M/s. Vijay Lakshmi Transport Co., Delhi v. ACIT, New Delhi

CO 272/DEL/2015 | 2010-2011
Pronouncement Date: 21-05-2021 | Result: Allowed

Appeal Details

RSA Number 27220123 RSA 2015
Assessee PAN AAAFV1036B
Bench Delhi
Appeal Number CO 272/DEL/2015
Duration Of Justice 5 year(s) 7 month(s) 6 day(s)
Appellant M/s. Vijay Lakshmi Transport Co., Delhi
Respondent ACIT, New Delhi
Appeal Type Cross Objection
Pronouncement Date 21-05-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted H
Tribunal Order Date 21-05-2021
Last Hearing Date 22-02-2021
First Hearing Date 22-02-2021
Assessment Year 2010-2011
Appeal Filed On 15-10-2015
Judgment Text
INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E: NEW DELHI BEFORE SHRI AMIT SHUKLA JUDICIAL MEMBER AND SHRI O.P. KANT ACCOUNTANT MEMBER CO NO. 272/DEL/2015 ASSTT. YEAR: 2010-11 O R D E R PER AMIT SHUKLA J.M.:- THIS CROSS OBJECTION WAS FILED ALONG WITH THE DEPARTMENTS APPEAL IN ITA NO. 1697/DEL/15. HOWEVER THE REVENUES APPEAL WAS DISMISSED ON ACCOUNT OF LOW TAX EFFECT. THEREFORE ONLY CROSS OBJECTION IS TO BE DECIDED. IN THE CROSS OBJECTION THE ASSESSEE HAD CHALLENGED THE PENALTY OF RS. 9 00 000/- SUSTAINED BY THE LD. CIT(A) OUT OF RS. 18 00 000/- IMPOSED BY THE AO U/S 271(1)(C) ON ACCOUNT OF EXPENSES OF RS. 30 00 000/- CLAIMED ON ACCOUNT OF ON WAY EXPENSES . THE VIJAY LAKSHMI TRANSPORT CO. 4112 NAYA BAZAR DELHI- 110 006 PAN AAAFV1036B VS. ACIT CIRCLE 47 (1) ROOM NO. 107 DRUM SHAPE BUILDING I.P. ESTATE NEW DELHI 110 002 (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI SANDEEP SAPRA ADVOCATE DEPARTMENT BY : MRS. AL KA GAUTAM SR. DR DATE OF HEARING 22/02 /20 21 DATE OF PRONOUNCEMENT 21 / 0 5 /20 21 2 ASSESSEE HAS ALSO RAISED FOLLOWING ADDITIONAL GROUNDS IN CROSS OBJECTION:- THAT THE PENALTY U/S 271(1)(C) OF I.T. ACT LEVIED VIDE ORDER DATED 14/08/2013 IS ILLEGAL AS VIDE PENALTY NOTICE ISSUED U/S 271(1)(C) DATED 28/03/2013 THE PENALTY WAS INITIATED FOR BOTH THE LIMBS VIZ. CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME WHEREAS THE PENALTY HAS BEEN LEVIED WITHOUT SPECIFYING ANY OF THE ABOVE MENTIONED LIMBS VIZ CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 2. THE FACTS IN BRIEF ARE THAT ASSESSEE IS DERIVING INCOME FROM PLYING OF TRUCK BUSINESS AND HAD FILED ITS RETURN OF INCOME FOR THE A.Y.2010-11 AT RS. 2 38 82 300/- ON 28.9.2010. HOWEVER THE ASSESSMENT U/S 143(3) WAS COMPLETED ON INCOME OF RS.2 73 37 711/-. AGAINST THE SAID ASSESSMENT ORDER NO APPEAL WAS FILED BEFORE THE LD. CIT (A). THE AO HAS LEVIED PENALTY OF RS. 18 00 000/- WHICH WAS 200 % OF THE TAX SOUGHT TO BE EVADED ON THE SURRENDER OF INCOME OF RS. 30 00 000/- DURING ASSESSMENT PROCEEDINGS. THIS SURRENDER WAS MADE OUT OF EXPENSE CLAIMED ON ACCOUNT OF ON WAY EXPENSES AS THE SAME WERE NOT SUPPORTED FULLY BY PROPER BILLS AND VOUCHERS. LD. CIT (A) HAS REDUCED THE PENALTY @ RS. 9 00 000/- ON THE GROUND THAT 100% PENALTY OF THE TAX SOUGHT TO BE EVADED WOULD BE CONFIRMED. 3. BEFORE US LD. COUNSEL FOR THE ASSESSEE FIRST OF ALL ON MERITS POINTED OUT THAT THE ASSESSEES PROFIT AND LOSS ACCOUNT WAS SHOWN ON NET BASIS THAT IS ON WAY EXPENSES WERE REDUCED FROM THE GROSS RECEIPTS. THIS IS EVIDENT FROM PAGE 4 OF THE PAPER BOOK AND ALSO NOTE GIVEN IN ANNEXURE 1 OF THE TAX AUDIT REPORT THE COPY OF WHICH HAS BEEN PLACED ON THE PAPER BOOK AT PAGE 20 WHEREIN IT HAS BEEN MENTIONED THAT TRUCK INCOME IS NET AFTER DEDUCTION OF ON WAY EXPENSES AND DELIVERY AND BOOKING COMMISSION CLAIMS PAID ARE 3 ACCOUNTED AS AND WHEN SETTLED/SANCTIONED. BEFORE THE AO THE ASSESSEE HAD DULY EXPLAINED IN THE COURSE OF THE ASSESSMENT PROCEEDINGS THAT ASSESSEE HAS BEEN REFLECTING INCOME FROM TRUCK AFTER DEDUCTION OF ON WAY EXPENSES ON NET BASIS FOR THE LAST 40 YEARS AND NO OBJECTION WAS EVER RAISED BY THE DEPARTMENT EVEN WHEN ASSESSMENT WERE COMPLETED U/S 143(3). IT WAS FURTHER SUBMITTED THAT ON WAY EXPENSES ARE GENUINE EXPENSES BECAUSE IN RUNNING OF TRUCK BUSINESS IT IS QUITE COMMON FEATURE THAT ON THE TRUCK ROUTES THE TRANSPORTERS/TRUCK DRIVERS HAVE TO INCUR VARIOUS EXPENSES AND PAY TIPS BECAUSE OTHERWISE THE TRUCKS ARE STOPPED AND NOT ALLOWED TO PROCEED FURTHER ON THAT ROUTE WHICH COULD BE VERIFIED BY THE AO SO THAT HE COULD HIMSELF SEE THAT SUCH EXPENSES ARE ACTUALLY INCURRED ON ROUTE. HOWEVER THE ABOVE SUBMISSIONS HAVE BEEN COMPLETELY IGNORED BY THE AO. THEREFORE THE AOS OBSERVATIONS IN THE ASSESSMENT ORDER THAT ON WAY EXPENSES AGGREGATING TO RS.26 02 146/- (17 56 694 + 8 45 452) ARE BOGUS ARE FACTUALLY INCORRECT. 4. APART FROM THAT LD. COUNSEL SUBMITTED THAT THE DETAILS OF DAY- WISE ON WAY EXPENSES WERE FILED BEFORE THE AO AND ON SAMPLE BASIS FOR THE MONTH OF APRIL 2009 WHICH HAS ALSO BEEN FILED BEFORE US IN THE PAPER BOOK AT PAGES 34 TO 44. DETAILS OF MONTH-WISE ON WAY EXPENSES AND NET INCOME FOR THE YEAR UNDER CONSIDERATION WAS ALSO FILED. ALL THESE DETAILS WERE FILED BEFORE THE ASSESSING OFFICER ALSO. HOWEVER THE ASSESSEE HAD VOLUNTARILY SURRENDERED RS. 30 00 000/- ON LUMP SUM BASIS NOT ONLY FOR THE YEAR UNDER CONSIDERATION I.E. ASSTT. YEAR 2010- 11 BUT ALSO THE SAME AMOUNT ON ADHOC BASIS FOR THE SUBSEQUENT YEARS I.E. FROM AYS 2011-12 TO 2013-14 OUT OF THE EXPENSES CLAIMED INCLUDING ON WAY EXPENSES ONLY TO AVOID LITIGATION. NO PENALTY HAS BEEN INITIATED IN THE SUBSEQUENT ASSESSMENT YEARS EVEN IN THE ASSESSMENT ORDER PASSED U/S 143(3). EVEN OTHERWISE ALSO ON WAY EXPENSES WERE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF 4 BUSINESS AND SURRENDER WAS ONLY ON ACCOUNT OF THE FACT THAT IT WAS IMPOSSIBLE TO SUPPORT THESE EXPENSES AND PROPER BILLS AND NOT BECAUSE THEY WERE NON GENUINE OR BOGUS. 5. ON LEGAL ISSUE IT WAS SUBMITTED THAT FROM A BARE PERUSAL OF THE NOTICE IT CAN BE SEEN THAT AO HAS NOT SPECIFIED THE CHARGE IN HIS NOTICE U/S 271(1) (C) R.W.S. 274 THAT UNDER WHICH LIMB HE IS INITIATING THE PENALTY PROCEEDINGS. THUS IN VIEW OF THE VARIOUS JUDGEMENTS LIKES CIT & ANR. VS. SSAS EMERALD MEADOWS 2015 (11) TMI 1620 (KARNATAKA) WHICH HAS BEEN UPHELD BY THE SUPREME COURT REPORTED IN 2016(8) TMI 1145 AND FOLLOWED BY THIS TRIBUNAL IN NUMEROUS DECISIONS THAT IF NOTICE DIES NOT SPECIFY THE CHARGE THEN PENALTY CANNOT BE LEVIED. 6. ON THE OTHER HAND LD. DR HAS STRONGLY RELIED UPON THE ORDER OF THE AO AND LD. CIT (A). 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND ON PERUSAL OF THE MATERIAL REFERRED TO BEFORE US WE FIND THAT THE SOLE REASON FOR LEVY OF PENALTY BY THE AO AND LD. CIT(A) IS THAT ASSESSEE HAD VOLUNTARILY SURRENDERED RS. 30 00 000/-ON ACCOUNT OF ON WAY EXPENSES. THE ASSESSEE IS A TRANSPORTER AND EARNED INCOME FROM THE DEPLOYMENT OF TRUCKS. ON WAY EXPENSES ARE EXPENSES INCURRED BY THE TRUCK DRIVERS ON ROUTE AND FOR SUCH EXPENSES IT IS VERY DIFFICULT TO GET PROPER BILLS. WHATEVER BILLS AND VOUCHERS ARE SUBMITTED AND CLAIMED BY THE TRUCK DRIVERS IS PAID. THE EXPENSES WHICH ARE INCURRED THROUGH DRIVERS ARE ATTACHED WITH WHATEVER EVIDENCE AS WERE AVAILABLE WHICH IN TURN IS PROPERLY VERIFIED BY THE SUPERVISORS WHO HAVE COMPLETE KNOWLEDGE OF QUANTUM OF ROUTE EXPENSES. THESE PAYMENTS WHICH HAVE BEEN MADE TO THE DRIVERS ARE ALSO DULY ACKNOWLEDGED BY THEM. THERE IS NO WAY THAT THE ASSESSEE CAN VERIFY THE EXPENSES WITH PROPER BILLS ABOUT QUANTUM OF EXPENDITURE CLAIMED BY TRUCK DRIVERS ON THE ROUTE. WHATEVER 5 PAYMENT IS MADE TO THE TRUCK DRIVERS BASED ON THEIR BILLS AND CLAIMS SUBMITTED BY THEM THE SAME IS DULY INCORPORATED AND THESE DETAILS ARE ACCORDINGLY MAINTAINED IN THE BOOKS OF ACCOUNTS. THE FACTUM OF INCURRING OF SUCH EXPENDITURE IS NOT DOUBTED AS IT HAS BEEN ACCEPTED IN THE PAST. WHILE DECIDING THE ALLOWABILITY OF ANY EXPENDITURE INCURRED DURING THE COURSE OF BUSINESS ONE HAS TO UNDERSTAND THE NATURE OF BUSINESS AND HOW IT IS RELATED WITH WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. IN RUNNING OF TRUCK SUCH EXPENDITURE ARE NOT GERMANE AS IT IS PREVALENT AND INEVITABLE EXPENSES WHICH OSTENSIBLY IS WHOLLY AND EXCLUSIVELY CONNECTED WITH THE ASSESSEES BUSINESS. 8. OTHERWISE ALSO THE ASSESSEE HAS BEEN SHOWING TRUCK INCOME ON NET BASIS AND NET INCOME IS BEING SHOWN AFTER DEDUCTION OF ON WAY EXPENSES AND DELIVERY AND BOOKING COMMISSION ETC. THESE ARE NOT SEPARATELY CHARGED TO PROFIT AND LOSS ACCOUNT. MERELY BECAUSE ASSESSEE HAD SURRENDERED DURING THE COURSE OF ASSESSMENT PROCEEDINGS ADHOC LUMP SUM AMOUNT OF RS.30 00 000/- THE SAME CANNOT BE HELD THAT EITHER THE ASSESSEES CLAIM OF ON WAY EXPENSES OR BILLS SHOWN IN THE BOOKS OF ACCOUNTS ARE BOGUS OR NON GENUINE. AT BEST LOOKING TO THE NATURE OF EXPENDITURE IT CAN BE HELD THAT EACH AND EVERY AMOUNT ARE NOT OPEN TO VERIFICATION THROUGH INDEPENDENT THIRD PARTY BILLS ALBEIT WHATEVER HAS BEEN SHOWN IS THE BILLS AND THE CLAIMS MADE BY THE DRIVERS AS EXPLAINED ABOVE. ON THESE FACTS IT CANNOT BE HELD THAT THESE EXPENDITURE ARE EITHER BOGUS OR NON GENUINE AND SIMPLY BECAUSE ASSESSEE HAD OFFERED IT AS AN INCOME IT DOES NOT MEAN THAT ASSESSEE HAS CONCEALED ITS INCOME. MOREOVER IN SUBSEQUENT ASSESSMENT YEARS SAME AMOUNT OF RS. 30 00 000/- WAS SURRENDERED BY WAY OF ON WAY EXPENSES ON THE SAME REASON BUT NO PENALTY HAS BEEN INITIATED IN THE ASSESSMENT ORDER WHICH IS EVIDENT FROM THE COPY OF ASSESSMENT ORDERS WHICH HAVE BEEN FILED IN THE PAPER BOOK FROM 6 PAGES 93 TO 96. THUS UNDER THESE FACTS AND CIRCUMSTANCES THE PENALTY CONFIRMED BY THE LD. CIT (A) IS DELETED. SINCE WE HAVE PENALTY ON MERITS THEREFORE THE LEGAL ISSUE RAISED BY THE LD. COUNSEL IS NOT ADJUDICATED UPON. 9. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. ` ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST MAY 2021. SD/- SD/- (O.P. KANT) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 21 /05/2021 VEENA COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT NEW DELHI