Union Roadways Ltd., Kolkata V. Addl. C.I.T.,-Range-3, Kolkata, Kolkata

ITA 6/KOL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4427 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 03-10-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 02-01-2014
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT DATTA JCIT LD
• Assessee Lawyers: V N PUROHIT FCA LD

Judgement Text

ITA NO. 06/KOL/14 M/S. UNION ROADWAYS LTD 1 IN THE INCOME TAX APPELLATE TRIBUNAL,B BENCH, KOLKATA BEFORE SHRI M.BALAGANESH, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMB ER I.T.A. NO. 06/KOL/2014 A.Y: 2009-10 M/S. UNION ROADWAYS LTD VS. ADDL.C.I.T, RANGE-3 PAN: AAACU 3732 C KOLKATA (APPELLANT) (RESPONDENT) APPEARANCES BY: SHRI V.N. PUROHIT, FCA, LD. AR FOR THE ASSE SSEE SHRI ABHIJIT DATTA, JCIT, LD.SR.DR DATE OF HEARING : 03-10-2016 DATE OF PRONOUNCEMENT : 07-10-2016 O R D E R SHRI S.S. VISWANETHRA RAVI, JM :- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER 02-10-2013 OF THE COMMISSIONER OF INCOME TAX(APPEAL S), I, KOLKATA DATED FOR THE ASSESSMENT YEAR 2009-10. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING EFFECTIVE GROUND:- 1. THAT FOR THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN SUSTAINING RS.3,00,000/- OU T OF RS. 15,00,000/- MADE BY ADDL.CIT., CIR-3. 3. THE BRIEF FACTS OF THIS CASE ARE THAT THE ASSES SEE IS A COMPANY INVOLVED IN THE BUSINESS OF TRANSPORTATION OF GOODS BY ROAD. THE ASSESSEE FILED ITS RETURN OF INCOME DECLA RING TOTAL ITA NO. 06/KOL/14 M/S. UNION ROADWAYS LTD 2 INCOME OF RS.2,58,90,470/-. UNDER SCRUTINY NOTICES U/S. 143(2)/142(1) OF THE ACT WERE ISSUED. IN RESPONSE T O WHICH, THE ASSESSEE FILED VARIOUS DETAILS, ACCOUNTS AND EV IDENCES IN SUPPORT OF THE RETURN FILED. 4. DURING SUCH PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE HAD DEBITED AN AMOUNT OF RS.168.12 CORES BEING EXPE NSES ON HIRE TRUCKS AND OWN TRUCKS. IN SUPPORT OF IS CLAIM, THE ASSESSEE FURNISHED PARTY-WISE BREAK UP OF EXPENSES ON HIRE T RUCKS AND MAINTENANCE AND RUNNING OF OWN TRUCKS BRANCH WISE. THE AO FOUND THAT RS.163.07 CRORES WERE ON HIRED TRUCKS AN D RS.5.04 CRORES ON OWN TRUCKS. IN EXPLANATION THE ASSESSEE F ILED THE DETAILS OF BREAK UP BRANCH WISE, ACCORDING TO THE A O, WHICH WERE DIFFICULT TO VERIFY THE SAME AND WAS OF THE OP INION THAT THE ASSESSEE SHOULD HAVE FILED PARTY WISE DETAILS FOR W HICH, THE ASSESSEE, FURTHER, SUBMITTED THAT THE HIRED TRUCKS WERE ENGAGED THROUGH BROKERS IN LARGE NUMBERS AND NAMES OF OWNER S/DRIVERS AND THEIR ADDRESSES AND DETAILS OF DRIVING LICENCE WERE ENTERED ON CHALLANS AND PRODUCED THE SAME BEFORE THE AO. CO NSIDERING THE SAME, THE AO HELD THAT THE DETAILS FILED BY THE ASSESSEE ARE UNVERIFIABLE, ACCORDINGLY, HE DISALLOWED OF RS. 15 LAKHS TOWARDS THE SAID EXPENSES ON ESTIMATION BY TREATING THE SAM E AS BOGUS EXPENDITURE. 5. AGGRIEVED BY SUCH ORDER OF THE AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT-A, WHO RESTRICTE D THE SAID DISALLOWANCE TO RS. 3 LAKHS BY STATING AS UNDE R:- 5. THE SUBMISSIONS OF THE APPELLANT HAVE BEEN CONSI DERED. IT IS SEEN THAT THE A.O HAS MADE A LUMP-SUM DISALLOWANCE FROM THE HEAD OF LORRY HIRE CHARGES AND LORRY EXPENSES, ON T HE GROUNDS THAT THE SATISFACTORY DETAILS WERE NOT PROVIDED BY THE APPELLANT AND THAT THE LORRY CHARGES DID NOT HAVE THE VERIFIA BLE DETAILS OF ITA NO. 06/KOL/14 M/S. UNION ROADWAYS LTD 3 THE LORRY OWNERS/DRIVERS. HE, THEREFORE, WENT