The DCIT, Circle-1, Kakinada v. M/s Amar Bulk Carriers, Mandapeta

ITA 223/VIZ/2004 | 2000-2001
Pronouncement Date: 29-04-2010 | Result: Dismissed

Appeal Details

RSA Number 22325314 RSA 2004
Bench Visakhapatnam
Appeal Number ITA 223/VIZ/2004
Duration Of Justice 6 year(s) 28 day(s)
Appellant The DCIT, Circle-1, Kakinada
Respondent M/s Amar Bulk Carriers, Mandapeta
Appeal Type Income Tax Appeal
Pronouncement Date 29-04-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 29-04-2010
Date Of Final Hearing 01-03-2010
Next Hearing Date 01-03-2010
Assessment Year 2000-2001
Appeal Filed On 01-04-2004
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH: VISAKHAPATNAM BEFORE: SRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SRI B.R. BASKARAN ACCOUNTANT MEMBER APPELLANT BY : SHRI B. SASMAL DR RESPONDENT BY : SHRI G.V.N. HARI CA O R D E R PER B.R. BASKARAN ACCOUNTANT MEMBER : THE APPEAL OF THE REVENUE IS DIRECTED AGAINST THE O RDER DATED 23-1-2004 PASSED BY LD CIT (A) RAJAHMUNDRY AND IT RELATES TO THE ASSESSMENT YEAR 2000- 01. 2. ALL THE GROUNDS RAISED BY THE REVENUE GIVE RISE TO A SINGLE ISSUE VIZ. WHETHER THE LD CIT (A) IS JUSTIFIED IN REDUCING THE INCOME DETERMINED BY THE ASSESSING OFFICER. 3. THE FACTS OF THE CASE ARE STATED IN BRIEF. THE A SSESSEE IS A TRANSPORT OPERATOR AND IT FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2000-01 DECLARING A TOTAL INCOME OF RS.1 71 430/-. ACCORDIN G TO THE AO THE ASSESSEE DID NOT APPEAR BEFORE HIM ON THE DATE OF HEARING FIXED ON 27-12-2002. AFTER A GAP OF I.T.A. NO 223/VIZAG/2004 ASSESSMENT YEAR : 2000-01 DCIT CIRCLE-1 KAKINADA VS. M/S. AMAR BULK CARRIERS MANDAPETA (APPELLANT) (RESPONDENT) GIR NO. A-304 2 3 MONTHS THE ASSESSEES AR APPEARED ON 28-3-2003 BEFORE THE AO. THE AO HAS OPINED THAT SINCE THE ASSESSEE HAS NOT FILED THE IN FORMATION CALLED FOR BY HIM IN TIME AND SINCE THE ASSESSEE HAS CLAIMED HUGE EXPEND ITURE IT IS NOT POSSIBLE FOR HIM TO GO INTO THE DETAILS AT THE FAG END OF THE YE AR. ACCORDINGLY THE AO REJECTED THE BOOK RESULTS AND ESTIMATED THE INCOME FROM TRAN SPORT INCOME AT 3% OF THE GROSS RECEIPTS CLEAR OFF DEPRECIATION. TO THE INCOM E SO ESTIMATED THE AO ADDED TRANSPORT COMMISSION INCOME AND INCOME FROM DIVIDEN DS. THUS THE TOTAL INCOME WAS DETERMINED AT RS.13 28 854/-. 4. AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN AP PEAL BEFORE THE LD CIT (A). THE FIRST APPELLATE AUTHORITY ANALYZED THE PRO FIT & LOSS ACCOUNT FURNISHED BY THE ASSESSEE. THE GROSS RECEIPTS DECLARED BY THE AS SESSEE CONSISTED OF FOLLOWING ITEMS. A) INCOME FROM OTHER SOURCES - 2 17 708 B) TRANSPORT COMMISSION - 7 92 058 C) GROSS RECEIPTS ON HIRED LORRIES - 87 21 76 0 D) GROSS RECEIPTS ON OWN LORRIES - 42 28 903 ----------- TOTAL - 1 39 60 429 ======= 5. THE LD CIT (A) NOTICED THAT AGAINST THE TRANSPOR T COMMISSION AND GROSS RECEIPTS ON HIRED LORRIES AGGREGATING TO RS.95.13 L AKHS THE ASSESSEE HAS INCURRED EXPENDITURE ON PAYMENT OF HIRE CHARGES TO THE TUNE OF RS.87.21 LAKHS THUS EARNING AN INCOME OF RS.7.92 LAKHS FROM OUT OF HIS OPERATIONS RELATING TO ENGAGEMENT OF LORRIES BELONGING TO OTHERS. THIS INC OME WAS FOUND TO BE REASONABLE BY THE LD CIT (A). EXCLUDING THE RECEIPT S AND EXPENDITURES RELATING TO THE HIRED LORRIES STATED ABOVE IT WAS NOTICED THAT THE ASSESSEE HAS INCURRED A 3 LOSS RS.9 60 059/- FROM OPERATION OF LORRIES BELONG ING TO THE ASSESSEE. THE SAID LOSS INCLUDED DEPRECIATION CLAIM OF RS. 6 22 880/-. ACCORDINGLY THE LD CIT (A) FELT THAT THE DISALLOWANCE IF ANY FOR IMPROPER MAINTENA NCE OF VOUCHERS AND LACK OF PROPER EXPLANATION COULD BE MADE ONLY IN RESPECT OF LOSS INCURRED IN THE OPERATION OF OWN LORRIES. AFTER CONSIDERING THE LIS T OF EXPENDITURE THE LD CIT (A) FELT THE LOSS FROM OPERATION OF OWN LORRIES SHOULD BE RESTRICTED TO AN AMOUNT EQUAL TO THE DEPRECIATION CLAIM MADE BY THE ASSESSE E. ACCORDING TO THE SAID OPINION OF THE LD CIT (A) THE DISALLOWANCE THAT SHO ULD BE MADE WORKED OUT RS.3 37 179/- AND THE SAME WAS DIRECTED ADDED TO TH E TOTAL INCOME DECLARED BY THE ASSESSEE. THUS THE LD CIT (A) DETERMINED THE T OTAL INCOME AT RS.5 08 609/-. AGGRIEVED BY THE SAID DECISION THE REVENUE IS IN A PPEAL BEFORE US CHALLENGING THE ORDER OF THE LD CIT (A). 6. WE HAVE HEARD THE PARTIES AND CAREFULLY PERUSED THE RECORDS. AS CAN BE SEEN FROM THE ASSESSING ORDER THE AO ISSUED NOTICE U/S 142 (1) POSTING THE CASE ON 27-12-2002. HOWEVER THE ASSESSEE DID NOT APPEAR ON THAT DATE. THEREAFTER THE AO DID NOT ISSUE ANY OTHER NOTICE THERE AFTER. SUBSEQUENTLY THE ASSESSEE APPEARED BEFORE THE AO VOLUNTARILY ON 28-3-2003 WIT H A REQUEST TO COMPLETE THE CASE. SINCE THE AO DID NOT HAVE TIME HE PROPOSED TO COMPLETE THE ASSESSMENT ON ESTIMATE BASIS BY REJECTING THE BOOK RESULTS. HO WEVER AS CAN BE SEEN THE APPROACH FOLLOWED BY THE LD CIT (A) WHICH IS NARRAT ED IN PARA 4 & 5 SUPRA THE FIRST APPELLATE AUTHORITY HAS MADE AN OBJECTIVE ANA LYSIS OF THE P&L A/C FILED BY THE ASSESSEE AND HAS COME TO THE CONCLUSION THAT TH E DISALLOWANCE IF ANY IS REQUIRED TO BE MADE WITH RESPECT TO THE LOSS INCURR ED BY THE ASSESSEE IN OPERATION OF OWN VEHICLES. SINCE THE DEPRECIATION I S A STATUTORY ALLOWANCE THE LD CIT (A) FELT THAT THE LOSS SHOULD BE RESTRICTED TO AN AMOUNT EQUAL TO THE CLAIM OF DEPRECIATION. ACCORDINGLY THE LD CIT (A) HAS COMPUT ED THE AMOUNT OF DISALLOWANCE TO BE MADE IN THE HANDS OF THE ASSESSE E AT RS.3 37 179/-. FROM THE FOREGOING WE ARE OF THE VIEW THAT THE LD CIT (A ) HAS COMPUTED THE 4 DISALLOWANCE IN A SYSTEMATIC MANNER AFTER DULY ANAL YZING THE VARIOUS TYPE OF OPERATION CARRIED ON BY THE ASSESSEE. ON THE OTHER HAND THE AO HAS DECIDED TO ESTIMATE THE INCOME OF THE ASSESSEE SINCE HE WAS IN SHORT OF TIME. AT THE TIME OF HEARING THE REVENUE COULD NOT PLACE ANY MATERIAL T O FIND FAULT TO THE APPROACH FOLLOWED BY THE LD CIT (A). IN VIEW OF THE ABOVE WE DO NOT FIND ANY REASON TO INTERFERE WITH THE DECISION OF THE LD CIT (A). 7. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. PRONOUNCED ACCORDINGLY ON 29 TH APRIL 2010. SD/- SD/- (SUNIL KUMAR YADAV) (B.R. BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM DATE : 29-4-2010. A COPY OF THIS ORDER IS FORWARDED TO : 01 THE DCIT CIRCLE-1 KAKINADA 02 M/S. AMAR BULK CARRIERS MANDAPETA EAST GODAVAR I DISTRICT 03 THE CIT (A) RAJAHMUNDRY 04 THE CIT RAJAHMUNDRY 05 THE DR ITAT VISAKHAPAATNAM 06 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY ITAT VISAKHAPATNAM BENCH