Nabros Transport Pvt. Ltd., Ahmedabad V. The Assistant Commissioner of Income Tax, Circle-3(1)(1), Ahmedabad

ITA 559/AHD/2023

• Counselvise Citation: [2024] 130 COUNSELVISE.COM (IT) 0818 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2024
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: D
• Next Hearing Date: 26-02-2024
• Assessment Year: 2016-2017
• Appeal Filed On: 10-07-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUDHAKAR VERMA
• Assessee Lawyers: SANJAY R. SHAH
• Keywords: Business expenditure; Depreciation; Principle of natural justice; Bogus
• Section: 142(1); 143(2); 143(1); 133(6)

Judgement Text

ITA No.559/Ahd/2023 Assessment Year: 2016-17 Page 1 of 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “D” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA No.559/Ahd/2023 Assessment Year: 2016-17 Nabros Transport Pvt. Ltd., D-1201, Titanium Square, Nr. BMW Showroom, Thaltej Cross Road, Thaltej, Ahmedabad – 380 054. [PAN – AAACN 3724 D] Vs. The Assistant Commissioner of Income Tax, Circle – 3(1)(1), Ahmedabad. (Appellant) (Respondent) Assessee by Shri Sanjay R. Shah, AR Revenue by Shri Sudhakar Verma, DR Da t e o f He a rin g 27.02.2024 Da t e o f P ro n o u n ce m e n t 29.02.2024 O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER: This appeal is filed by the assessee against order dated 12.05.2023 passed by the CIT(A), National Faceless Appal Centre (NFAC), Delhi for the Assessment Year 2016-17. 2. The assessee has raised the following grounds of appeal :- “1. The order passed by the Learned Commissioner of Income Tax (Appeals) is against the principle of natural justice as the appellant was not given sufficient opportunities to represent its case. It is submitted that the same be declared void ab initio and be cancelled. 2. Without prejudice to ground no.1 above, the Learned Commissioner of Income Tax (Appeals) has erred in law and on facts of the case by confirming disallowance of depreciation of Rs.1,18,997/- made by the learned Assessing Officer. ITA No.559/Ahd/2023 Assessment Year: 2016-17 Page 2 of 4 3. Without prejudice to ground no.1 above, the Learned Commissioner of Income Tax (Appeals) has erred in law and on facts of the case by confirming addition of Rs.1,68,09,500/- made by the learned Assessing Officer holding that contract expenses incurred by the appellant are bogus. It is submitted that all expenses incurred by the appellant are genuine business expenditure and hence disallowance confirmed be deleted. 4. The Appellant, therefore, prays - a) to delete the disallowance of Rs.1,18,997/- in respect of depreciation, and b) to delete the addition of Rs.168,09,500/- in respect of alleged bogus contract expenditure. made by the learned Assessing Officer and confirmed by the learned Commissioner of Income Tax (Appeals). 5. The appellant prays that the additional interest of Rs.18,47,017/- charged u/s.234B of the Income-tax Act, 1961 consequent to the aforesaid disallowance/addition be deleted.” 3. The assessee filed return of income declaring total income at Rs.7,10,41.270/- on 12.10.2016. The return of income was processed under Section 143(1) of the Income Tax Act, 1961. The case was selected under CASS and notice under Section 143(2) of the Act was issued on 04.07.2017 which was duly served upon the assessee. Notice under Section 142(1) of the Act along with detailed questionnaire was issued on 20.07.2018. In response to the notices, the assessee filed submissions along with the details. The assessee is engaged in the business of transportation services i.e. plying of heavy trucks and trolleys for freight services. The Assessing Officer observed that as per depreciation chart forming part of return of income, the assessee claimed depreciation of Rs.1,69,996/- at 50% on written down value of Rs.3,39,999/- on vehicles categorised under Plant & Machinery. After taking cognisance of the assessee’s reply and details, the Assessing Officer disallowed the excess depreciation amounting to Rs.1,18,997/-. The Assessing Officer further observed that in the Profit & Loss account the assessee debited huge contract expenses during the year. After verifying the details of contracts & sub-contracts and issuing notices under Section 133(6) to various contractors, the Assessing Officer observed that the assessee claimed contract expenses but the parties to whom the assessee ITA No.559/Ahd/2023 Assessment Year: 2016-17 Page 3 of 4 made payment are not found genuine and, therefore, made disallowance amounting to Rs.1,68,09,500/- in respect of bogus contract expenses. 4. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that though the assessee received notices and responded the same during the Covid period, it was not possible for the assessee to attend the proceedings and the CIT(A) simply passed the ex-parte order. The Ld. AR submitted that the matter may be remanded back to the file of the CIT(A) for proper adjudication of the issue on merit after giving hearing to the assessee. 6. The Ld. DR relied upon the Assessment Order and the order of the CIT(A). The Ld. DR submitted that the CIT(A) has given ample opportunity but the same was not availed by the assessee and, therefore, the CIT(A) has rightly dismissed the appeal of the assessee. 7. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee though received notices was not able to respond to the notices within the stipulated time as during the said period there was Covid Pandemic. This aspect was not considered by the CIT(A). Further, the CIT(A) has also not commented on the merits as well as not taken cognisance of the assessee’s evidences filed during the assessment proceedings. Therefore, it will be appropriate to remand back this matter to the file of CIT(A) for proper adjudication of the issues contested by the assessee therein on merit. Needless to say the assessee be given opportunity of being heard by following the principles of natural justice. 8. In the result, appeal of the assessee is partly allowed for statistical purpose. Order pronounced in the open Court on this 29 th February, 2024. Sd/- Sd/- (WASEEM AHMED) (SUCHITRA KAMBLE) Accountant Member Judicial Member Ahmedabad, the 29 th day of February, 2024 ITA No.559/Ahd/2023 Assessment Year: 2016-17 Page 4 of 4 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad