Frontline Corporation Ltd.,, ... vs Assessee

Frontline Corporation Ltd., Deputy Commisioner of Income 4th Floor, Shalin Building Tax, Circle-4, Ahmedabad. Nehru Bridge Corner,Ashram Vs Road, Ahmedabad.

PAN AAACF 2403 M

अपीलाथ / (Appellant) तयथ / ् (Respondent)

Appellant by : Shri P.F. Jain.

Respondent by : Shri Dinesh Singh, Sr.D.R.

ु वाई क तार ख/ Date सन of Hearing : 15/06/2015

घोषणा क तार ख / Date of Pronouncement: 19/06/2015

आदे श/O RDER

PER N.S. SAINI, ACCOUNTANT MEMBER:

ITA No.2883/Ahd/2011 Assessment Year 2008-09 2

This is an appeal filed by the assessee against the order of the CIT (A)-VIII, Ahmedabad dated 4-7-2011.

2. Ground No.1 of the appeal reads as under:-

"1. The Ld. CIT (A) has erred in law and on facts in upholding the disallowance of Rs.13,82,433/- from the expense relating to diesel and trip bhatta without properly appreciating the facts of the appellant."

3. The brief facts of the case are that Assessing Officer observed that the assessee has shown diesel expenses of Rs.299.93 lacs and trip and bhatta expenses of Rs.114.80 lacs as compared to the corresponding figures of F.Y. 2006-07 of Rs.306.78 lacs and Rs.96.82 lacs respectively. The Assessing Officer following his order for earlier year where he had made disallowance of diesel and trip & bhatta expenses of 10% out of the total expenditure made the disallowance of Rs.41,47,300/-.

4. On appeal, the CIT (A) restricted the disallowance to Rs.13,82,433/- being 1/3rd of the disallowance made of Rs.41,47,300/- and deleted the balance amount of Rs.27,64,867/- by following the decision of the Tribunal in the case of assessee itself in I.T.A.No.2226 & 2527/Ahd/2007 for Assessment Year 2003-04.

5. The only argument of the assessee is that in A.Y.2010-11,the CIT (A)-II, Ahmedabad vide his order dated27-1-2015 had restricted the disallowance to 1/3rd of the disallowance made by following the orders of the Tribunal for A.Y.2004-05 & A.Y.2006-07 which comes to 1.11% of the trip bhatta and diesel expenses on the ground that the ratio of the expenditure to transport has come down from 62.47% to 52.39% and the gross profit has also increased from 37.53% to 46.61.

ITA No.2883/Ahd/2011 Assessment Year 2008-09 3

Therefore, in the present year of appeal. The disallowance should be restricted to 1.11% of the expenditure of trip bhatta and diesel.

6. On the other hand, Departmental Representative supported the orders of the lower authorities.

7. We have heard the rival submissions, perused the orders of the lower authorities and materials available on record. The undisputed facts of the case are that the A.O. disallowed 10% out of the total expenditure incurred on diesel of Rs.299.93 lacs and on trip and bhatta of Rs.114.80 lacs by following his order of the earlier years and thereby made addition of Rs.41,47,300/- to the income of the assessee.

8. On the appeal, the CIT (A) by following the order of the Tribunal in the case of the assessee itself for A.Y. 2004-05 and 2006-07 has restricted the disallowance of 1/3rd of the disallowance made by the A.O. which worked out to Rs.13,83,433/- and effect rate of disallowance of total expenditure worked out to 3.33%.

9. The Tribunal in the assessment year 2006-07 the Tribunal in the case of the assessee itself in ITA No.1029/Ahd/2010 vide order dated 21-02-2013 following the order of the Tribunal in the assessee's own case for A.Y.2004-05 dismissed the appeal of the Revenue by observing as under:-

" At the outset, we would like to reiterate that similar issues to that of the issues - ground Nos.2 and 3 under consideration have cropped up before the earlier Bench of this Tribunal in the assessee's own case for A.Y. 2004-05 cited supra. After due ITA No.2883/Ahd/2011 Assessment Year 2008-09 4

consideration of the issues as deliberated upon therein, the findings recorded by the Hon'ble earlier Bench are extracted, choronologically, as under:-

Restricting the disallowance out of trip bhatta and diesel expenses:

"22. We have heard both the parties and gone through the facts of the case. As already mentioned, the onus squarely rested upon the assessee to satisfy the revenue authorities in respect of the purpose for which the expenditure concerned was incurred. In the instant case, the assessee did not produce log book/trip register or any corroborative evidence in support of their clam either before the A.O./Ld. CIT (A) and even before us while there is no justification for disproportionate increase in expenditure vis-a-vis expenditure incurred in the preceding years. Therefore, the Ld. CIT (A), considering the fact that input cost has gone up due to rise in diesel prices and other inflation cost, observed that current year operational results are found to be different from the preceding year. Taking into considering the fact that most of the freight rates were on rate contract basis which could not be increased commensurate with diesel expenses, the Ld. CIT (A) restricted the disallowance to the 1/3rd of the total disallowance of Rs.56.52 lacs. Though the ld. AR relied upon a decision in the case of 77 TTJ (Ahd) TM 490, it has not been demonstrated as to how the facts of the cited case were parallel to the facts and circumstances in the instant case, especially when the assessee did not discharge onus laid down upon them before any of the authorities and even before us. In these circumstances, especially when neither the ld. AR nor the Ld. DR referred us to any material so as to enable us to take a different view in the matter while undisputedly facts relating to the year under consideration are different from the facts obtaining in the preceding years as noted by the ld. CIT (A), we are not inclined to interfere. Thus, ground No.1 in the appeal of the assessee and ground No.1 in the appeal of the revenue are dismissed."

6.1. In conformity with the findings of the earlier Co-ordinate Bench of this Tribunal (supra), ground Nos.2 and 3 raised by the revenue are decided in favour of the assessee. In essence, both the grounds of the Revenue are dismissed."

ITA No.2883/Ahd/2011 Assessment Year 2008-09 5

10. The only argument of the A.R. of the assessee is that in A.Y. 2010-11, the CIT (A) has sustained the disallowance at 1.11% and therefore, in the year under appeal the disallowance should be scaled down to1.11% of the total expenditure.

11. We find that in the Assessment Year 2010-11, the CIT (A) given a finding that the ratio of expenditure to transport income has come down from 62.47% to 52.39% and the gross profit has also increased to 37.53% and 47.61%.

12. Before us the A.R. of the assessee has not brought any material on record to show that the ratio of expenditure to transport income has come down drastically and the gross profit has also increased substantially as was the case before the CIT(A) in the assessment year 2010-11. In absence of the same, the contention of the A.R. of the assessee cannot be accepted. We therefore, dismiss this ground of appeal.

13. Ground No.2 of the appeal reads as under:-

" CIT (A) has erred in law and on facts in upholding the addition of Rs.1,00,000/- on adhoc and estimated basis towards R.T.O. penalty without properly appreciating the facts of the appellant."

14. At the time of the hearing of the appeal, A.R. of the appellant has stated that he is not pressing this ground of appeal and hence the same is dismissed for want of prosecution.

ITA No.2883/Ahd/2011 Assessment Year 2008-09 6

15. In the result appeal of the assessee is dismissed.

Order pronounced in the Court on Friday the 19th day

of June, 2015 at Ahmedabad.

Sd/- Sd/- (S.S. GODARA) ( N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER

Ahmedabad.

Dated 19 /06/ 2015

Patki

आदे श क !त"ल#प अ$े#षत/Copy of the Order forwarded to :

1. अपीलाथ / The Appellant

2. यथ / The Respondent.

3. संबं धत आयकर आय ु त / Concerned CIT

4. आयकर आयु त(अपील) / The CIT(A)-VIII, Ahmedabad.

5. वभागीय #त#न ध, आयकर अपील य अ धकरण / DR, ITAT,

6. गाड% फाईल / Guard file.

आदे शानस ु ार / BY ORDER,

उप/सहायक पंजीकार ( Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad ITA No.2883/Ahd/2011 Assessment Year 2008-09 7

1. Date of dictation : 15-6-2015

2. Date on which the typed draft is placed before the Dictating Member 15-6-2015

3. Date on which the approved draft comes to the Sr.P.S./P.S. 15-6-2015

4. Date on which the fair order is placed before the Dictating Member for Pronouncement 19-6-2015.

5 Date on which the file goes to the Bench Clerk 19-6-2015

6. Date on which the file goes to the Head Clerk..................................

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

8. Date of Despatch of the Order..................