INCOME TAX OFFICER WARD-7(2), NAGPUR vs. M/S SHIVPRAKASH RAJNARAYAN MISHRA(HUF), NAGPUR

PER G. MANJUNATHA, A.M.

This appeal filed by the Revenue and the cross–objection filed by the assessee are directed against order dated 28th March 2012, passed

by the learned Commissioner (Appeals)–II, Nagpur, and they pertain

to assessment year 2008–09.

assessee involving common issues arising out of identical set of facts

and circumstances, therefore, as a matter of convenience, these were

heard together and are being disposed off by way of this consolidated

order.

ITA no.238/Nag./2012 Revenue’s Appeal – A.Y. 2008–09

“1. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding that only the TDS received by the assessee to the extent of ` 74,33,739 is his income.

3 M/s. Shivprakash Rajnarayan Mishra (HUF)

expenses out of this receipt, ignoring the fact that the assessee has not claimed any expenditure in this regard in his return of income.”

the business of transport commission agent under the name and style

of “S.S. Transport Company”. The assessee filed its return of income for the assessment year 2008–09 on 26th March 2009, declaring total

income of ` 1,92,600. The case was selected for scrutiny. During the

course of assessment proceedings, the Assessing Officer noticed that

the assessee has claimed TDS credit of ` 2,48,484, against gross total

receipts of ` 9,49,680 and claimed refund of ` 2,35,590. In order to

ascertain the correctness of claim of refund of TDS claimed, the

Assessing Officer called upon the assessee to file necessary evidences

along with its books of account. In response to the notice, the assessee, vide its reply dated 23rd September 2010, submitted that it

is in the business of transport commission agent facilitate movement

of goods from Southern States to Madhya Pradesh and Uttar Pradesh

by arranging trucks from Nagpur, because the truck owner of Southern

Stats is having transport permit up to Nagpur. The assessee further

contended that the transport operator from Southern State provide

transportation till Nagpur and thereafter it used to engage the trucks

on hire on behalf of principal purchaser (consignee) at Nagpur and

prepared the bilty from Nagpur to Uttar Pradesh / Madhya Pradesh.

4 M/s. Shivprakash Rajnarayan Mishra (HUF)

The consignee have directly paid the transportation charges to the

truck owners, however, it has paid transportation charges from Nagpur

to the respective point of delivery but the same has been reimbursed

by the consignee. The Assessing Officer after considering the

submissions of the assessee held that though the assessee has

received transportation charges of ` 1,14,22,786, has considered only

an amount of ` 9,49,680, in its return of income without offering any

proper explanation about the balance transportation charges. The

Assessing Officer further observed that the parties have deducted TDS

under section 194C of the Income Tax Act, 1961 (for short “the Act”)

@ 2% and the assessee has claimed credit for TDS without offering

corresponding receipts for taxation. Therefore, he made an addition of

` 1,04,73,178, as undisclosed transportation receipts. Aggrieved by

the assessment order so passed by the Assessing Officer, the assessee

preferred appeal before the first appellate authority.

elaborate written submissions which have been reproduced from

Page–5 to 17 of the order of the learned Commissioner (Appeals). The

assessee also filed certain additional evidences including confirmations

from parties to prove that it is acted only as an agent to facilitate

movement of goods from Southern States to Uttar Pradesh and

Madhyra Pradesh from Nagpur for which they have stated that the

5 M/s. Shivprakash Rajnarayan Mishra (HUF)

assessee is acting as an agent. The learned Commissioner (Appeals)

has forwarded additional evidences filed by the assessee to the

Assessing Officer for his comments. The Assessing Officer, vide its remand report dated 19th August 2011, commented on additional

evidences filed by the assessee and its admissibility in the light of rule

46A of the Income Tax (Appellate) Tribunal Rules, 1962. The learned

Commissioner (Appeals) after considering the submissions of the

assessee held that the assessee is a commission agent and has been

helping parties in Uttar Pradesh for arranging truck at Nagpur for

which he gets his commission and also gets his money reimbursed

which he has paid to South Indian truck owners. The learned

Commissioner (Appeals) further observed that the principal purchasers

have not only reimbursed the freight paid by the assessee on their

behalf and its commission for services rendered. The principal

purchasers have deducted TDS since they have made the payment to

the assessee as per the provisions of section 194C of the Act which

mandates deduction of tax at source on any payment made to any

transporter including agent. The assessee has filed all the details

including confirmation which clearly shows that he is acting as a

commission agent for facilitating movement of goods from South

Indian truck owners to Uttar Pradesh and Madhya Pradesh States by

arranging trucks at Nagpur. Therefore, he opined that the Assessing

Officer was erred in making additions on gross receipts. However, the

6 M/s. Shivprakash Rajnarayan Mishra (HUF)

learned Commissioner (Appeals) further observed that if at all any

addition is required, the addition can be made only to the extent of

TDS claimed by the assessee but not the total transport receipts.

Accordingly, he has deleted the additions made by the Assessing

Officer and confirmed the addition to the extent of ` 2,48,484.

Aggrieved by the order of the learned Commissioner (Appeals), the

Revenue is in appeal before us.

that the learned Commissioner (Appeals) erred in deleting the

additions made by the Assessing Officer by holding that only the TDS

on gross receipts needs to be added but not the total contract receipt

ignoring the fact that the deductors have rightly debited the amount

paid to the assessee as freight charges in their books of account. The

learned Departmental Representative further submitted that the

learned Commissioner (Appeals) erred in considering that if at all the

receipts are to be taken as assessee’s receipts, then the payments

made by the principal purchasers should also to be considered as

expenditure ignoring the fact that the assessee has not claimed any

expenditure in this regard. The Assessing Officer has brought out clear

facts to the effect that the assessee has omitted to include transport

receipt in his books of account and accordingly has rightly made the

additions as undisclosed receipts and his order should be upheld.

7 M/s. Shivprakash Rajnarayan Mishra (HUF)

strongly supporting the order of the learned Commissioner (Appeals)

submitted that the assessee has filed necessary details before the

learned Commissioner (Appeals) to prove that it acted only as an

agent for commission which has been rightly considered in his books of

account, therefore, the Assessing Officer was incorrect in making

additions towards gross receipts on the basis of TDS certificate

ignoring the fact that the assessee has considered the amount paid by

the principal purchasers as reimbursement of expenses after

considering its commission income. The assessee also filed

confirmation from the parties where they have categorically stated

that they have paid transportation charges directly to the truck owners

and the assessee gets only commission. The learned Commissioner

(Appeals) has appreciated these facts in right perspective to delete the

additions made by the Assessing Officer to the extent of receipts

excluding TDS. However, in respect of TDS credit, the assessee has

already considered commission income in its books of account which

includes TDS deducted by the payer, therefore, further addition

towards TDS credit amounts to double addition which is incorrect.

authorities below and the material available on record. The assessee

has considered commission income in its books of account after

8 M/s. Shivprakash Rajnarayan Mishra (HUF)

claiming certain expenses and declared income of ` 1,92,600. The

assessee claimed TDS credit of ` 24,484, making a claim of refund of `

2,35,590. The Assessing Officer made additions towards transportation

charges on the ground that the assessee claimed credit for TDS, but

failed to consider corresponding receipts in its books of account. It is

the claim of the assessee that it has considered commission income in

its books of account as it is working as a commission agent for

facilitating movement of goods from Southern States to Uttar Pradesh

and Madhya Pradesh by arranging the trucks from Nagpur, because

the truck owners from Southern States has transport permit up to

Nagpur and they cannot travel beyond Nagpur. The assessee was

further claimed that it has paid transport charges from Nagpur to the

point of delivery on behalf of principal purchaser and the same has

been reimbursed by the principal purchaser, but TDS has been

deducted on gross payment including commission and reimbursement

of expenditure in view of specific provisions of section 194C of the Act.

But, the fact remains that it has acted only as an agent on commission

basis which has been rightly considered in its books of account.

the learned Authorised Representative for the assessee for the reason

that the assessee has filed necessary evidences including confirmation

from the consignee to prove that it has acted only as an agent for

9 M/s. Shivprakash Rajnarayan Mishra (HUF)

facilitating movement of goods from Nagpur to Uttar Pradesh and

Madhya Pradesh States on behalf of principal purchaser on commission

basis. The assessee also filed confirmations from the consignee where

they have categorically stated that the assessee is only a commission

agent. The assessee also filed other evidences to prove that though

the principal purchasers have deducted TDS on gross payment which

includes reimbursement of transportation charges paid by the

assessee on behalf of principal purchaser. The learned Commissioner

(Appeals) has considered all these facts to come to the conclusion that

the assessee acted as a commission agent and accordingly allowed

relief by deleting the addition made by the Assessing Officer towards

gross transportation charges on the basis of TDS certificate, excluding

the amount of TDS credit claimed by the assessee. Consequently, we

do not find any error or infirmity in the findings of the learned

Commissioner (Appeals) and dismiss the grounds raised by the

Revenue.

the assessee has filed the present cross–objection in support of the

order passed by the learned Commissioner (Appeals). Since we have

dismissed the grounds raised by the Revenue in its appeal as

aforesaid, resultantly, the cross–objection filed by the assessee

becomes infructuous and, hence, liable to be dismissed.

10 M/s. Shivprakash Rajnarayan Mishra (HUF)

cross–objection is also dismissed.

Order pronounced in the open Court on 25.10.2018

Sd/- Sd/- SANDEEP GOSAIN G. MANJUNATHA JUDICIAL MEMBER ACCOUNTANT MEMBER

NAGPUR, DATED: 25.10.2018

Copy of the order forwarded to:

(1) The Assessee; (2) The Revenue; (3) The CIT(A); (4) The CIT, Nagpur City concerned; (5) The DR, ITAT, Nagpur; (6) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary

(A.R./Sr. P.S./P.S.) ITAT, Nagpur