M/s. Dushasan Jena, Cuttack V. ACIT, Cuttack

MA 24/CTK/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 5075 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 2 month(s) 8 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 27-02-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 19-12-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PER C.M.GAR; SOVESH CHANDRA MOHANT
• Keywords: TDS
• Section: 44AB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE S/ AND ARUN KHODPIA, ACCOUNTANT MEMBER M/s. Dushasan jena, Jobra (Talasahi), PO:College Square, Cuttack PAN/GIR No. (Appellant Revenue by Per C.M.Gar, JM By way of this miscellaneous petition, the assessee recall/rectify the order passed by it on 21.10.2019 in ITA No.182/CTK/2015 for the assessment year 2010 2. The contents of Miscellaneous petition read as under: “ 1. That, the assessee is engaged in the business of transportation and during the course of assessment proceedings as called for by the Assessing Officer has produced all the documents like books of accounts, profit and loss account, ledger accounts and bills and vouchers, ,which was verified course of assessment proceedings, the assessee also replied to query the AO whether any TDS has been made on the transaction made IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK S/SHRI CHANDRA MOHAN GARG, JUDICIAL AND ARUN KHODPIA, ACCOUNTANT MEMBER M.A.No.24/CTK/2019 (in ITA No.182/CTK/2015) Assessment Year : 2010-2011 M/s. Dushasan jena, Jobra (Talasahi), PO:College Square, Vs. ACIT, Circle No.AAAFD 9502 C (Appellant) .. ( Respondent Assessee by : Shri Natabar Panda Revenue by : Shri Sovesh Chandra Mohant, Add. Date of Hearing : 4/2/ 20 Date of Pronouncement : 28/ O R D E R Per C.M.Gar, JM By way of this miscellaneous petition, the assessee recall/rectify the order passed by it on 21.10.2019 in ITA No.182/CTK/2015 for the assessment year 2010-2011. The contents of Miscellaneous petition read as under: That, the assessee is engaged in the business of transportation and during the course of assessment proceedings as called for by the Assessing Officer has produced all the documents like books of accounts, profit and loss account, ledger accounts and bills and vouchers, ,which was verified and test checked by the AO. During the course of assessment proceedings, the assessee also replied to query the AO whether any TDS has been made on the transaction made Page1 | 7 IN THE INCOME TAX APPELLATE TRIBUNAL, JUDICIAL MEMBER AND ARUN KHODPIA, ACCOUNTANT MEMBER 182/CTK/2015) 2011 Circle-1(2),Cuttack Respondent) Natabar Panda, AR Sovesh Chandra Mohant, Add. CIT (DR) / 2022 /2/2022 By way of this miscellaneous petition, the assessee seeks to recall/rectify the order passed by it on 21.10.2019 in ITA No.182/CTK/2015 The contents of Miscellaneous petition read as under: That, the assessee is engaged in the business of transportation and during the course of assessment proceedings as called for by the Assessing Officer has produced all the documents like books of accounts, profit and loss account, ledger accounts and bills and and test checked by the AO. During the course of assessment proceedings, the assessee also replied to query of the AO whether any TDS has been made on the transaction made by the M.A.No.24/CTK/2019 (in ITA No.182/CTK/2015) Assessment Year : 2010-2011 Page2 | 7 assessee, if not, reasons thereof be given, that the assessee firm arranging the trucks, trailors individually standing on the road side on contract basis and it is pertinent to mention here that most of the truck drivers, helpers are not the real owners of the vehicles and they do not have any PAN card or bank account and they straight away refused to carry the materials when being asked about the necessity of TDS, therefore, the assessee had no other option to make them payment. 2. That, as per the return filed, the assessee has already paid advance tax of Rs.1,75,000/- and TDS was deducted at source of Rs.5,23,578/-totaling to Rs.6,98,578/- for the assessment under consideration ie. A.Y.2010-2011. 3. That, it is also submitted that the assessee has claimed the expenditures in question in the profit and loss account, which was verified and test checked by the AO mentioned in para 2 & 2.1 of the assessment order, however, the AO without going into the details in the profit and loss account disallowed the expenditures as claimed by the assessee. 4. That, the assessee rras shown profit more than 12% of the gross turnover before allowing interest on capital and remuneration to partners, which was considered by the CIT(A) in the first appeal. However, she restricted the same to Rs.5,00,000/- as against the 35% disallowance made by the AO on the total expenditure claimed by the assessee. 5. That, the assessee had maintained books of accounts and these were duly audited u/s 44AB of the l.T.Act. The Assessing Officer has not found or pointed out any discrepancy in the books of accounts which was produced by the assessee at the time of the scrutiny assessment proceeding. 6. That, the assessee before the Tribunal submitted that both the authorities below have taken a view on hypothetical and arbitrary manner. Therefore, the CIT(A) erred in restricting the disallowance to Rs.5,00,000/-, however, the Tribunal confirmed the disallowance by observing as under :~ "5. After hearing both the sides and perusing the entire materials available on record and order of the authorities below, we noted from the order of the lower authorities that during the assessment proceedings, the assessee submitted the bills and vouchers of another firm M/s Baba Lingaraj Enterprises. The AO had done test check on the evidence produced by the assessee in support of his claim of expenses debited into the profit and loss account. The other said firm is a sister concern of the assessee. This finding of the authorities below could not be controverted by the Id. AR. Considering the facts and circumstances of the case and in view of the above, we are of the opinion that the CIT(A) was justified to restrict the addition to Rs. 5,00,000/-." 7. That, in the observations made by the Hon'ble Tribunal, the Hon'ble Tribunal has mentioned that the "Id. AR could not controvert the findings M.A.No.24/CTK/2019 (in ITA No.182/CTK/2015) Assessment Year : 2010-2011 Page3 | 7 of the authorities below". In this regard, it is humbly submitted that the assessee has already paid advance tax of Rs.1,75,000/- and TDS deducted at source of Rs.5,23,578/- for the assessment year under consideration. The assessee during the course of assessment has filed profit and loss account which was verified and test checked by the AO. 8. That, it is also submitted that t he profit and loss account filed by the assessee has not been considered by both the authorities below. Even before the Tribunal the assessee in its written submission has i$/(jP\ submitted that the assessee has shown profit more than 12% of the y* gross turnover before allowing interest on capital and remuneration to the partners. And, the books of accounts maintained by the assessee was duly audited u/s.44AB of the Act and the same was produced during the scrutiny assessment. Neither any discrepancy nor any defect has been pointed out by the AO in the assessment order and, therefore, non-consideration of above facts by the Tribunal amounts to mistake apparent on the face of record. Therefore, the order dted 21.10.2019 may kindly be recalled and the appeal of the assessee may kindly be decided considering the factual aspect mentioned above. 9. That keeping in view of the above facts and circumstances of the case, it is requested before this Hon’ble Bench to allow the miscellaneous application of the assessee recalling the order dated 21.10.2019.” 3. Ld counsel for the assessee submitted that the profit and loss account filed by the assessee has not been considered by the authorities below. Even before the Tribunal, the assessee in its written submission, IT WAS submitted that the assessee has shown profit more than 12% of the gross turnover before allowing interest on capital and remuneration to the partners and this facts get also support by the books of accounts maintained by the assessee which was also duly audited u/s.44AB of the Income tax Act, (in short ‘the Act’) and the same were produced during scrutiny assessment proceedings. Ld counsel submitted that neither any discrepancy nor any defect has been pointed out by the Assessing Officer while passing the assessment order and, therefore, non-consideration of the M.A.No.24/CTK/2019 (in ITA No.182/CTK/2015) Assessment Year : 2010-2011 Page4 | 7 fact by the Tribunal amounts to mistake apparent on record. He submitted that in view of above, the order of the Tribunal may be recalled considering the factual aspects stated above. 4. Replying to above,. Ld Sr DR drew our attention towards orders of authorities below as well as the order of the Tribunal under challenge, especially paras 4 & 5. He submitted that during assessment proceedings, the assessee submitted bills and vouchers of another firm viz; M/s. Baba Lingaraj Enterprises, which was a sister concern of the assessee. Therefore, the AO made disallowance of Rs.42,12,029/- disallowing 35% of total expenditure claimed, which was further restricted by the ld CIT(A) to Rs.5 lakhs and the Tribunal has upheld the findings of the ld CIT(A) confirming the restricted disallowance of Rs.5 lakhs. Ld DR vehemently submitted that the disallowance upheld by the Tribunal cannot be rectified/amended or revised in the garb of miscellaneous petition u/s.254(2) of the Act. He also drew our attention to the recent judgment of Hon’ble Supreme Court in the case of Reliance Telecom Ltd., (2021) 133 taxmann.com 41 (SC) order dated 3.12.2021. 5. On careful consideration of the rival submissions, we are of the considered view that the AO has made impugned addition of Rs.42,12,029/- by disallowing 35% of total amount of expenditure claimed by the assessee on transportation and hire charges with following observations: “2. During the course of assessment proceeding, the assessee firm was specifically asked to produce the books of account and relevant supporting M.A.No.24/CTK/2019 (in ITA No.182/CTK/2015) Assessment Year : 2010-2011 Page5 | 7 documentary evidences in support of the expenses claimed in the profit and loss account. In reply, the assessee firm through it’s A.R. produced the ledger accounts, books of account maintained by the assessee firm and bills and vouchers. The AR also submitted some photo copies of the same bills and vouchers. 2.1 On verification of the bills and vouchers so produced/submitted, on test check basis, it is marked that the assessee firm has claimed expenditure on the bills aned vouchers of other i.e. Debit/credit vouchers of Baba Lingaraj Enterprise, Bhubaneswar on the following expenditures:: i. transportation & hire charges. ii. Oil & lubricants iii. Loading charges. iv. Shifting charges. Considering the bills and vouchers which are not related to the assessee firm, it is reasonable and fair to disallow 35% of the following owing to the nature of assessee’s business: Sl.No. Description Amount claimed Amount disallowed 1. transportation & hire charges 43,96,679 15,38,837 2 Oil & lubricants 30,12,617 10,54,415 3. Loading charges 26,89,505 9,41,326 4. Shifting charges. 19,35,576 6,77,451 6. In the first appeal, the ld CIT(A) has restricted the disallowance to Rs.5 lakhs with following observations: “4. I have carefully perused the assessment order and the submissions of the appellant. The AO in the assessment order stated that on verification of the bills and vouchers submitted by the assessee during assessment proceedings, on text check basis, he found that the assessee firm has claimed expenditure on the bills and vouchers of another firm M/s. Baba Lingaraj Enterprises, Bhubaneswar. The A/R of the appellant produced nothing to counter the finding of the AO. It appears that Baba Lingaraj Enterprises is a sister concern of the appellant. In the absence of any evidence to counter act the finding of the AO, it is not possible to negate his contention altogether. However, considering the net profit shown by the appellant, the AO is directed to restrict such disallowance to Rs.5,00,000/- on the issue.” 7. The assessee further carried the matter in appeal before the Tribunal and the Tribunal by order dated 21.10.2019, under challenge, confirmed the findings of ld CIT(A) with following observations: M.A.No.24/CTK/2019 (in ITA No.182/CTK/2015) Assessment Year : 2010-2011 Page6 | 7 “3. The Id. AR of the assessee submitted that the books of accounts of the assessee have been audited by a chartered accountant. No any adverse comments have been done by the chartered accountant. All the books of accounts and bills & vouchers were produced at the time of scrutiny assessment. No any deposits have been pointed out by the AO that the particular bills are evidence are examined or not related to the assessee's business. In the first appellate stage, the CIT(A) has also restrict the addition to Rs.5,00,000/- without giving any cogent reason. Therefore, order of the CIT(A) should be cancelled. 4. On the other hand, Id.DR relied on the order of CIT(A) and submitted that the CIT(A) has given relief to the assessee to the tune of Rs.37 lakhs after satisfying himself and considering the submissions of the assessee. Therefore, the order of C1T(A) should be restored. "5. After hearing both the sides and perusing the entire materials available on record and order of the authorities below, we noted from the order of the lower authorities that during the assessment proceedings, the assessee submitted the bills and vouchers of another firm M/s Baba Lingaraj Enterprises. The AO had done test check on the evidence produced by the assessee in support of his claim of expenses debited into the profit and loss account. The other said firm is a sister concern of the assessee. This finding of the authorities below could not be controverted by the Id. AR. Considering the facts and circumstances of the case and in view of the above, we are of the opinion that the CIT(A) was justified to restrict the addition to Rs. 5,00,000/-." 8. On careful consideration of the findings recorded by the authorities below and the observations recorded by the Tribunal in the order UNDER challenge, we are of the considered view that the grievance of the assessee has been addressed properly by considering the relevant facts and circumstances. In our considered opinion, the ld CIT(A) has taken a reasonable and liberal approach while restricting the disallowance to the tune of Rs.5 lakhs after considering the profits declared by the assessee @ 12% of gross turnover before allowing interest on capital and remuneration. These findings of the ld CIT(A) have been upheld by the Tribunal by giving detailed reasoning in the relevant operative paras, as noted above. M.A.No.24/CTK/2019 (in ITA No.182/CTK/2015) Assessment Year : 2010-2011 Page7 | 7 Therefore, in view of recent judgment of Hon’ble Supreme Court in the case of Reliance Telecom Ltd (supra), the Tribunal’s order dated 21.10.2019 cannot be recalled to decide the appeal of the assessee afresh. We are compelled to state that if in such circumstances, the Tribunal order is recalled, then it amount to revise of order in the garb of rectification provisions u/s.254(2) of the Act. We, accordingly, decline to accept the prayer of the assessee. 9. In the result, M.A. of the assessee is dismissed. Order pronounced on 28 /2/2022. SD/- SD/- (Arun Khodpia) (Chandra Mohan Garg) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack; Dated 28 /02/2022 B.K.Parida, SPS (OS) Copy of the Order forwarded to : By order Sr.Pvt.secretary ITAT, Cuttack 1. The Appellant : M/s. Dushasan jena, Jobra (Talasahi), PO:College Square, Cuttack 2. The Respondent. ACIT,Circle-1(2), Cuttack 3. The CIT(A)-, Cuttack 4. Pr.CIT-,Cuttack 5. DR, ITAT, Cuttack 6. Guard file. //True Copy//