Shri Ravi Prakash Langer Prop M/s Langer Auto Sales & Sevices, Ujjain, Ujjain V. ACIT 2 (1), Ujjain

ITA 717/Ind/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8892 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 22-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Assessment record
• Section: 143(3); 145

Judgement Text

RAVI PRAKASH LANGER ITA NO 717/IND/2017 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HON'BLE KUL BHARAT, JUDICIAL MEMBER AND HON'BLE MANISH BORAD, ACCOUNTANT MEMBER ITA NO.717/IND/2017 ASSESSMENT YEAR 2013-14 REVENUE BY SHRI R.P. MOURYA,SR.DR ASSESSEE BY NONE DATE OF HEARING 21.12. 2018 DATE OF PRONOUN CEMENT 26 .1 2 .2018 O R D E R PER MANISH BORAD, AM. THE ABOVE CAPTIONED APPEAL FILED AT THE INSTANCE OF ASSESSEE PERTAINING TO ASSESSMENT YEAR 2013-14 IS DIRECTED A GAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS) (IN SHORT LD.CIT(A)], UJJAIN DATED 24.07.2017 WHICH ARE AR ISING OUT OF THE S HRI RAVI PRAKASH LANGAR, PROP. M/S. LANGER AUTO SALES & SERVICE, DEWAS ROAD, UJJAIN VS. ACIT - 2(1) , UJJAIN ( APPELLANT ) (RESPONDENT ) PAN NO.AAOPL7857L RAVI PRAKASH LANGER ITA NO 717/IND/2017 2 ORDER U/S 143(3) OF THE INCOME TAX ACT 1961(IN SHO RT THE ACT) DATED 09.02.2016 FRAMED BY ACIT-2(1), UJJAIN. 2. WHEN THE CASE WAS CALLED UP THE AUTHORIZED REPRE SENTATIVE ON BEHALF OF LD. COUNSEL FOR THE ASSESSEE REQUESTED FO R THE ADJOURNMENT. HOWEVER LOOKING TO THE SMALLNESS OF T HE ISSUE WITH THE HELP OF DEPARTMENTAL REPRESENTATIVE AS WELL AS AVAILABLE RECORDS ON FILE THE CASE HAS BEEN HEARD. 3. ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL; 1. THAT THE LD.A.O ERRED IN MAKING ADDITION OF RS. 223584/- ON ACCOUNT OF DISALLOWANCE OF GENUINE & REASONABLE SHORTAGE (EVAP ORATION LOSS) CLAIMED AGAINST SALES OF PETROL & DIESEL AND THE HON'BLE CI T (APPEALS) ERRED IN CONFIRMING THE SAME THAT TOO WITHOUT CONSIDERING TH E FACTS OF THE CASE AND ALSO NOT IN ACCORDANCE WITH THE LAW. THE EVAPORATI ON OF PETROL/DIESEL IS WITHIN RECOGNIZED NORMS OF THE PETROLEUM COMPANIES. 2. THE APPELLANT CRAVES LEAVE TO ADD/ALTER/AMEND AN Y OF THE GROUNDS OF THE APPEAL AT THE TIME OF OR BEFORE THE HEARING OF THE CASE. 4. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE R ECORDS ARE THAT THE ASSESSEE IS ENGAGED IN THE RETAIL BUSINESS OF T RADING IN PETROLEUM PRODUCT. RETURN OF INCOME E-FILED ON 29.0 9.2013 AND REVISED ON 31.10.2013 DECLARING TOTAL INCOME OF RS. 64,87,406/- DERIVED FROM BUSINESS, HOUSE PROPERTY, CAPITAL GAI N AND OTHER RAVI PRAKASH LANGER ITA NO 717/IND/2017 3 SOURCES. THE CASE WAS PICKED UP FOR SCRUTINY THRO UGH CASS AND NOTICE U/S 143(2) WAS DULY SERVED UPON THE ASSESSEE . ASSESSMENT COMPLETED U/S 143(3) OF THE ACT AT RS.69,27,800/- AND AGRICULTURE INCOME AT RS.1,64,727/- AFTER ADDING ADDITIONS ON (I) DISALLOWANCE ON TRAVELLING EXPENSES AT RS.17,631/- (II) VEHICLE RUNNING & MAINTENANCE EXPENSES AND INTEREST PAID ON CAR LOAN AT RS.37,079/- (III) DEPRECIATION CLAIMED ON CARS AT RS.43,057/- ( IV) DELAYED PAYMENT OF PF/ESI AT RS. 1,19,040/- AND (V) SHORTAG E CLAIMED ON PETROL & DIESEL AT RS.2,23,584/-. 5. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. C I(A) AND PARTLY SUCCEEDED LD. CIT(A) CONFIRMED THE ADDITION OF RS. 2,23,584/- MADE BY LD.A.O OBSERVING AS UNDER; 4.5 GROUND NO.5:-THROUGH THIS GROUND OF APPEAL THE APPELLANT HAS CHALLENGED THE ADDITION OF RS.2,23,584/-ON ACCOUNT OF SHORTAGE OF DIESEL AND PETROL. THE APPELLANT HAS CLAIMED THE SHORTAGE OF PETROL AND DIESEL. THE EVAPORATION OF PETROL/DIESEL IS A RECOGNIZED NO RM OF THE PETROLEUM COMPANIES AND EVEN WHEN THEY VERIFY THE QUANTITY OF THE PETROL/DIESEL AVAILABLE WITH RESPECTIVE PETROL PUMP OWNERS, THAN CONCESSION IS GIVEN TO THE RESPECTIVE PARTIES ON ACCOUNT OF SUCH EVAPORATI ON. IN THE CASE THE QUANTITY AVAILABLE WITH THE PETROL PUMP OWNER IS FO UND TO BE AT VARIANCE BY THE PETROLEUM COMPANIES, STRINGENT ACTIONS ARE T AKEN AGAINST THE RAVI PRAKASH LANGER ITA NO 717/IND/2017 4 PETROL PUMP OWNERS. IN VIEW THEREOF PETROL PUMP OWN ER TAKE ALL MEASURES IN RESPECT OF QUANTITY OF THE PETROL AND D IESEL, IN THAT SITUATION IT IS INCUMBENT UPON THE ASSESSEE NOT TO CLAIM EXCE SSIVE EVAPORATION ON ACCOUNT OF PETROL' AND DIESEL. THE PERCENTAGE MAY V ARY DUE TO CERTAIN FACTORS AS WEATHER CONDITIONS, EVAPORATION AT THE T IME OF FILLING PETROL/DIESEL IN STORAGE TANKS FROM TANKERS AND AT THE TIME OF DISPENSING TO CONSUMERS FROM DISPENSERS ETC. IN THE CASE OF APPELLANT SHORTAGE FOR THE YEAR UNDE R CONSIDERATION, IN THE CASE OF PETROL AND DIESEL WERE ASUNDER:- PARTICULARS TOTAL SALE S (1 LTR.) SHORTAGE (QUANTITY IN 1 LTR.) SHORTAGE CLAIMED (%) PERMISSIBLE SHORTAGE (%)AS PER IOC NORM EXCESS CLAIMED (1 LTR.) DIESEL 2021117 4188 0.2072 0.20 146 PETROL 1848908 14008 0.7576 0.60 2915 FROM THE ABOVE IT IS CLEAR THAT THE APPELLANT HAS C LAIMED EXCESS LOSS ON ACCOUNT OF EVAPORATION AND OTHER FACTORS AS PRESCRI BED BY THE LOC. THE AO HAS RIGHTLY CALCULATED THE EXCESS LOSS ON ACCOUN T OF PETROL AT RS.2,16,306/- (2915 LITERS X RS. 74.23). SIMILARLY, THE AO BAS ALSO RIGHTLY CALCULATED THE EXCESS LOSS ON ACCOUNT OF DIESEL AT RS.7,278/(146 LITERS X RS.49.85). THEREFORE, THE ADDITION MADE BY THE AO A MOUNTING TO RS.2,23,584/- IS CONFIRMED. THEREFORE, THE APPEAL O N THIS GROUND IS DISMISSED. 6. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L. 7. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUE D AND SUPPORTED THE FINDINGS OF LOWER AUTHORITIES. RAVI PRAKASH LANGER ITA NO 717/IND/2017 5 8. WE HAVE HEARD THE ARGUMENT AND PERUSED THE RECOR DS PLACED BEFORE US. THE SOLE GRIEVANCE RAISED BY THE ASSEES SEE IN ITS APPEAL IS AGAINST THE CONFIRMATION OF RS.2,23,584/-MADE BY LD.CIT(A) ON ACCOUNT OF SHORTAGE OF DIESEL AND PETROL. 9. WE FIND THAT DISALLOWANCE OF RS.2,23,584/- HAVE BEEN MADE BY LD.A.O FOR THE ALLEGED EXCESS LOSS CLAIMED BY THE A SSESSEE ON ACCOUNT OF EVAPORATION AND OTHER FACTORS. WE OBSERV ED THAT THE ASSESSEE IS RUNNING A PETROL PUMP OF INDIAN OIL COR PORATION AND SALES VARIOUS PETROLEUM PRODUCTS. REGULAR BOOKS OF ACCOUNTS HAVE BEEN MAINTAINED AND FINANCIAL STATEMENTS ARE DULY A UDITED U/S 44AB OF THE ACT. THE ASSESSEE IS ALSO REGULARLY MA INTAINING QUANTITATIVE DETAILS OF VARIOUS ITEMS KEPT AT THE P ETROL PUMP AND QUANTITATIVE DETAILS ARE MAINTAINED AS PER THE DIRE CTIONS OF INDIAN OIL CORPORATION. WE ALSO OBSERVE THAT THE ALLEGED SHORTAGE HAS NOT BEEN CLAIMED AS EXPENDITURE IN THE PROFIT AND LOSS ACCOUNT AND ADJUSTMENT OF SHORTAGE/LOSS HAS ONLY BEEN SHOWN IN THE QUANTITATIVE DETAILS. IT IS TRUE THAT SOME STANDAR DS HAVE BEEN MADE BY INDIAN OIL CORPORATION FOR THE PERMISSIBLE SHORT AGE/EVAPORATION LOSS FOR PETROL AND DIESEL BUT IT IS AN ADMITTED FA CT THAT THEY ARE RAVI PRAKASH LANGER ITA NO 717/IND/2017 6 MERELY GUIDELINES AND NOT STANDARDS WHICH ARE MANDA TORY FOR LIMITING THE PERCENTAGE OF SHORTAGE AND THEREFORE T HE PERCENTAGE OF SHORTAGE/LOSS VARY ON VARIOUS FACTORS INCLUDING WEA THER CONDITIONS. WE ALSO OBSERVE THAT THE SHORTAGE OF DIESEL IS 0.20 72% AS AGAINST THE PERMISSIBLE LIMIT OF 0.20%AND SHORTAGE IN CASE OF PETROL IS 0.7576% AS AGAINST PERMISSIBLE LIMIT OF 0.60%. THE VARIATION IS NOT SO HIGH WHICH COULD RAISE THE QUESTION ON THE GENU INENESS OF THE BOOKS OF ACCOUNTS AND QUANTITATIVE RECORDS MAINTAIN ED BY THE ASSESSEE. EVEN OTHERWISE LD.A.O HAS NOWHERE RECORD ED THAT THE BOOKS OF ACCOUNTS HAVE BEEN REJECTED U/S 145(3) OF THE ACT AND PROFITS HAVE BEEN ESTIMATED. 10. IN THESE GIVEN FACTS AND CIRCUMSTANCES OF THE C ASE LD.A.O WAS NOT JUSTIFIED IN MAKING THE IMPUGNED DISALLOWANCE W ITHOUT INVOKING THE PROVISIONS U/S 145 OF THE ACT AND HE THEREFORE SHOULD HAVE ACCEPTED THE BOOK RESULTS WHICH WERE DULY AUDITED A ND SUPPORTED BY PROPER QUANTITATIVE DETAILS. WE THEREFORE SET A SIDE THE FINDINGS OF LOWER AUTHORITIES AND DIRECT THE LD.A.O TO DELET E THE ADDITION OF RS.2,23,584/-. WE ACCORDINGLY ORDER SO AND ALLOW G ROUND NO.1 RAISED BY THE ASSESSEE. RAVI PRAKASH LANGER ITA NO 717/IND/2017 7 11. GROUND NO.2 IS GENERAL IN NATURE WHICH NEEDS NO ADJUDICATION. 12. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED . THE ORDER PRONOUNCED IN THE OPEN COURT ON 26.12.201 8. SD/- ( KUL BHARAT) SD/- (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 26 DECEMBER, 2018 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE