ACIT, Gurgaon v. M/s. Naresh Mohan Singla HUF, Gurgaon

ITA 4548/DEL/2009 | 2005-2006
Pronouncement Date: 12-05-2010 | Result: Partly Allowed

Appeal Details

RSA Number 454820114 RSA 2009
Assessee PAN AAAHN9140A
Bench Delhi
Appeal Number ITA 4548/DEL/2009
Duration Of Justice 5 month(s) 9 day(s)
Appellant ACIT, Gurgaon
Respondent M/s. Naresh Mohan Singla HUF, Gurgaon
Appeal Type Income Tax Appeal
Pronouncement Date 12-05-2010
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted F
Tribunal Order Date 12-05-2010
Date Of Final Hearing 12-05-2010
Next Hearing Date 12-05-2010
Assessment Year 2005-2006
Appeal Filed On 03-12-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI C.L. SETHI JUDICIAL MEMBER AND SHRI K. G. BANSAL ACCOUNTANT MEMBER I.T.A. NO. 4548/D/2009 ASSESSMENT YEAR : 2005-06 INCOME TAX OFFICER VS. M/S NARESH MOHAN SINGLA WARD-4 GURGAON HUF C.W.-66 MALIBU TOWNE VPO BADSHAPUR GURGAON (APPELLANT) (RESPONDENT) PAN NO.AAAHN 9140A APPELLANT BY : SMT. MONA MOHANTY SR. DR RESPONDENT BY : SHRI NARESH MOHAN SINGLA ASSESSEE ORDER PER K.G. BANSAL: AM: THIS APPEAL OF THE REVENUE EMANATES FROM THE ORDER OF THE CIT(A) PANCHKULA PASSED ON 17-09-2009 IN APPEAL NO.154/GG N/07-08 PERTAINING TO ASSESSMENT YEAR 2005-06. 2. GROUND NO.1 IS AGAINST THE DELETION OF THE ADDI TION OF RS.10 41 947/- MADE BY THE ASSESSING OFFICER ON AC COUNT OF DIFFERENCE BETWEEN HIRE CHARGES. 2.1 IN THE COURSE OF ASSESSMENT PROCEEDINGS THE A SSESSING OFFICER FOUND THAT THE ASSESSEE HAD SHOWN HIRE CHARGES OF R S.25 01 375/- FROM OM LOGISTICS LIMITED AGAINST RS.53 91 953/- SHOWN I N THE TDS 2 CERTIFICATES ENCLOSED WITH THE RETURN OF INCOME. T HE ASSESSEE WAS REQUIRED TO RECONCILE THE DIFFERENCE AND AFTER CONS IDERING THE EXPLANATION OF THE ASSESSEE A SUM OF RS.10 41 947/- WAS ADDED IN COMPUTATION OF THE TOTAL INCOME. 2.2 AGGRIEVED BY THIS ORDER APPEAL WAS FILED BEFO RE THE CIT(A) PUNCHKULA. THE LEARNED CIT(A) CONSIDERED THE SUBMI SSION OF THE ASSESSEE AS WELL AS THE ASSESSMENT ORDER. THE CASE OF THE ASSESSEE WAS THAT THE HIRE CHARGES WERE BOOKED IN RESPECT OF OM LOGISTICS LIMITED ON COMPLETION OF THE DELIVERY OF THE GOODS. THEREFORE CERTAIN AMOUNT IN THE TDS CERTIFICATE FOR THE MONTH OF MARCH 2005 WAS N OT ACCOUNTED FOR IN THIS YEAR IN ABSENCE OF THE CONFIRMATION WHICH WAS ACCOUNTED FOR IN THE IMMEDIATELY SUCCEEDING YEAR. THE EXPLANATION OF TH E ASSESSEE BEFORE THE LEARNED CIT(A) IS REPRODUCED BELOW:- (III) THE RECONCILIATION OF THE TOTAL INCOME BOOKE D BY US WITH OM LOGISTICS LTD. IS AS UNDER:- (AMT.IN RS.) TOTAL AMOUNT OF HIRE CHARGES BOOKED BY OM LOGISTICS 65 99 729/- LESS: MISC. DEDUCTION (AS PER SUMMARY SHEET OF OM L OGISTICS) 1 65 785/- LESS: BILLS DATED 05.04.2005 . 3 15 3 06/- AMOUNT AS PER OUR P&L ACCOUNT 61 18 634/- WE HAVE CLAIMED ONLY RS.60 220/- AS TDS WHILE THE ACTUAL TDS WAS RS.73 747/- DEDUCTED BY M/S OM LOGISTICS LT D. (AS PER SUMMARY STATEMENT ISSUED BY M/S OM LOGISTICS). THUS WE COULD NOT CLAIM THE BENEFIT OF TDS OF RS.13 257/- W HILE WE WERE LEGALLY ENTITLED TO CLAIM IT; STILL WE HAVE PA ID THE TAX ON THE 3 TOTAL HIRE CHARGES. THUS AGAIN IT IS TOTALLY HARD SHIP TO THE HONEST TAX PAYERS. 2.3 ON THESE FACTS THE CIT(A) ACCEPTED THE ACCOUN TING PRACTICE AS AFORESAID AND DELETED THE ADDITION MADE BY THE ASSE SSING OFFICER WITH THE FOLLOWING REMARKS:- I FIND FORCE IN THE ARGUMENTS OF COUNSEL FOR THE A PPELLANT. THE CONFUSION HAS ARISEN ON ACCOUNT OF DIFFERENCE IN TH REE FIGURES. M/S OM LOGISTICS LTD. FOR WHOM THE APPELLANT IS DOI NG THE WORK OF TRANSPORTATION HAS SHOWN HIRE RECEIPTS OF RS.64 33 940/-. THE APPELLANT HAS CREDITED HIRE CH ARGES OF RS.61 18 634/- IN THE P&L ACCOUNT AND THE TDS CERTI FICATES ENCLOSED ALONGWITH THE RETURN ARE FOR HIRE CHARGES OF RS.53 91 953/-. THE ASSESSING OFFICER HAS MADE ADD ITION OF THE DIFFERENCE BETWEEN THE HIRE CHARGES SHOWN BY M/S OM LOGISTICS LTD. AND THE SAME AS PER THE TDS CERTIFIC ATES. THE APPELLANT ON THE OTHER HAND HAS ARGUED THAT THE REC EIPTS SHOWN BY HIM AMOUNTING TO RS.61 18 634/- ARE CORRECT AND HAVE BEEN RECEIVED FROM M/S OM LOGISTICS LTD. ONLY. THE DIFF ERENCE OF RS.3 15 306/- HAS BEEN EXPLAINED BY THE APPELLANT O N ACCOUNT OF THE HIRE CHARGES FOR THE MONTH OF MARCH 2005 AMOUN TING TO RS.3 15 306/- WHICH HAS BEEN BOOKED BY M/S OM LOGIS TICS LTD. IN THE FY 2004-05 WHEREAS THE SAME HAS BEEN TAKEN INTO ACCOUNT BY THE APPELLANT IN THE FY 2005-06. THE EX PLANATION GIVEN BY THE COUNSEL FOR THE APPELLANT IS CORRECT. THE ASSESSING OFFICER IS NOT JUSTIFIED IN TREATING HIRE CHARGES O F RS.7 26 681/- AS RECEIVED FROM THIRD PARTY WITHOUT BRINGING ANY M ATERIAL ON RECORD TO SHOW FROM WHOM THE SAME HAVE BEEN RECEIVE D AND THAT THE SAME HAS NOT BEEN RECEIVED FROM M/S OM LOG ISTICS LTD. THE ADDITION OF RS.10 41 947/- MADE BY THE AS SESSING OFFICER IS ORDERED TO BE DELETED. THIS GROUND OF A PPEAL IS ALLOWED. 2.4 BEFORE US THE LEARNED DR RELIED ON THE ORDER OF THE ASSESSING OFFICER AND THE ASSESSEE RELIED ON THE ORDER OF THE LEARNED CIT(A). THE 4 ASSESSEE WAS REQUIRED TO FURNISH SIMILAR RECONCILIA TION FOR IMMEDIATELY PRECEDING PREVIOUS YEAR AND IMMEDIATELY SUCCEEDING PREVIOUS YEAR WHICH WAS NOT DONE. 2.5 WE HAVE CONSIDERED THE FACTS OF THE CASE AND T HE SUBMISSIONS MADE BEFORE US. IT IS CLEAR FROM THE DISCUSSION MA DE ABOVE THAT IF THE ASSESSEE HAS BEEN FOLLOWING THE ACCOUNTING PRACTICE FOR HIRE CHARGES ON THE BASIS OF CONFIRMATION FROM THE CLIENT THEN NO INTERFERENCE IS REQUIRED IN THE ORDER OF THE LEARNED CIT(A) IN THIS MATTER. HOWEVER IF THE ASSESSEE HAS BEEN ACCOUNTING FOR THE HIRE CHARGES O N THE BASIS OF COMPLETION OF DELIVERY AS PER ITS OWN RECORD THEN THE HIRE CHARGES OF THIS YEAR MAY REQUIRE RE-COMPUTATION. IT WAS IN THIS CO NTEXT THAT THE ASSESSEE WAS REQUESTED TO FURNISH SIMILAR RECONCILIATION STA TEMENTS FOR IMMEDIATELY PRECEDING AND SUCCEEDING YEARS. AS MEN TIONED EARLIER THE SAME HAS NOT BEEN DONE. THEREFORE WE THINK IT FIT TO RESTORE THIS MATTER TO THE FILE OF THE ASSESSING OFFICER FOR ASCERTAINI NG THE ACCOUNTING PRACTICE IN THIS REGARD AND COMPUTE THE HIRE CHARGE S. 2.6 IN RESULT THIS GROUND IS TREATED AS ALLOWED F OR STATISTICAL PURPOSES. 3. GROUND NO.2 IS AGAINST DELETION OF ADDITION OF RS.25 000/- MADE BY THE ASSESSING OFFICER IN RESPECT OF TYRE EX PENSES. THE FINDINGS 5 OF THE LEARNED CIT(A) ARE CONTAINED IN PARAGRAPH 7 WHICH ARE REPRODUCED BELOW:- THE SECOND GROUND OF APPEAL IS REGARDING ADDITION OF RS.25 000/- OUT OF TYRE EXPENSES. THE ASSESSING OF FICER HAS MADE LUMP SUM DISALLOWANCE OF THIS AMOUNT FROM THE TYRE EXPENSES AMOUNTING TO RS.4 35 798/- ON THE GROUND T HAT LOG BOOKS OF THE VEHICLES HAVE NOT BEEN PRODUCED BY THE APPELLANT. THE COUNSEL ON THE OTHER HAND ARGUED THAT THE ASSES SING OFFICER HAS DISALLOWED THESE EXPENSES ON ASSUMPTION BASIS S INCE ALL THE BILLS HAVE BEEN PRODUCED BEFORE THE ASSESSING OFFIC ER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. I FIND FORCE IN THE ARGUMENTS OF THE COUNSEL FOR THE APPELLANT THAT THE ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER PURELY ON ASSUMP TION BASIS. THE ASSESSING OFFICER HAS NOT POINTED OUT A NY SPECIFIC EXPENDITURE WHICH IS NOT SUPPORTED BY PROPER VOUCHE RS. THE ADDITION BEING ARBITRARY IS ORDERED TO BE DELETED. THIS GROUND OF APPEAL IS ALLOWED. 3.1 BEFORE US THE LEARNED DR COULD NOT DISPLACE T HE FINDINGS OF THE LEARNED CIT(A) IN THIS MATTER. OTHERWISE ALSO THE ADDITION HAS BEEN MADE IN AN AD HOC MANNER WITHOUT REFERRING TO ANY E XPENDITURE WHICH HAS NOT BEEN INCURRED BY THE ASSESSEE. IN THESE CIRCUM STANCES WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LEARN ED CIT(A). 3.2 IN RESULT GROUND NO.2 IS DISMISSED. 4. GROUND NO.3 IS AGAINST DISALLOWANCE OF RS.50 00 0/- MADE BY THE ASSESSING OFFICER FROM VEHICLE RUNNING AND MAIN TENANCE EXPENSES. THE FINDINGS OF THE LEARNED CIT(A) ARE CONTAINED IN PARAGRAPH 8 WHICH IS REPRODUCED OVERLEAF:- 6 THE LAST GROUND OF APPEAL IS REGARDING DISALLOWANC E OF RS.50 000/- OUT OF VEHICLE RUNNING AND MAINTENANCE EXPENSES. THE ASSESSING OFFICER HAS MADE THIS LUMP SUM DISALL OWANCE ON THE GROUND THAT MOST OF THE PAYMENTS FOR THESE EXPE NSES HAVE BEEN MADE IN CASH AND THE EXPENSES HAVE BEEN INTERN ALLY VOUCHED AND THE APPELLANT HAS FAILED TO PROVE THAT .THE EXPENSES HAVE BEEN INCURRED FOR BUSINESS PURPOSES ONLY. THE COUNSEL ON THE OTHER HAND /HAS ARGUED THAT THE DISALLOWANCE HA S BEEN MADE PURELY ON ASSUMPTION BASIS AND ALL THE EXPENSES ARE RELATED TO BUSINESS. THE COUNSEL FURTHER ARGUED THAT KEEPING IN VIEW THE NATURE OF BUSINESS AND THE NATURE OF EXPENSES THESE ARE MET IN CASH ONLY. I FIND FORCE IN THE ARGUMENTS OF THE CO UNSEL THAT THE APPELLANT BEING A TRANSPORTER THE EXPENSES ON RUNNI NG AND MAINTENANCE OF VEHICLE ARE MADE IN CASH AND THE ASS ESSING OFFICER HAS NOT POINTED OUT ANY SPECIFIC EXPENSES W HICH ARE NOT RELATED TO BUSINESS. THE LUMP SUM DISALLOWANCE OF RS.50 000/- BEING ARBITRARY IS ORDERED TO BE DELETED. THIS GRO UND OF APPEAL IS ALLOWED. 4.1 THE SUBMISSIONS OF THE RIVAL PARTIES IN THIS M ATTER WERE IDENTICAL TO THE ARGUMENTS IN RESPECT OF GROUND NO.2. THEREF ORE FOLLOWING OUR ORDER IN RESPECT OF GROUND NO.2 THIS GROUND IS ALS O DISMISSED. 5. IN RESULT THE APPEAL IS PARTLY ALLOWED FOR STA TISTICAL PURPOSES. 6. THIS ORDER WAS ORDER PRONOUNCED IN OPEN COURT O N 12.05.2010 SOON AFTER THE CONCLUSION OF THE HEARING . SD/- SD/- ( C.L. SETHI ) ( K.G. BANSAL ) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 12.05.2010. NS 7 COPY FORWARDED TO:- 1. INCOME TAX OFFICER WARD-4 GURGAON. 2. M/S NARESH MOHAN SINGLA HUF C.W.-66 MALIBU TOWN E VPO- BADSHAPUR GURGAON. 3. THE CIT 4. THE CIT (A)- NEW DELHI. 5. THE DR ITAT LOKNAYAK BHAWAN KHAN MARKET NEW DELHI. TRUE COPY. BY ORDER (ITAT NEW DELHI).