ITO, New Delhi V. Sh. Anand Pal Singh, New Delhi

ITA 578/DEL/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2944 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 08-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 31-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVIKANT GUPTA
• Keywords: Rule of consistency

Judgement Text

ITA NO. 578/DEL/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI O.P. KANT, ACCOUNTANT MEMBER & SHRI K.N. CHARY, JUDICIAL MEMBER ITA NO.-578/DEL/2013 ( ASSESSMENT YEAR: 2009-10) ITO WARD 39(4) E-2, ROOM NO. 2103, 21 ST FLOOR, CIVIC CENTRE, NEW DELHI. VS ANAND PAL SINGH (PROP. OF M/S TIGRANIA TRANSPORT CO.) SOOD BUILDING, FLAT NO. 6, 3 RD FLOOR, TEL MILL MARG, RAM NAGAR, PAHAR GANJ, NEW DELHI. ABJPS5521Q ASSESSEE BY NONE REVENUE BY SH. RAVI KANT GUPTA, SR. DR ORDER PER K. NARSIMHA CHARY, J.M. CHALLENGING THE ORDER DATED 16/11/2012, IN APPEAL N O. 346/2011-12 PASSED BY THE LD. COMMISSIONER OF INCOM E TAX (APPEALS)-XXVIII (FOR SHORT HEREINAFTER REFERRED TO AS LD. CITA), REVENUE PREFERRED THIS APPEAL. 2. FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN INDIV IDUAL DERIVING INCOME FROM HIS PROPRIETARY CONCERN M/S TI GRANIA DATE OF HEARING 21.12.2017 DATE OF PRONOUNCEMENT 26.12.2017 ITA NO. 578/DEL/2013 2 TRANSPORT COMPANY. FOR THE ASSESSMENT YEAR 2009-10, HE FILED HIS RETURN OF INCOME ON 30/09/2009 DECLARING A TOTA L INCOME OF RS.12,29,700/-AND DURING SCRUTINY, LD. ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD SHOWN AN AMOUNT OF RS.3,90,17,453/-AS LORRY HIRE CHARGES PAYABLE IN TH E BALANCE SHEET UNDER THE HEADING SUNDRY CREDITORS AND THE TO TAL LORRY CHARGES CLAIMED IN PROFIT AND LOSS ACCOUNT WAS RS. 7,89,21,046/-AND WHEN CALLED FOR, THE ASSESSEE EXPL AINED THAT LORRY HIRE IS PAYABLE TO VARIOUS TRUCK OWNERS/AGENT S/DRIVERS AND AS PER TREND PREVAILING IN THE GOODS TRANSPORT INDUSTRY, THERE ARE NUMBER OF DRIVERS, AGENTS AND OWNERS OF T HE MEANS OF TRANSPORTATION WHICH INCLUDES TEMPO, MANY TRUCKS , NORMAL TRUCK AND LONG LORRIES ETC; THAT THESE TRUCK OWNERS , AGENTS, OR DRIVERS ARE NUMEROUS IN NUMBER AND SCATTERED OVER T HE VARIOUS PARTS OF DELHI AND NCR; THAT IS NEITHER FEA SIBLE NOR NECESSARY TO MAINTAIN ACCOUNT OF EACH TRANSPORTER/T RUCK OWNER; THAT DETAILS OF LORRY HIRE CHARGES PAYABLE W AS SUBMITTED AS PER ANNEXURE II; THAT THE ASSESSEE WAS NOT REQUI RED TO DEDUCT TDS BECAUSE IF THE AMOUNT IS LESS THAN RS. 2 0,000 IN SINGLE PAYMENT AND RS. 50,000 IN AGGREGATE PAYMENT; THAT AS PER 2 ND PROVISO TO SECTION 194 C (3) OF THE ACT, NOTED DED UCTION SHALL BE MADE IF THE SUBCONTRACTOR DOES NOT WARN MO RE THAN ITA NO. 578/DEL/2013 3 TWO GOODS CARRIAGE AT ANY TIME DURING THE PREVIOUS YEAR AND THE ASSESSEE SUBMITTED THE DECLARATION RECEIVED FRO M THE TRUCK OWNER; THAT ON THE BASIS OF RULE OF CONSISTENCY OF ACCOUNTING SYSTEMS, ASSESSEE MAINTAINS THE DETAILS OF LORRY HI RE CHARGES ON THE BASIS OF TOLERANCE, THE ASSESSEE SUBMITTED T HE DECLARATION ALONG WITH THE DETAILS OF LORRY HIRE CH ARGES AS PER ANNEXURE I, COPY OF GR AND OTHER RELEVANT AND DOCUM ENTS; THAT THE ASSESSEE HAS OTHER FORMS AND DOCUMENTS IN HIS POSSESSION AND WAS WILLING TO SUBMIT THE SAME AS AN D WHEN REQUIRED; AND THAT THE PAYMENT MADE TO LORRY OWNERS IS TOWARDS HIRE CHARGES OF THE LORRIES. 