ACIT, New Delhi v. M/s. Frontline Associates, New Delhi

ITA 1772/DEL/2009 | 2005-2006
Pronouncement Date: 15-01-2010 | Result: Dismissed

Appeal Details

RSA Number 177220114 RSA 2009
Bench Delhi
Appeal Number ITA 1772/DEL/2009
Duration Of Justice 8 month(s) 15 day(s)
Appellant ACIT, New Delhi
Respondent M/s. Frontline Associates, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 15-01-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 15-01-2010
Date Of Final Hearing 31-12-2009
Next Hearing Date 31-12-2009
Assessment Year 2005-2006
Appeal Filed On 30-04-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B : NEW DELHI BEFORE SHRI I.P.BANSAL JM AND SHRI R.C.SHARMA AM ITA NO.1772/DEL/2009 ASSESSMENT YEAR : 2005-06 ASSTT.COMMISSIONER OF INCOME TAX CIRCLE-32(1) NEW DELHI. VS. M/S FRONTLINE ASSOCIATES N-34 BASEMENT G.K.I NEW DELHI 110 048. PAN NO.AAAFF6568J. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B.KISHOR DR. RESPONDENT BY : SHRI ARUN KISHOR CA. ORDER PER R.C.SHARMA AM : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 15.1.2009 FOR AY 2005-06 WHEREIN FOLLOWING TWO GRO UNDS HAVE BEEN TAKEN BY THE REVENUE :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.22 85 876/ - ADDED BY THE AO U/S 69C OF THE IT ACT ON A/C OF UNEXPLAINED EXPEND ITURE ON PURCHASE OF DIESEL. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.9 LAKH ADD ED BY THE AO AS SCRAP VALUE OF 900 TYRES @ 1000/- PER TYRE WHICH CO ULD NOT BE EXPLAINED BY THE ASSESSEE. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. ASSESSEE WAS ENGAGED IN THE BUSINESS OF TRANSPORTATION OF GOODS BY TRUCKS. WITH REGARD TO ADDITION OF RS.22.85 LAKHS MADE U/S 69C WE FOUND T HAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO G IVE THE DETAILS OF VARIOUS TRIPS DONE BY IT. THE ASSESSEE HAS PROVIDED A SOFT COPY AS WELL AS THE PRINT OUT OF THE VARIOUS TRIPS MADE BY IT TO AND FROM JAMSHEDPUR. T OTAL NUMBER OF KILOMETERS COME TO 1794331. THE ASSESSEE HAS DEBITED AN AMOUN T OF RS.3 56 75 572/- ON DIESEL OIL. VIDE ORDER SHEET ENTRY DATED 26.12.200 7 THE ASSESSEE WAS ASKED TO GIVE ITA-1772/DEL/2009 2 THE DETAILS OF THE MILEAGE AS WELL AS THE METHOD OF THE TREATMENT GIVEN TO EXPENDITURE ON DIESEL. THE ASSESSEE VIDE ITS REPLY DATED 26.12.2007 HAS PROVIDED THE BREAK UP AND THE EXPENDITURE MADE ON DIESEL FOR ITS VARIOUS TRIPS TAKEN TO AND FROM JAMSHEDPUR. THE AO STATED THAT ASSESSEE HAS A DDED ESTIMATED EXTRA DISTANCE FOR OUT OF THE WAY JOURNEY ON RETURN LOAD @ 15% OF NORMAL DISTANCE AND HAS ADDED THE KILOMETERS OF 269150 ARBITRARILY IN THE TRIPS D ETAILS CARRIED OUT BY THE ASSESSEE. BY OBSERVING THAT TOTAL EXPENDITURE MADE BY THE ASS ESSEE ON DIESEL COMES TO RS.3 79 61 448/- WHEREAS THE ASSESSEE HAS DEBITED A N AMOUNT OF RS.3 56 75 572/- ON DIESEL OIL AN AMOUNT OF RS.22 85 876/- WAS ADDE D BACK IN THE INCOME OF THE ASSESSEE AS UNEXPLAINED EXPENDITURE U/S 69C OF THE IT ACT. 3. BY THE IMPUGNED ORDER THE CIT(A) DELETED THE AD DITION BY OBSERVING THAT ADDITION MADE BY THE AO WAS NOT BASED ON ANY COGENT EVIDENCE. HE FURTHER RECORDED A FINDING THAT THERE IS NO EVIDENCE ON REC ORD THAT THE ASSESSEE HAS INDEED SPENT AN AMOUNT OF RS.379.62 LAKHS AS AGAINST RS.35 6.76 LAKHS DEBITED IN BOOKS OF ACCOUNT. AGAINST THIS DELETION THE REVENUE IS IN FURTHER APPEAL BEFORE US. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FOU ND FROM THE RECORD THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF TRANSPORTATI ON BY ROAD OF H.R.COIL SHEETS PLATES CHANNELS ETC. DURING THE COURSE OF SCRUTIN Y ASSESSMENT THE AO FOUND THAT ASSESSEE HAS INCURRED EXPENDITURE OF RS.3.56 CRORES ON DIESEL OIL. THE ASSESSEE WAS ASKED TO GIVE DETAILS OF VEHICLE RUNNING AND TH E DIESEL EXPENDITURE INCURRED THEREON. ON THE BASIS OF RUNNING OF THE VEHICLES THE ESTIMATED DIESEL COST WORKED OUT TO RS.3.79 CRORES. THE AO ADDED THE SHORTFALL IN DIESEL EXPENDITURE UNDER THE HEAD UNEXPLAINED EXPENDITURE. WE FOUND THAT ACTUAL EXPENDITURE INCURRED BY THE ASSESSEE WAS LOWER THAN THE ESTIMATED EXPENDITURE W ORKED OUT ON THE BASIS OF VEHICLE RUNNING IN TERMS OF KILOMETERS. ECONOMY IN ACTUAL EXPENDITURE WAS ATTRIBUTED TO THE CLOSE MONITORING AND HIGHER EFFIC IENCY ACHIEVED AND DUE TO STRICT MONITORING AND CONTROL OVER THE DRIVERS WHO TOOK TH E VEHICLES ON LONG DISTANCES. THE AO HAS NOT POINTED OUT ANY INSTANCE OF EXPENDIT URE HAVING BEEN ACTUALLY INCURRED BUT NOT DEBITED IN THE PROFIT & LOSS ACCOU NT NOR ANY COGENT MATERIAL WAS ITA-1772/DEL/2009 3 BROUGHT ON RECORD INDICATING HIGHER EXPENDITURE HAV ING BEEN ACTUALLY INCURRED TOWARDS DIESEL COST. THE EFFICIENCY SHOWN BY THE A SSESSEE IN TERMS OF REDUCTION OF ITS EXPENDITURE CANNOT BE MADE A GROUND FOR MAKING AN ADDITION BY ALLEGING THE SAME AS UNEXPLAINED INVESTMENT WITHOUT POINTING OUT ANY SUCH EXPENDITURE HAVING BEEN ACTUALLY INCURRED. THE FINDING RECORDED BY TH E CIT(A) AT PARA 7 OF THE APPELLATE ORDER HAS NOT BEEN CONTROVERTED BY THE LE ARNED DR. WE THEREFORE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DELET ING THE ADDITION MADE U/S 69C OF THE ACT. 5. WITH REGARD TO DELETION OF RS.9 LAKHS WHICH WAS ADDED BY THE AO ON ACCOUNT OF SCRAP VALUE OF TYRES WE FOUND THAT AO H AS ESTIMATED THE VALUE OF OLD TYRES AND ADDED THE SAME IN THE INCOME OF THE ASSES SEE. THERE IS NO MERIT IN THE AOS ACTION INSOFAR AS ASSESSEE WAS NOT SELLING THE OLD TYRES BUT THE SAME WERE BEING REPLACED WITH THE NEW TYRES. WHEN THE TYRES USED WERE FOUND TO BE WORN OUT THEY WERE FIRST RETREATED AND CHARGES FOR THE SAME WERE CHARGED TO THE TYRE EXPENSES ACCOUNT AND WHEN THE TYRES WERE TOTALLY UN FIT FOR JOURNEY THEY WERE CUT INTO FOUR PIECES AND USED AS RUBBER PAD FOR SAFE CA RRIAGE OF THE CONSIGNMENTS. NOTHING WAS BROUGHT ON RECORD BY THE AO FOR ALLEGIN G THAT ASSESSEE HAS SOLD THE SCRAP TYRES AT RS.1 000/- PER TYRE THEREBY ESTIMAT ING TOTAL PRICE OF THE SCRAP TYRES DURING THE YEAR AT RS.9 LAKHS. AFTER GIVING DETAIL ED FINDING AT PARA 12 OF THE APPELLATE ORDER THE CIT(A) HAS DELETED THE ADDITIO N WHICH HAS NOT BEEN CONTROVERTED BY THE LEARNED DR. SINCE NO MATERIAL MUCH LESS A COGENT MATERIAL WAS BROUGHT ON RECORD BY THE AO FOR ESTIMATING THE SALE OF SCRAP TYRES OUT OF BOOKS THERE WAS NO MERIT IN THE ADDITION MADE BY T HE AO. NO INTERFERENCE IS REQUIRED IN THE CIT(A)S ORDER. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 15 TH JANUARY 2010. SD/- SD/- (I.P.BANSAL) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 15.01.2010. VK. ITA-1772/DEL/2009 4 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT DEPUTY REGISTRAR