SACHIN KUMAR BHOL,NAYAGARH vs. ITO, KHURDA WARD, KHURDA

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

the Commissioner of Income Tax(Appeals)-1, Bhubaneswar dated

19.4.2018 in I.T.Appeal No.220/16-17 for the assessment year

2011-12.

Commissioner of Income Tax(Appeals) has erred in confirming

the disallowance of Rs.4,14,200/- claimed under the head

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transportation charges without considering the submissions of the

assessee from its proper prospective.

assessment and first appellate order alongiwth copies of audit

report and TDS certificate submitted by the assessee. Ld A.R.

submitted that the assessee is a retail foreign liquor vendor. The

assessee purchased goods from Orissa State Beverage

Corporation Limited at Bhubaneswar and transported the same

through transporters to his shop situated at Nayagarh, which is 90

km away from Bhubaneswar. Ld A.R. further submitted that a

qualified auditor has checked and audited the books of account of

the assessee and there is no discrepancy or any adverse remark

by the auditor on the claim of the assessee regarding

transportation charges. Ld A.R. further submitted that from the

copy of TDS certificate, it is apparent that the assessee purchased

461 consignments from Orissa State Beverage Corporation Limited

which were transported to Nayagarh by local transporters through

230 trips and the assessee had paid Rs.1800/- per trip to the

driver/owner against transportation, which is necessary for the

purpose of business of the assessee. Ld A.R. also submitted that

the allegation of the Assessing Officer that the payment has been

made to four persons is not reasonable as the transportation of

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foreign liquor is very sensitive issue and the assessee cannot rely

on the new drivers/persons for every consignment and, therefore,

the assessee procured the services of limited four persons for

transportation to ensure the sincerity and dedication towards

transportation work of foreign liquor without any hindrance and as

per the direction of Excise Department, Government of Odisha.

pointed out by the lower authorities in the quantum claimed by

the assessee and the claim of the assessee has been dismissed

only on hyper technical ground that the assessee has mentioned

names of four persons (owners) in all the vehicles used for

transportation and the alleged owners are different with the same

vehicle numbers. Ld A.R. vehemently pointed out the assessee

had made payments to the owners only who generally works local

transportation., who may be the owner of the vehicle or may not

be owner of the vehicle and sometimes the owner of that vehicle

is different from the driver. Therefore, this ground of matching

theory of the authorities below is not practically acceptable.

Therefore, the claim of the assessee regarding transportation

charges may kindly be allowed.

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made payments only to four persons and the alleged owners are

different with the same vehicle numbers, therefore, the AO was

right in disallowing the transportation payments and the CIT(A)

was also correct in confirm the addition. Ld D.R. also drew my

attention to paras and 4 & 5 of the first appellate order and

submitted that the disallowance made by the AO is justified as the

assessee has not been able to produce bills and vouchers in

support of the transportation paid by him.

I may point out that the ld D.R. has not controverted the fact that

the assessee can only buy foreign liquor from specified vendor i.e.

Orissa State Beverage Corporation Ltd., situated at Bhubaneswar

and has to transport the goods from Bhubaneswar to the stock

point at Nayagarh, which is 90 kms away from Bhubaneswar.

Further, from the TDS certificate submitted by the assessee, I also

observe that undisputedly, the assessee purchased 461

consignments which were transported to Nayagarh to the shop of

the assessee by using local transportation vehicles. I am in

agreement with the contention of ld A.R. that it is not compulsory

that the driver of the vehicle is always the owner of the vehicle but

he may be owner of the vehicle and he may not be the owner of

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the vehicle. But in both the situation, the assessee makes

payment of transportation charges to the drivers who are driving

the vehicle and such kind of location transportation service

provider do not issue any bill to the service receiver for payment of

Rs.1800/- per trip. In my considered opinion, it is also a clear

major caution that the transportation of foreign liquor should be

done as per rules and procedure provided by the Excise

Department of Government of Odisha and also requires specific

guidance of foreign liquor vendor. During transportation, such

required caution and care has to be taken by the transporter, who

is transporting the vehicle from Bhubaneswar to Nayagarh.

Therefore, the assessee is compelled to take service from the

limited persons who are well-known and competent with the local

requirements for transportation of foreign liquor. Therefore, the

service rendered by the limited four persons cannot be doubted

only on the allegation of different vehicle numbers.

the AO was not correct in making disallowance of impugned

transportation charges and the CIT(A) was not justified in

upholding the same. Therefore, I set aside the order of the CIT(A)

and allow the sole ground of the assessee.

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Order pronounced on 13/05/2019. Sd/- (Chandra Mohan Garg) JUDICIALMEMBER Cuttack; Dated 13 /05/209 B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellant : Sachin Kumar Bhol, Haripur, Gadadhar Prasad, Itamati, Nayagarh

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