ACIT, Alwar V. THE TRUCK OPERATOR UNION, Alwar

ITA 914/JPR/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 47950 (ITAT-JAIPUR)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 13-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S L PODDAR
• Keywords: TDS
• Section: 133(6)

Judgement Text

1 ITA 914(2)-10 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 914/JP/2010 ASSTT. YEAR : 2006-07. THE ACIT, CIRCLE-2, VS. M/S. THE TRUCK OPERATOR UNION, ALWAR. N.H.8, NEAR CHORAHA, BEHROR, DIST. ALWAR. (APPELLANT) (RESPONDENT) C.O. NO. 108/JP/2010 (ARISING OUT OF ITA NO. 914/JP/2010 ) ASSTT. YEAR : 2006-07. M/S. THE TRUCK OPERATOR UNION, VS. THE ACIT, CIRCL E-2, ALWAR. ALWAR. (CROSS OBJECTOR) (RESPONDENT) APPELLANT BY : SHRI SANJAY KUMAR RESPONDENT BY : SHRI S.L. PODDAR ORDER DATE OF ORDER : 10/06/2011. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY DEPARTMENT AND A CROSS OBJECT ION BY ASSESSEE AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 20 06-07. 2. THE DEPARTMENT IS OBJECTING IN RESTRICTING THE T RADING ADDITION OF RS. 25,00,000/- TO RS. 5,34,074/-. 2 3. IN CROSS OBJECTION, THE ASSESSEE IS OBJECTING IN SUSTAINING THE TRADING ADDITION OF RS. 5,34,074/- ON ACCOUNT OF NET PROFIT ESTIMATED B Y THE AO. 4. SINCE BOTH THESE GROUNDS ARE CO-RELATED, THEREFO RE, THEY ARE BEING DISPOSED OFF TOGETHER. 5. THE LD. D/R HAS PLACED RELIANCE ON THE ORDER OF AO. 6. ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSESS EE PLACED RELIANCE ON THE ORDER OF LD. CIT (A) TO THE EXTENT TO WHICH THE ADDITION HAS BEEN DELETED AND FURTHER PLACED RELIANCE ON THE ORDER OF WRITTEN NOTE ALONG WITH OR DER OF TRIBUNAL PASSED IN THE CASE OF ASSESSEE ITSELF FOR A.Y. 2003-04 IN ITA NO. 49/JP/2 009 DATED 31.7.2009. 7. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FI LED RETURN OF INCOME OF RS. 2,19,632/- ON 23.10.2006. NOTICE UNDER SECTION 143 (2) WAS ISSUED ON 30.3.2007. THE ASSESSEE CONTINUES TO DERIVE INCOME FROM TRANSPORT SERVICE PROVIDER. IN THE PROFIT & LOSS ACCOUNT THE ASSESSEE HAS SHOWN RECEIPT OF BILTY CHA RGES AT RS. 1,45,000/- AND MEMBERSHIP FEE AT RS. 85,900/- AND AFTER INCORPORAT ING EXPENSES NET PROFIT HAS BEEN SHOWN AT RS. 49,439/-. ON EXAMINATION OF DETAILS, IT WAS OBSERVED BY AO THAT ASSESSEE HAS TOTAL RECEIPT OF RS. 1,78,02,465/- FROM VARIOUS PARTIES TO WHOM IT HAS PROVIDED THE TRANSPORT SERVICES ON WHICH TAX AMOUNTING TO RS. 3, 98,345/- HAS BEEN DEDUCTED AT SOURCE. THE AO OBSERVED THAT TRANSPORT SERVICES BY THE ASSE SSEE CANNOT BE RESTRICTED TO THE PARTIES WHO HAVE DEDUCTED TAX AT SOURCE, SUCH TRANSPORT SER VICES AND RECEIPT IN THIS REGARD COULD BE EXAMINED FROM THE BOOKS OF ACCOUNTS OF THE ASSES SEE, HAD IT PRODUCED THE SAME DURING THE COURSE OF ASSESSMENT PROCEEDINGS BUT THE ASSESS EE OPTED NOT TO PRODUCE THE SAME. ON LOCAL ENQUIRIES CONDUCTED THROUGH INSPECTOR OF THE DEPARTMENT, IT IS GATHERED THAT THE TRUCK UNION OF BEHROR GENERALLY PROVIDE ITS TRUCKS TO BEG PARTIES. FOR LOCAL TRANSPORTATION 3 THEY LEAVE IT TO THEIR MEMBERS TO BARGAIN WITH THE CUSTOMERS AND TAKE THE FREIGHT. HOWEVER, TRANSPORTATION TO SOME EXTENT ON CASH PAYM ENT AND WITHOUT TDS CANNOT BE RULED OUT. DURING THE ASSESSMENT PROCEEDINGS INFOR MATION UNDER SECTION 133(6) RECEIVED FROM PUNJAB NATIONAL BANK, BHIWADI. ON EXAMINATION OF THE BANK ACCOUNT IT WAS OBSERVED THAT ON 10.12.2005 THE ASSESSEE HAS DEPOSI TED CASH AMOUNT OF RS. 60,000/-. THIS IS INDICATIVE OF THE ASSESSEES RECEIPT IN CASH. T HUS AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, GROSS RECEIPTS OF THE AS SESSEE IS CONSIDERED AT RS. 2,50 CRORES AGAINST RS. 1.78 CRORES OR ODD SHOWN BY ASSESSEE AN D NET PROFIT WAS APPLIED AT 10% ON RS. 2.5 CRORES. IN THIS WAY, NET PROFIT WAS ESTIMA TED AT RS. 25 LACS. FURTHER, INTEREST ON I.T. REFUND WAS ADDED AT RS. 1,70,193/-. THUS TOTAL ASSESSMENT WAS COMPLETED AT RS. 26,70,190/-. 8. THE LD. CIT (A) AFTER CONSIDERING THE SUBMISSION S AND PERUSING OTHER MATERIAL ON RECORD HELD THAT IN ABSENCE OF BOOKS OF ACCOUNT OR ANY DETAILS, THERE IS EVERY POSSIBILITY OF LEAKAGE OF REVENUE. ACCORDINGLY HE HELD THAT IF A N ET PROFIT RATE OF 3% ON TOTAL RECEIPT SHOWN BY ASSESSEE IS APPLIED THEN IT WILL MEET THE ENDS OF JUSTICE. ACCORDINGLY ON RECEIPT OF RS. 1.78 CRORES OR ODD THE PROFIT @ 3% WAS COMPU TED AT RS. 9,65,926/-. IN THIS WAY ESTIMATED INCOME WAS REDUCED TO RS. 5,34,074/- AGAI NST RS. 25,00,000/- ESTIMATED BY AO. 9. NOW BOTH ARE IN APPEAL HERE BEFORE THE TRIBUNAL. 10. AFTER CONSIDERING THE ORDERS OF THE AO AND LD. CIT (A), WE FIND THAT ASSESSEE DESERVES TO SUCCEED IN ITS CROSS OBJECTION IN PART, AND THERE IS NO SUBSTANCE IN THE APPEAL OF THE DEPARTMENT. 11. THERE IS NO MATERIAL WITH THE AO TO ESTIMATE TH E TURNOVER OF THE ASSESSEE AT RS. 2.50 CRORES. ASSESSEE HAS SHOWN RECEIPT OF RS. 1.78 CRORES. IT IS A MATTER OF FACT THAT 4 ASSESSEE DOES NOT OWN ANY TRUCKS. ASSESSEE IS AN U NION ONLY. IT CHARGES RS. 10/- PER TRUCK FROM THE TRUCK OWNERS + MEMBERSHIP FEE. THE SAME HAS BEEN DISCLOSED BY THE ASSESSEE IN ITS PROFIT & LOSS ACCOUNT. IF THE AO W AS OF THE VIEW THAT ANY RECEIPT OVER AND ABOVE THE RECEIPT SHOWN BY ASSESSEE IS RECEIVED THE N ONUS LAY UPON THE AO TO DISCHARGE BURDEN BY BRINGING POSITIVE MATERIAL ON RECORD. NO THING HAS BEEN BROUGHT ON RECORD. IN SIMILAR CIRCUMSTANCES THE RECEIPTS WERE INCREASED F OR A.Y. 2003-04 ALSO. MATTER CAME BEFORE THE TRIBUNAL AND THE TRIBUNAL DISAPPROVED TH E ACTION OF THE AO IN INVOKING PROVISIONS OF SECTION 4AE AS ASSESSEE DOES NOT OWN ANY TRUCK. ACCORDINGLY THE PROFIT ESTIMATED BY THE AO WAS CANCELLED. THIS ORDER WAS P ASSED BY THE TRIBUNAL IN ITA NO. 49/JP/2009 VIDE ORDER DATED 31.7.2009. SIMILAR FAC TS ARE INVOLVED IN THE YEAR UNDER CONSIDERATION. THERE ARE OF COURSE NO PROPER BOOKS OF ACCOUNT MAINTAINED NEITHER PROPER EXPENSES ARE VOUCHED. IT IS NOT EXPLAINABLE THAT H OW THE TDS DEDUCTED BY ASSESSEE WAS REFUNDED TO THE RESPECTIVE PARTIES. THE AMOUNT OF T DS DEDUCTED BY THE ASSESSEE WAS TO THE TUNE OF RS.3,98,345/-. NET PROFIT HAS BEEN SHOW N BY ASSESSEE AT RS. 49,439/-. IF BOTH THESE POINTS ARE TAKEN INTO CONSIDERATION THEN THE INCOME OF THE ASSESSEE SHOULD BE ALLOWED AT RS. 4,47,000/-. THIS ISSUE WAS INVOLVED IN A.Y. 2003-04 AND IN VIEW OF THE PLUCKING OF LEAKAGE OF ANY REVENUE, THE ADDITION WA S SUSTAINED AT RS. 3,00,000/- BY THE TRIBUNAL. HERE, WE ARE OF THE VIEW THAT IF AN ADDI TION OF RS. 3.00 LACS IS SUSTAINED THEN IT WILL MEET THE END OF JUSTICE. ACCORDINGLY, THE CRO SS OBJECTION OF THE ASSESSEE IS ALLOWED IN PART AND THE APPEAL OF THE DEPARTMENT IS DISMISS ED. THE AO IS DIRECTED TO MODIFY HIS ORDER ACCORDINGLY. WE ORDER ACCORDINGLY. 5 12. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISM ISSED AND CROSS OBJECTION OF THE ASSESSEE IS ALLOWED IN PART. 13. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 10 .6.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/- COPY FORWARDED TO :- THE ACIT, CIRCLE-2, ALWAR. M/S. THE TRUCK OPERATOR UNION, ALWAR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 914/JP/2010) BY ORDER, AR ITAT JAIPUR.