Arihant Roadlines, Surat vs Department Of Income Tax

This is an appeal filed by the Revenue against the order of

CIT(A) dated 21.9.2011 on the following grounds:-

ITA No._105/Ahd/2012 2 Asst. Year 2008-09

1. On the facts and in the circumstances of the case and in law, the CIT(A)-IV, Surat has erred in deleting an addition of Rs.41,54,322/- made by the Assessing Officer on account of difference in contract receipt.

2. On the facts and in the circumstances of the case and in law, the CIT(A)-IV, Surat has erred in neglecting the information gathered u/s 133(6) of the Income-tax Act and mentioned in the form No.26AS.

3. On the facts and in the circumstances of the case and in law, the CIT(A)-IV, Surat has erred in admitting the additional evidences as per the provisions of Rule 46A of the Income-

tax Rule.

4. On the facts and in the circumstances of the case and in law, the CIT(A)-IV, Surat ought to have upheld the order of the Assessing Officer.

5. It is therefore, prayed that the order of the CIT(A)-IV, Surat may be set aside and that of the Assessing Officer restored.

2. The only issue is with regard to the deletion of addition of

Rs.41,54,322/- made on account of suppression of receipts. The

assessee filed the return of income for AY 2008-09 declaring total

income of Rs.15,573/- on 30.9.2008 along with audited accounts

u/s 44AB of the I.T. Act in form Nos.3CB & 3CD. The case was

selected for scrutiny. The assessee is engaged in the transport

business. During the course of assessment proceedings the ITA No._105/Ahd/2012 3 Asst. Year 2008-09

Assessing Officer observed that the assessee had shown total

freight receipts of Rs.48,51,212/-. As per information received u/s

133(6) the total freight receipts of the assessee should have been

89,70,734/-. The Assessing Officer issued show cause notice

asking the assessee as to why the difference of Rs.41,19,522/- be

not considered as its unaccounted income. In response the assessee

submitted that they had received only Rs.48,51,212/- which was

reflected in the TDS certificates and also in the Profit and Loss

account. The details of freight receipts earned was given. The stand

of the assessee was that it acted as a commission agent and supply

of trucks from the market for which they received commission. It

was also stated on behalf of the assessee that parties who claimed

to have contended making payments will not be able to produce

any receipt signed by the assessee. After considering the

submissions of assessee Assessing Officer held that assessee had

suppressed receipts and thereby income of Rs.41,54,322/- and

accordingly he added the same to the income of assessee.

ITA No._105/Ahd/2012 4 Asst. Year 2008-09

3. The matter was carried in appeal before the first appellate

authority. The CIT(A) considered the submissions raised on behalf

of the assessee and granted relief to the assessee which has been

opposed by the Revenue stating that CIT(A) erred in deleting the

addition of Rs.41,54,322/- made by Assessing Officer on account

of difference in contract receipts. The order of CIT(A) be set aside

and that of the Assessing Officer be restored. On the other hand the

ld. AR supported the order of CIT(A).

4. After going through the material on record, we find that as stated above the addition is made by Assessing Officer on account of suppression of receipts. During the appellate proceedings the assessee submitted that in the vehicle hire challans of Ankita Logistics Pvt. Ltd. assessee's name is mentioned as the broker which itself shows that they had acted only as intermediary and payments were not received from Ankita Logistics Pvt. Ltd. As regards BAL Roadlines, it was submitted that as per information given to the Assessing Officer freight paid to the assessee was Rs.15,52,405/- whereas in the TDS certificate provided by them the amount is mentioned as Rs.3,78,834/-. In this regard, it was ITA No._105/Ahd/2012 5 Asst. Year 2008-09

submitted on behalf of the assessee that it acted only as a broker for this person also but TDS was made in his name. It was clarified that the assessee has not claimed the benefit of TDS as the corresponding revenue was not his income. As regards M/s BLRPvt. Ltd. it was submitted that the party had issued clarificatory letter dated 21.03.2011 (after the date of assessment) along with complete transaction details and relevant TDS certificate which made it clear that transactions with the assessee were only for Rs.2,20,950/- and that they had inadvertently credited Rs.10,00,000/- which belonged to another party of similar name M/s Arihant Roadways. In this regard it was requested that this additional evidence be admitted. As regards Sayed Ahmed Abdul Rasid Shaikh, Prop. M/s Arrow Logistics, it was submitted that the trucks were owned by the partners Satish Mishra and Subhash Pandey and they had accounted the receipts in their return of income. The assessee enclosed the R.T.O. book to establish the registered ownership of partners and Income-tax Returns thereof. As regards Eastern Western Roadways and Khetan Shivprakash, it was submitted that the assessee had acted only as a broker and not received payment for freight. It was submitted that the clarifications in respect of Eastern Western Roadways, Khetan Shivprakash, Ankita Logistics Pvt. Ltd. and BAL Roadlines could be given if the assessee was provided with the evidences which the ITA No._105/Ahd/2012 6 Asst. Year 2008-09

Assessing Officer had relied. In these circumstances vide letter dated 10.06.2011 the Assessing Officer was directed to provide the details collected during the assessment proceedings to the assessee. The Assessing Officer provided the evidences collected to the assessee. The assessee made its submission vide letter dated 22.06.2011 on the basis of material received from the Assessing Officer. The submission of the assessee dated 31.05.2011 and 22.06.2011 along with additional evidences were forwarded to the Assessing Officer on 27.6.2011 and his comments were requested by 6.7.2011. However, no report was received from the Assessing Officer and a reminder was issued on 16.8.2011asking for the report by 24.8.2011. The Assessing Officer was also informed that if remand report is not received the appeal would be decided on merits without further opportunity to him. However, no report was received from the Assessing Officer. So the CIT(A) decided the issue on the basis of material on record. From the clarification received from M/s BLR Logistics Pvt. Ltd. in their letter dated 21.3.2011 CIT(A) observed that the assessee had received only Rs.2,20,950/- from them and this amount was duly accounted for by the assessee. In view of this, the addition of Rs.10,00,000/- made on account of difference in receipts from this party was rightly deleted by CIT(A). Next addition of Rs.66,087/- was made on account of receipts from Sayed Ahmed Abdul Rasid Shaikh, ITA No._105/Ahd/2012 7 Asst. Year 2008-09

Prop. M/s Arrow Logistics. The partners'ownership of the trucks (used for this party) had been established and the receipts had also been owned up by the partners in their individual returns. Therefore, no addition was warranted in the hands of the assessee. Accordingly, this addition was rightly deleted by CIT(A). As regards addition in respect of Ankita Logistics Pvt. Ltd. the vehicle hire challans clearly mention the assessee as the broker. These challans also have the name of the owner of the truck and the amount of freight payable and advances made. The payment voucher for the remainder amount was made out to cash and although the name mentioned by Ankita Logistics Pvt. Ltd. was of the assessee, but there was no signature or acknowledgement of the assessee on these vouchers. It shows that assessee had not received the freight from this party and therefore no addition should have been made in respect of freight receipts from Ankita Logistics Pvt. Ltd. and same was rightly deleted. As regards addition made on account of freight receipts from Eastern Western Roadways and Khetan Shivprakash are concerned these had been made on the basis of form 26AS downloaded by the Assessing Officer. No information was received from these persons u/s 133(6). The assessee had not claimed benefit of any TDS made by these persons. Therefore, the submissions of the assessee in respect of these persons were accepted by the CIT(A) as no evidence ITA No._105/Ahd/2012 8 Asst. Year 2008-09

regarding actual receipts had been brought on record by Revenue. Regarding addition of Rs.15,52,405/- made on account of freight receipts from BAL Roadlines. It was mentioned that this amount was also reflected in form 26AS. It was submitted by the assessee that as per TDS certificate given to them, this person had given Rs.3,78,834/- to the assessee whereas in its reply to the Assessing Officer it had shown payments of Rs.15,52,405/- in cash to the assessee. The assessee also submitted copy of the Profit and Loss account of the said BAL Roadlines, which shows only Rs.89,370/- being claimed as freight expenses. The stand of the assessee was that it was not possible for a person making expenses of Rs.89,370/- only would make payments of Rs.15,52,405/- to the assessee for the same purpose. It was pleaded that there was some mistake in the accounts of BAL Roadlines and the assessee had acted only as a broker for the party should not be penalized for the lapse of third party. The assessee submitted that it had not claimed benefit of TDS as corresponding revenue was not his income. The concern Assessing Officer had not responded to the letters issued by CIT(A). So the CIT(A) held that Assessing Officer had not made any effort to obtain vehicle hire challan from this party. Considering the fact that the amounts of freight mentioned by M/s BAL Roadlines was different at different places it could not be held as conclusive evidence against the assessee which had also ITA No._105/Ahd/2012 9 Asst. Year 2008-09

not claimed benefit of TDS. In this back ground the CIT(A) was justified in deleting the addition in respect of BAL Roadlines and assessee should not suffer for the fault of third party. In view of this factual matrix, we find no infirmity in the order of CIT(A). We uphold the same.

5. In the result, the appeal of Revenue is dismissed.

Pronounced in the open Court on this the day 30th of June, 2015 Sd/- Sd/-

(Anil Chaturvedi) (Shailendra Kumar Yadav) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated : 30/6/2015

Mahata/-

Copy of the order forwarded to: 1. The Appellant 2. The Respondent 3. The CIT concerned 4. The CIT(A) concerned 5. The DR, ITAT, Ahmedabad 6. Guard File BY ORDER

Dy.Registrar,ITAT, Ahmedabad ITA No._105/Ahd/2012 10 Asst. Year 2008-09

1. Date of dictation: 30.6.2015

2. Date on which the typed draft is placed before the Dictating Member: 30/6/2015 other Member:

3. Date on which approved draft comes to the Sr. P. S./P.S.:

4. Date on which the fair order is placed before the Dictating Member for pronouncement: __________

5. Date on which the fair order comes back to the Sr. P.S./P.S.:

6. Date on which the file goes to the Bench Clerk: 1/7/2015

7. Date on which the file goes to the Head Clerk:

8. The date on which the file goes to the Assistant Registrar for signature on the order:

9. Date of Despatch of the Order: