Sh. Gagan Deep Singh, Ambala Cantt. V. DCIT, Ambala

ITA 487/CHANDI/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63871 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 08-08-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 02-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A, CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 487/CHD/2012 ASSESSMENT YEAR: 2008-09 GAGAN DEEP SINGH V THE D.C.I.T., PROP M/S AMBIKA GOODS AMBALA CARRIERS, 65 GOBIND NAGAR, AMBALA CANTT. BGWPS 3441 L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VINEET KRISHAN RESPONDENT BY: SHRI N.K. SAINI DATE OF HEARING: 8.8.2012 DATE OF PRONOUNCEMENT: 9.8.2012 ORDER PER SUSHMA CHOWLA, JM THE APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A), ROHTAK DATED 2.2.2012 RELATING TO ASSESSMENT YEAR 2008-09 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF THE I.T. ACT, 1961 . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS I N THIS APPEAL:- 1 THAT THE ORDER U/S 250(6) OF THE INCOME-TAX ACT, 1961 DATED 2.2.2012 PASSED BY CIT(A), ROHTAK IS CONTRARY TO LA W AND FACTS OF THE CASE. 2. THAT IN THE PRESENCE OF PROPERLY MAINTAINED BOOK S OF ACCOUNT WITH SUPPORTING BILLS AND VOUCHERS AND WITHOUT POIN TING ANY SPECIFIC DEFECT THEREIN THE CIT(A), ROHTAK GRAVELY ERRED IN SUSTAINING THE ADDITION MADE BY THE ASSESSING OFFIC ER OF RS. 8,73,031/- OUT OF THE FREIGHT EXPENSES PAID ON ARBI TRARY BASIS. 3. THAT WITHOUT PREJUDICE TO THE GROUND NO. 2 THE A DDITION SUSTAINED BY THE CIT(A), ROHTAK IS HIGHLY EXCESSIV E. 3. GROUND NO. 1 RAISED BY THE ASSESSEE BEING GENERA L, IS DISMISSED. 4 THE ISSUE IN GROUND NO. 2 AND 3 RAISED BY THE ASS ESSEE IS IN RELATION TO THE DISALLOWANCE OUT OF FREIGHT EXPENSES AMOUNTI NG TO RS. 8,73,031/-. 2 THE ASSESSEE VIDE GROUND NO. 2 HAS AGITATED THE SAI D DISALLOWANCE AND VIDE GROUND NO. 3 HAS RAISED THE ISSUE THAT THE DIS ALLOWANCE MADE IS HIGHLY EXCESSIVE. 5. BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE A SSESSEE WAS PROPRIETOR OF M/S AMBIKA GOODS CARRIERS AND WAS ENGAGED IN BUS INESS OF TRANSPORT OF PETROLEUM COKE FROM THE REFINERY OF RELIANCE PET ROLEUM SITUATED AT JAM NAGAR TO VARIOUS PARTS OF THE COUNTRY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE OUT OF THE FREIGHT RECEIPTS OF RS. 17,95,51,809/-, RS. 17,46,0 6,125/- WAS CLAIMED AS FREIGHT PAYMENTS. THE ASSESSING OFFICER NOTED THAT THE PAYMENTS WERE MADE IN CASH AND THUS WERE NOT VERIFIABLE. THE ASS ESSING OFFICER DISALLOWED 0.5% OF THE SAID PAYMENTS AMOUNTING TO R S. 8,73,031/-, IN ORDER TO PLUG ANY LEAKAGE ON THIS ACCOUNT. THE CIT (A) UPHELD THE ORDER OF THE ASSESSING OFFICER. THE ASSESSEE IS IN APPEA L AGAINST THE ORDER OF THE CIT(A). 6 SHRI VINEET KRISHAN APPEARED FOR THE ASSESSEE AND SHRI N.K. SAINI APPEARED FOR THE REVENUE AND PUT FORWARD THEIR CONT ENTIONS. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION TO THE EXPENSES CLAIMED BY THE ASSESSEE AGAINST HIS BUSINESS OF RUNNING TRA NSPORT COMPANY. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD CL AIMED EXPENSES OF RS. 17.46 CRORES ON ACCOUNT OF FREIGHT PAYMENT OUT OF FREIGHT RECEIPTS OF RS. 17.95 CRORES. ADMITTEDLY THE SAID PAYMENTS HAVE BE EN MADE IN CASH. THE CASE OF THE ASSESSEE IS THAT HE HAS MAINTAINED PROP ER VOUCHERS IN RESPECT OF SAID FREIGHT CHARGES PAID TO THE TRUCK OWNERS. THE DISALLOWANCE WAS MADE IN THE HANDS OF THE ASSESSEE IN ORDER TO PLUG ANY LEAKAGE ON ACCOUNT OF CASH PAYMENTS MADE BY THE ASSESSEE. IN THE TOT ALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE POSSIBILITY OF LEAKA GE CANNOT BE RULED OUT. 3 HOWEVER, IN THE INTEREST OF JUSTICE, WE RESTRICT TH E DISALLOWANCE OUT OF FREIGHT PAYMENTS TO RS. 4,50,000/-. THUS GROUND NO . 2 RAISED BY THE ASSESSEE IS DISMISSED AND GROUND NO. 3 RAISED BY TH E ASSESSEE IS PARTLY ALLOWED. 8 IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 9TH DAY OF AUGUST, 2012. SD/- SD/- (T.R. SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 9 TH AUGUST, 2012 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR