The ITO, Ward-6(1),, Surat v. Shri Afsarakhan Basirkhan Pathan,

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AT SURAT CAMP AHMEDABAD BEFORE SHRI T.K. SHARMA JUDICIAL MEMBER AND SHRI D. C. AGRAWAL ACCOUNTANT MEMBER ITA NO.2129/AHD/2008 C.O. NO.121/AHD/2008 (ARISING OUT ITA NO.2129/AHD/2008) ASSESSMENT YEAR: 2005-06 DATE OF HEARING:24.5.10 DRAFTED:25.5.10 INCOME TAX OFFICER WARD-6(1) ROOM NO.614 6 TH FLOOR AAYAKAR BHAVAN MAJURA GATE SURAT AFSARKHAN BASIRKHAN PATHAN PROP. OF DELHI SWAIMADHOPUR TRANSPORT CO. SHOP NO.11 TRIDEV COMPLEX POST. UMBHEL TAL. KADODARA DIST. SURAT PAN NO.AITPP1986J V/S . V/S . AFSARKHAN BASIRKHAN PATHAN PROP. OF M/S. DELHI SWAIMADHOPUR TRANSPORT CO. SHO NO.11 TRIDEV COMPLEX POST. UMBHEL TAL. KADODAR DIST. SURAT INCOME TAX OFFICER WARD-6(1) ROOM NO.614 6 TH FLOOR AAYAKAR BHAVAN MAJURA GATE SURAT (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI K.K. SHAH AR REVENUE BY:- SMT. JYOTI LAXIMI SR-DR O R D E R PER D.C.AGRAWAL ACCOUNTANT MEMBER:- THIS IS AN APPEAL FILED BY REVENUE RAISING FOLLOWI NG GROUNDS:- ITA NO.2129/AHD/2008 & CO 121/AHD/2008 A.Y. 2005-06 ITO WD-6(1) SRT V. SH. AFSARKHAN B PATHAN PAGE 2 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A)-IV SURAT HAS ERRED IN DELETING THE ADDITION OF RS.1 50 000/- SUBSTANTIAL BASIS MADE BY THE ASSESSING OFFICER AS THE ASSESSEE PROVIDED HIS NAME TO THE TRANSPORTERS FOR CLAIMING FREIGHT E XPENSES. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LEARNED CIT(A)-IV SURAT HAS ERRED IN DELETING THE ADDITION OF RS.6 00 000/- ON PROTECTIVE BASIS MADE BY THE ASSESSING OFFICER WHIC H IS TO BE DECIDED DIN THE CASE OF TRANSPORTERS AND TUCK OWNERS. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I LAW THE LEARNED CIT(A)-IV SURAT HAS ERRED IN DELETING THE ADDITION OF RS.86 000/- ON ACCOUNT OF LOW HOUSEHOLD EXPENSES MADE BY THE ASSE SSING OFFICER. WHEREAS ASSESSEE IS FILED CO RAISING FOLLOWING GROU NDS:- THE LEARNED CIT(A) GROSSLY ERRED IN CONFIRMING ADD ITION OF RS.2 68 200/- ON ACCOUNT OF DIFFERENCE IN COMMISSI ON INCOME. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS E NGAGED IN BUSINESS OF BOOKING OF TRUCKS. IT IS ACTING AS A TRANSPORT CONT RACTOR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSING OFFICER RECORDED THE STATEMENT OF ASSESSEE WHO STATED THAT HE HAS NOT RECEIVED ANY FREIGHT CHA RGES. BUT HE IS ONLY PROVIDING TRUCKS TO THE PRINCIPALES ARE ISSUING THE TDS CERTI FICATE TO HIM AGAINST WHICH IT IS CLAIMING REFUND. HE HAS GOT THE BOOKS OF ACCOUN T AUDITED AS TOTAL RECEIPT EXCEEDED FOR RS.40 LAKH. THE PRINCIPALES ARE NOT PA YING ANY FREIGHT EXPENSES TO THE ASSESSEE BUT CLAIMING EXPENSES IN HIS NAME IN T HEIR BOOKS. THUS ASSESSEE HAD ONLY FACILITATED TRANSPORT EXPENSES BY PROVIDIN G FACILITIES TO HIS PRINCIPLES. FOR THIS PURPOSE THE ASSESSEE IS CHARGING COMMISSI ON. THE ASSESSING OFFICER WAS OF THE VIEW THAT SINCE THE ASSESSEE IS CLAIMING REFUND AGAINST TDS THEN CORRECTNESS AND COMPLETENESS OF COMMISSION INCOME S HOWN BY THE ASSESSEE AT RS.3 31 800/- CANNOT BE ACCEPTED. THE ASSESSEE HAS COLLECTED TOTAL FREIGHT CHARGES AT RS.1 32 02 312/- AND SAME HAS BEEN SHOWN AS PAID AS PER TDS ACCOUNT. SINCE THE EXPENSES CLAIMED ARE NOT VERIFI ABLE HE REJECTED THE ACCOUNTS INVOKING THE PROVISION OF SEC.145(3). THE AO CARRIE D OUT INQUIRIES FROM VARIOUS ITA NO.2129/AHD/2008 & CO 121/AHD/2008 A.Y. 2005-06 ITO WD-6(1) SRT V. SH. AFSARKHAN B PATHAN PAGE 3 PARTIES IN RESPECT OF TRANSPORT RECEIPTS. SOME PART IES CONFIRMED THE RECEIPTS OF MONEY AS PER TDS CERTIFICATE AND OTHERS DID NOT. T HE CLAIM OF THE ASSESSEE WAS THAT IT KNOWS ONLY ONE PARTY FOR WHOM HE IS ARRANGI NG TRUCKS AND HE DOES NOT KNOW THE TRUCK OPERATORS. SINCE THE PRINCIPAL HAD DEDUCTED TDS AT RS.1 44 491/- AND ISSUED CERTIFICATE IN HIS NAME I T HAD TO FILE THE RETURN AND CLAIM REFUND. THE ASSESSING OFFICER FURTHER NOTICED ONE CASE OF SHRI DEVENDRA SONI WHERE THAT ASSESSEE RECEIVED A SUM OF RS.54 L AKHS OUT OF WHICH RS.8 LAKH OF INCOME WAS SHOWN. THAT ASSESSEE HAD ALSO CLAIMED RETURNED FROM TDS. TAKING THAT CASE AS AN EXAMPLE AO ESTIMATED INCOME OF RS.6 LAKH AND MADE AN ADDITION OF RS.2 68 200/-. IN ADDITION TO THIS AO HELD THAT ASSESSEE IS ACTING AS AGENT FOR THE TRANSPORTER AND IT MUST BE EARNING IN COME FROM THEM ALSO. THEREFORE HE ESTIMATED THIS INCOME AT RS.1.50 LAKH ON SUBSTANTIVE BASIS. BUT HE ASSESSED RS.6 LAKH ON PROTECTIVE BASIS. IN ADDITION TO THIS AO ESTIMATED HOUSEHOLD EXPENSES AND PROPOSED ADDITION OF RS.86 0 00/- ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS. ACCORDING TO HIM ASSESSEE H AS VERY LARGE FAMILY AND DECLARED EXPENDITURE IS NOT ENOUGH FOR HIS LARGE FA MILIES. 3. LD. CIT(APPEALS) DELETED THE ADDITION OF RS.1.5 LAKH ON THE GROUND THAT IT IS MADE ON SURMISES AND CONJECTURES. HE ALSO DE LETED THE ADDITION OF RS.86 000/- MADE FOR LOW HOUSEHOLD WITHDRAWALS. HOW EVER HE CONFIRMED THE ADDITION OF RS.6 LAKH AS ACCORDINGLY HIM IT IS REAS ONABLE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PARTIES AND CAREFULLY PERUSED THE MATERIALS ON RECORD. IN OUR CONSIDERED VIEW NO INTERFERENCE IS CALLED FOR IN THE ORDER OF LD. CIT(APPEALS). LD. C IT(APPEALS) HAS CONFIRMED THE ADDITION OF RS.6 LAKH AND DELETED OTHER TWO ADD ITIONS. IN OUR VIEW THE ADDITION MADE AT RS.2 68 200/- TO THE RETURNED INCO ME WOULD COVER BOTH THE ADDITIONS. NO FURTHER ADDITION IS CALLED FOR. LD. CIT(APPEALS) HAS GIVEN COGENT REASONS. WHEN IN A SIMILAR CASE OF SHRI DEVENDRA S ONI AN INCOME OF RS. 8 LAKH ITA NO.2129/AHD/2008 & CO 121/AHD/2008 A.Y. 2005-06 ITO WD-6(1) SRT V. SH. AFSARKHAN B PATHAN PAGE 4 FROM RECEIPT DECLARED WAS SHOWN THEN WHAT IS ESTIMA TED BY ASSESSING OFFICER IN THE PRESENT CASE IS REASONABLE. AS A RESULT WE CON FIRM THE ORDER OF LD. CIT(APPEALS). THE APPEAL FILED BY REVENUE AS WELL A S CO OF THE ASSESSEE ARE DISMISSED. 5. IN THE RESULT APPEAL FILED BY REVENUE AND THAT OF ASSESSEES CO IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 28/05/2010 SD/- SD/- (T.K.SHARMA) (D.C.AGRAWAL) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD DATED : 28/05/2010 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-IV SURAT 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD