Income Tax Officer Ward-3, Durg V. SHRI Amritpal Singh Kanda, Durg

ITA 65/BIL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93992 (ITAT-RAIPUR)
• Duration Of Justice: 4 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 25-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S M DAS
• Assessee Lawyers: R B DOSHI
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI MUKUL K. SHRAWAT , JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER IT A NO. 65 / BLPR./2011 ( ASSESSMENT YEAR : 20 0 7 08 ) INCOME TAX OFFICER 3 AAYAKAR BHAVAN CIVIC CENTRE, BHILAI APPELLANT V/S SHRI AMRITPAL SINGH KANDA SANTRA BADI, NEAR DR. BHATIA HOUSE C/O KANDA GARAGE, DURG PAN AQQPK2935E .... RESPONDENT REVENUE BY : SHRI S.M. DAS ASSESSEE BY : SHRI R .B . DOSHI DATE OF HEARING 1 0.06.2015 DATE OF OR DER 12 .06.2015 O R D E R PER SHAMIM YAHYA, A.M. THE APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 29 TH NOVEMBER 2010, PASSED BY THE LEARNED CIT(A), BILASPUR, FOR THE ASSESSMENT YEAR 2007 08. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER : SHRI AMRITPAL SINGH KANDA 2 1. WHETHER IN LAW AND ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF ` 6,65,660, MADE BY THE A.O. UNDER THE HEAD TRANSPORTATION PAYMENT. 2. WHETHER IN LAW AND ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF ` 7,71,330, MADE BY THE A.O. UNDER THE HEAD TRANSPORTATION PAYABLE. 2. IN THIS CASE, THE ASSESSEE DERIVES INCOME FROM TRANSPORTATION BUSINESS. DURING THE COURSE OF ASSE SSMENT, HE OBSERVED THAT THE ASSESSEE HAD NOT PRODUCED PROPER VOUCHERS FOR TRANSPORTATION EXPENSES. HOWEVER, THE ASSESSEE SUBMITTED LEDGER ACCOUNT OF THE PARTIES DULY SIGNED BY THEM IN SUPPORT OF THE TRANSPORTATION EXPENSES CLAIMED. THE ASSESSING OFFICER W AS NOT SATISFIED , THOUGH HE NOTED THAT THE ASSESSEE HAS OBTAINED SIGNATURE OF THE PARTIES IN THE COPY OF LEDGER AND HAS FURNISHED THE SAME AS CONFIRMATION, COPY OF RETURNS OF INCOME OF THESE PARTIES WERE ALSO FILED . H OWEVER, NOTING THAT PROPER VOUCHERS WER E NOT MAINTAINED , T HE ASSESSING OFFICER DISALLOWED 1/8 TH OF THE TRANSPORTATION EXPENSES AMOUNTING TO ` 6,65,660. THE ASSESSING OFFICER FURTHER NOTED THAT OUT OF THE TOTAL TRANSPORTATION EXPENSES SHOWN, THE ASSESSEE HAS SHOWN TRANSPORTATION PAYMENT PAYABLE AT ` 7,75,330. THE ASSESSING OFFICER ISSUED SUMMONS TO THE PARTIES TO WHOM OUTSTANDING PAYMENTS WERE SHOWN. HOWEVER, THERE SHRI AMRITPAL SINGH KANDA 3 WAS NO COMPLIANCE TO THE SUMMONS, HENCE, THE ASSESSING OFFICER DISALLOWED ` 7,71,330, BEING THE AMOUNT OF TRANSPORTATION PAYABLE. 3. UP ON THE ASSESSEES APPEAL, THE LEARNED CIT(A) NOTED THAT THE ASSESSEE HAS MAINTAINED PROPER BOOKS AND RECORDS IN RESPECT OF TRANSPORTATION PAYMENT, TRUCK WISE DETAILS, PARTY WISE LEDGER ACCOUNTS WERE MAINTAINED. THESE LEDGER ACCOUNTS WERE DULY SIGNED BY THE PARTIES. HENCE, THE LEARNED CIT(A) HELD THAT WHEN THE ASSESSEE HAS SUBMITTED NECESSARY DETAILS, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING AN AD HOC DISALLOWANCE. ON SIMILAR REASONING, THE LEARNED CIT(A) ALSO DELETED THE ADDITION OF THE TRANSPORTAT ION PAYABLE. AGAINST THE ABOVE ORDER, REVENUE IS IN APPEAL BEFORE US. 4. AT THE OUTSET, WE NOTE THAT TAX EFFECT IN THIS CASE IS BELOW ` 4 LAKH FIX ED BY THE CBDT FOR FILING APPEALS BEFORE THE TRIBUNAL AS PER ITS LATEST CIRCULAR. HOWEVER, SINCE THIS APPEAL WAS FILED PRIOR TO THE DATE OF THIS LATEST CIRCULAR AND THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD THAT THE SAID CIRCULAR OF THE DEPARTMENT OPERATES PROSPECTIVELY, WE ADJUDICATE THE ISSUE RAISED ON MERITS. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTE D THAT THE ASSESSEE HAS NOT PRODUCED PROPER VOUCHERS AND THE LEARNED CIT(A) WAS NOT JUSTIFIED IN DELETING THE DISALLOWANCE. HE FURTHER SUBMITTED SHRI AMRITPAL SINGH KANDA 4 THAT REGARDING THE TRANSPORTATION EXPENSES PAYABLE, THE ASSESSING OFFICER HAS ISSUED SUMMONS TO THE PARTIES WHO HAVE NOT RESPONDED, HENCE, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE ASSESSING OFFICER. 6. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS IS THE FIRST YEAR OF THE ASSESSEES TRANSPORTATION BUSINESS. HE IS INVOLVED IN TRANSPORTATION OF GOODS BETWEEN DIFFERENT GODOWNS AS PER THE ORDERS OF THE STATE GOVERNMENT. THE LEARNED COUNSEL SUBMITTED THAT THE PERSON TO WHOM THE TRANSPORTATION CHARGES HAVE BEEN PAID ARE SMALL TIME TRANSPORTERS AND ARE NOT PROPERLY LIT ERATE HENCE, EXPECTING THEM TO ISSUE INVOICE AND PROPER VOUCHERS IS NOT JUSTIFIED. THE LEARNED COUNSEL SUBMITTED THAT THE ASSESSEE HAS GIVEN NECESSARY DETAILS REGARDING TRANSPORTATION EXPENSES PAYABLE IN THE FORM OF LEDGER A CC OUNTS OF THE TRANSPORTERS DULY SIGNED BY THEM. THE LEARNED COUNSEL SUBMITTED THAT THEIR ADDRESS AND INCOME TAX DETAILS WERE ALSO FURNISHED. IN THESE CIRCUMSTANCES, THE LEARNED COUNSEL SUBMITTED THAT AD HOC DISALLOWANCE IS NOT JUSTIFIED. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBM ITTED THAT THE TRANSPORTATION PAYABLE IS A PART OF THE TRANSPORTATION EXPENDITURE DEBITED. THE ASSESSING OFFICER HAVING ONCE MADE AN AD HOC DISALLOWANCE OUT OF THE TRANSPORTATION EXPENSES IS NOT JUSTIFIED IN AGAIN SHRI AMRITPAL SINGH KANDA 5 MAKING DISALLOWANCE OUT OF THE TRANSPORTAT ION PAYABLE AS THIS AMOUNTS TO DOUBLE DISALLOWANCE. ACCORDINGLY, THE LEARNED COUNSEL SUBMITTED THAT THE LEARNED CIT(A) HAS RIGHTLY DELETED THE ADDITIONS. 7. UPON CAREFUL CONSIDERATION, WE NOTE THAT THERE IS CONSIDERABLE COGENCY IN THE SUBMISSIONS OF THE LEAR NED COUNSEL THAT SMALL TIME TRANSPORTERS / TRUCK OWNERS CANNOT BE EXPECTED TO ISSUE INVOICE AND PROPER BILLS. THE ASSESSEE HAS DONE THE BEST POSSIBLE EXERCISE OF FURNISHING THEIR LEDGER ACCOUNT DULY SIGNED BY THEM. THE ASSESSEE HAS ALSO FURNISHED THEIR INC OME TAX DETAILS. IN THESE CIRCUMSTANCES, THE ASSESSING OFFICER WAS NOT JUSTIFIED TO MAKE AD HOC DISALLOWANCE. THIS IS MORE SO WHEN IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT THE ASSESSEE HAS MADE ANY BOGUS PAYMENT. AS REGARDS THE DISALLOWANCE OF TRAN SPORTATION PAYABLE, WE AGREE WITH THE LEARNED COUNSEL THAT THIS DISALLOWANCE HAS BEEN MADE OUT OF THE TRANSPORTATION EXPENSES, HENCE, THIS AMOUNTS TO A DOUBLE DISALLOWANCE. FURTHERMORE, JUST BECAUSE THE PARTIES TO WHOM THE ASSESSING OFFICER HAS ISSUED SUMM ONS DID NOT APPEAR, CANNOT BE A SOLE REASON FOR MAKING THE DISALLOWANCE OF THE ENTIRE OUTSTANDING PAYMENT SHOWN AS PAYABLE. THIS VIEW IS SUPPORTED BY THE HONBLE SUPREME COURT DECISION IN CIT V/S ORISSA CORPORATION (P) LTD. [1986] 159 ITR 78 (SC), WHEREIN IT WAS EXPOUNDED WHEN THE NAME AND ADDRESS OF THE CREDITOR IS GIVEN AND SHRI AMRITPAL SINGH KANDA 6 THEY ARE ASSESSED UNDER THE INCOME TAX , THE ONUS THEN SHIFTS ON THE REVENUE TO PROVE THAT THE ASSESSEES CLAIM IS WRONG. IN THE BACKGROUND OF THE AFORESAID DISCUSSION AND PRECEDENCE, I N OUR CONSIDERED OPINION, THE ADDITION MADE BY THE ASSESSING OFFICER IS NOT JUSTIFIED. ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 8. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT O N 12 TH JUNE 2015 SD/ - MUKUL K. SHRAWAT JUDICIAL MEMBER SD/ - SHAMIM YAHYA ACCOUNTANT MEMBER RAI PUR , DATED : 12 TH JUNE 2015 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE ; (2) THE REVENUE; (3) THE CIT(A ) ; (4) THE CIT, BILASPUR CITY CONCERNED ; (5) THE DR, ITAT, RAIPUR (6) GUARD FILE . T RUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY SR. PRIVATE SECRETARY / ASSISTANT REGISTRAR ITAT, RAIPUR