M/S SUPREME CYLINDERS PVT. LTD., Alwar V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2, ALWAR

ITA 402/JPR/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6038 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 25-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J C KULHERI JCIT DHK
• Keywords: Loose papers; Set aside
• Section: 154

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENC H A JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRA M SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 402/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2005-06. M/S. SUPREME CYLINDERS LTD., A-146K, INDUSTRIAL AREA, BHIWADI, ALWAR. CUKE VS. THE ASSTT. COMMISSIONER OF INCOME-TAX, CIRCLE-2, MOTI DUNGARI, ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AACCS 9200 M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SH. HIMANSHU GOYAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI J.C. KULHERI (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 30/07/2019 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 01/08/2019 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A)-22, ALWAR DATED 02.01.2019 FOR A.Y 2005-06 WHEREIN ASSE SSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED U/S 154 OF THE ACT BY THE LEARNED COMMISSIONER OF INCOME TA X [CIT(A)] IS BAD BOTH IN THE EYE OF LAW AND ON FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE CIT(A ) HAS ERRED IN LAW AND ON THE FACTS IN REJECTING THE APPLICATION FILED BY THE ASSESSEE UNDER SECTION 154 OF THE ACT, BY HOLDING THAT THE SAID APPLICATIO N DOES NOT COME UNDER THE PURVIEW OF ANY MISTAKE APPARENT FROM RECORD. 2 ITA NO. 402/JP/2019 M/S. SUPREME CYLINDERS LIMITED, JAIPUR VS. ACIT, AL WAR 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE WHILE COMPUTING THE AMOUNT OF ADDITION ON ACCOUNT OF ALLEGED CASH BOOK ON FREIGHT CHARGES INCURRED BY THE APPELLANT, THE CIT(A) HAS ERRED IN ALLOWING A RELIEF OF RS. 4,47,421/- AS AGAINST OF RS. 5,85,323/- AS CONCLUDE D BY HIM IN HIS OWN ORDER. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE A CTION OF THE CIT(A) IS CONTRADICTORY FROM HIS OWN FINDING WHILE DELETING T HE ADDITION. 2. AT THE OUTSET, THE LD. AR DRAWN OUR REFERENCE TO TH E ORDER OF LD. CIT(A) IN THE ORIGINAL PROCEEDINGS WHEREIN, IN RELATION TO ADDITI ON MADE BY THE AO ON ACCOUNT OF FREIGHT CHARGES, THE LD. CIT(A) HAS HELD AS UNDER:- 7.5 I HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD AND FIND THAT AO HAS NOT BROUGHT ON RECORD ANY OTHER MATERIAL AGAINS T THE ASSESSEE TO PROVE THAT THE CASH WAS RECEIVED BACK ON THE TOTAL FREIGH T CHARGES. HOWEVER, I FIND THAT THE APPELLANT HAS ALSO FAILED TO CONTROVERT TH E EVIDENCE OF HAVING RECEIVED THE CASH BACK FROM THE PARTY (M/S HARYANA RAJASTHAN ROADLINES) AS FOUND FROM THE PAPERS IMPOUNDED DURING THE COURSE O F SURVEY OPERATION. ACCORDINGLY, I HOLD THAT IT WOULD BE APPROPRIATE TO RESTRICT THE ADDITION TO THE EXTENT OF RS. 1,37,902/- AS WAS FOUND RECORDED ON T HE PAPERS IMPOUNDED IN THE COURSE OF SURVEY OPERATION. THE APPELLANT WOULD THEREFORE GET A RELIEF OF RS. 4,47,421/- ON THIS ACCOUNT. 