The ITO, Ward-1(2), RAJKOT-GUJARAT V. Shri Laljibhai Limbabhai Vasani, RAJKOT-GUJARAT

ITA 759/RJT/2010

• Counselvise Citation: 75924914 RSA 2010
• Duration Of Justice: 1 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 29-08-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 05-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH SHRI MJ RANPURA
• Assessee Lawyers: PVJ
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI A.L. GEHLOT (AM) AND SHRI N.R.S. GANESA N (JM) I.T.A. NO.759/RJT/2010 (ASSESSMENT YEAR 2004-05) ITO, WD.1(2) VS SHRI LALJIBHAI LIMBABHAI VASANI RAJKOT PROP M/S LL VASANI TRANSPORT MAHADEVWADI, RAJKOT PAN : ABYPV6191J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MK SINGH RESPONDENT BY: SHRI MJ RANPURA DATE OF HEARING : 29-08-2011 DATE OF PRONOUNCEMENT : 09-09-2011 O R D E R PER N.R.S. GANESAN, JM THIS APPEAL OF THE REVENUE WAS DISMISSED BY AN ORD ER DATED 15-09-2010 ON THE GROUND THAT THE TAX EFFECT IS LESS THAN RS.2 LAKHS. HOWEVER, THE REVENUE FILED MISCELLANEOUS APPLICATION IN MA NO.18/RJT/201 1 ON THE GROUND THAT THE TAX EFFECT IS RS.3,41,000; THEREFORE, IT IS WELL ABOVE THE LIMIT PRESCRIBED BY THE CBDT. ON THE BASIS OF THE MISCELLANEOUS PETITION FILED BY THE REVENUE THE ORDER OF THE TRIBUNAL DATED 15-09-2010 WAS RECALLED AND THE APPE AL WAS RESTORED ON FILE. ACCORDINGLY, THE APPEAL IS FIXED AGAIN FOR FINAL DI SPOSAL. 2. THE FIRST ISSUE ARISES FOR CONSIDERATION IS DIFF ERENCE IN INCOME BETWEEN FREIGHT RECEIPTS SHOWN IN THE TDS CERTIFICATES AND AS RECORDED IN THE BOOKS OF ACCOUNT. ITA NO.759/RJT/2010 2 3. SHRI MK SINGH, THE LD.DR SUBMITTED THAT AS PER T HE AUDIT REPORT, THE FREIGHT RECEIPT WAS SHOWN AS RS.74,40,423. HOWEVER, AS PER THE TDS CERTIFICATE IT WAS RS. 83,82,042. THE ASSESSEE HAS NOT PRODUCED THE B OOKS OF ACCOUNT FOR VERIFICATION BEFORE THE ASSESSING OFFICER. THEREFO RE, THE ASSESSING OFFICER ADDED THE DIFFERENCE BETWEEN AMOUNTS SHOWN IN THE TDS CER TIFICATES AND THE BOOKS OF ACCOUNT AS INCOME OF THE ASSESSEE. ON APPEAL BY TH E ASSESSEE, THE CIT(A) DELETED THE SAME WITHOUT ANY REASONS. ACCORDING TO THE LD.DR SINCE THERE WAS ACTUAL DIFFERENCE BETWEEN THE AUDITED STATEMENTS AN D THE TDS CERTIFICATES TO THE EXTENT OF RS. 9,41,588 THE SAME WAS RIGHTLY ADDED B Y THE ASSESSING OFFICER. THE CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION. 4. ON THE CONTRARY, SHRI MJ RANPURA, THE LD.REPRESE NTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE BY HIS LETTER DATED 13- 11-2008 EXPLAINED WHY THE DIFFERENCE HAS OCCURRED AND THE SAME WAS RECONCILED . HOWEVER, THE ASSESSING OFFICER REJECTED THE RECONCILIATION STATEMENT FILED BY THE ASSESSEE ON THE GROUND THAT IT WAS NOT CERTIFIED BY THE ASSESSEE. ACCORDI NG TO THE LD.REPRESENTATIVE, THE RE-CONCILIATION STATEMENT WAS CERTIFIED BY THE REPR ESENTATIVE OF THE ASSESSEE; THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED I N REJECTING THE RECONCILIATION STATEMENT FILED BEFORE HIM. REFERRING TO THE CIT(A )S ORDER, THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS FI LED THE VERY SAME RECONCILIATION STATEMENT BEFORE THE CIT(A). THE CI T(A) CALLED FOR REMAND REPORT WITH REGARD TO THE RECONCILIATION STATEMENT FILED B EFORE HIM. HOWEVER, THE ASSESSING OFFICER HAS NOT FILED THE REMAND REPORT. THEREFORE, THE CIT(A) ITA NO.759/RJT/2010 3 EXAMINED THE SAME AND FOUND THAT THE REJECTION OF T HE RECONCILIATION STATEMENT BY THE ASSESSING OFFICER MERELY ON THE GROUND THAT IT WAS SIGNED BY THE AUTHORIZED REPRESENTATIVE IS NOT CORRECT. THE CIT(A ) FOUND THAT ALL THE ITEMS WERE FULLY VERIFIABLE AND THE RECONCILIATION WAS RIGHTLY SHOWN BY THE ASSESSEE. ACCORDINGLY THE CIT(A) DELETED THE ADDITION OF RS.9 ,41,588. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND HAVE ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSE SSING OFFICER MADE THE ADDITION ON THE GROUND THAT THERE WAS A DIFFERENCE BETWEEN THE FREIGHT CHARGES RECORDED IN THE BOOKS OF ACCOUNT AND THAT SHOWN IN THE TDS CERTIFICATES. THE ASSESSEE FILED THE RECONCILIATION STATEMENT SHOWING HOW SUCH DIFFERENCE OCCURRED. THE ASSESSING OFFICER REJECTED THE RECON CILIATION STATEMENT ON THE GROUND THAT IT WAS NOT SIGNED BY THE ASSESSEE. THE FACT REMAINS IS THAT THE RECONCILIATION WAS SIGNED BY THE AUTHORIZED REPRESE NTATIVE OF THE ASSESSEE. THEREFORE, AS FOUND BY THE CIT(A), THE ASSESSEE IS NOT JUSTIFIED IN REJECTING THE RECONCILIATION STATEMENT FILED BY THE ASSESSEE. TH E CIT(A), IN FACT, CALLED FOR A REMAND REPORT ON THE BASIS OF THE VERY SAME RECONCI LIATION STATEMENT FILED BEFORE HIM. HOWEVER, THE ASSESSING OFFICER HAS NOT FILED ANY REMAND REPORT BEFORE THE CIT(A). WHEN AN OPPORTUNITY WAS GIVEN TO THE ASSES SING OFFICER TO FILE REMAND REPORT AFTER EXAMINING THE BOOKS OF ACCOUNT, THE SA ME WAS NOT FILED BY THE ASSESSING OFFICER. THE CIT(A) HIMSELF EXAMINED THE RECONCILIATION STATEMENT FILED BY THE ASSESSEE AND FOUND THAT CERTAIN ADJUSTMENTS WERE REQUIRED TO BE MADE IN RESPECT OF CERTAIN REIMBURSEMENT EXPENSES AND HIRE CHARGES. THEREFORE, THE ITA NO.759/RJT/2010 4 CIT(A) FOUND THAT ALL THE ITEMS WERE VERIFIABLE FRO M THE BOOKS OF ACCOUNT AND THE RECONCILIATION STATEMENT FILED BY THE ASSESSEE SHOW S THAT THERE WAS NO DIFFERENCE. ACCORDINGLY HE DELETED THE ADDITION MA DE BY THE ASSESSING OFFICER TO THE EXTENT OF RS.9,41,588. SINCE THE RECONCILIATIO N STATEMENT WAS FILED AND THE SAME WAS FOUND TO BE TRUE WE DO NOT FIND ANY INFIRM ITY IN THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY THE SAME IS CONFIRMED. 6. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADDI TION OF RS. 1,65,744. WE HAVE HEARD THE LD.DR AND THE LD.REPRESENTATIVE FOR THE ASSESSEE. THE ASSESSING OFFICER MADE AN ADDITION OF RS.1,65,000 AFTER ESTIM ATING THE GROSS PROFIT AT 10%. THE ASSESSEE HAS SHOWN THE GROSS PROFIT AT 7.77%. THE CIT(A) FOUND THAT CERTAIN EXPENSES WERE NON BUSINESS IN NATURE AND CO NSIDERING THE TOTAL EXPENDITURE INCURRED BY THE ASSESSEE, THE CIT(A) IN EXERCISE OF HIS DISCRETION FOUND THAT A LUMP SUM DISALLOWANCE OF RS.30,000 WOU LD MEET THE ENDS OF JUSTICE. IN THE ABSENCE OF ANY MATERIAL TO CONTRADICT THE FI NDINGS OF THE CIT(A) WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A). ACCORDI NGLY, THE SAME IS CONFIRMED. 7. IN THE RESULT, APPEAL OF THE REVENUE STANDS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09-09-2011. SD/- SD/- (A.L. GEHLOT) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT, DT : 09 TH SEPTEMBER, 2011 PK/- ITA NO.759/RJT/2010 5 COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A)-I, RAJKOT 4. THE CIT-I, RAJKOT 5. THE DR, I.T.A.T., RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT