SHRI RAVI PRAKASH LANGER PROP M/S LANGER AUTO SALES & SEVICES, UJJAIN,UJJAIN vs. ACIT 2 (1), UJJAIN

PER MANISH BORAD, AM.

The above captioned appeal filed at the instance of assessee

pertaining to Assessment Year 2013-14 is directed against the

orders of Ld. Commissioner of Income Tax (Appeals) (in short

‘Ld.CIT(A)’], Ujjain dated 24.07.2017 which are arising out of the order u/s 143(3) of the Income Tax Act 1961(In short the ‘Act’)

dated 09.02.2016 framed by ACIT-2(1), Ujjain.

behalf of Ld. Counsel for the assessee requested for the

adjournment. However looking to the smallness of the issue with

the help of Departmental Representative as well as available records

on file the case has been heard.

the assessee is engaged in the retail business of trading in

petroleum product. Return of income e-filed on 29.09.2013 and

revised on 31.10.2013 declaring total income of Rs.64,87,406/-

derived from business, house property, capital gain and other sources. The case was picked up for scrutiny through CASS and

notice u/s 143(2) was duly served upon the assessee. Assessment

completed u/s 143(3) of the Act at Rs.69,27,800/- and agriculture

income at Rs.1,64,727/- after adding additions on (i) disallowance

on travelling expenses at Rs.17,631/- (ii) Vehicle running &

maintenance expenses and interest paid on car loan at Rs.37,079/-

(iii) depreciation claimed on cars at Rs.43,057/- (iv) delayed

payment of PF/ESI at Rs. 1,19,040/- and (v) shortage claimed on

petrol & diesel at Rs.2,23,584/-.

succeeded Ld. CIT(A) confirmed the addition of Rs.2,23,584/- made

by Ld.A.O observing as under;

“4.5 Ground No.5:-Through this ground of appeal the appellant has challenged the addition of Rs.2,23,584/-on account of shortage of diesel and petrol. The appellant has claimed the shortage of petrol and diesel. The evaporation of petrol/diesel is a recognized norm of the petroleum companies and even when they verify the quantity of the petrol/diesel available with respective petrol pump owners, than concession is given to the respective parties on account of such evaporation. In the case the quantity available with the petrol pump owner is found to be at variance by the petroleum companies, stringent actions are taken against the 3 petrol pump owners. In view thereof petrol pump owner take all measures in respect of quantity of the petrol and diesel, in that situation it is incumbent upon the assessee not to claim excessive evaporation on account of petrol' and diesel. The percentage may vary due to certain factors as weather conditions, evaporation at the time of filling petrol/diesel in storage tanks from tankers and at the time of dispensing to consumers from dispensers etc.

In the case of appellant shortage for the year under consideration, in the case of petrol and diesel were asunder:- Particulars Total Sales Shortage Shortage Permissible Excess (1 ltr.) (Quantity claimed shortage claimed in 1 ltr.) (%) (%)as per (1 ltr.) IOC norm Diesel 2021117 4188 0.2072 0.20 146 Petrol 1848908 14008 0.7576 0.60 2915

From the above it is clear that the appellant has claimed excess loss on account of evaporation and other factors as prescribed by the lOC. The AO has rightly calculated the excess loss on account of petrol at Rs.2,16,306/- (2915 liters x Rs. 74.23). Similarly, the AO bas also rightly calculated the excess loss on account of diesel at Rs.7,278/(146 liters x Rs.49.85). Therefore, the addition made by the AO amounting to Rs.2,23,584/- is Confirmed. Therefore, the appeal on this ground is Dismissed”.

supported the findings of lower authorities. 4

before us. The sole grievance raised by the asseessee in its appeal

is against the confirmation of Rs.2,23,584/-made by Ld.CIT(A) on

account of shortage of diesel and petrol.

Ld.A.O for the alleged excess loss claimed by the assessee on

account of evaporation and other factors. We observed that the

assessee is running a petrol pump of Indian Oil Corporation and

sales various petroleum products. Regular books of accounts have

been maintained and financial statements are duly audited u/s

44AB of the Act. The assessee is also regularly maintaining

quantitative details of various items kept at the petrol pump and

quantitative details are maintained as per the directions of Indian

Oil Corporation. We also observe that the alleged shortage has not

been claimed as expenditure in the profit and loss account and

adjustment of shortage/loss has only been shown in the

quantitative details. It is true that some standards have been made

by Indian Oil Corporation for the permissible shortage/evaporation

loss for petrol and diesel but it is an admitted fact that they are 5 merely guidelines and not standards which are mandatory for

limiting the percentage of shortage and therefore the percentage of

shortage/loss vary on various factors including weather conditions.

We also observe that the shortage of diesel is 0.2072% as against

the permissible limit of 0.20%and shortage in case of petrol is

0.7576% as against permissible limit of 0.60%. The variation is not

so high which could raise the question on the genuineness of the

books of accounts and quantitative records maintained by the

assessee. Even otherwise Ld.A.O has nowhere recorded that the

books of accounts have been rejected u/s 145(3) of the Act and

profits have been estimated.

not justified in making the impugned disallowance without invoking

the provisions u/s 145 of the Act and he therefore should have

accepted the book results which were duly audited and supported

by proper quantitative details. We therefore set aside the findings

of lower authorities and direct the Ld.A.O to delete the addition of

Rs.2,23,584/-. We accordingly order so and allow Ground No.1

raised by the assessee. 6

adjudication.

The order pronounced in the open Court on 26.12.2018.

Sd/- Sd/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER �दनांक /Dated : 26 December, 2018 /Dev

Copy to: The Appellant/Respondent/CIT concerned/CIT(A) concerned/ DR, ITAT, Indore/Guard file.

By Order, Asstt.Registrar, I.T.A.T., Indore