Shri Vinodkumar Dubey, Baroda V. The ACIT.,Circle-2(2), Baroda

ITA 607/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9463 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 16-02-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 09-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS USHA SHROTE
• Keywords: Business expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI S.S. GODARA, JUDICIAL MEMBER) ITA. NO: 607/AHD/2012 (ASSESSMENT YEAR: 2008-09) SHRI VINODKUMAR DUBEY, PROP. INDO TRADING CO., FF-48, VAIKUNTH COMPLEX, GIDC RANOLI, BARODA V/S ACIT, CIRCLE-2(2), BARODA (APPELLANT) (RESPONDENT) PAN: ACDPD 3110H APPELLANT BY : MS. URVASHI SHODHAN, AR RESPONDENT BY : MRS. USHA SHROTE, SR. D.R. ( )/ ORDER DATE OF HEARING : 16 -02-201 6 DATE OF PRONOUNCEMENT : 19 -02-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)- II, BARODA DATED 02.01.2012 PERTAINING TO A.Y. 2008 -09. ITA NO. 607/ AHD/2012 . A.Y. 2008-09 2 2. THE SOLE GRIEVANCE OF THE ASSESSEE RELATES TO THE D ISALLOWANCE OF TRIP EXPENSES OF RS. 25,91,974/-. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT ASSES SEE IS IN THE BUSINESS OF TRANSPORT AND IS PROPRIETOR OF INDO TRADING CO., ENGAGED IN THE TRANSPORTATION CONTRACTS AND ALSO TRADING IN TYRES. THE RETURN FOR THE YEAR UNDER CONSIDERATION WAS SELECTED FOR SCRUTINY ASSESSMENT AND ACCORDINGLY STATUTORY NOTICES WERE ISSUED AND SERVE D UPON THE ASSESSEE. 4. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS, THE A.O. NOTICED THAT THE ASSESSEE HAS SHOWN TURNOVER OF RS. 6.76 CRORES ON WHICH IT HAS SHOWN GROSS PROFIT OF RS. 78.70 LACS. THE A.O FURTHER FOUND THAT THE ASSESSEE HAS DEBITED RS. 30,17,280/- ON ACCOUNT OF TRIP EXPENSES. THE ASSESSEE WAS ASKED TO FURNISH COMPLET E DETAILS OF TRIP EXPENSES. ASSESSEE FILED COPIES OF LEDGER ACCOUNT. 5. THE A.O OBSERVED THAT THE ASSESSEE IS DOING THE SAM E BUSINESS AS WAS DONE IN EARLIER YEARS WHERE NO TRIP EXPENSES WERE F OUND. IN ABSENCE OF ANY JUSTIFICATION, THE A.O COMPLETELY DISALLOWED TH E TRIP EXPENSES AND MADE ADDITION OF RS. 30,17,280/-. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) AND POINTED OUT THAT THE ASSESSEE HA S PURCHASED NEW TRUCKS TO TAKE THE TRANSPORTATION WORK FOR LONG DIS TANCES ALSO. ASSESSEE FILED COMPLETE DETAILS OF TRIP EXPENSES AL ONG WITH EXTRACTS OF SUPPORTING BILLS AND VOUCHERS. AFTER CONSIDERING TH E FACTS AND THE SUBMISSIONS, THE LD. CIT(A) DIRECTED TO RESTRICT TH E DISALLOWANCE OF TRIP EXPENSES TO RS. 25,91,974/-. 6. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. THE L D. COUNSEL FOR THE ASSESSEE VEHEMENTLY SUBMITTED THAT THE LD. CIT(A) C OMPLETELY IGNORED ITA NO. 607/ AHD/2012 . A.Y. 2008-09 3 THE VOLUMINOUS DETAILS FILED BEFORE HIM DURING THE COURSE OF THE APPELLATE PROCEEDINGS. IT IS THE SAY OF THE COUNSEL THAT SINCE THE ASSESSEE HAS MODIFIED ITS LINE OF BUSINESS BY ACCEP TING TRIPS FOR LONG DISTANCES, THE ASSESSEE HAD TO INCUR CERTAIN EXPENS ES FOR THIS NEW LINE, THEREFORE, THESE EXPENSES WERE ABSENT IN THE EARLIE R YEARS. THE LD. COUNSEL FURTHER STATED THAT THIS CANNOT BE THE BASI S FOR THE DISALLOWANCE AS THE TRIP EXPENSES ARE VERY MUCH SUP PORTED BY BILLS AND VOUCHERS AND THE SAME CANNOT BE DISCARDED AT TH E WHIMS AND SURMISES OF THE REVENUE AUTHORITIES. PER CONTRA, TH E LD. D.R. STRONGLY SUPPORTED THE FINDINGS OF THE LOWER AUTHORITIES. 7. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. WE HAVE ALSO GONE THROUGH THE RE LEVANT DOCUMENTARY EVIDENCES BROUGHT ON BEFORE US. UNDISPU TEDLY, COMPLETE DETAILS OF TRIP EXPENSES WERE FILED BEFORE THE FIRS T APPELLATE AUTHORITY. IT IS A TRITE LAW THAT THE POWERS OF LD. CIT(A) ARE CO-TERMINUS TO THAT OF THE A.O. HOWEVER, WE FIND THAT THE FIRST APPELLATE AUTHORITY NEITHER EXAMINED THE VOLUMINOUS DETAILS FILED BEFORE HIM NO R HE CALLED FOR ANY REMAND REPORT FROM THE A.O. 8. IT IS ALSO AN ADMITTED FACT THAT DURING THE YEAR UN DER CONSIDERATION. THE ASSESSEE HAS STARTED TAKING TRANSPORTATION WORK FOR LONG DISTANCES FOR WHICH IT HAS PURCHASED NEW TRUCKS THIS FACT HAS NOT BEEN CONTROVERTED BY ANY OF THE LOWER AUTHORITIES. A CAR EFUL PERUSAL OF THE DOCUMENTARY EVIDENCES BROUGHT ON RECORD BEFORE US S HOW THAT TRIP EXPENSES HAVE BEEN INCURRED BY THE DRIVERS OF THE T RUCKS DURING THEIR LONG DISTANCES TRAVELLING. NONE OF THE LOWER AUTHOR ITIES HAVE BROUGHT ANY COGENT MATERIAL ON RECORD WHICH COULD SUGGEST T HAT THESE ARE NOT BUSINESS EXPENDITURE OF THE ASSESSEE. ITA NO. 607/ AHD/2012 . A.Y. 2008-09 4 9. THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF SY MPHONY COMFORT SYSTEM LTD. IN TAX APPEAL NO. 1501 OF 2011 35 TAXMA NN.COM 533 HAS DECLINED TO INTERFERE WITH THE FINDINGS OF THE TRIB UNAL WHICH READ AS UNDER:THE A.O. CANNOT MAKE ADDITION MERELY BY COMP ARING EXPENDITURE WITH THE PRECEDING YEARS EXPENDITURE. 10. CONSIDERING THE FACTS IN TOTALITY, IN OUR CONSIDERE D OPINION, THE FINDINGS OF THE LD. CIT(A) DESERVES TO BE SET ASIDE , WE DIRECT THE A.O. TO DELETE THE ADDITION OF RS. 25,91,974. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 19 - 02 - 2016. SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD