ITO, Barnala V. M/s The Truck Operator Union, Barnala

ITA 688/CHANDI/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5058 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2004-2005
• Appeal Filed On: 02-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGHDR
• Keywords: Assessment record

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 688/CHD/2016 ASSESSMENT YEAR: 2004-05 THE INCOME TAX OFFICER, VS THE TRUCK OPERATOR UNI ON, WARD 2, SEHNA BHADAUR, DISTT. BARNALA. BARNALA. PAN NO. : AAAAT9000E & CO NO. 30/CHD/2016 IN ITA 688/CHD/2016 THE TRUCK OPERATOR UNION, VS THE INCOME TAX OFFIC ER, SEHNA BHADAUR, DISTT. BARNALA. WARD-2, BARNALA. PAN NO. : AAAAT9000E (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI MANJIT SINGH,DR ASSESSEE BY : SHRI SUDHIR SEHGAL DATE OF HEARING : 24.05.2017 DATE OF PRONOUNCEMENT : 14.07.2017 ORDER PER MS. DIVA SINGH,JM THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE ALONGW ITH CO/30/CHD/2016 ASSAILING THE CORRECTNESS OF THE ORDER D ATED 29.02.2016 OF LD. CIT(APPEALS) PANCHKULA PERTAINING TO 2004-05 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS : 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 19,20,000/- MADE ON ACCOUNT OF DIFF ERENCE IN RECEIPTS AS PER FORM NO.L6A VIS-A-VIS PROFIT AND LOSS ACCOUNT. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.28,20,508/- TO THE EXTENT OF RS.26,2 6,700/- MADE ON ACCOUNT OF DIFFERENCE IN RECEIPTS AS PER BANK ACCOUNTS VIS-A-V IS PROFIT AND LOSS ACCOUNT. 2. THE LD. SR.DR ADDRESSING THE BACKGROUND OF THE CASE S UBMITTED THAT THE ASSESSEE IS A TRUCK OPERATOR UNION AND IN THE COURSE OF PROCEEDINGS BEFORE THE AO, IT WAS NOTED THAT THE ASSESS EE HAD RECEIVED A PAYMENT OF RS. 3,66,32,394/- WHEREAS AS PER THE PROFIT & L OSS ACCOUNT, THE ASSESSEE HAD SHOWN GROSS RECEIPT OF RS. 3,47,12,394/ -. THUS, NOTING THE DIFFERENCE OF RS. 19,20,000/-, THE ASSESSEE WAS REQUIRE D TO EXPLAIN THE SAME. INVITING ATTENTION TO THE REPLY DATED 28.08.20 06, TAKEN NOTE OF ITA 688/CHD/2016 A.Y. 2004-05 PAGE 2 OF 9 BY THE AO AT PAGE 2, IT WAS SUBMITTED THAT THE ASSESSE E HAD SUBMITTED THE FOLLOWING REPLY : 'THERE WAS A DIFFERENCE OF RS.19,20,000/- BETWEEN T HE FREIGHT RECEIVED CREDITED TO THE PROFIT AND LOSS ACCOUNT AND TDS CERTIFICATES DU E TO THE FACT THAT SOME PAYMENTS WERE DIRECTLY MADE TO THE MEMBERS FROM THE FREIGHT RECEIVED ACCOUNT INSTEAD OF DEBITING IN THE FREIGHT PAID ACCOUNT. TH E LIST OF ALL THESE MEMBERS IS ENCLOSED AS PER ANNEXURE-I.' 2.1. INVITING ATTENTION TO PAGE 3 OF ASSESSMENT ORDER IT W AS SUBMITTED THAT THE ADDITION OF THE SAID AMOUNT WAS MADE BY THE AO SINCE DESPITE PROVIDING AMPLE OPPORTUNITY, THE ASSESSEE FAILED TO FURNISH ANY DOCUMENTARY EVIDENCE. 2.2 APART FROM THAT, AN ADDITION OF RS. 28 LACS WAS ALSO MADE AS THERE WERE DIFFERENCES NOTED IN THE BANK STATEMENTS. THE ADDIT ION, IT WAS SUBMITTED WAS CONFIRMED IN APPEAL BY THE CIT(A). HOWEVER, T HE ASSESSEE HAD FILED AN APPEAL BEFORE THE ITAT AND THE ISSUE WAS REM ANDED TO THE CIT(A) VIDE ORDER DATED 25.11.2011 IN ITA 959/CHD/2010. 2.3 ACCORDINGLY, IN THE SECOND ROUND BEFORE THE CIT(A), IT WAS SUBMITTED THOUGH THE REMAND REPORTS WERE OBTAINED AND COPY OF THE SAME IS EXTRACTED IN THE ORDER, THE ADDITIONS HAVE BEEN LARGELY DELETED. 2.4 INVITING ATTENTION TO THE REMAND REPORT DATED 27.0 9.2012, IT WAS SUBMITTED THAT THE ASSESSEE COULD NOT JUSTIFY THE NECE SSITY OF PREPARING THE IMPREST ACCOUNT. IN FACT, THE FOLLOWING OBSERVATION OF THE AO WAS HIGHLIGHTED : AS DURING THE COURSE OF ASSESSMENT PROCEEDINGS AN ADDITION OF RS.19,20,000/- WAS MADE ON ACCOUNT OF FREIGHT RECEIVED FROM PUNJAB AGR O AND THE SAME WAS NOT REFLECTED IN THE BOOKS OF ACCOUNTS. THE ASSESSEE CO ULD NOT JUSTIFY THE NECESSITY OF PREPARING IMPREST ACCOUNT RATHER SHOWING THESE TRAN SACTIONS IN REGULAR BOOKS OF ACCOUNT. 3. THE LD. AR, ON THE OTHER HAND, SUBMITTED THAT IN THE FAC TS OF THE PRESENT CASE IT IS AN ACCEPTED FACT THAT THE ASSESSEE DOES NOT OWN ANY TRUCKS AND EXISTS ONLY FOR ITS MEMBERS FOR WHICH SOME NO MINAL COMMISSION IS CHARGED. THE MATTER HAS BEEN ENQUIRED INTO AT LENGTH BY THE AO DURING THE REMAND PROCEEDINGS . REMAND REPORT IS EXTRACTED IN THE ORDER. REPLY OF THE ASSESSEE TO THE REMAND RE PORT, IT WAS SUBMITTED , IS ALSO EXTRACTED. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, AS HAS BEEN CONSIDERED BY THE CIT(A), IT WAS HIS SUBMISSION THE ADDITION ON FACTS IS CORRECTLY DELETED. IT WAS SUBMITTED THAT THE ASSESSEE ALSO, IN FACT, HAS COME IN CROSS OBJECTIONS AGAINST THE PART ADDITION SUSTA INED IN APPEAL BY THE CIT(A) . ITA 688/CHD/2016 A.Y. 2004-05 PAGE 3 OF 9 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON CONSIDERATION THEREOF, WE FIND THAT THE ARGUMENTS ON BEHALF OF THE REVENUE BY LD. SR.DR SHRI MANJ IT SINGH, ARE NOT SUPPORTED BY THE SPECIFIC FINDINGS OF THE AO IN THE REM AND REPORT WHICH HAS BEEN EXTRACTED IN PARA 3.2 OF THE IMPUGNED ORD ER. A PERUSAL OF THE SAME SHOWS THAT THE ASSESSING OFFICER ACCEPTS THE FACT THAT THERE WERE NO ASSETS WITH THE ASSESSEE IN THE SHAPE OF TRUCK S AND THE TRUCKS HAVE BEEN PROVIDED BY THE MEMBERS OF UNION AND ON GOING THROUGH THE RECORD WHICH INCLUDES STATEMENTS OF THE OPERATORS, THE S PECIFIC BANK ACCOUNTS, THE CONCLUSIONS HAVE BEEN DRAWN THAT AS FAR A S THE AMOUNT OF RS. 19,20,000/- IS CONCERNED, THE EXPLANATION OF THE ASSESS EE IS FULLY SUPPORTED. SIMILARLY, IN REGARD TO THE SECOND AMOUNT OF R S. 26,20,508/- , THE AO IN THE REMAND PROCEEDINGS, AGAIN TAKING INTO CONS IDERATION THE STATEMENTS OF THE CONCERNED PERSONS HAS CONCLUDED THA T THE AMOUNT WHICH WAS SO STATED TO HAVE BEEN HANDED OVER TO THE ORIGINAL OWNER BY SHRI MOOL RAJ, ON FACTS WAS FOUND TO HAVE BEEN HANDED OV ER TO THE MUNSHI OF THE TRUCK UNION WHO DEPOSITED THE AMOUNT IN TH E BANK ACCOUNT WHO LATER ON WITHDREW AND DISTRIBUTED THE SAME TO THE MEMBERS AS PER THEIR WORK. STATEMENT OF THE MEMBERS HAVE BEE N RECORDED. STATEMENT OF MUNSHI SHRI BALJIT SINGH HAS ALSO BEEN RECOR DED BY HIM AND HE HAS GIVEN A CATEGORIC FINDING THAT THE STATEMENT CO-RELATES TO WHAT IS RECORDED IN THE EARLIER REMAND REPORT AND ONLY IN REGARD TO THE LIMITED AMOUNT WHEREIN EXPLANATION WAS NOT OFFERED, THE ADDIT ION WAS STATED TO HAVE BEEN RIGHTLY MADE. IT IS SEEN THAT THE ASSESSEE'S SUBMISSION ON THE REMAND REPORT IS RECORDED IN PARA 3.3 AND INFACT RELIANCE IS PLACED UPON THE OBSERVATIONS OF THE AO IN THE REMAND PROCEEDINGS. CONSIDERING THESE SUBMISSIONS, CIT(A) IN PARA 3 .4 RESTRICTED THE ADDITION TO AN AMOUNT OF RS. 1,93,808/- AND A COMMISSION INCOME @ 1% ON THE AMOUNT OF RS. 45,46,700/- AMOUNTING TO RS. 45,467/- HAS BEEN SUSTAINED. 4.1 ON A CONSIDERATION OF THE SPECIFIC FINDINGS, ARGUMENTS AND CONSIDERATION OF FACTS AND CIRCUMSTANCES WHEREIN WE NOTE THAT QUA THE ADDITIONS SUSTAINED TO THE EXTENT OF RS. 1,93,808/-, THE LD. AR THOUGH ARGUED THAT ONLY THE COMMISSION INCOME COULD HAVE BEEN SUSTAINED, DID NOT OFFER ANY SPECIFIC EXPLANATION IN REGARD TO THE SAME. A CCORDINGLY, IN THE AFOREMENTIONED PECULIAR FACTS AND CIRCUMSTANCES, WE FIND THAT NO ITA 688/CHD/2016 A.Y. 2004-05 PAGE 4 OF 9 INTERFERENCE IS CALLED FOR IN THE IMPUGNED ORDER. RELEVANT E XTRACT FROM THE SAID ORDER IS REPRODUCED HEREUNDER, WHICH IS UPHELD BY US : 3.2 IN VIEW OF THE SPECIFIC OBSERVATION OF HON'BLE ITAT THE MATTER WAS REMANDED BACK TO THE A.O. U/S 250(4) OF IT ACT, 196 1 FOR NECESSARY ENQUIRY AND VERIFICATION OF THE FACTS AND THE SUBMI SSION MADE BY THE APPELLANT WAS FORWARDED TO THE A.O. THE SUBMISSIONS OF THE APPELLANT WAS SENT TO THE A.O. VIDE THIS OFFICE LETTER NO. 60 5 DATED 04.09.2012 FOR HIS COMMENTS. THE AO FILED REPLY VIDE LETTER NO. 33 8 DATED 27.09.2012, THE RELEVANT PORTION OF WHICH IS REPRODUCED AS UNDE R: 'THE BRIEF FACTS OF THE CASE ARE THAT DURING THE CO URSE OF ASSESSMENT PROCEEDINGS, THE ADDITION OF RS. 19,20,0 00/- WAS MADE ON ACCOUNT OF DIFFERENCE IN GROSS RECEIPTS AS PER B OOKS OF ACCOUNT AND TDS CERTIFICATES AND FURTHER ADDITION OF RS.28, 20,508/- WAS MADE BEING THE DIFFERENCE IN THE TOTAL RECEIPTS AND THE TOTAL RECEIPTS CREDITED IN THE BANK OF THE ASSESSES BESID ES THIS THERE WAS AN ADDITION ON ACCOUNT OF DISALLOWANCE OF EXPEN SES DEBITED IN PROFIT AND LOSS ACCOUNT. IT IS A FACT THAT THE T RUCK OPERATOR UNION IS FORMED FOR COLLECTIVE BARGAIN OF ITS MEMBE RS TO AVOID UNHEALTHY COMPETITION. THE ACCOUNT BOOKS OF ASSESSE E HAVE BEEN DULY AUDITED AND ITS BALANCE SHEET REFLECTS THAT UN ION DOES NOT OWN ANY TRUCK OF ITS OWN AND IT MERELY RECEIVES COMMISSION/CERTAIN FEES FROM ITS MEMBERS. THE GOVT. AGENCIES LIKE FCI, MARKFED WHO REQUIRED TRANSPORTATION OF FO OD GRAINS IN BULD FIND ITS CONVENIENT TO ENTER AGREEMENT WITH TH E UNION FOR SUPPLY OF TRUCKS. THE PAYMENTS RECEIVED FROM THESE AGENCIES ARE DISTRIBUTED AMONGST ITS MEMBERS AS PER THEIR WORK A ND A NOMINAL FEE IS EXTRACTED FROM GROSS RECEIPT TO RUN DAY EXPE NSES. AS PER YOUR DIRECTIONS, I ISSUED NOTICE TO THE ASSE SSEE TO PROVIDE COMPLETE LIST OF MEMBERS ALONG WITH THEIR C OMPLETE ADDRESS AND ASSESSEE PROVIDED THE LIST OF ITS MEMBE RS. AS DURING THE COURSE OF ASSESSMENT PROCEEDINGS AN ADDITION OF RS.L9,20,000/- WAS MADE ON ACCOUNT OF F REIGHT RECEIVED FROM PUNJAB AGRO AND THE SAME WAS NOT REFL ECTED IN THE BOOKS OF ACCOUNTS. THE ASSESSEE COULD NOT JUSTIFY T HE NECESSITY OF PREPARING IMPREST ACCOUNT RATHER SHOWING THESE TRAN SACTIONS IN REGULAR BOOKS OF ACCOUNT. THERE AFTER I HAVE CALLED UPON SOME OF THE OPERATO RS OF THE UNION FOR THEIR STATEMENTS. THE STATEMENTS OF T HE OPERATORS RECORDED AND ENCLOSED HEREWITH. STATEMENT CLEARLY R EVEALS THAT THE OPERATORS HAD RECEIVED THE PAYMENT OUT OF THE A MOUNT OF RS.19,20,000/- AS PER WORK DONE. IN THEIR STATEMENT S, OPERATORS HAVE ADMITTED THAT THEY HAD RECEIVED ALL THEIR DUES UPTO 31.03.2004 AND NOTHING IS PENDING WITH THE UNION. THIS FACT WAS ALSO CO-RELATED WITH THE OFFICE RECOR DS THAT THE DETAILS OF TRUCK NUMBERS AND NAMES OF THE OWNER S OF THE TRUCK HAD BEEN PLACED ON RECORD TO WHOM THE PAYMENT S IS MADE. THE DETAIL OF PROFIT AND LOSS ACCOUNT AS FILED WITH THE RETURN OF INCOME SHOW THE FREIGHT AMOUNT RECEIVED AND AGAINST THAT, THE MAJOR EXPENSES ARE WITH REGARD TO FREIGHT TO THE ME MBERS AND OTHERS ARE ONLY VERY NOMINAL EXPENSES. I HAVE PERUS ED THE BALANCE SHEET OF THE TRUCK OPERATORS UNION AND FIND THAT, THERE ARE NO ASSETS IN THE SHAPE OF TRUCKS. THUS, WHEN TH E TRUCKS HAD BEEN PROVIDED BY THE MEMBERS OF THE UNION, THEN THE PAYMENT OF FREIGHT HAS TO BE MADE BY THE UNION AND AGAINST SUC H PAYMENT MADE TO THE TRUCK OPERATORS, SINCE THEY BEAR ALL DA Y TO DAY EXPENSES OF THE RUNNING AND REPAIRS OF THE TRUCK AN D UNION IS NOT RESPONSIBLE FOR THE SAME. IN THE BANK ACCOUNTS OF THE ASSESSEE, THE AMOUNT OF RS.19,20,000/- HAS BEEN DEP OSITED AND ITA 688/CHD/2016 A.Y. 2004-05 PAGE 5 OF 9 THE SAME HAD BEEN WITHDRAWN ON DIFFERENT DATES FOR DISTRIBUTING AMONGST ITS MEMBERS. SECOND ADDITION OF RS.26,20,508/- WAS MADE ON ACCOUNT OF DIFFERENCE IN CREDIT SUMMATION IN THE B ANK AND AS PER BOOKS OF ACCOUNTS. OUT OF TOTAL ADDITION, THE MAIN ADDITION OF RS.26,26,700/- WAS DUE TO EXCESS DEPOSIT IN BANK AC COUNT ON DIFFERENT DATES. THE ASSESSEE STATED THAT THE AMOUNT WAS RECEIVED FR OM MOOL RAJ HTC ON BEHALF OF ITS MEMBERS WHO HAD INDI VIDUALLY SUPPLIED THEIR TRUCK FOR SPECIAL AND TO ENSURE THAT PAYMENT IS DISTRIBUTED TO THE ORIGINAL OWNER, MOOL RAJ HANDED OVER THE ENTIRE AMOUNT TO MUNSHI OF THE TRUCK UNION WHO DEPO SITED THE AMOUNT IN BANK ACCOUNT AND LATER WITHDRAWN AND DIST RIBUTED THE SAME TO THE MEMBERS AS PER THEIR WORK. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT THIS AMOUNT WAS CREDITED IN THE BANK A CCOUNTS OF ASSESSEE WHEREAS THE SAME WAS NOT REFLECTED IN P&L ACCOUNT ON GROSS RECEIPTS SIDE. THE INCOME OF RS. 26,26,700/-W AS RECEIVED FROM THE MARKET. HOWEVER AS PER DIRECTIONS, I CALLED UPON THE CONTRA CTOR MOOL RAJ AND RECORDED HIS STATEMENT WHICH IS APPEND ED HEREWITH. MOOL RAJ IN HIS STATEMENT HAS ADMITTED TH AT HE ENGAGED TRUCKS INDIVIDUALLY FROM THE OPERATORS FOR CARRYING THE WORK OF SPECIAL. HE ALSO ADMITTED THAT HE HAD INDIV IDUALLY MADE THE PAYMENT TO OPERATORS OF THE UNION THROUGH MUNSH I OF THE UNION SO THAT PAYMENT MAY NOT FALL IN WRONG HANDS. THE MEMBERS WHOSE STATEMENT HAVE BEEN RECORDED HAVE ALS O ADMITTED THAT THEY HAD RECEIVED THEIR SHARE FROM AM OUNT OF RS. 26,26,700/- FROM MOOL RAJ THROUGH MUNSHI OF THE UNI ON. THE STATEMENT OF MUNSHI SH. BALJEET SINGH HAS ALSO BEEN RECORDED AND HE HAS ALSO ADMITTED THAT THE PAYMENT WAS ROUTE D THROUGH HIM. IN VIEW OF THE ABOVE, I AM OF THE VIEW THAT TH E ACCOUNTS STATED SUPRA ARE THE PART AND PARCEL OF GROSS RECEI PTS, HOWEVER WERE NOT SHOWN IN THE PROFIT AND LOSS ACCOUNT AS T HE MEMBERS OF THE UNION HAVE ADMITTED IN THEIR STATEMENT THAT THEY HAD RECEIVED THE PAYMENT AS PER THEIR WORK DONE AND NOT HING IS DUE AT THE CLOSING OF YEAR 31.03.2004. THIS FACT ALSO CO-RELATES TO STATEMENT OF SOME OF I TS MEMBERS RECORDED AT TIME OF EARLIER REMAND PROCEEDI NGS AVAILABLE ON FILE. ALL THE MEMBERS HAD ADMITTED THA T THEY HAD WORKED FOR SH. MOOL RAJ, HTC AND THEIR SHARE OF PAY MENT WAS RECEIVED THROUGH MUNSHI OF THE UNION. IN THE STATEM ENT OF SH. MOOL RAJ, HTC WHICH HAD BEEN PLACED ON RECORD, HE H AS ADMITTED THAT INSTEAD OF DISTRIBUTING THE PAYMENT A MONGST THE MEMBERS, THE SAME WAS HANDED OVER TO MUNSHI OF THE UNION FOR BETTER ACCOUNT AND CONTROL. THE REST OF THE ADDITION IS DUE TO DIFFERENCE IN BA NK ACCOUNT AND IN REGULAR BOOKS OF ACCOUNTS. THE ASSES SEE HAD FILED DETAIL IN THIS REGARD TO JUSTIFY THE DIFFEREN CE IN BANK ACCOUNT. DURING THE COURSE OF ASSESSMENT PROCEEDING S THE ASSESSEE COULD NOT PROVE THE GENUINENESS OF THESE D EPOSITS. HENCE THIS ADDITION WAS RIGHTLY MADE.' 3.3 DURING THE APPELLATE PROCEEDINGS, THE COUNSEL OF THE THE RELEVANT PORTION OF THE SAME IS REPRODUCED AS UNDER: 'RESPECTFULLY SUBMITTED THAT IN CONTINUATION OF MY EARLY SUBMISSIONS, SOME MORE DETAILS ARE FURNISHED. IT IS AGAIN SUBMITTED THAT LD. AO HAS ADMITTED IN H IS REMAND REPORT THAT TRUCK OPERATORS UNION IS FORMED FOR COLLECTIVE ITA 688/CHD/2016 A.Y. 2004-05 PAGE 6 OF 9 BARGAIN OF ITS MEMBERS AND TO AVOID UNHEALTHY COMPE TITION. HE HAS FURTHER ADMITTED THAT UNION ITSELF DOES NOT OWN ANY TRUCK OF ITS OWN AND IT MERELY RECEIVES COMMISSION / CERTAIN FEE FROM ITS MEMBERS TO REGULATE DAY TO DAY WORK AND RUNNING OF DAILY OFFICE EXPENSES OF THE UNION. THE PAYMENTS RECEIVED FROM THE AGENCIES ARE DISTRIB UTED AMONGST ITS MEMBERS AS PER THEIR WORK DONE AND A NO MINAL FEE IS EXTRACTED FROM THE GROSS RECEIPTS TO RUN DAY TO DAY EXPENSES. FIRSTLY THERE WAS AN ADDITION OF RS. 1920000/- WAS MADE ON ACCOUNT OF FREIGHT RECEIVED FROM PB. AGRO AND THE S AME WAS NOT REFLECTED IN THE GROSS RECEIPT ACCOUNT. LD. AO IN H IS REMAND REPORT ADMITTED THAT DETAILS OF TRUCK MEMBERS AND NAME OF THE OWNERS OF THE TRUCKS HAD BEEN PLACED ON RECORD TO WHOM THE PA YMENT OF 1920000/- WAS MADE. THE DETAIL OF PROFIT AND LOSS A CCOUNT AS FILED WITH THE RETURN OF INCOME SHOWS THAT FREIGHT AMOUNT RECEIVED AND AGAINST THAT THE MAJOR EXPENSES WITH REGARD TO THE FREIGHT TO THE MEMBERS AND OTHER EXPENSES ARE VERY NOMINAL. HE ALS O ADMITTED THAT APPELLANT DID NOT OWN ANY TRUCK OF ITS OWN, TH EREFORE WHEN THE TRUCKS HAVE BEEN PROVIDED BY THE MEMBERS OF THE UNI ON, THEN THE PAYMENT OF FREIGHT HAS TO BE MADE TO ITS MEMBERS. A S AGAINST SUCH PAYMENT MADE TO THE TRUCK OPERATORS THEY BEAR ALL D AY TO DAY EXPENSES OF THE RUNNING AND REPAIRS OF TRUCK AND UN ION IS NOT RESPONSIBLE FOR THE SAME. IN THE BANK ACCOUNTS OF T HE ASSESSEE THE AMOUNT OF RS. 1920000/- HAS BEEN DEPOSITED AND THE SAME HAS BEEN WITHDRAWN ON DIFFERENT DATES TO DISTRIBUTE THE SAME AMONGST THE MEMBERS. IN VIEW OF THE FORGOING FINDING OF THE LD. AO AFTER GOING THROUGH ASSESSMENT RECORD IT SHOWS THAT APPELLANT H AS DEPOSITED THE AMOUNT RS. 1920000/- IN THE BANK AFTER RECEIVIN G IT FROM PB AGRO AND THE SAME WAS DISTRIBUTED AMONGST THE MEMBE RS OF THE UNION (AS PER LIST GIVEN DURING THE ASSESSMENT PROC EEDINGS). LD. AO HAS WRONGLY MADE THE ADDITION ONLY ON THE GROUND THAT APPELLANT HAS NOT PRODUCED ANY VOUCHERS. IT IS SUBM ITTED THAT ON ONE SIDE LD. AO ADMITS THAT APPELLANT RETAINS ONLY SMALL AMOUNT FOR ITS DAY TO DAY WORK EXPENSES AND BALANCE IS REM ITTED TO THE MEMBERS OF THE TRUCK UNION, SECONDLY HE HAS ALSO AD MITTED THAT APPELLANT HAS NOT OWNED ANY TRUCK OF ITS OWN AND TH E AMOUNT HAS TO BE MADE TO ITS MEMBERS. THEREFORE, THE AMOUNT OF RS. 1920000/- WITHDRAWN FROM BANK ACCOUNT ON DIFFERENT DATES TO D ISBURSE IT AMONGST THE MEMBERS. SIMPLY MERE NON PRODUCTION OF VOUCHER DOES NOT ITSELF SURVIVES FOR ADDITION OF THE AMOUNT OF R S. 1920000/-. SECOND ADDITION OF RS. 2820508/- WAS MADE ON ACCOUN T OF DIFFERENCE IN CREDIT SUMMATION IN THE BANK AND AS P ER BOOKS OF ACCOUNTS. OUT OF THIS ADDITION MAJOR ADDITION IS OF RS. 2626700/- WHICH WAS DUE TO EXCESS DEPOSIT IN BANK ACCOUNT ON DIFFERENT DATES. LD. AO DURING THE ASSESSMENT PROCEEDINGS MAD E ADDITION OF RS. 2626700/- ONLY ON THE GROUND THAT THE SAME WAS NOT REFLECTED IN PROFIT AND LOSS ACCOUNT ON GROSS RECEIPT SIDE. R EPLY / FACTS SUBMITTED BY THE APPELLANT WERE CATEGORICALLY NOT T AKEN INTO ACCOUNT. WHEREAS LD. AO IN HIS REMAND REPORT HAS AD MITTED THAT DURING THE FIRST REMAND REPORT STATEMENT OF MOOL RA J CONTRACTOR REVEALS THAT MEMBERS OF THE UNION HAD INDIVIDUALLY SUPPLIED THEIR TRUCKS FOR SPECIAL AND TO ENSURE THAT PAYMENT IS DI STRIBUTED TO THE ORIGINAL OWNER, MOOL RAJ CONTRACTOR HANDED OVER THE AMOUNT TO MUNSHI OF THE UNION. MUNSHI DEPOSITED THE AMOUNT IN THE BANK ACCOUNT OF UNION AND LATER THE SAME WAS WITHDRAWN A ND DISTRIBUTED AMONGST THE MEMBERS. STATEMENT OF SOME MEMBERS OF T HE UNION WAS ALSO TAKEN AND ALL THE MEMBERS STATED THAT THEY HAV E INDIVIDUALLY WORKED FOR THE CONTRACTOR AND AMOUNT WAS RECEIVED F ROM THE CONTRACTOR THROUGH MUNSHI OF THE UNION. ITA 688/CHD/2016 A.Y. 2004-05 PAGE 7 OF 9 APPELLANT HAD FURNISHED THE DETAIL LIST OF THE PAYM ENT OF RS. 2626700/- DISTRIBUTED AMONGST THE MEMBERS OF THE UN ION DURING THE ASSESSMENT PROCEEDINGS AND LD. AO IN HIS FIRST REM AND REPORT RECEDED THE STATEMENTS OF THE MEMBERS AS WELL AS TH E CONTRACTOR FROM WHOM THE PAYMENT WAS RECEIVED HAVE JUSTIFY THE CLAIM OF THE APPELLANT. ON REST OF THE ADDITION LD. AO ONLY STATES THAT ASS ESSES COULD NOT PROVE THE GENUINENESS OF THESE DEPOSITS. APPELLANT DURING THE ASSESSMENT PROCEEDINGS EXPLAINED ALL THE ENTRIES, WHICH ITSELF EXPLAIN THE GENUINENESS OF THE ENTRIES. APPE LLANT HAS FILED ALL THE RELEVANT DETAILS DURING ASSESSMENT PROCEEDINGS AS WELL AS BEFORE YOUR GOOD SELF DURING APPELLANT PROCEEDINGS, WHICH ITSELF EXPLAIN THE NATURE OF ENTRIES. WITH REGARDS TO ADDITION OF RS. 1920000/ AND SUM OF RS. 2626700/- OUT OF 2820508/- IT IS SUBMITTED AS UND ER ----- THE AMOUNT OF RS. 1920000/ RECEIVED FROM PB AGRO A GOVT AGENCY HAS MADE THE PAYMENT ON 09/05/2003 FOR AN AMOUNT OF RS. 1850235/ AFTER DEDUCTING TDS AND OTHER CHARGES IN SANGRUR CE NTRAL CO OPERATIVE BANK SENNA BHADAUR AND