T AND D PETRO SERVICES,SALIGAO V. INCOME TAX OFFICER, WARD - 2(3) , PANAJI

ITA 190/PAN/2023

AI Insights

The case involves T And D Petro Services, a partnership firm engaged in the business of dealing in petroleum products, which appealed against the order of the CIT(A) sustaining additions made by the Assessing Officer (AO) under sections 143(3) and 250 of the Income Tax Act. The AO had disallowed an excess provision in current liabilities and made additions for unrecorded sales of petrol and diesel in the stock register. The CIT(A) granted partial relief but sustained a significant addition. The Tribunal, after considering the submissions and evidence, decided to estimate the income at 5% of the disputed purchase value, thus partly allowing the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 32329 (ITAT-PANAJI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: WT(D)
• Assessment Year: 2014-2015
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NARENDRA REDDY.
• Assessee Lawyers: S J KAMAT
• Section: 143(3); 142(1); 250

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH PANAJI BEFORE SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER & SHRI G D PADMAHSHALI ACCOUNTANT MEMBER I T A. Nos. 190/PAN/2023 (A.Y. 2014-15 ) T And D Petro Services , Plot.No.8/2 B,Saligao, Bardez Goa-403511, Goa. Vs . ITO-Ward-2(3), Aayakar Bhavan, Panaji, Goa-403001. . PAN .No. AAHFT4732H (अपीलाथȸ/Appellant) (Ĥ×यथȸ/Respondent) Assessee by Shri S J Kamat.AR Revenue by Shri.Narendra Reddy.Sr.DR सुनवाई कȧ तारȣख/Date of Hearing 07.01.2025 घोषणा कȧ तारȣख/Date of Pronouncement 10.01.2025 ORDER PER PAVAN KUMAR GADALE, JM: The appeal is filed by the assesse against the order of ADDL/JCIT(A) passed u/sec 143(3) and u/sec 250 of the Act. The assessee has raised the grounds of appeal challenging the order of the CIT(A) sustaining the addition made by the Assessing Officer. 2. The brief facts of the case are that, the assesse is a partnership firm and is engaged in the business as dealer in petroleum products. The assesse has filed the return of income on 28-11-2014 disclosing a total income of Rs.3,00,950/-. Subsequently the case was selected for 2 ITA. No. 190/PAN/2023 T And D Petro services. limited scrutiny under CASS and the notice u/sec143(2) and u/sec 142(1) of the Act along with questionnaire are issued. In compliance, the Ld.AR of the assesse appeared from time to time and submitted the information and details. The Assessing Officer (AO) on perusal of financial statements and information find that the assessee has made provision of Rs.1,19,750/- in the current liabilities in the balance sheet and on verification the details, there is excess provision to the extent of Rs.4500/- and was disallowed. And on the second disputed issue, the A.O found that the the assessee on the three occasions in the F.Y.2013-14 in the stock register of motor spirit has not entered the details of petrol & diesel to the extent of 15000 Litres and the assesse was called to reconcile/explain the difference, Since the information was not substantiated, the A.O has made addition of suppression of sales valued at Rs.8,85,326/- and finally assessed the total income of Rs.11,90,778/- and passed the order u/sec 143(3) of the Act dated 6.12.2016. 3. Aggrieved by the order, the assessee has filed an appeal before the CIT(A), whereas the CIT(A) has considered the grounds of appeal, statement of facts and findings of the AO and granted partial relief and sustained balance of Rs.8,64,744/- and partly allowed the assessee appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Hon'ble Tribunal. 3 ITA. No. 190/PAN/2023 T And D Petro services. 4. At the time of hearing, the Ld.AR submitted that the CIT(A) has erred in confirming the action of the A.O overlooking the facts and submissions of the assessee in the proceedings. Further the Ld.AR emphasized that the assessee in response to notices has submitted the explanations along with the details of purchases with the quantitative details which are genuine. The Ld. AR emphasized that the transactions entered by the assesse are disallowed by the revenue authorities without proper inquires though the assesse has substantiated with material evidences/information of rectification of entries of stock in puts before the lower authorities and the Ld.AR supported the submissions with the paper book and prayed for allowing the appeal. Per Contra, the Ld. DR supported the order of the CIT(A). 5. We heard the rival submissions and perused the material on record. The Ld.AR submitted that the CIT(A) has erred in sustaining the disallowance overlooking the submissions and the Assessing Officer has not doubted the genuineness of claim of expenditure/ purchases but has made addition in the absence of entries in the stock register but in the end of the year, the transactions was rectified and the quantitative details of purchases and sales are tallied . The Ld.AR demonstrated the invoice copies of motor spirit and explained the quantity purchase and value placed at page 1&2 of the paper book, further the daily record of quantity of stock pertaining to two months i.eOctober2013 and February 2014 in the specific format was highlighted 4 ITA. No. 190/PAN/2023 T And D Petro services. at page 4 to 11 of the paper book.The Ld.AR submitted that the gross profit margin/element in the motor spirit I.e Diesel & Petrol business range between 2% to 3% and both the revenue authorities has over looked the factual aspects of the purchase transactions substantiated with material evidences filed in compliance to the notices. The Ld.AR highlighted the clauses of Tax Audit report in Form. no 3CD in particular clause 35(a) and 40. We considering the facts, circumstances, gross profit margin, and omission of entries by the assesse and to meet the ends of justice, restrict the addition @ 5% of the purchase transactions. Accordingly, we set-aside the order of the CIT(A) and direct the assessing officer to estimate the income@5% of disputed purchase value. Further we make it clear that, this estimated percentage is applicable only to this Assessement year. And we partly allow the grounds of appeal in favour of the assessee. 6. In the result, the appeal filed by the assessee is partly allowed. Order pronounced in the open court on 10.01.2025. Sd/- Sd/- (GD PADMAHSHALI) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER Panaji Dated: 10/01/2025 5 ITA. No. 190/PAN/2023 T And D Petro services. Copy of the Order forwarded to: 1. The Appellant, 2. The Respondent 3. The CIT(A)- 4. CIT 5. DR, ITAT, 6. Guard file. //True Copy// BY ORDER, (Asstt. Registrar)ITAT, Panaji Date Initial 1. Draft dictated on PS 2. Draft placed before author PS 3. Draft proposed & placed before the second member PS 4. Draft discussed/approved by Second Member. PS 5. Approved Draft comes to the Sr.PS/PS PS 6. Kept for pronouncement on 7. File sent to the Bench Clerk 8. Date on which file goes to the AR 9. Date on which file goes to the Head Clerk. 10. Date of dispatch of Order. 11. Dictation Pad is enclosed "