DCIT, Tiruppur V. Maglink Infra Projects Pvt Ltd., Tiruppur

ITA 97/CHNY/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9055 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 19-01-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN IRS
• Assessee Lawyers: S SRIDHAR
• Keywords: Bad and doubtful debts; Revised return

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , . ! ' , #'$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A. NO.97/MDS/2016 # % &% / ASSESSMENT YEAR : 2011-2012 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE -2, TIRUPUR 641 602. VS. M/S. MAGLINK INFRA PROJECTS PVT. LTD, NO.27, CHIKKANNA CHETTAIR STREET, TIRUPUR 641 604. [PAN AAFCM 5427P] ( / APPELLANT) ( /RESPONDENT) '( ) * / APPELLANT BY : SHRI. P. RADHAKRISHNAN, IRS, JCIT +,'( ) * /RESPONDENT BY : SHRI. S. SRIDHAR, ADVOCATE ! ) - / DATE OF HEARING : 29-06-2016 ./& ) - / DATE OF PRONOUNCEMENT : 30-06-2016 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER : THE APPEAL FILED BY THE DEPARTMENT IS DIRECTED AGAINST ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-3 , COIMBATORE IN ITA NO.130/2014-2015, DT 29.10.2015 FOR THE ASSESSM ENT YEAR ITA NO.97/MDS/2016. :- 2 -: 2011-2012 PASSED U/S.143(3) AND 250 OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT). 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS:- 2. THE LEARNED CIT(APPEALS) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF TRANSPORTATION CHARGES CLAIMED BY THE ASSESSEE FOR RS.5,06,40,696/-. 3. THE LEARNED CIT(APPEALS), FAILED TO APPRECIATE T HE CIRCUMSTANCES UNDER WHICH THE TRANSPORTATION EXPENS E WAS DISALLOWED BY THE AO. THE SAID EXPENSE WAS NOT PART OF THE ORIGINAL RETURN AND IT WAS INTRODUCED O NLY AT THE STAGE OF FILING THE REVISED RETURN. MOREOVER NO TDS WAS DEDUCTED NOR PAN AND DETAILS ABOUT THE TRANSPOR T AGENTS WERE PRODUCED. HENCE THE GENUINENESS WAS NOT PROVED BEFORE THE ASSESSING OFFICER. 4. WHETHER THE LEARNED CIT(APPEALS) WAS JUSTIFIED IN ALLOWING THE CLAM OF TRANSPORTATION BY THE ASSESSEE , JUST BY RELYING ON SUBMISSION OF SOME PAN WITHOUT EVEN VERIFYING THE GENUINENESS OF THE SAME. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S ENGAGED IN THE BUSINESS OF CIVIL CONTRACT WORKS AND FILED RET URN OF INCOME ON 30.09.2011 ADMITTING :2,34,67,370/-. SUBSEQUENTLY, FILED REVISED RETURN ON 04.08.2012 DECLARING A LOSS OF :24,09,996/- AND THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S.143(2) OF THE ACT WAS ISSUED. THE LD. ASSESSING OFFICER ON PERUSAL OF THE RETURN OF INCOM E FOUND THAT THE ASSESSEE COMPANY HAS FILED REVISED RETURN AFTER CON SIDERING TRANSACTIONS WITH THE PARTIES AND RECEIPTS IN THE NATURE OF CONT RACT AND SUB-CONTRACT ACCOMMODATION TRANSACTION ADMITTED BY THE ASSESSEE BEFORE ITA NO.97/MDS/2016. :- 3 -: INVESTIGATION AUTHORITIES OF INCOME TAX DEPARTMENT AND WAS REDUCED FROM THE TURNOVER AS WELL AS FROM THE EXPENDITURE. FURTHER, THE ASSESSEE CLAIMED BAD DEBTS IN THE REVISED RETURN. THE LD. AUTHORISED REPRESENTATIVE APPEARED FROM TIME TO TIME AND FILE D DETAILS. THE LD. ASSESSING OFFICER FOUND THAT THERE IS DIFFERENCE IN RECEIPTS AND PAYMENTS AGGREGATING TO :88,28,804/- AND CONSIDERED FOR DISA LLOWANCE. FURTHER, THE ASSESSEE HAS CLAIMED AN AMOUNT OF :5,06,40,696/ - AS TRANSPORTATION CHARGES AND THE SAME WAS REDUCED IN THE REVISED RETURNS. THE ASSESSEE HAS NOT DEDUCTED TDS ON TRAN SPORTATION CHARGES AND PAN NUMBER OF THE PERSONS NOT OBTAINED FROM THE OWNERS OF THE GOODS VEHICLE AS REQUIRED U/S.194C(6) OF THE ACT. ON VERIFICATION OF THE BILLS, THE LD. ASSESSING OFFICER FOUND THAT THERE I S NO SIGNATURE, TELEPHONE NUMBERS OF THE TRANSPORTERS. THE LD. ASSE SSING OFFICER DOUBTED THE CLAIM OF EXPENDITURE ON COMPARISON WIT H TRANSPORT CHARGES RECEIVED AND FURTHER THE ASSESSEE HAS NOT COMPLIED WITH THE DIRECTION OF SUBMISSIONS OF THE PAN NUMBER OF GOODS VEHICLE OWNE RS. THE LD. ASSESSING OFFICER NOT BEING SATISFIED WITH THE GENU INENESS OF THE TRANSACTIONS AND THE ASSESSEE COMPANY HAS NOT PROV IDED PAN NUMBER OF THE OWNERS OF THE GOODS VEHICLE EXCEEDING CONTRA CT VALUE :1,00,000/- AND DISALLOWED TRANSPORT CHARGES OF :5,06,40,696/- AND ASSESSED TOTAL INCOME WITH OTHER DISALLOWANCES AND RAISED THE DEMA ND. AGGRIEVED BY ITA NO.97/MDS/2016. :- 4 -: THE ORDER, THE ASSESSEE FILED AN APPEAL BEFORE COMM ISSIONER OF INCOME TAX (APPEALS). 4. IN THE APPELLATE PROCEEDINGS, THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE APPEARED AND ARGUED THE GROUNDS AND REITERATED THE SUBMISSIONS MADE IN THE ASSESSMENT P ROCEEDINGS AND ALSO FILED EXPLANATIONS IN RESPECT OF DISPUTED ISSU E REFERRED AT PAGE 3 & 4 OF COMMISSIONER OF INCOME TAX (APPEALS) ORDER W ERE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS OBSERVED O N NON DEDUCTION OF TDS ON TRANSPORT CHARGES AND THE PROVISIONS OF SEC. 194C(6) OF THE ACT AS UNDER:- NO DEDUCTION SHALL BE MADE FROM ANY SUM CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID DURING THE PREVIOUS YEAR TO THE ACCOUNT OF A CONTRACTOR DURING THE COURSE OF BUSINESS OR PLYING, HIRING OR LEASE GOODS CARRIAGES, ON FURNISHING OF HIS PERMANENT ACCOUNT NUMBER, TO THE PERSON PAYING OR CREDITING SUCH SUM . AND FURTHER, LD. COMMISSIONER OF INCOME TAX (APPEAL S) HAS CONSIDERED THE STATEMENT OF TRANSPORT DETAILS FILED PARTYWISE WITH PAN NUMBER FOR THE SAID DISPUTED ASSESSED AMOUNT. THE LD. COMMISSI ONER OF INCOME TAX (APPEALS) ON VERIFICATION FOUND THAT OUT OF TH IRTY ONE CONTRACTORS THE ASSESSEE HAS NOT PRODUCED PAN NUMBER OF SEVENTE EN CONTRACTORS AND PARTLY ALLOWED THE APPEAL OBSERVING AT PARA 6.1 .1 OF HIS ORDER AS UNDER:- ITA NO.97/MDS/2016. :- 5 -: 6.1 . 1 THE APPELLANT PRODUCED PAN OF THE TRANSPORT CONTRACTORS WITH WH OM CHARGES PAID EXCEEDED RS. 1 LAKH. OUT OF THE 31 CONTRACTORS 17 PARTIES P ANS HAVE N O T BEEN PRODUCED. THE DISALLOWANCE WILL BE R ESTRICTED TO THE AMOU NT S TO THESE PARTIES. THE DETAILS FURNISHED BY THE APPELLANT IS MADE AS ANNEXURE ' A ' TO THIS APPELLATE ORDER. THE DISALLOWANCE OF PAYMENT OF TRANSPORTAT I ON CH AR GES PAID INVOKING THE PROVISIONS OF SECTION 194C(6) WILL BE RESTRICTED TO THE T OTAL AMOUNT TO THE PARTIES, WHO HAVE NOT PRODUCED PAN NUMBERS. AGGRIEVED BY THE COMMISSIONER OF INCOME TAX (APPEAL S) ORDER, THE REVENUE ASSAILED AN APPEAL BEFORE TRIBUNAL. 5. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE REI TERATED THE GROUNDS AND EXPLAINED THE FINDINGS OF THE LD. ASSES SING OFFICER ON DISALLOWANCE OF TRANSPORT CHARGES AND THE LD. COMMI SSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ADDITION IRRESP ECTIVE OF THE FACT THAT THE ASSESSEE HAS CLAIMED EXPENDITURE IN THE REVISED RETURN AND FURTHER THE ASSESSEE HAS NOT PROVIDED THE PAN NUMBER OF OWN ERS OF GOODS TRANSPORT VEHICLE IN ASSESSMENT PROCEEDINGS BUT IN THE APPELLATE PROCEEDINGS STATEMENT WAS FILED AND THE LD. COMMISS IONER OF INCOME TAX (APPEALS) RELYING ON THE STATEMENT AND THE SUBM ISSIONS OF THE ASSESSEE WITHOUT VERIFYING THE GENUINENESS OF THE TRANSACTION PARTLY ALLOWED THE APPEAL AND PRAYED FOR SET SIDING THE OR DER OF COMMISSIONER OF INCOME TAX (APPEALS). ITA NO.97/MDS/2016. :- 6 -: 6. ON THE OTHER HAND, THE LD. AUTHORISED REPRESENTATIV E RELIED ON THE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEA LS) AND OPPOSED THE GROUNDS. 7. WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIA L ON RECORD. THE ONLY CRUX OF THE ISSUE IS THE LD. DEPA RTMENTAL REPRESENTATIVE EMPHASIZED THAT THE LD. COMMISSION ER OF INCOME TAX (APPEALS) HAS CONSIDERED THE ASSESSEES SUBMISSIONS AS PER ANNEXURE A REFERRED IN THE APPELLATE ORDER CONTAINING PARTY WI SE PAN NUMBER, AMOUNT PAID WHICH IS DISPUTED BY THE REVENUE. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) RELIED ON THE EVIDENCE FILE D IN THE APPELLATE PROCEEDINGS AND THE SAME WAS NOT AVAILABLE TO THE L D. ASSESSING OFFICER FOR VERIFICATION. WE ON PERUSAL OF THE LD. COMMISS IONER OF INCOME TAX (APPEALS) ORDER FOUND THAT THERE IS NO FINDINGS O N ASSESSING OFFICER COMMENTS OR REMAND REPORT IN RESPECT OF ANNEXURE A FILED BY THE ASSESSEE. CONSIDERING THE APPARENT FACTS, MATERIAL ON RECORD, WE ARE OF THE OPINION THAT LD. ASSESSING OFFICER SHOULD BE PR OVIDED AN OPPORTUNITY TO VERIFY THE GENUINENESS OF TRANSACTION AND COMPLI ANCE OF PROVISIONS OF SEC. 194C(6) OF THE ACT BY THE ASSESSEE. THEREFORE, WE SET ASIDE THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) ON TH IS GROUND AND REMIT THE ENTIRE ISSUE TO THE FILE OF THE LD. ASSES SING OFFICER TO VERIFY THE ITA NO.97/MDS/2016. :- 7 -: GENUINENESS OF TRANSACTIONS AND PASS THE ORDER AFTE R PROVIDING ADEQUATE OF HEARING HEARD TO THE ASSESSEE. THIS APPEAL OF T HE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. 8. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS ALL OWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON THURSDAY, THE 30 TH DAY OF JUNE, 2016, AT CHENNAI. SD/- SD/- ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER ( . ! ' ) (G. PAVAN KUMAR) / JUDICIAL MEMBER / CHENNAI 1 / DATED:30 .06.2016 KV 2 ) +#-34 54&- / COPY TO: 1 . '( / APPELLANT 3. ! 6- () / CIT(A) 5. 4 9: +#-# / DR 2. +,'( / RESPONDENT 4. ! 6- / CIT 6. :;% < / GF