3. HOWEVER, LD. ASSESSING OFFICER OBSERVED THAT INA SMUCH AS THE ASSESSEE HAD SHOWN HIS INABILITY TO PROVIDE THE PERSON- WISE/PARTY-WISE DETAILS AS SPECIFICALLY REQUIRED BY HIM, AND THE ASSESSEE IS NOT MAINTAINING THE RECORDS WITHOUT VERIFICATION OF WHICH IT WOULD BE DIFFICULT TO DETE RMINE WHETHER THE CRIME OF THE ASSESSEE WAS CORRECT OR NOT, AS SU CH CONSIDERING THE NATURE OF BUSINESS, INSTEAD OF DISS OLVING THE WHOLE LORRY CHARGES, ONLY A NOMINAL DISALLOWANCE OF 5% OF THE LORRY CHARGES WAS MADE, AND ADDED BACK TO THE INCOM E OF THE ASSESSEE. ITA NO. 578/DEL/2013 4 4. IN THE APPEAL PREFERRED BY THE ASSESSEE, LD. CIT (A) ON VERIFICATION OF RECORD FOUND THAT THE ASSESSEE HAD PRODUCED DETAILS TO EXPLAIN HIS CASE AND HE HAS BEEN MAINTAI NING FORM 15-1 AND PRODUCED THE SAME ON A RANDOM BASIS TO EXP LAIN THE CASE; THAT AS SUCH THERE IS ONLY COOPERATION ON THE PART OF THE ASSESSEE TO EXPLAIN THE CASE IN ORDER TO PROVE THE CLAIM ON LORRY EXPENSES; THAT CONSIDERING THE HISTORY OF THE CASE AND THE NATURE OF BUSINESS, IT IS CLEAR THAT THE ASSESSEE W AS FOLLOWING THE PROCEDURE REGARDING MAINTENANCE OF NECESSARY FO RMS AND DOCUMENTS AND WAS READY TO PRODUCE THE SAME IN SUPP ORT OF HIS CLAIM; AND THAT THE ASSESSING OFFICER SHOULD HA VE APPRECIATED THE NATURE OF BUSINESS OF THE ASSESSEE. AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE , LD. CIT(A) FOUND MERIT IN THE CONTENTION OF THE ASSESSEE AND F URTHER OBSERVED THAT UNVERIFIABLE CLAIM DOES NOT MEAN THAT SUCH CLAIM IS NOT A GENUINE ONE AND THE ASSESSING OFFICE R WITHOUT PINPOINTING ANY UNVERIFIABLE CLAIM CANNOT MAKE DISA LLOWANCE ON ESTIMATE BASIS. HOLDING SO, LD. CIT(A) ALLOWED T HE APPEAL OF THE ASSESSEE AND DELETED THE ADDITIONS MADE BY THE LD. AO. CHALLENGING THIS, REVENUE PREFERRED THIS APPEAL. 5. LD. DR VEHEMENTLY RELIED UPON THE ORDERS OF THE LD. ASSESSING OFFICER. HOWEVER, THE IMPUGNED ORDER READ S THAT THE ITA NO. 578/DEL/2013 5 ASSESSEE HAS BEEN FOLLOWING THE PROCEDURE REGARDING MAINTENANCE OF NECESSARY FORMS AND DOCUMENTS AND HE WAS ALSO READY TO PRODUCE THEM BEFORE THE LD. ASSESSING OFFICER AS AND WHEN REQUIRED, IN SUPPORT OF HIS CLAIM BUT WITH OUT CALLING SUCH RECORD AND VERIFICATION THEREOF, LD. ASSESSING OFFICER PROCEEDED TO MAKE ADDITION ON ESTIMATE WHICH HAS NO BASIS AT ALL. 6. WE HAVE GONE THROUGH THE RECORD. THE OBSERVATI ONS OF THE LD. CIT(A) THAT THE ASSESSEE HAS BEEN FOLLOWING THE PROCEDURE RECORDING MAINTENANCE OF NECESSARY FORMS AND DOCUMENTS, AND WAS READY TO PRODUCE THEM IN SUPPORT OF HIS CLAIM GOES UNCONTROVERTED. FURTHER, THE OBSERVATIO NS OF THE LD.CIT(A) THAT THE RECORD MUST BE HAD TO THE NATURE OF BUSINESS AND THE REQUIREMENTS OF LAW WHILE APPRECIA TING THE MERITS OF THE CASE, IS VERY APT AND SOUND IN THE FA CTS AND CIRCUMSTANCES OF THE CASE. WE ARE IN AGREEMENT WIT H THE LD.CIT(A) THAT WHEN THE ASSESSEE IS READY TO PRODUC E DIFFERENT FORMS AND DOCUMENTS, LD.AO IS NOT JUSTIFIED IN MAKI NG ADDITION THAT TOO ON ESTIMATE WHICH HAS NO BASIS AT ALL. WE, THEREFORE, ARE OF THE CONSIDERED OPINION THAT THE A DDITION MADE ON ESTIMATE BASIS CANNOT BE SUSTAINED AND THE IMPUG NED ITA NO. 578/DEL/2013 6 ORDER CANNOT BE DISTURBED. WE ACCORDINGLY DO NOT F IND ANY MERITS IN THIS APPEAL AND DISMISS THE SAME. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26.12.2017 SD/- SD/- (O.P. KANT) (K. NARSIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMB ER DATED: 26.12.2017 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI