISSION OF THE ASSESSEE FRAMED THE ASSESSMENT U/S 143(3) OF THE ACT AND HE WAS OF THE VIEW THAT THE ASSESSEE IS SILENT ON THE DEFECTS POINTED BY HIM, AND ACCORDINGLY CONSIDERING THE TOTALITY OF THE FACTS AND THE NATURE OF THE BUSINESS OF THE ASSESSEE 10% OF TH E TRANSPORTATION EXPENSES RS.1,03,100/- OF RS.10,30,999/- DEBITED BY T HE ASSESSEE IN THE PROFIT AND LOSS ACCOUNT DISALLOWED RS.1,03,100/- AND A DDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 3. ON APPEAL, THE LD. CIT(A) CONFIRMED THE DISALLOWAN CE. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. ITA NO.388/RJT/2011. 3 4. AT THE TIME OF HEARING, BEFORE US ON BEHALF OF THE ASSESSEE SHRI MANISH H.VORA APPEARED AND FILED PAPER BOOK CONTAINING 133 PAGES. THE COUNSEL OF THE ASSESSEE SUBMITTED THAT TRANSPORTATION EX PENSES WERE PAID DURING THE YEAR, TAX WAS DULY DEDUCTED AT SOURCE AND T HE ASSESSEE HAS ALSO ISSUED TDS CERTIFICATE TO THEM. HE ALSO PLACED COPY O F RESPECTIVE LORRY RECEIPTS. HE SUBMITTED THAT THERE IS NO SINGLE P AYMENT EXCEEDING RS.20,000/- HAS BEEN PAID TO ANY TRANSPORTER. THUS, THERE IS NO VIOLATION OF PROVISIONS OF SECTION 40A(3). FINALLY, THE LD. COU NSEL OF THE ASSESSEE SUBMITTED THAT ALL THE VOUCHERS WERE PRODUCED BEFORE TH E AO AND THE AO COULD NOT POINT OUT A SINGLE INCIDENT WHICH IS NOT VER IFIABLE. HE FURTHER SUBMITTED THAT THE ASSESSEE CAN FURNISH THE NAMES AND ADD RESSES OF ALL THE PERSONS TO WHOM THE TRANSPORTATION CHARGES WERE PAID . THE AO IS AT LIBERTY TO MAKE CROSS VERIFICATION FROM THE CONCERNED T RANSPORTERS. HE ACCORDINGLY CONTENDED THAT THE DISALLOWANCE OF RS.1,03,1 00/- BE DELETED. 5. ON THE OTHER HAND, SHRI. ANKUR GARG, LD. DR APP EARED FOR THE REVENUE AND CONTENDED THAT THE NAMES AND ADDRESSES OF TH E TRANSPORTERS WERE NOT FURNISHED, THEREFORE, IT WAS NOT POSSIBLE FOR THE AO TO MAKE CROSS-VERIFICATION. IN REJOINDER, THE COUNSEL OF THE ASSESSEE SUBMITTED THAT IN TDS CERTIFICATE, ADDRESS AND NAME OF THE TRANSPORTERS HAVE BEEN GIVEN, THEREFORE, THE AO IS AT LIBERTY TO MAKE CROSS VERIFICATION. 6. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY GON E THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT PRIMA FACIE IT APPEARS THAT THE NAME AND ADDRESSES OF THE TRANSPORTER S WERE NOT FILED BEFORE THE AO. IT APPEARS THAT ALL THE TRANSPORTE RS ARE VERIFIABLE BUT THIS ITA NO.388/RJT/2011. 4 NEEDS TEST CHECK AT THE END OF THE AO. WE, THEREFORE, SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE ISSUE TO THE FILE O F THE AO WITH A DIRECTION THAT THE AO WILL GIVE OPPORTUNITY TO THE ASSESSEE TO P RODUCE DETAILS OF PAYMENTS, NAMES AND ADDRESSES OF THE TRANSPORTERS TO W HOM THE ASSESSEE HAS PAID TRANSPORTATION CHARGES AMOUNTING TO RS.1 0,30,999/-. THE AO WILL MAKE TEST CHECK/CROSS-VERIFICATION AND RE-ADJU DICATE THE DISALLOWANCE OF RS.1,03,100/- AFRESH IN ACCORDANCE WITH LAW. 7. IN THE RESULT, FOR THE STATISTICAL PURPOSE THE AP PEAL OF THE ASSESSEE IS TREATED AS ALLOWED. THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON THE DAT E MENTIONED HEREINABOVE. SD SD ( .. / D. K. SRIVASTAVA) ( .. / T. K. SHARMA) / ACCOUNTANT MEMBER /JUDICIAL MEMBER 3/ ORDER DATE 14-09-2012. /RAJKOT SRL . .. . +4 +4 +4 [phone] / COPY OF ORDER FORWARDED TO:- 1. * / APPELLANT-, 2. +,* / RESPONDENT- 3. : / CONCERNED CIT. 4. :- / CIT (A). 5. 4 +, , / DR, ITAT, RAJKOT 6. / GUARD FILE. / BY ORDER , TRUE COPY SENIOR PRIVATE SECRETARY , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.