Ram Kumar Daitapati, Puri V. ITO, Puri Ward, Puri, Puri

ITA 430/CTK/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5082 (ITAT-CUTTACK)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 31-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: B R PANDA

Judgement Text

P A G E 1 | 5 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK SMC BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG , JUDICIAL MEMBER ITA NO. 430 /CTK/201 8 ASSESSMENT YEA R: 2010 - 2011 SRI RAM KUMAR DAITAPATI, AT: MATIMANDAP SAHI, NABAT KHANA LANE, PURI VS. ITO, PURI WARD, PURI PAN/GIR NO. AEPPD 2413 R (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI B.R.PANDA, AR REVENUE BY : SHRI SUBHENDU DUTTA, DR DATE OF HEARING : 1 6 / 0 5 / 201 9 DATE OF PRONOUNCEMENT : 1 6 / 0 5 / 201 9 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS) - 2 , BHUBANESWAR DATED 30.11.2018 FOR THE ASSESSMENT YEAR 201 0 - 2011 . 2. ALTHOUGH THE ASSESSEE HAS RAISED VARIOUS GROUNDS, BUT AT THE TIME OF HEARING, THE SOLE ISSUE AGITATED IS THAT THE COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.7,96,948/ - ON ACCOUNT OF NILACHAL SERVICE STATION IN ITA NO.430/CTK/2018 ASSESSMENT YEAR: 2010 - 2011 P A G E 2 | 5 THE HANDS OF THE ASSESSEE AS HE I S NOT THE REAL OWNER OFF THE PETROL PUMP. 3. THE FACTS IN BRIEF, AS EMANATED FROM THE CIT(A) ORDER ARE THAT THE ASSESSEE ENTERED INTO AGREEMENT WITH JAYAKRUSHNA BRAHMACHARI FOR MANAGING AND RUNNING THE PETROL PUMP AND OPENED A BANK ACCOUNT WITH STATE BANK OF INDIA, TEMPLE ROAD BRANCH, PURI AND THERE ARE CREDITS OF RS.2,35,60,423/ - . BEFORE THE ASSESSING OFFICER CONFIRMED THE CREDITS ARE OUT OF SALE PROCEEDS FROM PETROL PUMP. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS PURCHASED AND SOLD PETROL OF 584 KL AND DIESEL OF 208 KL. THEREFORE, HE CONSIDERING THE DEALER COMMISSION @ RS.1125/ - PER KL OF PETROL TO RS.6,57,000/ - AND @ RS.673/ - PER KL OF DIESEL AMOUNTING TO RS.1,39,984/, COMPUTED THE TOTAL COMMISSION AT RS.7,96,984/ - AND ADDED THE SAME AS BUSINESS PROFIT OF THE ASSESSEE TO THE INCOME OF THE ASSESSEE. 4. ON APPEAL, THE CIT(A) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 5. AT THE TIME OF HEARING, LD A.R. OF THE ASSESSEE SUBMITTED THAT THE REAL OWNER OF THE PETROL PUMP BEING ILL AND IN OLD AGE, VIDE AN AGREEMENT EMPOWERED THE ASSE SSEE TO MANAGE THE NEELACHAL SERVICE STATION. ACCORDINGLY, THE ASSESSEE OPENED A ITA NO.430/CTK/2018 ASSESSMENT YEAR: 2010 - 2011 P A G E 3 | 5 BANK ACCOUNT WITH STATE BANK OF INDIA AND DEPOSITED THE SALE PROCEEDS FOR SMOOTH TRANSACTION. IN SUPPORT OF THIS, HE FILED AN AGREEMENT BETWEEN THE ASSESSEE AND SHRI JAYAK RUSHNA BRAHMCHARI DATED 1.9.2008, WHEREIN, IT IS STATED THAT THE ASSESSEE WOULD RECEIVE RS.5,000/ - PER MONTH FROM THE OWNER OF PETROL PUMP TILL THREE YEARS FROM THE DATE OF AGREEMENT. HE SUBMITTED THAT TO MANAGE THE PETROL PUMP, THE ASSESSEE HAD INCURRED INCIDENTAL EXPENDITURE AND OTHER EXPENSES ON DAY TO DAY BASIS. HOWEVER, WITHOUT CONSIDERING THE EXPENDITURE, THE AUTHORITIES BELOW ADDED THE COMMISSION PAID BY THE INDIAN OIL CORPORATION TO THE INCOME OF THE ASSESSEE, WHICH IS NOT CORRECT. 6. ON THE OTHER HAND, LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 7. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD OF THE TRIBUNAL. IT IS NOT DISPUTED THAT THE ASSESSEE IS NOT THE OWNER OF THE PETROL PUMP, WHICH INCOM E IS COMPUTED IN HANDS OF THE ASSESSEE. THE ASSESSEE HAD ENTERED INTO AN AGREEMENT WITH THE OWNER OF NEELACHAL SERVICE STATION, MR JAYAKRUSHNA BRAHMACHARI TO LOOK AFTER THE SERVICE STATION ON THE GROUND OF HIS OLD AGE AND ILL HEALTH WITH A REMUNERATION O F RS.5000/ - PER MONTH TILL THREE YEARS FROM THE DATE OF THE ITA NO.430/CTK/2018 ASSESSMENT YEAR: 2010 - 2011 P A G E 4 | 5 AGREEMENT. ACCORDINGLY, THE ASSESSEE HAD OPENED A BANK ACCOUNT WITH STATE BANK OF INDIA AND DEPOSITED THE D AY TO DAY SALE PROCEEDS FROM THE SAID PETROL PUMP. IT IS THE CONTENTION OF THE ASSESSEE THAT TO MANAGE THE PETROL PUMP, THE ASSESSEE HAD TO INCUR SEVERAL EXPENDITURE, WHICH HAS NOT BEEN TAKEN INTO CONSIDERATION BY THE LOWER AUTHORITIES WHILE COMPUTING THE COMMISSION INCOME FROM IOCL. IT IS ALSO EVIDENT FROM THE ORDER OF THE CIT(A) THAT TH E ASSESSEE HAS NOT MAINTAINED THE BOOKS OF ACCOUNT, FOR WHICH, THE ACTUAL EXPENDITURE INCURRED TO MANAGE THE PETROL PUMP IS NOT KNOWN. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE HAD NOT INCURRED ANY EXPENDITURE FOR SMOOTH FUNCTIONING OF THE PETROL PUMP. THERE ARE SO MANY EXPENSES TO BE INCURRED SUCH AS STAFF SALARY . ELECTRICITY BILL . FUEL TRANSPORTATION EXPENSES AND LOSS OF PETROL IN TRANSPORTATION AND MAINTENANCE AND ACCOUNTING EXPENSES . THIS ASPECT HAS TO BE TAKEN INTO CONSIDERATION WHILE DETERMINING THE PROFIT OF THE ASSESSEE ON THE BASIS OF DEALERS COMMISSION FIXED BY IOCL. HOWEVER, LOOKING INTO THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE CONSIDERED VIEW THAT EVEN THOUGH THE ASSESSEE HAS NOT MAINTAINED BOOKS OF ACCOUNT FOR CARRYING OUT THE PETROL PUMP BUSINESS, BUT AT THE SAME TIME HAS INCURRED EXPENDITURE. THEREFORE, IN ORDER TO RENDER SUBSTANTIAL JUSTICE, I DEEM IT PROPER TO RESTRICT THE ADDITION TO 50% OF RS.7,96,984/ - WHICH COMES TO RS.3,98,492/ - . ITA NO.430/CTK/2018 ASSESSMENT YEAR: 2010 - 2011 P A G E 5 | 5 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 1 6 / 0 5 /201 9 . S D/ - ( CHANDRA MOHAN GARG ) JUDICIALMEMBER CUTTACK; DATED 1 6 / 0 5 /20 9 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER SR. PVT. SECRETARY, ITAT, CUTTACK 1. THE APPELLANT : SRI RAM KUMAR DAITAPATI, AT: MATIMANDAP SAHI, NABAT KHANA LANE, PURI 2. THE RESPONDENT. ITO, PURI WARD, PURI 3. THE CIT(A) - 2, BHUBANESWAR 4. PR.CIT - 2, BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//