DCIT, Chandigarh V. M/s Sukhna Automobiles, Chandigarh

ITA 768/CHANDI/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68488 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 05-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.768 /CHD/2013 (ASSESSMENT YEAR : 2010-11) THE D.C.I.T., VS. M/S SUKHNA AUTOMOBILES PETROL PUMP, CIRCLE 4(1), SECTOR 28C, CHANDIGARH. CHANDIGARH. PAN: AANFS2336L,. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AKHILESH GUPTA, DR RESPONDENT BY : SHRI JASPAL SHARMA DATE OF HEARING : 16.09.2013 DATE OF PRONOUNCEMENT : 20.09.2013 O R D E R PER SUSHMA CHOWLA, J.M. : THE APPEAL FILED BY THE REVENUE IS AGAINST THE ORDE R OF THE COMMISSIONER OF INCOME-TAX (APPEALS), CHANDIGARH DA TED 25.04.2013 RELATING TO ASSESSMENT YEAR 2010-11 AGAINST THE ORD ER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHOR T THE ACT). 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE REA D AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. C1T(A] HAS ERRED IN ALLOWING APPEAL OF THE ASSE SSEE WITHOUT APPRECIATING THE FACTS OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS .19,59,859/- MADE ON ACCOUNT OF EXCESS EVAPORATION/HANDLING LOSS CLAIMED ON PETROL AND DIESEL. 3. IT IS PRAYED THAT THE ORDER OF THE LD. CIT (A) BE S ET ASIDE AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. 4. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GRO UNDS OF APPEAL BEFORE THE APPEAL IS HEARD OR IS DISPOSED OFF. 2 3. THE LEARNED A.R. FOR THE ASSESSEE AT THE OUTSET POINTED OUT THAT THE ISSUE IN THE PRESENT APPEAL IS COVERED BY THE ORDER S OF THE TRIBUNAL IN ASSESSEES OWN CASE RELATING TO ASSESSMENT YEARS 20 07-08 TO 2009-10 VIDE SEPARATE ORDERS. IT WAS FURTHER POINTED OUT B Y THE LEARNED A.R. FOR THE ASSESSEE THAT THE CIT (APPEALS) HAD DECIDED THE ISSUE FOLLOWING THE ORDERS OF THE TRIBUNAL. 4. THE REVENUE PLACED RELIANCE ON THE ORDER OF THE ASSESSING OFFICER. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF RUNNING OF P ETROL PUMP. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD SHOWN AN EVAPORATION LOSS @ 0.97% IN THE CASE OF PETROL AND 0.37% IN THE CASE OF THE DIESEL. THE ASSESSING OFFICER HAD CALLED FOR INFORMATION UNDER SECTION 133(6) IN ASSESSMENT YEAR 2008-09 FROM M/S INDIAN OIL CORPORA TION LTD., WHO HAD CONFIRMED THE EVAPORATION/HANDLING LOSS AS UNDER: (A) PETROL 0.75% ON QUANTITY SOLD UPTO AN ANNUAL AVERAGE OF 600 KLS. 0.60% ON ADDITIONAL QUANTITY BEYOND AN ANNUAL AVERAGE OF 600 KLS. (B) HIGH SPEED DIESEL 0.25% ON QUANTITY SOLD UPTO AN ANNUAL AVERAGE OF 600 KLS. 0.20% ON ADDITIONAL QUANTITY BEYOND AN ANNUAL AVERAGE OF 600 KLS. 2.1.1. THE ASSESSING OFFICER CALCULATED THE LOSS A S PER THE ABOVE GUIDELINES AND MADE ADDITION OF RS.19,19,859/- ON THIS ACCOUNT. 6. THE CIT (APPEALS) ALLOWED THE CLAIM OF THE ASSES SEE VIDE PARA 2.3 WHICH READS AS UNDER: 2.3 I HAVE GONE THROUGH THE FACTS OF THE CASE AND CONSIDERED THE SUBMISSION OF THE LD. COUNSEL FOR TH E APPELLANT. AT THE OUTSET, IT MAY BE MENTIONED THAT SHORTAGE/LOSS IN PETROL/DIESEL ON ACCOUNT OF EVAPORATION/HANDLING IS A NORMAL UNDISPUTED FEATURE . 3 SIMILAR ISSUE HAD COME UP IN A.Y.2009-10 ALSO AND HON'BLE ITAT HAS AFFIRMED MY ORDER, ALLOWING EVAPORATION/HANDLING LOSS @ 1%. AS THE EVAPORATION LOSS IN THE CASE OF APPELLANT IN THIS YEAR IS LESS THAN 1% IN PETROL AND DIESEL ACCOUNTS AND SO THE ADDITIO N MADE IS DELETED. GROUNDS OF APPEAL NOS.1 TO 4 ARE ALLOWED. 7. WE FIND IDENTICAL ISSUE AROSE BEFORE THE TRIBUNA L IN ITA NOS. 912 & 913/CHD/2012 RELATING TO ASSESSMENT YEARS 2008-09 AND 2009-10 WHEREIN THE TRIBUNAL VIDE PARAS 8 AND 9 HELD AS UND ER: 8. THE REVENUE IS IN APPEAL AGAINST THE ABOVE SAID FINDINGS OF CIT (APPEALS). NO APPEAL FILED BY THE ASSESSEE HAS BEEN BROUGHT TO OUR NOTICE. WE FIND T HAT THE PRESENT ISSUE OF EVAPORATION LOSS HAS BEEN CONSIDERED BY THE CHANDIGARH BENCH OF THE TRIBUNAL IN ARJUN SINGH (SUPRA) WHEREIN IT HAS BEEN HELD AS UND ER: 2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON THE FILE. BRIEF FACTS ARE THAT THE ASSESSEE DECLARED LOSS OF RS.2,12,730/- IN ITS RETU RN FILED ON 30.10.2006, WHICH WAS PROCESSED UNDER SECTION 143(1 ) OF THE ACT. IT WAS NOTICED BY THE ASSESSING OFFICER THAT IN THE ACCOUN TS OUT OF TOTAL PETROL OF 703953 LITERS, THE ASSESSEE HAS SHOWED LOSS OF 7998 LITERS WHICH AS PER THE ASSESSING OFFICER W AS HIGHLY EXCESSIVE. OPPORTUNITY WAS PROVIDED TO THE ASSESSEE VIDE LETTER DATED 1.9.2008 TO EXPLAIN THE EXCESSIVE CLAIM OF LO SS. THE STAND OF THE ASSESSEE WAS THAT THE EVAPORATION LOSS IS WITHI N THE PRESCRIBED NORMS. THE ASSESSING OFFICER CALCULATED THE LOSS, WHICH WAS IN EXCESS BY 1% I.E. 2874 LITERS WHICH RE SULTED INTO THE ADDITION OF RS.1,01,337/-. ON APPEAL, THE IMPUGNED ADDITION WAS CONFIRMED WHICH IS UNDER CHALLENGE BEFORE THE T RIBUNAL. WE HAVE FOUND THAT THE ASSESSING OFFICER HAS QUOTED THE CERTIFICATE ISSUED BY FEDERATION OF ALL INDIA PETRO LEUM TRADERS (INCORPORATED UNDER THE INDIAN COMPANIES, ACT) WHER EIN A MAXIMUM LOSS OF 1% WAS PROJECTED. ON THE OTHER HAN D, THE LEARNED FIRST APPELLATE AUTHORITY HAS RELIED UPON T HE DECISION OF THE PATNA BENCH OF THE TRIBUNAL IN THE CASE OF M ATENJI BHAGWANJI AND ALSO OF THE MEERUT BENCH OF THE TRIBU NAL IN THE CASE OF GUPTA SERVICE STATION WHEREIN EVAPORATION L OSS UPTO 1% WAS HELD TO BE NORMAL. EVEN THE ASSESSEE HAS NOT EXPLAINED AT ANY STAGE, AS TO HOW, THE LOSS OF 7998 LITERS OF PE TROL IS JUSTIFIED AS THE PRESENT LOSS IS ABOUT 1.14%. HOWEV ER, ALTERNATELY IT WAS CLAIMED THAT THE EXCESS OF 1% I. E. RS.33834/- SHOULD HAVE BEEN ADDED. WE HAVE FOUND FORCE IN THE ALTERNATIVE SUBMISSION RAISED BY THE ASSESSEE, THEREFORE, KEEPI NG IN VIEW THE ABOVE FACTS, THE ASSESSING OFFICER IS DIRECTED TO MAKE THE ADDITION OF THE EXCESS LOSS WHICH IS MORE THAN THE PRESCRIBED LIMIT I.E. 1% IN PLACE OF 1.14% SHOWN BY THE ASSESSEE. TH EREFORE, THIS GROUND OF THE ASSESSEE IS PARTLY ALLOWED. 4 9. THE TRIBUNAL HAD HELD THE EVAPORATION LOSS OF 1% IN THE ACCOUNT OF BOTH THE PETROL AND DIESEL AS REASONABLE. THE ISSUE RAISED IN THE PRESENT APPEAL S BEFORE US IS ALSO IN RELATION TO THE CLAIM OF EVAPORATION/HANDLING LOSS. FOLLOWING THE RATIO LAI D DOWN BY THE CHANDIGARH BENCH OF THE TRIBUNAL WE ARE IN AGREEMENT WITH THE FINDINGS OF THE CIT (APPEALS) IN ALLOWING THE CLAIM OF EVAPORATION/HANDLING LOSS AT 1% OF THE TOTAL SALES AND DISALLOWING THE BALANCE. UPHOLDING THE ORDER OF THE CIT (APPEALS) WE DISMISS GROUNDS OF APPEAL RAISED BY THE REVENUE IN BOTH THE APPEALS. 8. FURTHER THE TRIBUNAL IN ITA NO.457/CHD/2011 RELA TING TO ASSESSMENT YEAR 2007-08 VIDE ORDER DATED 13.2.2013 FOLLOWING ITS EARLIER ORDER ALLOWED THE CLAIM OF THE ASSESSEE. THE ISSUE ARISING IN THE PRESENT APPEAL IS IDENTICAL TO THE ISSUE AROSE BEFORE THE T RIBUNAL IN THE EARLIER YEARS. THE EVAPORATION LOSE IN THE CASE OF PETROL IS LESS THAN 1% AND IN THE CASE OF DIESEL IS 0.37%. FOLLOWING THE PARITY OF REASONING AS IN THE EARLIER YEARS WE ALLOW THE CLAIM OF THE ASSESSEE. UPHOLDING THE ORDER OF THE CIT (APPEALS) WE DISMISS THE GROUNDS OF APPEAL RAISED BY THE REVENUE. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 20 TH DAY OF SEPTEMBER, 2013. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 20 TH SEPTEMBER, 2013 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 5