Classic Cargo Carriers, Kolkata V. ITO, Ward - 1, Balurghat, Uttar Dinajpur

ITA 575/KOL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48285 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 12-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SAHA
• Assessee Lawyers: S L KOCHAR
• Section: 143(3); 133(6)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE , /AND , . !' . ) [BEFORE HONBLE SRI MAHAVIR SINGH, JM & HONBLE SHR I C. D. RAO, AM] # # # # / I.T.A NO. 575/KOL/2011 $% &' $% &' $% &' $% &'/ // / ASSESSMENT YEAR : 2004-05 CLASSIC CARGO CARRIERS VS INCOME-TAX OFFICER, W D-1, BALURGHAT (PAN-AADFC 9154 A) ()* /APPELLANT ) (+,)*/ RESPONDENT ) FOR THE APPELLANT: SHRI S. L. KOCHAR FOR THE RESPONDENT: SHRI R. K. SAHA - / ORDER PER MAHAVIR SINGH, JM ( , , , , ) THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A), JALPAIGURI IN APPEAL NO.01/BLG/CIT(A)/JAL/2009-10 DATED 21.02.2011. ASSE SSMENT WAS FRAMED BY ITO, WD-1, BALURGHAT U/S. 143(3) OF THE INCOME TAX ACT, 1961 ( HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2004-05 VIDE HIS ORDER DATED 27.12. 2006. THE PENALTY IN DISPUTE WAS LEVIED BY ITO, WD-1, BALURGHAT U/S 271(1)(C) OF THE ACT VI DE HIS ORDER DATED 30.03.2009. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST ORDER OF CIT(A) CONFIRMING LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. FOR THI S, ASSESSEE HAS RAISED FOLLOWING THREE GROUNDS OF APPEAL: 1.FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING LEVY OF PENALTY OF RS.71,750/- MADE BY THE A.O. U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961 . 2. FOR THAT THE LD. CIT(A) OUGHT TO HAVE APPRECIATE D THE SUBMISSIONS MADE BY THE APPELLANT AND OUGHT TO HAVE CANCELLED THE LEVY OF P ENALTY. 3. FOR THAT THERE HAD BEEN NO CONCEALMENT OF ANY IN COME ON THE PART OF THE APPELLANT AND THAT THE LD. CIT(A) OUGHT TO HAVE TAKEN NOTE OF THE EXPLANATION SUBMITTED BEFORE HIM PROPERLY AND OUGHT TO HAVE ALLOWED THE APPEAL O F THE APPELLANT. 3. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE T HAT ASSESSEE IS A TRANSPORTER WHO CARRIES GOODS ON CONTRACT BASIS FROM DIFFERENT PART IES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSING OFFICER NOTICED THAT ASSESSE E HAD LORRY HIRE CHARGES OUTSTANDING TO THE TUNE OF RS.24,50,050/- AS AGAINST THE SUNDRY DEBTORS AMOUNTING TO RS.26,77,280/-. ACCORDING TO ASSESSING OFFICER, ASSESSEE IS FOLLOWI NG CASH SYSTEM OF ACCOUNTING AND THERE CANNOT BE ANY OUTSTANDING AMOUNT OF SUNDRY CR EDITORS AND ACCORDING TO HIM LORRY HIRE CHARGES OUTSTANDING AMOUNTING TO RS.24,50,050/ - ARE NOT ALLOWABLE AS DEDUCTION SINCE PAYMENTS ARE NOT ACTUALLY MADE AND ASSESSEE I S MAINTAINING CASH SYSTEM OF 2 ITA 575/K/2011 CLASSIC CARGO CARRIERS. A.Y.04-05 ACCOUNTING. ACCORDINGLY, HE ADDED A SUM OF RS.24,50 ,050/- TREATING THE SAME AS BOGUS. ASSESSING OFFICER ALSO INITIATED PENALTY PROCEEDING S U/S. 271(1)(C) OF THE ACT. AGGRIEVED AGAINST THIS ADDITION, ASSESSEE PREFERRED APPEAL BEFORE CIT(A) AND CIT(A) CONSIDERING THE OUTSTANDING SUNDRY DEBTORS OF RS.26 ,77,280/- BEING THE DIFFERENTIAL AMOUNT OF RS.2,27,230/-, ESTIMATED THE ADDITION OF LORRY HIRE CHARGES OUTSTANDING AT RS. 2 LACS. ASSESSEE HAS NOT CARRIED THE MATTER FURTHER IN APPEALS BEFORE HIGHER FORUMS. ASSESSING OFFICER AFTER RECEIPT OF THE ORDER OF CIT (A) STARTED PENALTY PROCEEDINGS FOR THIS AMOUNT OF RS. 2 LACS AND LEVIED PENALTY AS UND ER: SUBMISSION OF THE A/R IS METICULOUSLY GONE THROUGH BUT FOUND TO BE FALSE AND NOT ACCEPTABLE ON THE GROUNDS THAT THE RETENTION OF RS. 2,00,000/- BY THE LD. CIT(A) IS NOT AN ESTIMATED ADDITION. IT IS LORRY HIRE CHARGE OUTSTA NDING, SHOWN IN LIABILITIES SIDE OF THE BALANCE SHEET. IN ORDER TO TEST CHECK THE GENUINEN ESS OF CREDITORS FOR OUTSTANDING LORRY HIRE CHARGES. NOTICES U/S. 133(6) OF THE I. T. ACT , 1961 WERE ISSUED TO SOME OF THE CREDITORS ON THE BASIS OF ADDRESS SUPPLIED BY THE A/R OF THE ASSESSEE DURING THE COURSE OF SCRUTINY ASSESSMENT, ALL THE NOTICES RETURNED BACK WITH THE POSTAL REMARKS NOT KNOWN AND NO SUCH PERSON IN THE ADDRESS EXCEPT ONE, IN WHICH CASE, THE CREDITOR DENIED TO HAVE ANY TRANSACTION WITH THE ASSESSEE. THE ABOVE FACTS WERE APPRISED TO THE A/R. BUT HE COULD NOT OFFER ANY SATISFACTORY EXPLANATION. T HUS, IT WAS PROVED THAT THE ASSESSEE FAILED TO SUBSTANTIATE THE GENUINENESS OF OUTSTANDI NG LORRY HIRE CHARGES. THE ITO MADE TOTAL ADDITION OF RS.24,50,050./- ON ACCOUNT OF LOR RY HIRE CHARGES OUTSTANDING ON THE SAME GROUND, TREATING THE SAME AS BOGUS LORRY HIRE CHARGES OUTSTANDING. BUT THE LD. CIT(A) , JALPAIGURI VIDE HIS ORDER IN APPEAL NO.20/ CIT(A)/BLG/JAL DATED 29.6.2007 CONFIRMED ONLY RS.2,00,000/-. THUS, AS PER THE OR DER OF THE LD. CIT(A), A/RS SUBMISSION IS FOUND TO BE FALSE AND THE MENS REA I S WELL ESTABLISHED. THEREFORE, IT IS PROVED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME TO THE TUNE OF RS.2,00,000/- AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A). CIT(A) ALSO CONFIRMED THE PENALTY EXACTLY ON SAME REASONING. AGGRIEVED, NOW ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT TOTAL FREIGHT CHARGES RECEIVED HAVE BEEN AT RS.1,27,95,372/- AND LORRY HIRE PAYMENT AT RS.1,10,70,060/- OUT OF WHICH PAYAB LE OUTSTANDING ARE AT RS.24,50,050/- AND RECEIVABLE OUTSTANDING ARE AT RS.26,77,280/-. THE ASSESSING OFFICER MADE ADDITION OF ONLY PAYABLE OUTSTANDING WITHOUT GIVING COUNTER EFFECT TO RECEIVABLE OUTSTANDING. CIT(A), ALTHOUGH THE DIFFERENCE WAS RS.2,27,230/- B ETWEEN RECEIVABLES AND PAYABLES, DESPITE THAT ESTIMATED DISALLOWANCE AT RS. 2 LACS. WE FIND THAT THE ONLY PREMISE OF THE ASSESSING OFFICER FOR LEVYING PENALTY IS THAT ADDIT ION CONFIRMED BY CIT(A) OF RS.2 LACS CLEARLY PROVES THAT SUBMISSIONS OF ASSESSEE IS FALS E AND MENS REA IS ESTABLISHED. ACCORDING TO HIM, THEREFORE, THE ASSESSEE HAS FURNI SHED INACCURATE PARTICULARS OF HIS INCOME TO THE TUNE OF RS.2 LACS. WE FIND THAT THE C IT(A) HAS CLEARLY ADMITTED THE ADDITION ON ACCOUNT OF BEING DIFFERENCE IN PAYABLES AND RECEIVABLES OUTSTANDING AND 3 ITA 575/K/2011 CLASSIC CARGO CARRIERS. A.Y.04-05 THEN ESTIMATED RS. 2 LACS AS DISALLOWANCE. THERE I S NO REASON OR BASIS FOR LEVY OF PENALTY AND HOW THIS AMOUNT IS CONCEALED INCOME. N O DOUBT THE ASSESSEE IS FOLLOWING CASH SYSTEM OF ACCOUNTING, THESE PAYABLES AND RECEI VABLES CANNOT BE CLAIMED AS DEDUCTIONS, BUT THE ASSESSEE HAS NOT CONCEALED ANY PARTICULARS OF INCOME RATHER HE HAS FILED COMPLETE DETAILS BEFORE ASSESSING OFFICER DUR ING ASSESSMENT PROCEEDINGS AND THIS VIEW OF OURS IS FORTIFIED BY THE DECISION OF HONBL E APEX COURT IN THE CASE OF CIT V. RELIANCE PETROPRODUCTS PVT. LTD. (2010) 322 ITR 174 (SC), WHEREIN THE HONBLE APEX COURT HAS HELD :- WE ARE NOT CONCERNED IN THE PRESENT CASE WITH THE MENS REA. HOWEVER, WE HAVE TO ONLY SEE AS TO WHETHER IN THIS CASE, AS A MATTER OF FACT , THE ASSESSEE HAS GIVEN INACCURATE PARTICULARS. IN WEBSTERS DICTIONARY, THE WORD INACCURATE HAS BEEN DEFINED AS: NOT ACCURATE, NOT EXACT OR CORRECT ; NOT ACCORDING TO TRUTH ERRONEOUS AS AN INACCURATE STATEMENT, COPY OR TRANSCRIPT . WE HAVE ALREADY SEEN THE MEANING OF THE WORD PARTI CULARS IN THE EARLIER PART OF THIS JUDGMENT. READING THE WORDS IN CONJUNCTION, THEY MU ST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CORREC T, NOT ACCORDING TO TRUTH OR ERRONEOUS. WE MUST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. SUCH NOT BEING THE CASE, THERE WOULD BE NO Q UESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACC URATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANN OT AMOUNT TO THE INACCURATE PARTICULARS. IN VIEW OF THE GIVEN FACTS AND CIRCUMSTANCES AND RE LYING ON THE DECISION OF HONBLE APEX COURT CITED SUPRA, WE DELETE THE PENALTY AND A PPEAL OF ASSESSEE IS ALLOWED. 5. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. 6. ORDER PRONOUNCED IN OPEN COURT ON 22.7.2011 SD/- SD/- . !' !'!' !' . , (C. D. RAO) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( ' ' ' ' ) )) ) DATED 22ND DAY OF JULY, 2011 ./ $01 2 JD.(SR.P.S.) 4 ITA 575/K/2011 CLASSIC CARGO CARRIERS. A.Y.04-05 - 3 +4 54&6- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT M/S. CLASSIC CARGO CARRIERS, 170/2C, AJ C BOSE ROAD, 1 ST FLOOR, KOLKATA-700 014. 2 +,)* / RESPONDENT, ITO, WD-1, BALURGHAT 3 . -$ ( )/ THE CIT(A), JALPAIGURI 4. -$ / CIT, 5 . => +$ / DR, KOLKATA BENCHES, KOLKATA ,4 +/ TRUE COPY, -$?/ BY ORDER, 1 /ASSTT. REGISTRAR .