M/s. Aashirwad Clearing Agency, Ahmedabad v. The Income tax Officer,Ward-10(2),, Ahmedabad

ITA 3285/AHD/2010 | 2007-2008
Pronouncement Date: 08-03-2011 | Result: Allowed

Appeal Details

RSA Number 328520514 RSA 2010
Assessee PAN AAFFA6440D
Bench Ahmedabad
Appeal Number ITA 3285/AHD/2010
Duration Of Justice 2 month(s) 26 day(s)
Appellant M/s. Aashirwad Clearing Agency, Ahmedabad
Respondent The Income tax Officer,Ward-10(2),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 08-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 08-03-2011
Assessment Year 2007-2008
Appeal Filed On 13-12-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD B BENCH BEFORE SHRI G.D. AGARWAL VICE-PRESIDENT (AZ) AND SHRI D.K. TYAGI JUDICIAL MEMBER ITA NO.3285/AHD/2010 [ASSTT.YEAR 2007-08] M/S. AASHIRWAD CLEARING AGENCY -VS- INCOME TAX OFFI CER 101 SAHAJANAND COMPLEX NR. WARD-10(2) AHMEDABAD SWASTIK CHAR RASTA NAVRANGPURA AHMEDABAD PAN NO.AAFFA6440D (APPELLANT) (RESPONDENT) REVENUE BY : SHRI K. MADHUSUDAN SR-DR ASSESSEE BY: SHRI S.N.DIVETIA AR O R D E R PER D.K. TYAGI JUDICIAL MEMBER:- THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF COM MISSIONER OF INCOME-TAX (APPEALS)-XVI AHMEDABAD IN APPEAL NO. C IT(A)-XVI /WD.10(2)/ 227/09-10 DATED 22-10-2010 FOR THE ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS:- 1.1 THE ORDER PASSED U/S. 250 ON 22.10.2010 FOR A. Y. 2007-08 BY CIT(A)-XVI ABAD UPHOLDING THE DISALLOWANCE OF OV ER-LOADING CHARGES OF RS.4 88 700/- MADE BY AO IS WHOLLY ILLEGAL UNLA WFUL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 1.2 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN UPHOLDING THE IMPUGNED DISALLOWANCE WITHOUT CONSIDE RING THE EVIDENCE PRODUCED AND EXPLANATION OFFERED. 2.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THAT THE OVER-LOADING CHARGES OF RS.4 88 700/- PAID TO T\RTO ITA NO.3285/AHD/2010 A.Y. 2007-08 M/S. AASHIRWAD CLEARING AGENCY V. ITO WD-10(2) ABD PAGE 2 WERE COVERED UNDER EXPLANATION TO SECTION 37(1) OF THE ACT AND AS SUCH INADMISSIBLE. 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CAS E AS WELL AS IN LAW THE LD. CIT(A) OUGHT NOT TO HAVE UPHELD THAT THE OV ER-LOADING CHARGES PAID TO RTO WAS EXPENDITURE INCURRED FOR ANY PURPOS E WHICH WAS AN OFFENCE OR PROHIBITED BY LAW. IT IS THEREFORE PRAYED THAT THE DISALLOWANCE OF O VER-LOADING CHARGES OF RS.4 88 700/- UPHELD BY THE CIT(A) MAY KINDLY BE DE LETED. 3. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE ASSESSMENT PROCEEDINGS ASSESSING OFFICER FOUND THAT ASSESSEE HAS CLAIMED E XPENDITURE OF RS.4 88 700/- IN THE PROFIT AND LOSS ACCOUNT. THE A SSESSEE EXPLAINED THAT THIS AMOUNT WAS PAID TO RTO AHMEDABAD FOR OVERLOADING CH ARGES. THE ASSESSEES CONTENTION BEFORE ASSESSING OFFICER WAS THAT THIS PAYMENT WAS FOR THE PURPOSE OF BUSINESS AS IT RELATED TO OVERLOADIN G CHARGES WHICH WAS PAID IN THE COURSE OF BUSINESS. THIS EXPLANATION OF THE ASS ESSEE WAS NOT ACCEPTABLE TO AO AND HE WROTE A LETTER TO RTO AHMEDABAD ABOUT THE NATURE OF PAYMENT. THE RTO AHMEDABAD REPLIED THAT IT WAS A PENALTY RE COVERED FOR OVERLOADING OF GOODS. THE AO THEREFORE DISALLOWED THE AMOUNT SA YING THAT AMOUNT REPRESENTS PENALTY WHICH IS NOT ALLOWABLE UNDER THE IT ACT. THIS ACTION OF AO WAS CONFIRMED BY LD. CIT(APPEALS WHEN ASSESSEE WENT IN APPEAL BEFORE HIM. FURTHER AGGRIEVED ASSESSEE IS NOW IN APPEAL BEFORE US. 4. AT THE TIME OF HEARING LD. COUNSEL FOR THE ASSES SEE PLACED RELIANCE ON A DECISION OF ITAT BENCH IN THE CASE OF AGRAWAL ROADLINES PVT. LTD. V. DCIT (2011) 7 ITR (TRIB) 576 (AHD) AND SUBMITTED THAT TH E ISSUE IS COVERED IN FAVOUR OF ASSESSEE AND AGAINST THE REVENUE. LD. SR-DR ON T HE OTHER HAND RELIED ON THE ORDERS OF AUTHORITIES BELOW. 5. HEARD BOTH THE PARTIES AND PERUSED THE CASE RECO RDS AND FIND THAT ON IDENTICAL FACTS THIS TRIBUNAL IN THE CASE OF AGRAWAL ROADLINES PVT. LTD. (SUPRA) HAS HELD AS UNDER:- ITA NO.3285/AHD/2010 A.Y. 2007-08 M/S. AASHIRWAD CLEARING AGENCY V. ITO WD-10(2) ABD PAGE 3 HELD THAT THE DECISION OF THE SUPREME COURT IN PARMAJIT BHASINS CASE WAS APPLICABLE FROM NOVEMBER 9 2005 I.E. FRO M THE ASSESSMENT YEAR 2006-07. IT WAS NOT APPLICABLE TO THE ASSESSME NT YEAR 2005-06. THE GOVERNMENT OF GUJARAT HAD ALLOWED VEHICLES TO C ARRY EXCESS LOAD AND COLLECTED ONLY COMPENSATORY AMOUNT FROM THE ASS ESSEE WHICH COULD NOT BE TERMED AS PAYMENT TOWARDS INFRINGEMENT OF LAW. THE LAWS OF THE SATE GOVERNMENT ALLOWED THE TRANSPORTERS TO CARRY EXCESS LOAD IN VEHICLES IN RELEVANT YEARS AND HENCE SUCH PAYMENT W AS NOT IN VIOLATION OF ANY LAW. PAYMENT OF CHARGES FOR EXCESS LOAD CARR IED IN VEHICLES WAS IN THE NATURE OF COMPENSATION IN THE BUSINESS ACTIV ITIES OF TRANSPORTATION OF GOODS. IT WAS DEDUCTIBLE. RESPECTFULLY FOLLOWING THE SAME THE ADDITION MADE BY ASSESSING OFFICER AND SUSTAINED BY LD. CIT(APPEALS) OF RS.4 88 700/- FOR OVERLOADING CHARGES IS HEREBY DELETED. 6. IN THE RESULT ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED ON THIS DAY OF 8 TH MARCH 2011 SD/- SD/- ( G.D.AGARWAL ) ( D.K. TYAGI ) (VICE PRESIDENT) (JUDICIAL MEMBER) AHMEDABAD DATED : 08/03/2011 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD