ACIT, Central Circle-1, Bhubaneswar V. M/S- Badrinarayan Transport, Angul

ITSSA 43/CTK/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 2432 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 07-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Non-deduction of tax; Assessment record; Reason to believe; TDS
• Section: 40A(3); 43

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE S/ AND MANISH BORAD, ACCOUNTANT MEMBER IT(SS) A NO IT(SS) A NO. IT(SS) A NO. IT(SS) A NO. IT(SS) A NO. IT(SS) A NO. IT(SS) A NO. M/S. BADRI NARAYAN TRANSPORT, AT: BAGHUABOL, BUDHARAJA, PO: HATATOTA, TALCHER, DIST: ANGUL. PAN/GIR NO. (APPELLANT IT(SS) A NO. IT(SS) A NO. ACIT, CENTRAL CIRCLE BHUBANESWAR. PAN/GIR NO. (APPELLANT PER BENCH THE ASSESSEE HAS FILED APPEALS TO 2013-14 AND THE REVENUE HAS FILED APPEALS FOR THE ASSESSMENT YEAR IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK S/ SHRI CHANDRA MOHAN GARG, JUDICIAL AND MANISH BORAD, ACCOUNTANT MEMBER A NO . 29 /CTK/2019 : ASSESSMENT YEAR : A NO. 30 /CTK/2019 : ASSESSMENT YEAR : A NO. 31 /CTK/2019 : ASSESSMENT YEAR : A NO. 32 /CTK/2019 : ASSESSMENT YEAR : A NO. 33 /CTK/2019 : ASSESSMENT YEAR : A NO. 34 /CTK/2019 : ASSESSMENT YEAR : A NO. 35 /CTK/2019 : ASSESSMENT YEAR : M/S. BADRI NARAYAN TRANSPORT, AT: BAGHUABOL, BUDHARAJA, PO: HATATOTA, TALCHER, DIST: ANGUL. VS. ACIT, CENTRAL CIRCLE BHUBANESWAR. NO. AAHFB 1582 D (APPELLANT ) .. ( RESPONDENT A NO. 43 /CTK/2019 : ASSESSMENT YEAR : A NO. 47 /CTK/2019 : ASSESSMENT YEAR : ACIT, CENTRAL CIRCLE - 1, BHUBANESWAR. VS. M/S. BADRI NARAYAN TRANSPORT, AT: BAGHUABOL, BUDHARAJA, PO: HATATOTA, TALCHER, DIST: ANGUL PAN/GIR NO. AAHFB 1582 D (APPELLANT ) .. ( RESPONDENT ASSESSEE BY : SHRI P.K.MISHRA REVENUE BY : SHRI M.K.GAUTAM, DATE OF HEARING : 27 /10 / 20 DATE OF PRONOUNCEMENT : 28 / 10 O R D E R THE ASSESSEE HAS FILED APPEALS FOR THE ASSESSMENT YEARS 2008 AND THE REVENUE HAS FILED APPEALS FOR THE ASSESSMENT YEAR P A G E 1 | 8 IN THE INCOME TAX APPELLATE TRIBUNAL, JUDICIAL MEMBER AND MANISH BORAD, ACCOUNTANT MEMBER ASSESSMENT YEAR : 2008-2009 ASSESSMENT YEAR : 2009-2010 ASSESSMENT YEAR : 2010-2011 ASSESSMENT YEAR : 2011-2012 ASSESSMENT YEAR : 2012-2013 ASSESSMENT YEAR : 2013-2014 ASSESSMENT YEAR : 2014-2015 ACIT, CENTRAL CIRCLE - 1, BHUBANESWAR. RESPONDENT ) ASSESSMENT YEAR : 2009-2010 ASSESSMENT YEAR : 2013-2014 M/S. BADRI NARAYAN TRANSPORT, AT: BAGHUABOL, BUDHARAJA, PO: HATATOTA, TALCHER, DIST: ANGUL RESPONDENT ) , AR CIT (DR) / 20 21 10 /2021 FOR THE ASSESSMENT YEARS 2008 -2019 AND THE REVENUE HAS FILED APPEALS FOR THE ASSESSMENT YEAR S M/S. BADRI NARAYAN TRANSPORT P A G E 2 | 8 2009-10 AND 2013-14, RESPECTIVELY. THE ASSESSMENT FOR THE ASSESSMENT YEARS 2008-09 TO 2013-14 HAS BEEN PASSED UNDER SECTION 153A/144 OF THE INCOME TAX ACT, 1961. FURTHER, THE ASSESSMENT FOR THE ASSESSMENT YEAR 2013-14 HAS BEEN PASSED U/S.144 OF THE ACT. 2. SINCE THE FACTS AND CIRCUMSTANCES OF THE CASE FOR ALL THE ASSESSMENT YEARS ARE IDENTICAL, EXCEPT VARIANCE IN AMOUNT OF DISALLOWANCE, THEY WERE CLUBBED TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 3. IN ASSESSEES APPEALS, ALTHOUGH THE ASSESSEE HAS RAISED VARIOUS GROUNDS, THE EFFECTIVE GRIEVANCE IS THAT THE LD CIT(A) IS NOT JUSTIFIED IN RESTRICTING THE ESTIMATION OF PROFIT @ 10.4% AS AGAINST 15% DETERMINED BY THE ASSESSING OFFICER. 4. FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATION U/S.132 OF THE ACT WAS CONDUCTED IN THE CASE OF PRAVAKAR SAHOO & GROUP ON 7.11.2013, IN WHICH THE ASSESSEE IS A PARTNERSHIP FIRM. IN THE COURSE OF SEARCH, SOME INCREMENTING DOCUMENTS AND BOOKS OF ACCOUNTS WERE FOUND AND SEIZED FROM BUSINESS PREMISES OF THE FIRM AS WELL AS FROM THE RESIDENCE OF THE PARTNERS. DURING THE COURSE OF SEARCH, SHRI PRAVAKAR SAHOO, THE PARTNER OF THE ASSESSEE FIRM ADMITTED THAT IT WAS IN PRACTICE OF INFLATING OF TRANSPORTATION EXPENSES DURING THE ASSESSMENT YEAR 2008-09 TO 2013-14 AND THEREBY SUPPRESSING THE PROFIT OF THE ASSESSEE FIRM AMOUNTING TO M/S. BADRI NARAYAN TRANSPORT P A G E 3 | 8 RS.505 LAKHS. THE PARTNER ALSO EXPLAINED THAT THE UNDISCLOSED INCOME EARNED BY THE PARTNERSHIP FIRM WAS UTILIZED FOR INVESTMENT IN ASSETS. BASED ON THE SEARCH, THE AO ISSUED NOTICES U/S.153A OF THE ACT FOR ASSESSMENT YEARS 2008-09 TO 2013-14 AND FOR ASSESSMENT YEAR 2014-15 U/.S.143(2) OF THE ACT, IN RESPONSE TO WHICH, THE ASSESSEE FILED RETURNS OF INCOME. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE ASSESSING OFFER FRAMED ASSESSMENT ORDERS U/S.153C/144 OF THE ACT FOR THE ASSESSMENT YEARS 2008- 09 TO 2013-14 AND U/S.144 OF THE ACT. FOR ASSESSMENT YEAR 2014-15, INTER ALIA, MAKING VARIOUS ADDITIONS. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD DISCLOSED BOGUS TRANSPORTATION EXPENSES AGAINST ASSESSMENT YEARS 2008-09 TO 2013-14 AND ALL THE DISCLOSURE ARE ALSO IN ROUND FIGURES WHICH PROVES THAT THE REAL PROFIT FIGURE HAS NOT BEEN DISCLOSED FOR ANY OF THE SIX YEARS. IN VIEW OF ABOVE, THE AO OPINED THAT THE ASSESSEE HAS SHOWN LESS PROFIT IN THE LINE OF BUSINESS UNDERTAKEN BY THE ASSESSEE. CONSIDERING THE NATURE OF BUSINESS AND PROFIT DETERMINED BY THE ASSESSEE, VIS--VIS NON- COMPLIANCE OF TDS PROVISIONS U/S.194C OF THE ACT, NON-ADHERENCE TO SECTION 40A(3) OF THE ACT, THE PROFITABILITY OF TRANSPORTATION CUM TRUCK BUSINESS, THE AO REJECTED THE BOOK PROFITS DECLARED BY THE ASSESSEE AND DETERMINED THE PROFIT @ 15% OF THE GROSS TURNOVER FOR THE ASSESSMENT YEARS UNDER APPEAL. 5. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). THE CIT(A) CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER. THEREAFTER, A REJOINDER TO THE REMAND M/S. BADRI NARAYAN TRANSPORT P A G E 4 | 8 REPORT WAS FILED BY THE ASSESSEE. THE LD CIT (A) OPINED THAT DURING THE COURSE OF SEARCH, NO EVIDENCE TO SUGGEST THAT THE ASSESSEE HAS INDULGED INTO INFLATION OF TRANSPORTATION EXPENSES WAS FOUND. THERE IS NO EVIDENCE ALSO TO SUGGEST THAT THE ASSESSEE HAS INFLATED FUEL AND LUBRICANT EXPENSES. THE PARTNERS OF THE ASSESSEE FIRM BEFORE THE AO HAS EXPLAINED THAT FOR HIS OWN VEHICLES AS WELL AS FOR THE HIRED VEHICLES, A TOKEN IS ISSUED TO THE TRUCK DRIVERS FOR FILLING FUEL AND LUBRICANT AND PAYMENTS ARE DIRECTLY MADE TO THE PETROL PUMP THROUGH BANKING CHANNELS. THE AO HAS NOT FOUND ANY DISCREPANCY IN THE EXPLANATION OF THE ASSESSEE. THEREFORE, THERE IS NO REASON TO BELIEVE THAT THE ASSESSEE HAS INFLATED THE EXPENSES. REGARDING ALLEGED NON-DEDUCTION OF TAX AT SOURCE AND PAYMENT IN EXCESS OF RS.20,000/-, NO SUCH INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH OR IN THE ASSESSMENT ORDER AND REMAND REPORT. THE LD CIT(A) ALSO OBSERVED THAT DURING THE COURSE OF SEARCH FOR THE A.Y. 2009-10, 2012-13 AND 2013-14, THE ASSESSEE HAS FILED RECONCILIATION WITH THE AUDITED PROFIT AND LOSS ACCOUNT AND BALANCE SHEET. 6. FURTHER, THE LD CIT(A) OBSERVED THAT THE AO ISSUED NOTICES U/S.133(6) OF THE ACT TO 47 TRANSPORTERS AND SUMMONS U/S.131 OF THE ACT TO 66 PERSONS, FOR ALL THE SEVEN ASSESSMENT YEARS. IT WAS NOTED THAT ALL THE TRANSPORTERS TO WHOM THE NOTICES WERE ISSUED DID NOT WORK FOR THE ASSESSEE FOR ALL THE ASSESSMENT YEARS. THE AO ISSUED TWO LETTERS DATED 25.1.2019 TO THE ASSESSEE GIVING DETAILS OF THE TRANSPORTERS WHO COMPLIED WITH HIS M/S. BADRI NARAYAN TRANSPORT P A G E 5 | 8 NOTICES/SUMMONS AND ASKED TO PRODUCE THESE PERSONS. THE ASSESSEE CONTACTED THE TRANSPORTERS AND RECEIVED DETAILS FROM THEM AND SAME WERE SUBMITTED BEFORE THE AO, WHICH ARE IN THE ASSESSMENT RECORD. THE LD CIT(A) HAS GONE THROUGH THE CHART ALONGWITH THE GROSS RECEIPTS AND BOOK PROFIT AS PER RETURN OF INCOME IN RESPONSE TO NOTICE U/S.153C/143(2) OF THE ACT AND NOTICED THAT THE PROFIT DISCLOSED BY THE ASSESSEE AFTER DISCLOSURE OF ADDITIONAL TRANSPORTATION CHARGES, THE PERCENTAGE OF BOOK PROFIT COMES TO 7.85% FOR ALL SEVEN ASSESSMENT YEARS. BESIDES ABOVE FACTS, THE LD CIT(A) OBSERVED THAT THE ASSESSEE HIMSELF AGREED THAT SOME TRANSPORTERS DID NOT SUBMIT THE DETAILS CALLED BY THE AO U/S.133(6) OF THE ACT AND EVEN THE ASSESSEE COULD NOT COLLECT THEIR CONFIRMATIONS. EVEN IN RESPONSE TO NOTICE U/S.131, THE ASSESSEE COULD NOT PROCURE THE CONFIRMATIONS FROM SOME OF THE TRANSPORTERS. THEREFORE, THE LD CIT(A) TREATED AS NON-GENUINE. IN VIEW OF ABOVE, THE LD CIT(A) OBSERVED THAT THE TRANSPORTERS WHO DID NOT RESPONSE TO THE AO NOR TO THE ASSESSEE AMOUNTING TO RS.3,90,05,485/- AND ADDED TO THE TOTAL BOOK PROFIT FOR THE SEVEN ASSESSMENT YEARS, WHICH COMES TO RS.16,05,27,992/- AND CONSIDERING THE ENTIRE FACTS AND FACTS ON RECORD, THE LD CIT(A) REDUCED THE BOOK PROFIT TO 10.4% OF GROSS RECEIPTS AGAINST 15% DETERMINED BY THE AO. ACCORDINGLY, THE AO WAS DIRECTED TO COMPUTE BOOK PROFIT OF THE ASSESSEE @ 10.4% OF GROSS RECEIPTS. BEING NOT SATISFIED WITH THE PARTIAL RELIEF BY THE LD CIT(A), THE ASSESSEE HAS AGAIN FILED APPEALS BEFORE THE TRIBUNAL. M/S. BADRI NARAYAN TRANSPORT P A G E 6 | 8 7. AT THE TIME OF HEARING, LD A.R. OF THE ASSESSEE, FIRST OF ALL, SUBMITTED THAT THE SEARCH WARRANT WAS ISSUED IN THE PARTNERS NAME BUT THE ASSESSMENT HAS BEEN COMPLETED U/S.153C IN THE HANDS OF THE FIRM, WHICH IS NOT SUSTAINABLE IN THE EYE OF LAW. HE SUBMITTED THAT NO INCRIMINATING MATERIALS WERE FOUND DURING THE COURSE OF SEARCH, WHICH COULD SUGGEST THAT THE ASSESSEE HAS INFLATED THE TRANSPORTATION EXPENSES. HOWEVER, WITHOUT GOING INTO THE MERITS OF THE CASE, LD A.R. SUBMITTED THAT THE BOOK PROFIT DETERMINED BY THE LD. CIT(A) SEEMS TO BE IN HIGHER SIDE AS COMPARED THE BOOK PROFIT SHOWN BY THE ASSESSEE IN RESPECTIVE ASSESSMENT YEARS, WHICH SHOULD BE REDUCED TO 7%. 8. REPLYING TO ABOVE, LD CIT DR SUPPORTED THE ORDER OF THE LD CIT(A) FOR ALL THE ASSESSMENT YEARS. LD CIT DR ALSO SUBMITTED THAT IF IT IS FOUND JUST AND PROPER TO GIVE SOME RELAXATION IN THE PERCENTAGE OF PROFIT, THEN HE LEAVE IT TO THE WISDOM OF THE BENCH UNDER A JUSTIFIED AND REASONABLE APPROACH TO COVER LEAKAGE OF REVENUE. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD OF THE CASE. WE OBSERVE THAT THE LD CIT(A) IN THE IMPUGNED ORDER FOR THE ASSESSMENT YEAR 2008-09 AT PARA 5.7.1 TO 5.12, HAS DISCUSSED THE ISSUE AT LENGTH AND REDUCED THE PROFIT RATE TO 10.4% AS AGAINST THE PROFIT @ 15% DETERMINED BY THE AO. BEFORE US, BOTH THE PARTIES COULD NOT CONTROVERT THE FINDINGS OF THE LD CIT(A) IN REDUCING THE BOOK PROFIT. CONSIDERING THE NATURE OF BUSINESS UNDERTAKEN BY THE ASSESSEE VIS--VIS THE BOOK PROFIT M/S. BADRI NARAYAN TRANSPORT P A G E 7 | 8 DECLARED IN THE RESPECTIVE ASSESSMENT YEARS IN IN TOTO 7.85% AND FACTS IN ENTIRETY, AND TO COVER UP ALL POSSIBLE LEAKAGE OF REVENUE, WE DEEM IT PROPER TO REDUCE THE BOOK PROFIT TO 8.5% AS AGAINST 10.4% APPLIED BY THE LD CIT(A). WE ORDER ACCORDINGLY. HENCE, APPEALS FILED BY THE ASSESSEE FOR THE ASSESSMENT YEARS 2008-09 TO 2013-14 I.E. FOR ALL SEVEN ASSESSMENT YEARS ARE PARTLY ALLOWED. 10. THE REVENUE IN ITS APPEAL FOR THE ASSESSMENT YEAR2009-10 AND 2013- 14, HAS CHALLENGED THE RESTRICTION OF BOOK PROFIT TO 10.4% BY THE LD CIT(A). SINCE, IN THE APPEALS OF THE ASSESSEE, WE HAVE FURTHER REDUCED THE BOOK PROFIT TO 8.5% CONSIDERING THE ENTIRE FACTS OF THE CASE, WE DISMISS THE GROUND RAISED BY THE REVENUE FOR BOTH THE ASSESSMENT YEARS. 11. IN THE RESULT, APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED AND THAT OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON 28 /10/2021. SD/- SD/- (MANISH BORAD) (CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER CUTTACK; DATED 28 /10/2021 B.K.PARIDA, SPS (OS) M/S. BADRI NARAYAN TRANSPORT P A G E 8 | 8 COPY OF THE ORDER FORWARDED TO : BY ORDER SR.PVT.SECRETARY ITAT, CUTTACK 1. THE APPELLANT /ASSESSEE : M/S. BADRI NARAYAN TRANSPORT, AT: BAGHUABOL, BUDHARAJA, PO: HATATOTA, TALCHER, DIST: ANGUL 2. THE RESPONDENT. /REVENUE: ACIT, CENTRAL CIRCLE - 1, BHUBANESWAR. 3. THE CIT(A) - 2 , BHUBANESWAR 4. PR.CIT - 2 , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//