3. IT WAS SUBMITTED BY THE LD AR THAT THE LD. CIT(A ) HAS RESTRICTED THE ADDITION TO RS. 1,37,902/- WHICH ADMITTEDLY IS COVERED UNDER SU RRENDERED PEAK BY THE ASSESSEE ITSELF AND IS NOT PART OF THE EXTRAPOLATED AMOUNT O F RS. 5,85,323/-. IT WAS 3 ITA NO. 402/JP/2019 M/S. SUPREME CYLINDERS LIMITED, JAIPUR VS. ACIT, AL WAR ACCORDINGLY SUBMITTED THAT BASIS SUCH FACTUAL MISTA KE, THE ASSESSEE MOVED AN APPLICATION U/S 154 WHICH HAS BEEN REJECTED BY THE IMPUGNED ORDER DATED 20.12.2019 WHEREIN THE LD. CIT(A) HAS HELD THAT ON THE BASIS OF EVIDENCE ON RECORD, THE PRESENT APPLICATION FILED U/S 154 DOES NOT COME UNDER THE PURVIEW OF ANY MISTAKE APPARENT FROM RECORD. 4. IT WAS FURTHER SUBMITTED THAT THE MATTER IN THE ORIGINAL PROCEEDINGS HAS REACHED THE TRIBUNAL WHEREIN BY ORDER DATED 29.05.2 018 IN ITA NO. 525/JP/2014 AND CO NO. 44/JP/2016, THE TRIBUNAL HAS SET-ASIDE T HE MATTER AND THE RELEVANT FINDINGS ARE CONTAINED AT PARA NOS. 11-13 WHICH REA DS AS UNDER:- 11. THE AO ON THE ANALYSES OF LOOSE PAPERS FOUND T HAT THE ASSESSEE HAS RECEIVED UNACCOUNTED CASH @ 22.25% WHICH IS THE DIF FERENCE BETWEEN THE BILLED AMOUNT AND ACTUAL FREIGHT MUTUALLY DETERMINE D WITH THE TRANSPORTERS. BY APPLYING THIS RATE TO THE TOTAL EXPENSES ON FREI GHT DECLARED BY THE ASSESSEE, THE AO HAS MADE AN ADDITION OF RS. 5,85,3 23/- OVER AND ABOVE AN AMOUNT OF RS. 1,37,902/- DECLARED BY THE ASSESSEE A ND SURRENDERED DURING THE SURVEY. THE LD. CIT (A) DELETED THE SAID ADDIT ION ON THE GROUND THAT THE AO HAS MADE THE ADDITION WITHOUT BRINGING ANY MATER IAL ON RECORD TO PROVE THAT THE ASSESSEE HAS RECEIVED CASH BACK ON THE TOT AL FREIGHT CHARGES. 12. BEFORE US, THE LD. D/R HAS SUBMITTED THAT THOUG H THE LOOSE PAPERS CONTAINS THE UNACCOUNTED CASH RECEIPT FOUND AT RS. 1,37,902/- ON ACCOUNT OF FREIGHT CHARGES, HOWEVER, ONCE THIS UNDECLARED INCO ME WAS FOUND DURING THE SURVEY, THE AO HAS APPLIED THE SAME RATIO ON THE EN TIRE FREIGHT CHARGES PAID BY THE ASSESSEE. 4 ITA NO. 402/JP/2019 M/S. SUPREME CYLINDERS LIMITED, JAIPUR VS. ACIT, AL WAR 12.1. ON THE OTHER HAND, THE LD. A/R OF THE ASSESSE E HAS SUBMITTED THAT THE AO HAS NOT BROUGHT ON RECORD ANY MATERIAL OR EVIDEN CE TO PROVE THAT THE ASSESSEE HAD IN FACT RECEIVED AN AMOUNT @ 22.25% OF THE FREIGHT EXPENSES RECORDED IN THE BOOKS OF ACCOUNT. THE ONLY EVIDENCE IS THE LOOSE PAPERS FOUND DURING THE COURSE OF SURVEY WHICH CONTAINS ONLY RS. 1,37,902/- AND, THEREFORE, OVER AND ABOVE THE SAID AMOUNT THE AO CA NNOT MAKE AN ADDITION. SHE HAS SUPPORTED THE ORDER OF THE LD. CIT (A). 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS THE RELEVANT MATERIAL ON RECORD. THE AO HAS NOTED FROM ANNEXURE -A-22 OF THE LOOSE PAPERS THAT THE BILLS OF HARYANA RAJASTHAN ROADLINE S WERE IMPOUNDED DURING SURVEY. THE DETAILS OF THE LEDGER ACCOUNT AND THE BILL AMOUNT AS PER THE LOOSE PAPER IS GIVEN BY THE AO AS UNDER :- MONTH EXPENSES CLAIMED BY COMPANY BILL AMOUNT AS PE R LOOSE PAPER DIFFERENCE APRIL, 04 78338 55000 23338 MAY, 04 243901 165900 7800 JUNE, 04 127463 96800 30663 JULY, 04 48104 19400 28704 AUG, 04 122097 74700 47397 TOTAL 619903 411800 137902 ACCORDINGLY THE AO COMPUTED THE DIFFERENCE BETWEEN THE BILLED AMOUNT AND ACTUAL FREIGHT AMOUNT MUTUALLY DETERMINED BETWEEN T HE PARTIES @ 22.25%. THIS RATE OF DIFFERENCE WAS APPLIED BY THE AO ON TH E TOTAL FREIGHT CHARGES OF RS. 32,50,451/- AND ARRIVED AT TOTAL DIFFERENCE AMO UNT OF RS. 7,23,225/-. SINCE AN AMOUNT OF RS. 1,37,902/- IS FOUND FROM THE LOOSE PAPERS BEING DIFFERENCE BETWEEN THE AGREED RATE AND THE EXPENSES CLAIMED IN THE BOOKS 5 ITA NO. 402/JP/2019 M/S. SUPREME CYLINDERS LIMITED, JAIPUR VS. ACIT, AL WAR WAS ALREADY SURRENDERED BY THE ASSESSEE, THEREFORE, THE AO HAS MADE THE ADDITION OF RS. 5,85,323/-. THE ASSESSEE HAS OBJEC TED TO THE EXTRAPOLATING OF THIS DIFFERENCE TO THE ENTIRE FREIGHT CHARGES WHICH IS ACCEPTED BY THE LD. CIT (A) AND DELETED THE SAID ADDITION. 13.1. HAVING CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE, WHEN THE ASSESSEE HAS ADMITTED THE OVER-INFLATED CLAIM OF FR EIGHT CHARGES AS FOUND IN THE LOOSE PAPERS FOR THE MONTHS OF APRIL TO AUGUST IN RESPECT OF THE PAYMENT MADE TO ONE TRANSPORTER, NAMELY, HARYANA RAJASTHAN ROADLINES, THE SAID RATE OF INFLATED EXPENSES ON ACCOUNT OF FREIGHT CHARGES CAN BE APPLIED IN RESPECT OF THE FREIGHT CHARGES CLAIMED BY THE ASSESSEE PAID TO HARYANA RAJASTHAN ROADLINES. THEREFORE, TO THE EXTENT OF FREIGHT PAI D TO THE SAID TRANSPORTER, THE INFLATED RATE AS APPLIED BY THE ASSESSEE IS JUSTIFI ED BUT NOT IN RESPECT OF THE OTHER TRANSPORTER WHEN THERE IS NO MATERIAL OR OTHE R RECORD TO SHOW SUCH AN ARRANGEMENT BETWEEN THE ASSESSEE AND OTHER TRANSPOR TER. ACCORDINGLY, WE SET ASIDE THIS ISSUE TO THE RECORD OF THE AO TO VER IFY THE OTHER FREIGHT CHARGES AND ONLY TO THE EXTENT OF FREIGHT CHARGES TO HARYAN A RAJASTHAN ROADLINES THIS DIFFERENCE RATE CAN BE APPLIED. 5. THE LD. DR IS HEARD WHO HAS RELIED ON THE ORDER OF LOWER AUTHORITIES AND SUBMITTED THAT THERE IS NO MISTAKE APPARENT FROM RE CORD WHICH CALLS FOR ANY INTERFERENCE BY THE LD CIT(A). HE ACCORDINGLY SUPP ORTED THE ORDER OF THE LD CIT(A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE CO-ORDINATE BENCH HAS ALRE ADY EXAMINED THE MATTER AND 6 ITA NO. 402/JP/2019 M/S. SUPREME CYLINDERS LIMITED, JAIPUR VS. ACIT, AL WAR WHICH HAS BEEN SET ASIDE TO THE RECORD OF THE AO. T HEREFORE, THE PRESENT MISTAKE SO POINTED OUT BY THE ASSESSEE IS ALSO REMANDED BACK T O THE FILE OF THE ASSESSING OFFICER WHO SHALL VERIFY THE SAME AND WHERE THE SAM E IS FOUND TO BE CORRECT, ALLOW THE NECESSARY RELIEF TO THE ASSESSEE. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 01/08/2019. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 01/08/2019. GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S. SUPREME CYLINDERS LTD., JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- ACIT, CIRCLE-2, MOTI DUNGARI, ALWAR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 402/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR