ITO, New Delhi v. Mr. Rajinder Kumar Gupta, New Delhi

ITA 3611/DEL/2011 | 2008-2009
Pronouncement Date: 21-10-2016 | Result: Dismissed

Appeal Details

RSA Number 361120114 RSA 2011
Assessee PAN AAAPG2929C
Bench Delhi
Appeal Number ITA 3611/DEL/2011
Duration Of Justice 5 year(s) 3 month(s)
Appellant ITO, New Delhi
Respondent Mr. Rajinder Kumar Gupta, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 21-10-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted F
Tribunal Order Date 21-10-2016
Date Of Final Hearing 23-08-2016
Next Hearing Date 23-08-2016
Assessment Year 2008-2009
Appeal Filed On 21-07-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : F NEW DELHI BEFORE SH. H.S. SIDHU JUDICIAL M EMBER AND SH. O.P. KANT ACCOUNTANT MEMBER ITA NO. 3611 /DEL/ 2011 ASSESSMENT YEAR: 2008 - 09 INCOME TAX OFFICER WARD - 25(1) D - 304A VIKAS BHAWAN NEW DELHI VS. SH. RAJINDER KUMAR GUPTA BA - 64 MANGOLPURI INDUSTRIAL AREA PHASE - II NEW DELHI PAN : AAAPG2929C (APPELLANT) (RESPONDENT) APPELLANT BY SH. F.R. MEENA SR.DR RESPONDENT BY SH. K. SAMPATH ADV. DATE OF HEARING 23.08.2016 DATE OF PRONOUNCEMENT 21.10.2016 ORDER PER O.P. KANT A. M. : THIS APPEAL BY THE R EVENUE IS DIRECTED AGAINST ORDER DATED 30/05/2011 PASSED BY THE LEARNED COMMISSIONER OF INCOME - TAX ( APPEALS) - XXIV NEW DELHI FOR ASSESSMENT YEAR 2008 - 09 RAISING FOLLOWING GROUNDS: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW CIT(A) HAS ERRED IN: 1. DELETING THE DISALLOWANCE OF EXPENSES TO THE EXTENT NOT AUDITED BY THE ASSESSEE AMOUNTING TO RS.43 82 013/ - ; 2. N OT GIVING OPPORTUNITY TO THE ASSESSING OFFICER TO VERIFY THE EXP ENSES; 3. ALLOWING THE EXPENSES WITHOUT VERIFYING T HE SAME AT THE APPELLATE STAGE; 4. THE APPELLANT CRAVES THE RIGHT TO ADD DELETE ALTER OR AMEND ANY GROUND OF APPEAL. 2 ITA NO. 3611/DEL/2011 AY: 2008 - 09 2. T HE FACTS IN BRIEF ARE THAT DURING THE RELEVANT YEAR ASSESSEE WAS ENGAGED IN PLYING TRUCKS IN THE NAME OF PROPRIETARY CONCERN M/S . ACHIN ROAD C ARRIERS. THE ASSESSEE FILED RETURN OF INCOME ON 28/09/2008 DECLARING INCOME OF RS.2 26 810/ - ALONGWITH AUDIT REPORT IN FORMS NO. 3CB & 3CD PRE SCRIBED UNDER INCOME TAX R ULES 1962. THE CA SE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SEC TION 143(2) AND 142 (1) OF THE INCOME - TAX ACT 1961 (IN SHORT THE ACT ) WERE ISSUED AND SERVED WITHIN THE STIPULATED PERIOD . DURING THE SCRUTINY PROCEEDINGS THE ASSESSING OFFICER NOTICED TH AT THE ASSESSEE DECLARED GROSS RECEIPT FROM SIX TRUCKS AT RS. 54 34 763/ - AND A FTER CLAIMING EXPENSES OF RS.43 82 013/ - NET RECEIPT OF RS.10 52 750/ - WAS SHOWN BY THE ASSESSEE. THE ASSESSEE SUBMITTED DETAILS AND EXPENSES OF EACH OF THE SIX TRUCKS. THE ASSESSING OFFICER OBSERVED THAT THE AUDIT WAS DONE WITH REFERENCE TO NET RECEIPT OF RS.10 52 750/ - AND NOT IN RESPECT OF THE GROSS RECEIPT FROM THE TRUCKS . ACCORDING TO THE ASSESSING OFFICER NO DETAIL OF TRUCK - WISE EXPENSES WAS FURNISHED. WHEREAS THE ASSESSEE SUBMITTED THAT THE PROFIT SHOWN BY THE ASSESSEE WAS MORE THAN THE PROFIT AS REQUIRED UNDER SECTION 44AE OF THE ACT. THE ASSESSING OFFICER INITIATED PENALTY UNDER SECTION 271B FOR NON - COMPLIANCE OF THE AUDIT PROVISIONS AND ALSO DISALL OWED THE ENTIRE EXPENSES OF RS.43 82 013/ - CLAIMED AGAINST THE RECEIPT FROM THE ACTIVITY OF PLYING TRUCKS ON THE GROUND THAT NO BOOKS OF ACCOUNTS ALONG WITH BILLS/VOUCHERS WERE PRODUCED FOR VERIFICATION BEFORE HIM. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT NO TRUCK CAN BE PLIED WITHOUT EXPENDITURE ON DIESEL/OIL AND DIVE RS SALARY AND AN INCOME OF RS.46 08 820 / - ASSESSED BY THE ASSESSING OFFICER WHICH IS ALMOST 85% OF THE RECEIPT CANNOT BE EARNED FROM THE ACTIVITY OF THE PLYING OF TRUCKS THEREFORE HE HELD THAT THE ADDITION MADE BY THE ASSESSING OFFICER WAS IN ABSURDITY AND ACCORDINGLY HE ALLOWED THE APPEAL OF THE ASSESSEE. 3 ITA NO. 3611/DEL/2011 AY: 2008 - 09 2.1 AGGRIEVED THE R EVEN UE IS IN APPEAL BEFORE US RAISING THE GROUNDS AS REPRODUCED ABOVE. 3. IN THE GROUNDS OF APPEAL RAISED THE EFFECTIVE GROUND IS IN RESPECT OF D ELETING THE DISALLOWANCE OF RS.43 82 013/ - TOWARD TRUCK EXPENSES. 3.1 BEFORE US THE LEARNED SR. DEPARTMENTAL REPRESENTATIVE RELYING ON THE ORDER OF THE ASSESSING OFFICER SUBMITTED THAT THE ASSESSEE DID NOT PRODUC E BOOKS OF ACCOUNTS AND VOUCHERS BEFORE THE ASSESSING OFFICER AND THEREFORE THE ACTION OF THE ASSESSING OFFICER IN DISALLOWING THE EXPENSES WAS IN AC CORDANCE TO LAW AND THEREFORE SAME MIGHT BE UPHELD. 3.2 ON THE OTHER HAND LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT PROFIT SHOWN BY THE ASSESSEE FROM THE ACTIVITY OF PLYING TRUCKS WAS MORE THAN THE AMOUNT ESTIMATED UNDER THE PRE SUMPTIVE SCHEME UNDER SECTION 44AE OF THE ACT IN RESPECT OF BUSINESS OF PLYING TRUCKS. THE LEARNED AUTHORIZED REPRESENTATIVE FURTHER SUBMITTED THAT IN THE CASE OF THE ASSESSEE IN SUBSEQUENT ASSESSMENT YEAR I.E. 2009 - 10 THE ASSESSING OFFICER HAS ACCEPTED THE PROFIT DECLARED BY THE ASSESSEE BEING MORE THAN THE INCOME OF RS. 3500 PER VEHICLE PROVIDED UNDER THE PRESUM PTIVE TAXATION UNDER SECTION 44 AE OF THE ACT. ACCORDINGLY HE PRAYED THAT THE RESULT DECLARED BY THE ASSESSEE MIGHT BE ACCEPTED AND THE DISALLOWANCE MADE BY THE ASSESSING OFFICER MIGHT BE DELETED. 3.3 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT IN THE YEAR UNDER CONSIDERATION THE ASSE SSEE HAD ENGAGED SIX TRUCKS AND AS PER THE PROVISIONS OF SECTION 44AE(2) OF THE ACT THE INCOME FROM TRUC KS SHOULD HAVE BEEN TAKEN AT RS. 3 500 / - PER MONTH FOR EACH TRUCK WHICH WORKS OUT TO RS.2 52 000/ - FOR THE ENTIRE YEAR. WE FIND THAT AGAIN ST THIS AMOUNT OF INCOME OF RS.2 52 000/ - UNDER SECTION 44AE OF THE ACT THE ASSE SSEE HAS DECLARED INCOME OF 4 ITA NO. 3611/DEL/2011 AY: 2008 - 09 RS.3 15 614/ - IN THE RETURN OF INCOME. THUS WE FIND THAT THE INCOME DECLARED BY THE ASSESSEE IS MORE THAN THE INCOME WHICH SHOULD HAVE BEEN DECLARED UNDER THE PRESUMPTIVE TAXATION SCHEME UNDER SECTION 44 AE OF THE ACT. FURTHER AS REGARD TO THE NON - COMPLIANCE OF AUDIT PROVISIONS THE ASSESSING OFFICER HAS ALREADY INITIATED THE PENAL PROCEEDINGS UNDER THE ACT AND THEREFORE IN THE CIRCUMSTANCES THE DISALLOWANCE OF ENTIRE EXPENSES INCURRED BY THE ASSESSEE FOR FLY ING TRUCKS CANNOT BE JUSTIFIED. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ON THE ISSUE IN DISPUTE HAS OBSERVED AS UNDER: 4.4 I HAVE GIVEN CAREFUL CONSIDERATION TO THE ARGUMENTS PUT FORTH BY BOT H SIDES. I HAVE ALSO CONSIDERED THE FACTS OF THE CASE AND HAVE CAREFULLY GONE THROUGH THE AUDIT REPORT OF THE ASSESSEE U/S.44AB OF THE ACT. ON PERUSAL OF THE INCOME & EXPENDITURE ACCOUNT OF THE ASSESSEE FOR THE YEAR ENDED 31ST MARCH 2008 IT IS SEEN THAT THE AUDITOR HAS SHOWN INCOME FROM TANKERS AT RS. 10 52 750.48 ON THE INCOME SIDE GIVING TRUCK WISE BREAKUP OF THE INCOME. THE AUDITOR HAS BEEN CAREFUL NOT TO MENTION GROSS RECEIPTS BUT HAS CAREFULLY MENTIONED INCOME FROM TANKERS . THIS NARRATION ITS ELF GOES ON TO INDICATE THAT THE AUDITOR HAS TAKEN INTO CONSIDERATION BOTH THE GROSS RECEIPTS AS WELL AS THE DIRECT EXPENSES AND HAS THEREAFTER ARRIVED AT THE NET FIGURE OF INCOME. THE ASSESSING OFFICER HAS CLEARLY MISUNDERSTOOD THE NARRATION GIVEN BY THE AUDITOR AND HAS ARRIVED AT A MISTAKEN BELIEF THAT THE DIRECT EXPENSES HAVE NOT BEEN AUDITED AT ALL. FURTHERMORE IT IS MY CONSIDERED OPINION THAT A PROPOSITION WHICH ARRIVES AT AN ABSURD CONCLUSION CANNOT BE ACCEPTED. THE ASSESSEE IS CORRECT WHEN HE SAYS THAT NO TRUCK CAN BE PLIED WITHOUT EXPENDITURE ON DIESEL/OIL AND DRIVER S SALARY. MOREOVER TO ARRIVE AT A CONCLUSION THAT ON A GROSS RECEIPT FROM PLYING OF TRUCKS OF RS.54 34 763/ - AN INCOME OF RS.46 08 820/ - CAN BE EARNED DURING ONE YEAR I.E. APPROX. 85% OF THE RECEIPT IS NOTHING BUT AN ABSURDITY. 3.4 F URTHER FROM THE COPY OF THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2009 - 10 WHICH WAS PRODUCED BEFORE US BY THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE WE FIND THAT THE ASSESSING OFFICER HA S ACCEPTED THE PROFIT DECLARED BY THE ASSESSEE FROM PLYING OF TRUCKS ON THE 5 ITA NO. 3611/DEL/2011 AY: 2008 - 09 GROUND THAT PROFIT DECLARED BY THE ASSESSEE IS MORE THAN THE INCOME UNDER THE PRESUMPTIVE TAXATION SCHEME UNDER SECTION 44AE OF THE ACT. 3.5 IN VIEW OF ABOVE FACTS AN D CIRCUMSTANC ES IN OUR OPINION THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ON THE ISSUE IN DISPUTE IS WELL REASONED AND NO INTERFERENCE ON OUR PART IS REQUIRED AND ACCORDINGLY WE UPHOLD THE SAME. THE GROUNDS OF THE APPEAL ARE ACCORDINGLY DISMISSED. 4. IN THE RESULT APPEAL OF THE R EVENUE IS DISMISSED. THE DECISION IS PRONOUN CED IN THE OPEN COURT ON 2 1 S T OCTOBER 2016 . S D / - S D / - ( H.S. SIDHU ) ( O.P. KANT ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 1 S T OCTOBER 2016 . LAPTOP / - COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR ITAT NEW DELHI