M/S UNIQUE CARRIERS PVT. LTD.,CHANDIGARH vs. ITO, W-5(1), CHANDIGARH

ITA 557/CHANDI/2019Status: DisposedITAT Chandigarh13 November 2019AY 2012-136 pages

AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that while the accounting explanation for the difference was plausible, the TDS credited to the assessee's account constituted income. Therefore, the addition made by the AO was partly deleted, but the TDS amount was to be treated as the assessee's income.

What were the facts?

The assessee, a transporter, had a difference between receipts shown in Form 26AS and its books of account. The Assessing Officer made an addition of Rs. 7,85,332/- on this account. The assessee explained that the difference arose because amounts received through drivers for hired vehicles were not directly booked under party accounts but under truck accounts, and some amounts did not belong to the assessee.

What were the issues?

Whether the difference in receipts between Form 26AS and books of account, when explained by the assessee as amounts paid to third-party vehicle owners, warrants an addition to income, considering TDS implications.

Which sections of the Income-tax Act were involved?

Section 250(6)

AI-generated summary — verify with the full judgment below

आदेश/Order

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the assessee against the order dated 28.02.2019 of the Commissioner of Income Tax (Appeals)-2 Chandigarh [hereinafter referred to as ‘CIT(A)’]

The assessee in this appeal has taken following grounds of appeal:-

ITA No. 557/Chd/2019- M/s Unique Carriers Pvt. Ltd, Chandigarh 2 1. That on the facts, circumstances and legal position of the case, the Worthy CIT(A) in Appeal No. 106/15-16 has erred in passing that order in contravention of the provisions of S. 250(6) of the Income Tax Act, 1961.

That on law, facts and circumstances of the case, the Worthy CIT(A) has erred in confirming the action of Ld. AO in making addition of Rs. 1,20,000/- on adhoc basis by disallowing certain expenses on account of non maintainability of external vouchers even when the books of accounts were produced and duly verified by the Ld. AO.

That on law, facts and circumstances of the case, the Worthy CIT(A) has erred in confirming the action of Ld. AO in making addition of Rs. 7,85,332/- to the income on account of difference in receipts as per Form 26AS and as per books of accounts even when the said difference was not taxable income of the appellant.

That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same.

At the outset, the Ld. Counsel for the assessee has submitted that

he does not press Ground No.2. Ground No.2 is, therefore, dismissed

as not pressed.

Ground Nos. 1 & 4 : Ground No.1 & 4 are general in nature and

do not require any specific adjudication.

Now, we are left with Ground No.3 only of the appeal, whereby,

the assessee has agitated the confirmation of addition made by the

ITA No. 557/Chd/2019- M/s Unique Carriers Pvt. Ltd, Chandigarh 3 Assessing Officer of Rs. 7,85,332/- on account of difference in receipts

as shown in Form 26AS vis-a-vis books of account of the assessee.

The brief facts relating to the issue are that the assessee is a

transporter and engaged in transportation of the goods. The assessee not

only uses its own trucks but also hires / engages trucks / vehicles of

other parties for the said purpose. The Assessing Officer during the year

under consideration noticed that there was difference in the receipts as

per the books of account of the assessee when compared with the Form

26AS in respect of five parties, detailed as under:-

Sr Name of the deductor Receipt as per Receipt as per Difference No. form 26AS books of the assessee 1. Pioneer Hose & Rs. 11,715 Rs. 10,245 Rs. 1,470 Hydraculics (P) Ltd.

R P S Vikas Castings Rs. 85,765 Rs. 83,885 Rs. 1,880 Private Limited 3. Ohri Marble and Sanitary Rs. 6,45,134 Rs. 12,600 Rs.6,32,534 Works 4. Modern Steels Limited Rs. 1,43,265 Rs. 18,060 Rs. 1,25,205

Bharat Gears Limited Rs. 3,02,057 Rs. 2,77,814 Rs. 24,243

Total RS. 11,87,936 Rs. 4,02,604 Rs.7,85,332

He, therefore, made the addition of Rs. 7,85,332/- relating to the

difference in the receipts.

ITA No. 557/Chd/2019- M/s Unique Carriers Pvt. Ltd, Chandigarh 4 7. Being aggrieved by the above order of the Assessing Officer, the

assessee preferred appeal before the Ld. CIT(A). Before the Ld.

CIT(A), the assessee explained that so far as the amount shown to have

been received from M/s Bharat Gears Limited was concerned, the said

party has made the necessary rectification and has filed the revised

Form 26AS. So far as the addition made by the Assessing Officer in

respect of difference in the amount relating to M/s Ohri Marble &

Sanitary Works and Modern Steel Ltd. was concerned, the assessee

explained that the amount received through drivers was not reflected in

the ledger account of the said party but reflected in the ledger account

of the truck / vehicle. That only the amounts in cheques from the

parties had been recorded in the ledger of the parties and that the

balance received through truck drivers concerned had been entered in

concerned truck account. Though, Ld. CIT(A) in this respect observed

that the contention raised by the assessee seemed to be plausible,

however, he observed that the assessee could have duly corroborated

the same by furnishing confirmations from the parties. It was also

explained to the CIT(A) that the amount reflected by the two parties

namely M/s RPS Vikas Castings Pvt Ltd and M/s Pioneer Hose &

Hydraulics (P) Ltd did not belong to the assessee. However, the Ld.

CIT(A) did not agree with the above contention and gave relief to the

assessee only in respect of difference of amount in the case of Bharat

Gears Limited.

ITA No. 557/Chd/2019- M/s Unique Carriers Pvt. Ltd, Chandigarh 5

Before us, Ld. Counsel for the assessee has submitted that since

the vehicles of the other parties were hired, hence, the amount shown to

have been paid by the aforesaid parties was further paid by the assessee

to the respective vehicles. The assessee had only retained margin of the

freight as its commission. That it was duly explained to the CIT(A) that

the amount in fact was duly paid by the parties to the respective truck

owners, however, only the TDS was deducted in the name of the

assessee as the contract was in the name of the assessee. The assessee

also furnished the revised ledger account in this respect to the CIT(A)

which was also further forwarded by the CIT(A) to the Assessing

Officer. That the claim of the assessee has been rejected only on the

ground that the confirmation from the respective truck owners was not

filed.

Considering the above submission of the assessee, and the fact

that the assessee has duly explained the accounting and also the fact that

the amount in question was credited to “to pay freight” category in the

books of account, we do not see any justification on the part of the

CIT(A) to confirm the addition made by the Assessing Officer.

However, as explained by the assessee, the amount of TDS since has

been credited to the account of the assessee, the same constitutes the

income of the assessee and the assessee is liable to pay the due taxes on

the said amount.

ITA No. 557/Chd/2019- M/s Unique Carriers Pvt. Ltd, Chandigarh 6 With the above observation, the order of the CIT(A) is set aside and the Assessing Officer is directed to treat the amount credited in the

TDS account of the assessee as income of the assessee. However, the addition made by the Assessing Officer otherwise is ordered to be deleted. The appeal of the assessee is treated as partly allowed. Order pronounced in the Open Court on 18.11.2019.

Sd/- Sd/- (अ�नपूणा� गु�ता / ANNAPURNA GUPTA) (संजय गग� / SANJAY GARG) लेखा सद�य/ Accountant Member �या�यक सद�य/ Judicial Member Dated : 18.11.2019 “आर.के.” आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File

आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar

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