ACIT CIR 13(3), MUMBAI V. ANAND TRANSPORT AGENCY, MUMBAI

ITA 6525/MUM/2010

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4222 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-02-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 06-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: HARI S RAHEJA
• Section: 133A

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI .. , , , BEFORE, SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI JOGINDER SINGH, JUDICIAL MEMBER ITA NO.6525/MUM/2010 ASSESSMENT YEAR: 2007-08 ACIT-13(3), ROOM NO.430, 4 TH FLOOR, AAAYKAR BAHVAN, NEW MARINE LINES MUMBAI-400020 / VS. SHREE ANAND TRANSPORT AGENCY, 15, MAHESH CHAMBERS, 391, NARSINATHA STREET, MASJID BUNDER, MUMBAI-400009 ( ! / REVENUE) ( '#$% /ASSESSEE) PAN. NO. AACFS4872N ! / REVENUE BY SHRI AARSI PRASAD '#$% / ASSESSEE BY SHRI HARI S. RAHEJA & !'(%) / DATE OF HEARING : 10/02/2016 (%) / DATE OF ORDER: 01/03/2016 ITA NO.6525/MUM/2010 SHRI ANAND TRANSPORT AGENCY 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DA TED 17/06/2010, OF THE LD. FIRST APPELLATE AUTHORITY, M UMBAI. GROUND NO.1(I) IS GENERAL IN NATURE REQUIRES NO DEL IBERATION FROM OUR SIDE. THE NEXT EFFECTIVE GROUND I.E. 1(A) RAISED BY THE ASSESSEE PERTAINS TO ADDITION AMOUNTING TO RS.1,42, 427/-, OUT OF RS.3,15,000/-, CASH FOUND DURING SURVEY CARR IED OUT U/S 133A OF THE ACT. THE LD. DR, SHRI AARSI PRASAD, DEFENDED THE ADDITION MADE BY THE LD. ASSESSING OFFICER, WHE REAS, THE LD. COUNSEL FOR THE ASSESSEE, SHRI HARI. S. RAHEJA, DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER BY CONTENDING THAT NOT A SINGLE PIECE OF PAPER WAS NOT FOUND FROM THE PREMISES AND EVEN THERE WAS NO ERROR IN TH E ACCOUNTS OF THE ASSESSEE. PLEA WAS ALSO RAISED THAT THE AMOUNT OF RS.3,15,000/- WAS WITHDRAWN FROM THE BANK ONE DAY PRIOR TO THE DATE OF SURVEY. 2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE, A PARTNERSHIP FIRM, AT THE R ELEVANT TIME WAS ENGAGED IN THE BUSINESS OF TRANSPORTATION FOR T HE LAST ABOUT MORE THAN 30 YEARS. A SURVEY U/S 133A OF THE ACT WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSE E ON 14/03/2007, WHEREIN, THE STATEMENT OF SHRI ANAND KH OSLA, PARTNER OF THE ASSESSEE FIRM WAS RECORDED, WHEREIN, HE MADE ITA NO.6525/MUM/2010 SHRI ANAND TRANSPORT AGENCY 3 A DISCLOSURE OF RS.1 CRORE ON ACCOUNT OF CERTAIN DISCREPANCIES. HOWEVER, IT IS NOTEWORTHY THAT NO INCRIMINATING DOCUMENTS/MATERIAL WAS IMPOUNDED DURI NG THE COURSE OF SURVEY. THE ADDITION WAS BROADLY MADE ON THE BASIS OF STATEMENT RECORDED DURING SURVEY. DURING S URVEY, CASH AMOUNTING TO RS.3,15,000/- WAS FOUND. IT WAS EXPLAINED BY THE ASSESSEE THAT THE CASH WAS WITHDRA WN FROM THE BANK ON 13/03/2007. IN THE BOOKS OF ACCOUNTS, THE CASH AS ON 14/03/2007 WAS RS.1,42,427/-, THUS, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DISALLOWED RS.1,72,573/-, WHICH WAS UN-RECONCILED ACCOUNT BALA NCE. WITHOUT GOING INTO MUCH DELIBERATION, WE FIND NO ME RIT IN THE GROUND OF THE REVENUE, THEREFORE, THE SAME IS DISMI SSED. 3. THE NEXT GROUND PERTAINS TO ADDING THE AMOUNT O F RS.26 LAKH OUT OF RS. 36 LAKH DISCLOSED AS UNACCOUN TED RENOVATION OF OFFICE AND RESIDENTIAL PREMISES. THE CRUX OF ARGUMENT ADVANCED ON BEHALF OF THE REVENUE IS IN SU PPORT OF THE ADDITION, WHEREAS, THE LD. COUNSEL FOR THE ASSE SSEE IS THAT THE RENOVATION OF OFFICES AT SANTOSH NAGAR AND KAIL ASH BHAVAN, THESE PREMISES ARE NOT OWNED BY THE ASSESSE E, THEREFORE, THERE IS NO QUESTION OF INCURRING EXPEND ITURE ON RENOVATION BY THE FIRM. IT WAS ALSO PLEADED THAT NO INCRIMINATING DOCUMENTS OR BILLS FOR THE SO CALLED RENOVATION WERE FOUND DURING SURVEY WHICH CAN WARRANT SUCH ADD ITION. THE ASSESSEE RETRACTED THE STATEMENT WITH RESPECT T O THE DISCLOSURE AND THE ADDITION WAS MADE ON THE BASIS O F ITA NO.6525/MUM/2010 SHRI ANAND TRANSPORT AGENCY 4 STATEMENT OF SHRI ANAND KHOSLA. HOWEVER, SINCE RET RACTION WAS MADE TO THE STATEMENT, THE LD. ASSESSING OFFICE R WAS EXPECTED TO VERIFY THE FACTUAL MATRIX. THE LD. COMM ISSIONER OF INCOME TAX (APPEALS) RESTRICTED THE ADDITION TO THE TUNE OF RS.10 LAKH. WITHOUT MAKING SUCH DELIBERATION AND T HE ASSESSEE IS NOT IN APPEAL, WE SUSTAIN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AS THE LD. ASS ESSING OFFICER HAS NOT BROUGHT ANY RECORD OR MATERIAL TO J USTIFY THE ADDITION. THIS GROUND OF THE REVENUE IS, THEREFORE, DISMISSED. 4. THE NEXT ADDITION OF RS.6,14,575/-, IS WITH RES PECT TO MISTAKES AND COMMISSION DURING SURVEY CARRIED OU T U/S 133A OF THE ACT. THE CRUX OF ARGUMENT ADVANCED ON B EHALF OF THE REVENUE IS THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WHILE GRANTING RELIEF TO THE ASSESSEE FAI LED TO APPRECIATE THAT THE ADDITIONS WERE MADE ON THE BASI S OF STATEMENT RECORDED DURING SURVEY. ON THE OTHER HAN D, THE LD. COUNSEL FOR THE ASSESSEE DEFENDED THE CONCLUSIO N ARRIVED AT IN THE IMPUGNED ORDER. 4.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE AD VERTING FURTHER, WE NOTE THAT IN THE GROUND RAISED BY THE R EVENUE, IT HAS BEEN ACCEPTED BY THE DEPARTMENT THAT THE ADDITI ONS WERE MADE ON THE BASIS OF STATEMENT RECORDED DURING SURV EY, THEREFORE, ON THIS COUNT ITSELF, THE REVENUE HAS NO CASE AT ALL BECAUSE, THE STATEMENT HAS TO BE LINKED WITH THE MA TERIAL ITA NO.6525/MUM/2010 SHRI ANAND TRANSPORT AGENCY 5 AND ONLY THEN THE ADDITION CAN BE MADE. THE ADDITIO N HAS BEEN MADE ON THE BASIS OF OTHER MISTAKES AND COMMIS SION. HOWEVER, NO SUCH MISTAKES OR COMMISSION HAS BEEN PO INTED OUT, THUS, SUCH A ADDITION CANNOT BE SUSTAINED, THE REFORE, WE FIND NO MERIT IN THE GROUND OF THE REVENUE, CONSEQU ENTLY, DISMISSED. 5. GROUND NO.2 (I) RAISED BY THE REVENUE PERTAINS TO REDUCING THE DISALLOWANCE TO 5% OF LOADING AND UNLO ADING EXPENSES INSTEAD OF 50% MADE BY THE LD. ASSESSING O FFICER. THE LD. DR, DEFENDED THE ADDITION, WHEREAS, THE LD. COUNSEL FOR THE ASSESSEE DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER. 5.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE LD. ASSESSING OFFICER MADE DISALLOWANC E OF RS.7,17,490/- BEING 50% OF LOADING AND UNLOADING EX PENSES ON AD-HOC BASIS. WHILE DOING SO, THE LD. ASSESSING OFFICER OBSERVED THAT THE ASSESSEE DID NOT PRODUCE ANY DOCU MENTARY EVIDENCE WHICH ESTABLISHES THE EXPENSES. THE STAND OF THE ASSESSEE IS THAT THE EXPENSES OF LOADING AND UNLOAD ING ARE MOSTLY INCURRED BY THE DRIVERS AND THE PAYMENTS ARE MADE TO ILLITERATE WORKERS, WHO DONT GIVE ANY BILL OF RECE IPTS. BROADLY, WE ARE IN AGREEMENT WITH THE FINDING CONTAINED IN T HE IMPUGNED ORDER WHICH WERE ARRIVED AT AFTER CONSIDER ING THE TOTALITY OF FACTS. THE DISALLOWANCE OF 50% OF THE E XPENSES ON ITA NO.6525/MUM/2010 SHRI ANAND TRANSPORT AGENCY 6 AD-HOC BASIS CANNOT BE SAID TO BE JUSTIFIED, THUS, THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), ON TH IS ISSUE IS SUSTAINED. 6. THE NEXT GROUND PERTAINS TO REDUCING THE DISALLOWANCE TO 10% OF THE TRIP EXPENSES INSTEAD OF 80% MADE BY THE LD. ASSESSING OFFICER. THE CRUX OF ARGU MENT ADVANCED ON BEHALF OF THE REVENUE IS IN SUPPORT TO THE ADDITION, WHEREAS, THE LD. COUNSEL FOR THE ASSESSEE DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER. 6.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE IS A TRANSPORTER. IN ITS PROF IT & LOSS ACCOUNT UNDER VARIOUS HEAD, LIKE DIESEL EXPENSES, T YRE EXPENSES, DRIVER INCENTIVES, REPAIR AND MAINTENANCE , PER TRIP, MADE A CLAIM. THE LD. ASSESSING OFFICER MADE DISALL OWANCE OF RS.26,10,441/- ON THE PLEA THAT THE CLAIM EXPENSES WERE NOT INCURRED BY THE ASSESSEE FOR BUSINESS PURPOSES, THE REFORE, HE DISALLOWED 80% OF SUCH EXPENSES AND ADDED TO THE TO TAL INCOME. TOTALITY OF FACTS CLEARLY INDICATES THAT TH E DISALLOWANCE WAS PURELY MADE ON AD-HOC BASIS, WHICH CANNOT BE SUSTAINED. THE IMPUGNED ORDER WAS PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) CONSIDERING TH E TOTALITY OF FACTS, THEREFORE, THE SAME IS UPHELD. 7. THE LAST GROUND RAISED BY THE REVENUE PERTAINS TO REDUCING THE DISALLOWANCE OF RS.96,000/- OF STAFF S ALARY ITA NO.6525/MUM/2010 SHRI ANAND TRANSPORT AGENCY 7 EXPENSES INSTEAD OF RS.1,91,104/-. THE CRUX OF ARGU MENT ADVANCED BY LD. DR IS IN SUPPORT TO THE ADDITION, W HEREAS, THE LD. COUNSEL FOR THE ASSESSEE, DEFENDED THE CONC LUSION ARRIVED AT IN THE IMPUGNED ORDER. 7.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT IN ITS PROFIT & LOSS ACCOUNT, THE ASSESSEE DEBITED RS.4,03,024/- TOWARDS STAFF COST/STAFF SALARY. ON V ERIFICATION OF THE SALARY REGISTER, IT WAS NOTICED BY THE ASSES SING OFFICER THAT THE STAFF SALARY COMES TO RS.2,11,920/-. THE A SSESSEE VIDE LETTER DATED 18/12/2009 CLAIMED THAT A SALARY OF RS.15,000/- PER MONTH PAID TO MRS. ARCHANA KHOSLA, WHO ASSIST THE PARTNERS IN THEIR DAY TO DAY BUSINESS AC TIVITIES. IN SUPPORT OF ITS CONTENTION, THE ASSESSEE ALSO FILED A SALARY CERTIFICATE. HOWEVER, THE LD. ASSESSING OFFICER DI D NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND THE AMOUNT OF RS.1,91,104/- PAID TO MRS. ARCHANA KHOSLA WAS DISAL LOWED. ON THE PLEA THAT THE ASSESSEE HAS NOT PRODUCE ANY E VIDENCE THAT MRS. KHOSLA ACTUALLY SERVED IN THE OFFICE OR A SSISTED THE PARTNERS. ON EXAMINATION OF RECORD AND AFTER CONSI DERING THE TOTALITY OF FACTS, THE LD. COMMISSIONER OF INCOME T AX (APPEALS) REDUCED THE ADDITION OF RS.11,104/- FROM THE ADDITI ON. MRS. KHOSLA IS A COMMERCE GRADUATE AND USED TO ASSIST TH E PARTNERS IN DAY TO DAY BUSINESS. THE DISALLOWANCE W AS RESTRICTED TO RS.96,000/-. WE FIND NO INFIRMITY IN THE CONCLUSION OF THE LD. COMMISSIONER OF INCOME TAX (A PPEALS). ITA NO.6525/MUM/2010 SHRI ANAND TRANSPORT AGENCY 8 FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVE FROM BOTH SIDES AT T HE CONCLUSION OF THE HEARING ON 10/02/2016. SD/- SD/- ( G.S. PANNU ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER & ' MUMBAI; + DATED : 01/03/2016 F{X~{T? P.S/. .. %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. , -. / THE APPELLANT 2. /0-. / THE RESPONDENT. 3. 11 & 2% ( , ) / THE CIT, MUMBAI. 4. 11 & 2% / CIT(A)- , MUMBAI 5. 4!5/%' , 1, ),'6 , & ' / DR, ITAT, MUMBAI 6. 7#8' / GUARD FILE. / BY ORDER, 04%/% //TRUE COPY// / (DY./ASSTT. REGISTRAR) , & ' / ITAT, MUMBAI