THE SAME WAS DISTR IBUTED AMONG THE MEMBERS. (DETAILS OF PAYMENTS TO MEMBERS WAS ALREADY FURNISHED WITH EARLIER REPLIES. SIMILARLY THE PAYME NTS OF RS. 2626700 OUT OF RS. 2820508/- THE SAME WAS ALSO DEPO SIT IN THE SANGRUR CENTRAL COOPERATIVE BANK LTD SENHA BHADUHAR ON 28/07/2003 TO 25/11/2003 BY THE CONTRACTORS. THE SA ME WAS REPAID TO THE MEMBERS (LIST OF PAYMENT MADE TO MEMBERS WAS ALREADY FURNISHED ON EARLIER HEARINGS.) PHOTO COPY THE BANK A/C FROM THE ASSESSES BOOK AND FROM BANK ARE FURNISHED IN ITS SU PPORT THAT ALL THE PAYMENTS WERE FIRST DEPOSIT IN THE BANK AND THE REAFTER THE SAME WAS REPAID TO THE MEMBERS. A GIST OF PAYMENTS RECEIVED FROM AGENCIES AND CREDI TED IN BANK ALSO ATTACHED WHICH NARRATES AGENCIES WISE DEP OSIT AND OTHER DEPOSITS. GIST OF THE PAYMENTS SHOWS THAT IN THE SA NGRUR CENTRAL CO-OPERATIVE BANK COMES TO RS. 35973531/- AND IN SB OP COMES TO RS. 3479271/-, THUS TOTALING OF TWO COMES TO RS. 39 452802/-, APPELLANT RECEIVES GROSS FREIGHT AS PER BOOKS OF RS. 34712394-00 GROSS FREIGHT FROM PBAGRO AS PER FORM NO. 16A RS . 1920000-00 TOTAL COMES TO RS.36632394-00 FREIGHT RECEIVED FROM CONTRACTORS DEPOSIT IN BANK RS. 2626700-00 TOTAL COMES TO RS. 39259094-00 WITH REGARD TO BALANCE OF RS. 2820408 - 2626700 - 9 3708/- IS CONCERNED THE SAME IS EXPLAINED AS UNDER - AMOUNT TDS DEDUCTED RS. 202885-00 SECURITIES DEDUCTED RS. 281009-00 BANK CHARGES RS. 8097-00 TOTAL COMES TO_______________________ RS. 491991-00 LESS REFUND OF SECURITIES RS. 364699-00 NET BALANCE COMES TO RS. 321000-00 NET EFFECT COMES TO RS. 193708- THE SAME IS ADDED. THUS, THE AMOUNT OF RS. 2626700 + 193708 COMES TO R S. 2820408/-. THEREFORE THE ADDITION OF RS. 192000/- AND RS. 2820 408/- STANDS EXPLAINED AND DESERVES TO BE DELETED. THIRDLY THE ADDITION OF RS. 22323/- ON ACCOUNT OF D ISALLOWANCE OF EXPENSES OUT OF MISC., REPAIR & MAINTENANCE, TELEPH ONE, TRAVELLING AND POOJA & LANGER EXPENSES. ONLY ON THE GROUND THE VOUCHERS ARE ITA 688/CHD/2016 A.Y. 2004-05 PAGE 8 OF 9 NOT PRODUCED. THESE EXPENSES ARE INCIDENTAL TO BUSI NESS AND PART AND PARCEL OF THE BUSINESS HENCE DESERVES TO BE ALL OWED. IN VIEW OF THE FORGOING SUBMISSIONS ADDITIONS MADE BY THE LD. AO MAY KINDLY BE DELETED AND GROUNDS RAISED BY THE APPELLANT BE ADMITTED.' 3.4 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPEL LANT AND THE REMAND REPORTS OF THE A.O. U/S 250(4) OF IT ACT' 1961. AS PER RECORD AND DETAILS SUBMITTED DURING APPELLATE PROCEEDING THE GROSS REC EIPTS OF THE APPELLANT AS PER BANK A/C IS RS.3,94,52,802/- WHICH IS INCLUSIVE OF RS. 35,97,351/- IN SANGRUR CENTRAL CO-OP. BANK AND RS. 34,79,271/- IN SBOP WHILE THE APPELLANT HAS SHOWN GROSS RECEIPTS A T RS.3,92,59,094/-. THE GROSS RECEIPTS AS PER FORM-16A STATED AT RS.3,6 6,32,394/-. THE DIFFERENCE OF RS.26,26,700/- BETWEEN GROSS RECEIPT SHOWN BY APPELLANT AND GROSS RECEIPTS AS PER FORM-16A SAID TO BE DUE T O A PAYMENT PERTAINING TO SH. MOOL RAJ. THE A.O. HAS, HOWEVER, ADDED RS.28,20,508/- ON ACCOUNT OF DIFFERENCE IN THE GROS S RECEIPT SHOWN IN BANK A/C AND GROSS RECEIPT AS PER FORM-16A. THE A.O . HAS ALSO CONTENDED THAT THE BALANCE IN SANGRUR CENTRAL CO-OP . BANK WAS AT RS.3,36,017/- BUT THE APPELLANT HAS SHOWN IN BALANC E SHEET ONLY RS.15,017/-. THE BALANCE RS.3,21,000/- WAS SAID TO BE A COLLECTION OF FUNDS BY THE OPERATOR MEMBERS FROM AMONG THEMSELVES FOR SOME UNION WORKING WHICH WAS DEPOSITED IN THE BANK ON 29.03.20 09, WHEREAS THE SAME WAS ENTERED IN THE BOOKS ON 01.04.2004. HOWEVE R, THE A.O. DIDN'T ACCEPT THE CONTENTION OF THE APPELLANT AND CONSIDER ED RS. 3,21,000/- AS UNDISCLOSED INCOME BUT MADE NO SEPARATE ADDITION AS THE SAME WAS INCLUDED IN RS.28,20,508/-. ON PERUSAL OF THE REMAN D REPORT OF THE A.O., IT IS SEEN THAT THE APPELLANT'S SUBMISSION IN RESPECT OF THE DISTRIBUTION OF THE AMOUNTS TO THE MEMBERS IS CORRO BORATED. IT IS ALSO OBSERVED THAT SUCH ENQUIRY WAS UNDERTAKEN DURING TH E ORIGINAL REMAND PROCEEDINGS ALSO WHEREIN THE MEMBERS HAD CONFIRMED RECEIPT OF SUCH PAYMENTS. NO DISCREPANCY IS NOTED BY THE A.O. IN TH E SUBMISSION MADE BY THE APPELLANT. IT IS ALSO POINTED OUT THAT THE D ETAILS OF TRUCK NUMBERS AND NAMES OF PERSONS TO WHOM PAYMENTS WERE MADE ARE PLACED ON RECORD. DURING THE EARLIER APPELLATE PROCEEDINGS, T HE ID. CIT(A) HAD CONFIRMED THE ADDITION DUE TO THE FACT THAT THE APP ELLANT DIDN'T CO- OPERATE DURING THE REMAND PROCESSING. THEREAFTER, H ON'BLE ITAT RESTORED THE MATTER BACK TO THE C1T(A) WITH THE OBS ERVATION AS REPRODUCED IN PARA 2.2 OF THIS ORDER. NOW, THE A.O. HAS SUBMITTED THE REMAND REPORT AS REPRODUCED IN PARA 3.2. HOWEVER, I T IS ALSO SEEN THAT DURING THE REMAND PROCEEDINGS, THE TRUCK OPERATORS ETC. HAVE GIVEN THE REPLIES AND IN SOME CASES, THE EXACT AMOUNT RECEIVE D COULD NOT BE CONFIRMED THOUGH THE SAME IS CONFIRMED BY APPELLANT . HOWEVER, THE A.O. IN THE REMAND REPORT HAS SUBMITTED THAT TRUCKS ARE SUPPLIED BY THE MEMBERS OF THE UNION AND, THEREFORE, PAYMENTS H AD TO BE MADE TO THEM. EVEN OTHERWISE, LOGICALLY SPEAKING THE TRUCK OPERATOR UNION WHICH IS ONLY FACILITATING AGENCY HAS RENDERED ITS SERVICES ONLY FOR THE BENEFITS OF ITS MEMBERS AND THE ENTIRE GROSS AMOUNT RECEIVED BY IT DIRECTLY OR OTHERWISE CANNOT BE ITS TOTAL INCOME BE CAUSE FOR RENDERING SERVICES LOGICALLY SPEAKING THEY HAVE TO GET THE TR UCK FROM ITS MEMBERS TO WHOM THE PAYMENT HAS TO BE MADE AND THEREFORE, T HE TOTAL AMOUNT OF RS. 47,40,508 (19,20,000 + 28,20,508) BY NO STRETCH OF IMAGINATION CAN BE ITS TOTAL INCOME. HOWEVER, THE VERY FACT THAT TH E APPELLANT HAS FURNISHED THE DETAILS OF ONLY RS. 45,46,700/- (19,2 0,000 + 26,26,700) TO THE A.O. OUT OF THE TOTAL AMOUNT OF RS, 47,40,508/- , THE ADDITION TO THE EXTENT OF BALANCE AMOUNT OF RS. 1,93,808/- IS CONFI RMED. 3.5 REGARDING THE GROSS RECEIPT OF RS. 45,46,700/ -, I DIRECT THE A.O. TO CONSIDER EXPENSES ONLY TO THE TUNE OF 99% TO INC OME AS SHOWN BY APPELLANT IN ITS BOOKS OF ACCOUNT AND ADD 1% OF RS. 45,46,700/- TO THE ITA 688/CHD/2016 A.Y. 2004-05 PAGE 9 OF 9 TOTAL INCOME OF THE APPELLANT. HENCE, ADDITION TO T HE TUNE OF RS. 45,467/- IS ALSO CONFIRMED. (EMPHASIS PROVIDED) 5. IN THE RESULT, APPEAL OF THE REVENUE AND C.O. OF THE AS SESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH JULY,2017. SD/- SD/- (ANNAPURNA GUPTA) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT,CHANDIGARH.