ITO,Ward-40(3), Kolkata, Kolkata V. M/s Greenfield Road Transport, Kolkata

ITA 67/KOL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6065 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 12-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A BHATTACHARJEE
• Assessee Lawyers: N O N E
• Section: 37(1)

Judgement Text

1 ITA NO.67/KOL/2017 GREENFIELD ROAD TRANSPORT, AY- 2012-13 , D , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: KOL KATA ( ) BEFORE . . , /AND . , ) [BEFORE SHRI A. T. VARKEY, JM & SHRI M. BALAGANESH , AM] I.T.A. NO. 67/KOL/2017 ASSESSMENT YEAR: 2012-13 INCOME-TAX OFFICER, WD-40(3), KOLKATA VS. GREENFIEL D ROAD TRANSPORT (PAN: AAGFA2850G) APPELLANT RESPONDENT DATE OF HEARING 20.06.2018 DATE OF PRONOUNCEMENT 11.07.2018 FOR THE APPELLANT SHRI A. BHATTACHARJEE, ADDL. CIT FOR THE RESPONDENT N O N E ORDER PER SHRI A.T.VARKEY, JM THE APPEAL FILED BY THE REVENUE IS AGAINST THE ORDE R OF LD. CIT(A)-12, KOLKATA DATED 28.10.2016 FOR AY 2012-13. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL OF REVENU E IS AGAINST THE ACTION OF THE LD. CIT(A) IN DELETING THE DISALLOWANCE OF RS.71,20,998 /- ON ACCOUNT OF HIRE CHARGES AND TRIP EXPENSES BY ADMITTING FRESH EVIDENCE IN CONTRAVENTI ON OF THE PROVISIONS OF RULE 46A OF THE INCOME-TAX RULES, 1962 (HEREIN AFTER REFERRED TO AS THE RULES). 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AO FOUND THAT THE ASSESSEE HAS DEBITED RS.5,60,76,454/- AND RS.1,51,33,524/- RESPECTIVELY IN ITS P&L ACCOUNT UNDER THE HEADS HIRE CHARGES AND TRIP EXPENSES RESPECTIVELY. D URING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO PRODUCE PART Y WISE DETAILS OF THESE EXPENSES ALONG WITH MODE OF TRANSACTION. ACCORDING TO AO, THE ASS ESSEE DID NOT EVEN FILE THE LEDGER COPY OF THESE EXPENSES. AS THE ASSESSEE FAILED TO PRODU CE ANY DOCUMENT AND ALSO FAILED TO ESTABLISH THE GENUINENESS OF THESE EXPENDITURE, AS PER PROVISIONS OF SECTION 37(1) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS TH E ACT), A SUM OF RS.71,20,998/-, BEING 10% OF EXPENDITURE UNDER THESE HEADS I.E. OF RS.7,1 2,09,978/- WAS DISALLOWED AND ADDED 2 ITA NO.67/KOL/2017 GREENFIELD ROAD TRANSPORT, AY- 2012-13 BACK BY THE AO TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO DELETED THE DISAL LOWANCE AS MADE BY THE AO. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE SUBMISSION OF LD DR AND CAREFU LLY GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. DESPITE FIXING THE APPE AL THRICE, NONE APPEARED ON BEHALF OF ASSESSEE AND WE NOTE THAT THE NOTICE ISSUED BY SPEE D POST FROM OUR TRIBUNAL ALSO HAS RETURNED. THEREFORE, IN THE ABSENCE OF THE LD. AR, WE PROCEED TO HEAR THE APPEAL OF THE REVENUE IN THEIR ABSENCE BECAUSE NO USEFUL PURPOSE WILL BE SERVED KEEPING THE APPEAL PENDING. SO WE ARE DISPOSING THE APPEAL OF THE REVE NUE AFTER HEARING THE LD DR. THE MAIN GRIEVANCE OF THE REVENUE IS AGAINST THE ACTION OF T HE LD. CIT(A) IN DELETING THE DISALLOWANCE OF RS. 71,20,998/- BY ADMITTING FRESH EVIDENCES WIT HOUT GIVING THE ASSESSING OFFICER AN OPPORTUNITY FOR EXAMINING THE VERACITY OF THE DOCUM ENTS, WHICH RESULTED IN VIOLATION OF RULE 46A OF THE INCOME TAX RULES. THE LD. DR DREW OUR AT TENTION TO PARA NO.7.2 OF THE IMPUGNED ORDER OF THE LD. CIT(A) WHEREIN THE LD. CI T(A) ADJUDICATED THE ISSUES AS UNDER: 7.2 I HAVE CONSIDERED THE FACTS OF THE CASE AND TH E SUBMISSIONS OF APPELLANT. IT IS SEEN THAT THE ASSESSEE HAS DEBITED RS.5,60,76,454/- AND 1,51,33,5 24/- RESPECTIVELY IN ITS P&L ACCOUNT UNDER THE HEAD, HIRE CHARGE AND TRIP EXPENSES RESPECTIVELY. THE A.O DISALLOWED A SUM RS.71,20,998/- BEING 10% OF EXPENDITURE UNDER THESE HEADS I.E. RS.7,12,0 9,978/- AS THE ASSESSEE FAILED TO PRODUCE ANY DOCUMENT AND THIS ALSO FAILED TO ESTABLISH THE GENU INENESS OF THESE EXPENDITURE AS PER PROVISION OF SECTION 37(1) OF THE ACT. IT IS SEEN THAT THE APPEL LANT MAINTAINED BOOKS OF ACCOUNTS DULY AUDITED .... ..... SUBMISSIONS. THESE HAVE BEEN PERUSED. THE NP DECLAR ED BY THE APPELLANT IS A HEALTHY 2.7% WHICH IS RATHER ON THE HIGH SIDE IN THIS KIND OF BUSINESS AN D THE DISALLOWANCE BY THE A.O INCREASES THE NP TO 11.5% WHICH IS AN ABSURD AMOUNT. THE APPELLANT HAS MAINTAINED REGISTRATION CERTIFICATE OF ALL THE VEHICLES AS WELL AS THE PHOTOCOPIES OF THE PAN OF T HE OWNERS OF SUCH VEHICLES AND HIRE CHARGES HAVE BEEN PAID ARE VERY MUCH WITH THE APPELLANT AND SAME PHOTOCOPIES OF THEM ARE ANNEXED WITH THIS WRITTEN SUBMISSIONS FOR YOUR EXAMINATION. THE APPEL LANT FURTHER SUBMITS THAT THE APPELLANT MAINTAINS VEHICLE WISE DETAILS OF TRIP EXPENSES (VEHICLE WISE DETAILS ARE FILED IN ANNEXURE C AND D ARE ENCLOSED ALONG WITH THIS SUBMISSIONS).......... HAS NOT POINTED OUT ANY DEFICIENCIES IN THEIR AUDITED BOOKS. AS PER ......... SUBMITTED, I FIND FORCE IN THE CONTENTION OF THE APPELLANT AND HEREBY DELETE T HE DISALLOWANCE MADE BY THE A.O. 5. WE NOTE THAT THE ASSESSING OFFICER HAS MADE THE DISALLOWANCE BECAUSE THE ASSESSEE HAD NOT FILED LEDGER COPY OF THE EXPENSES IT CLAIME D AND IT FAILED TO PRODUCE ANY DOCUMENTS TO ESTABLISH THE GENUINENESS OF THE EXPENDITURE CLA IMED AS HIRE CHARGE AND TRIP EXPENSES. SO, THE ASSESSING OFFICER MADE DISALLOWA NCE OF 10% OF THE EXPENSES CLAIMED. ON APPEAL, THE LD. CIT(A) HAS GIVEN RELIEF TO THE A SSESSEE BY TAKING NOTE OF THE ASSESSEES SUBMISSION AND AFTER PERUSAL OF ANNEXURE C & D ETC. FROM THE PERUSAL OF THE ORDER OF THE LD. CIT(A), WE NOTE THAT THE ASSESSEE HAD FURNI SHED CERTAIN DOCUMENTS WHICH HAD NOT 3 ITA NO.67/KOL/2017 GREENFIELD ROAD TRANSPORT, AY- 2012-13 BEEN PRESENTED BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. IN SUCH A SCENARIO, THE LD. CIT(A) OUGHT TO HAVE APPLIED RUL E 46A OF THE RULES BEFORE ADJUDICATING THE ISSUE. AS PER RULE 46A, TWO STAGE OPPORTUNITY NEED TO BE GIVEN BY LD. CIT(A) TO AO. FIRST, BEFORE ADMISSION OF FRESH EVIDENCE, AND SECO ND AFTER ADMISSION OF EVIDENCE AS TO THE MERIT OF NEW EVIDENCE BY CALLING FOR A REMAND REPOR T. WITHOUT DOING SO, RULE 46A OF THE RULES HAS BEEN VIOLATED AND, THEREFORE, WE FIND FOR CE IN THE GROUND OF APPEAL OF THE REVENUE. THEREFORE WE SET ASIDE THE ORDER OF THE LD . CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO DE NOVO ASSESSMEN T ON THE ISSUE DISCUSSED ABOVE ON WHICH THE REVENUE HAS COME IN APPEAL. 6. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 11.07.2018 SD/- SD/- (M. BALAGANESH) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 11TH JULY, 2018 JD.(SR. P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT ITO, WARD-40(3), KOLKATA. 2 RESPONDENT GREENFIELD ROAD TRANSPORT, 2 ND FLOOR, 32, D. H. ROAD, KOLKATA-700 060. 3. THE CIT(A) -12, KOLKATA. (SENT THROUGH E-MAIL) 4. 5. CIT KOLKATA DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, SR. PVT. SECRETARY