ON TO HOLD THAT THERE WAS A POSSIBILITY OF SUCH EXPENSES BEING INFL ATED OR BOGUS. IN APPEAL IT HAS BEEN ADMITTED THAT DUE TO T HE PECULIARITIES OF THE TRANSPORTATION BUSINESS, THE A PPELLANT DID NOT HAVE THE LORRY OWNERS ADDRESS AND OTHER DETAILS WHICH IT HAD BEEN ASKED TO PROVIDE IN ASSESSMENT PROCEEDINGS . THE APPELLANT HOWEVER DID PROVIDE TO THE A.O, THE DETAI LS OF PAYMENTS IN SUBSEQUENT YEARS IE A.Y 2010-11 AND 201 1-12 OF THE BALANCES WHICH WERE OUTSTANDING AS ON 31.03 200 9.IT IS ALSO CLAIMED THAT THE LORRY CHALLAN IS PREPARED IN EACH CASE GIVING DETAILS OF THE LORRY NO., DRIVERS NAME, ADVANCE PAI D IF ANY AND BROKERS NAME ETC. IT IS ALSO SEEN THAT IN A.Y 2008- 09, THE DISALLOWANCE BY THE A.O WAS MADE ONLY FROM THE APPE LLANT'S OWN TRUCK EXPENSES AND THAT TOO ON ESTIMATE BASIS, WHEREAS IN THE CURRENT YEAR, THE DISALLOWANCE HAD BEEN MADE FR OM THE LORRY CHARGES WHEN THESE EXPENSES ARE IN FACT COMPA RATIVELY LOWER THAN THE PREVIOUS YEAR. THEREFORE, CONSIDERIN G THE ABOVE FACTS INCLUDING THE BOOKING OF TRUCKS THROUGH THE B ROKERS, THE AD-HOC DISALLOWANCE OF SUCH HUGE AMOUNT CANNOT BE M ADE ONLY ON THE GROUND THAT FULL DETAILS OF DRIVERS INCLUDI NG THEIR ADDRESSES ETC. WERE NOT MAINTAINED. HOWEVER LOOKING TO THE FACT THAT THE APPELLANT HAS SHOWN A HUGE AMOUNT OUTSTAND ING WHICH WAS APPARENTLY PAID IN THE SUBSEQUENT FINANCIAL YE ARS AND FULL VERIFICATION OF SUCH CASH PAYMENTS WOULD NOT BE ACT UALLY POSSIBLE. THEREFORE CONSIDERING ALL THE FACTS, IT W OULD BE REASONABLE FOR THE DISALLOWANCE TO BE RESTRICTED TO RS.3,00,000/-, THE DISALLOWANCE IS ACCORDINGLY CON FIRMED TO THIS EXTENT ONLY. 6. NOT SATISFIED WITH THE ORDER OF THE CIT-A, NOW T HE ASSESSEE IS IN APPEAL BEFORE US BY RAISING THE ABOV E MENTIONED GROUND OF APPEAL AND CONTENDED THAT THE DISALLOWAN CE MADE BY THE AO IS BAD IN LAW FOR THE REASON THAT THE SAID D ISALLOWANCE MADE ON THE BASIS OF ESTIMATION. HE FURTHER SUBMITS THAT THE RESPONDENT REVENUE HAD DISALLOWED AN AMOUNT OF RS.2 .51 LAKHS FOR THE AY 2008-09 IN SUPPORT OF WHICH FILED A CHAR T SHOWING THE SAME. HE FAIRLY STATED THAT NO APPEAL WAS PREFE RRED BY THE ASSESSEE AGAINST THE ORDER PASSED FOR A.Y 2008-09. HOWEVER, HE PRAYED THE BENCH TO RESTRICT THE DISALLOWANCE IN AY 2009- 10 ( I.E. THE YEAR UNDER APPEAL) TO 50% OF RS.3,00, 000/-. 7. THE LD. DR RELIED ON THE ORDER OF THE AO. ITA NO. 06/KOL/14 M/S. UNION ROADWAYS LTD 4 8. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE HAS INCURRED OWN LORRY EXPENSES, WHICH IS LESSER THAN THAT COMPARED TO A.Y 2008-09. HENCE, WE FIND THAT DISALLOWANCE OF OWN LO RRY EXPENSES AT RS.1,50,000/- WOULD MEET THE ENDS OF JU STICE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THE GROUND RAISED BY THE ASSESSEE IS PARTLY ALLOWED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH OCTOBER,2016. SD/- SD/- M.BALAGANESH S.S.VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 07/10/2016 1. THE APPELLANT/ ASSESSEE : M/S. UNION ROADWAYS LTD C/O V.N.PUROHIT & CO. CHARTERED ACCOUNTANTS, DIAMON D CHAMBERS, UNIT-III, 4 TH FLOOR, SUIT NO.4G, 4 CHOWRINGHEE LANE, KOLKATA-16. 2 . THE RESPONDENT/ DEPARTMENT: ADDL. CIT, RANGE - 3, AAYKAR BHAWAN, KOLKATA-69. 3. CIT 4. CIT(A) 5. THE DEPARTMENTAL REPRESENTATIVE 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGIS TRAR ** PRADIP SPS INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA COPY OF THE ORDER FORWARDED TO: -