HARISHCHANDRA ANANT GHARGE,SATARA vs. ITO, WARD 2, SATARA, SATARA
आयकर अपीलीय अिधकरण ”ए” Ɋायपी ठपुणेमŐ।
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCHES “A” :: PUNE
BEFORE DR.DIPAK P. RIPOTE, ACCOUNTANT MEMBER
AND SHRI VINAY BHAMORE, JUDICIAL MEMBER
आयकर अपील सं. / ITA No.444/PUN/2024
िनधाᭅरण वषᭅ / Assessment Year: 2021-22
Harishchandra Anant Gharge,
225, Guruwar Peth Satara,
Satara – 415001. Maharashtra
V s
The Income Tax Officer,
Ward-2, Satara.
PAN: ADGPG4107M
Appellant/ Assessee
Respondent / Revenue
Assessee by Smt. Deepa Khare – AR
Revenue by Shri Ramnath P Murkunde – CIT(DR)
Date of hearing
22/04/2025
Date of pronouncement 23/06/2025
आदेश/ ORDER
PER DR. DIPAK P. RIPOTE, AM:
This is an appeal filed by the assessee directed against the order of ld.Commissioner of Income Tax(Appeal)[NFAC] under section 250 of the Income Tax Act, 1961 dated 21.02.2024 for the A.Y.2021-22. The Assessee has raised the following grounds of appeal :
“GROUNDS OF APPEALS
On the facts and in the circumstances of the case and in law the CIT(A) erred in confirming addition of Rs. 3,34,04,541/- in the hands of ITA No.444/PUN/2024 [A]
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this appellant is itself illegal and without juri iction. It be quashed and set-aside.
On the facts and in the circumstances of the case and in law the CIT(A) erred in law and on facts in not appreciating that the appellant had substantiated the expenditure and adduced the relevant evidence.
The appellant craves to leave, add/amend or alter any of the above grounds of appeal.”
Brief facts of the case :
The Assessee is a transporter and filed his ITR Form No.3 on 28.02.2022 declaring total income of Rs.1,57,32,245/- for A.Y.2021-22 which was processed under section 143(1)(a) of the Act.
1 The facts reproduced by ld.CIT(A) are under :
“In this case, the Assessing Officer noticed that the appellant debited a sum of Rs.3,34,04,541/- as sub-contract payment to Shri Ananda
Yashwant Dubal. However, it is noticed that he did not file any return of income for the A.Y.2020-21. When the AO has called for the details of contract agreement, evidences for service, GST registration of Shri
Ananda Yashwant Dubal, etc., it is ascertained that there was no formal contract or agreement entered between the appellant and service provider. The AO also noticed from the GST portal that his registration was cancelled on 08.07.2019 and later he did not carry our any business.
It is also ascertained that he did not file any income tax return for the relevant AY 2021-22. The appellant produced some bills issued by Shri
Ananda Yashwant Dubal and noticed that none of the bills contain
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details of TIN/GST, Vehicle No., details of payment, details of driver, details of inward and outward carriage of vehicle, etc. Hence, the AO concluded that the sub-contract payment of Rs.3,34,0,4,541/- was not genuine payment.”
Submission of ld.AR :
Advocate-Smt.Deepa Khare - Ld.AR filed a paper book containing 152 pages. Ld.AR submitted that Assessee is a Transporter for Food grains. Assessee received contract from District Collector regarding transporting various food grains from the godowns to various Ration Shops of Satara District. Ld.AR submitted that during the year, Assessee has made payment to various transporters. The details are as under : Name :- Gharge Harischandra Anand
Address :- 225, Guruwar Peth, Satara
A/c.Year : 2020-21________________________________________________________
Total Payment Made to Transportor (Sub Contract)
Rs.170402503
Less:- T.D.S. has been Deducted From Payment Given Transportor (Sub-
Contract)
Rs.132901967
1 Ajay Arun Bhoite
Rs. 8328606
2 Amit Shantaram Allies Ashok Bhoite
Rs. 66298050
3 Ananda Yashwant Dubal
Rs. 33404541
4 Firoz Habib Pathan
Rs. 17420619
5 Ruturaj Traders
Rs. 5381122
6 K.Shamrao Abaji Bhoite
Rs. 2069029
__________
Balance Amount
Rs.37500536
Less:-Payment Made by Cheque Truck & Tempo (No TDS)
Rs.23757324
Balance Amount
Rs.13743212
Less :- Payment to Sub-Contract by Cash During The Covid
Period (Govt Supply Work ) Transport by Truck & Tempo
Balance Amount
Rs. NIL
ITA No.444/PUN/2024 [A]
1 Ld.AR submitted that one of the persons to whom the Assessee has made payment was Mr.Ananda Yashwant Dubal of Rs.3,34,04,541/-. Assessee has made these payments for the Transportation Services provided by Mr.Dubal. Assessee filed Ledger Account of Mr.Dubal in the books of assessee which is at page no.76 to 80 of the paper book. Assessee has also filed copy of Bank Statement of Assessee to demonstrate the payments made to Mr.Dubal. Ld.AR submitted that Assessee has also deducted Tax at Source on these payments. Ld.AR invited our attention to Form No.16A filed in the paper book. Ld.AR also submitted that Assessee has also filed copy of Bank Statement of Mr.Dubal maintained with The Karad Urban Cooperative Bank Limited, Karad which is at Page No.53 to 72 of the paper book to demonstrate receipts from Assessee. Ld.AR submitted that thus assessee has filed all the necessary details to prove genuineness of the expenditure. Ld.AR submitted that the Assessing Officer has erred in disallowing the said payment. If Mr.Dubal has not filed the Return of Income, the Assessee cannot be held responsible for the same. Ld.AR submitted that if Mr.Dubal has failed to confirm the payments, does not mean that Assessee has not made the payment.
ITA No.444/PUN/2024 [A]
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The entire payment appears in the Bank Statement of Mr.Dubal.
Therefore, genuineness of the said payment cannot be challenged.
The distance calculations made by the Assessing Officer in the assessment order is erroneous as Assessing Officer has considered the place “Jalgaon” as the place which is situated at North of Maharashtra, however, the word “Jalgaon” mentioned in the Bills, refers to Jalgaon-Ambe which is in Satara District. Therefore,
Assessing Officer erred in calculations. As per the Government
Regulations, Assessee had permission for distribution of food grains only in Satara District, therefore, there was no question of Transportation to Jalgaon which is in North Maharashtra. Ld.AR submitted that AO and ld.CIT(A) has erred in making the addition.
2 Ld.AR for the Assessee in rebuttal submitted that there are Gate Passes issued by the Competent Authority. Ld.AR submitted that if opportunity is given, the same can be produced.
3 Ld.AR also submitted that in this case, in earlier years and subsequent year also, assessee had made payments to Mr.Dubal, which is evident from the Ledger Account. The Ledger Account at page no.76 of paper book shows Opening Balance of Rs.10,77,804/-
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and there is a Closing Balance of Rs.96,79,974/-. Department has not made any addition in earlier or subsequent years. This explains that Department has accepted the payments to be genuine for earlier year. Therefore, Department cannot take two views for the same person.
Submission of ld.DR :
The ld.DR for the Revenue relied on the order of Assessing Officer and ld.CIT(A).
Mr.Ramnath
P.Murkunde-Ld.DR vehemently submitted that the onus of proving expenditure was on assessee. Assessee has filed copies of the bills during the assessment proceedings which were not containing basic details like
Vehicle No, Driver Name etc., Mr.Murkunde further submitted that these foodgrains are picked up from godowns of the Food
Corporation of India, any vehicle picking up foodgrains from godowns of Food Corporation of India(FCI) will obviously have to have the Challan, Gate Pass etc., to demonstrate goods being picked up from FCI Godowns. Even otherwise, whenever foodgrains are picked up from Government Godowns, there is always Challans,
Gate Passes which specifically mentions the name of the Driver,
Vehicle Number, Destination etc. The Assessee has not produced any such document to demonstrate that Shri Anand Y. Dubal has ITA No.444/PUN/2024 [A]
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transported foodgrains from godowns to various ration shops.
Merely because, payments have been made through banking channel does not mean that the expenditure has been incurred wholly and exclusively for the purpose of business of the assessee. Assessee has to prove that the expenditure was wholly and exclusively for the purpose of the business of the assessee. Mr.Murkunde further submitted about various scams taken place in Public Distribution
System(PDS). Mr.Murkunde submitted that even in the paper book filed by Assessee, he has not filed copies of any bills, which explains that the transaction is not genuine. The ld.DR further invited our attention to the Bank Statement of Shri Anand Dubal stating that immediately after the credits, the amounts have been withdrawn as cash. Ld.DR submitted that this fact has been mentioned by ld.CIT(A) in his order. Ironically, Mr.Dubal has received payments only from Assessee, as if Mr.Dubal was exclusively working for Assessee. Therefore, Mr.Murkunde pleaded that addition shall be sustained.
Findings & Analysis:
We have heard both the parties and perused the records. The only issue before us is genuineness of payments of Rs.3,34,04,541/- made to Ananda Yashwantha Dubal on account of Transportation
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Charges. Admittedly, in this case, Assessee has received a Contract from the District Collector, Satara for transportation of foodgrains from Food Corporation of India’s Godowns to Ration Shops in the District of Satara. The Assessee in the profit and loss account has shown gross receipts of Rs.21,15,77,483/- on account of Transportation Charges received. On perusal of the Schedule-G enclosed with Profit and Loss Account, the receipt shown by Assessee are as under :
HARISHCHANDRA ANANT GHARGE
SCHEDULES FORMING PART OF ACCOUNTS FOR THE YEAR ENDED
31 ST MARCH 2021
AS AT 31/03/2021
Rs.
AS AT 31/03/2021
Rs.
AS AT 31/03/2020
Rs.
SCHEDULE – F
SALES
SCHEDULE – G
OTHER INCOME
Transport Charges Received CMR External
4,91,31,991.00
Dwarpohoch Transport Charges Received
3,36,77,981.00
4,63,57,715
Transport Charges Received
3,96,77,414.00
3,87,279
Transport Charges Received District Office Satara
8,72,01,567.00
5,15,97,803
Transport Charges Received Renuka Sales Corp.
-
18,96,559
Transport Charges Received Kiran Bhoite
18,88,529.00
71,40,939
TOTAL Rs.
21,15,77,482.00
10,73,80,295
SCHEDULE – H
INCREASE /(DECREASE) IN STOCK
Closing Stock
-
37,19,158
Less :- Opening Stock
37,19,158.00
99,67,853
TOTAL Rs.
(37,19,158.00)
(62,48,695)
SCHEDULE – I
DIRECT EXPENSES
Diesel and Petrol Expenses
80,40,240.44
30,95,284.46
Hamali and Warni Expenses
48,38,934.00
16,98,234.00
Shortage
30,95,643.00
-
Transport Charges and Non TDS
2,98,84,774.00
53,46,978.00
Temp Hire Charges
76,15,762.00
54,15,127.00
Transport Bill Deduction
-
11,413.00
Transport Charges
13,29,01,967.00
18,63,77,320.44
7,39,11,972.72
TOTAL Rs.
18,63,77,320.44
8,94,79,009
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6. As per Schedule-I enclosed with Profit and Loss Account,
Assessee has debited under the Head “Transportational Charges”,
Rs.13,29,01,967/-.
During the assessment proceedings, the Assessing Officer noted that Assessee has made payment of Rs.3,34,04,541/- to Shri Ananda Yashwantha Dubal for Transportation. However, Assessing Officer noted that Mr.Ananda Yashwanta Dubal failed to reply letter issued u/s.133(6) of the Act. Assessing Officer also observed that Ananda Yashwantha Dubal is not registered under GST and had also not filed Income Tax Return. Therefore, Assessing Officer held that payments made to Mr.Ananda Yashwanta Dubal are not genuine and hence, added the same amount. Ld.CIT(A) confirmed the addition.
1 In this case, the Assessing Officer in para 4.5.3 of the Assessment Order observed based on the copies of the bills submitted that there was “Transportation between Karad and Jalgaon”, the Assessing Officer calculated the distance between Karad and Jalgaon and observed that it is impossible to travel to and fro the distance of 1022 kms in a day. Therefore, Assessing Officer observed that the details filed by Assessee are fictitious. However, ld.AR during the hearing submitted that Assessee was awarded
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contract only for Satara District. There is a place called “Jalgaon-
Ambe” in Satara District, which has been mentioned on the bills.
We agree with the submission of ld.AR that Assessing Officer has considered another place called Jalgaon for calculating the distance.
It is observed that Assessee had submitted bills from which Assessing Officer in Paragraph 4.5.3 has recorded the Truck
Numbers, Distance and Place. We have verified one of the Truck
Number MH50N4504 and observed that it is a Heavy Goods
Vehicle registered in Karad, Maharashtra. However, the Assessing
Officer has not bothered to verify the Truck Numbers.
1 Ld.CIT(A)in the order[page 10, para 8(f)] has noted that in the bank statement of Mr.Ananda Yashwanta Dubal, immediately after Cheque Deposits, there are cash withdrawals, therefore, ld.CIT(A) opined that payments are not genuine. However, we have studied the bank statement of Mr.Ananda Yashwanta Dubal which is at page no.64 to 72 of the paper book. There are cash withdrawals, but there are other expenditures through banking channels. For example, as under : 26.11.2020
-
Receipt of Rs.2,50,000/-
02.12.2020
-
NEFT – Shriram Transport
Finance Company Ltd. Rs.60,005/-
To clearing Shriram Tyres
-
Rs.30,400/-
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7.2 Thus, the findings recorded by ld.CIT(A) is factually incorrect.
Rather the payments made to Shriram Tyres suggest that Mr.Ananda
Yashwant Dubal was into Transportation.
3 As per CGST Notification No. 12/2017- Central Tax (Rate), dated 28.06.2017, GST on Heading 9965 or Heading 9967 for “Services provided by a goods transport agency, by way of transport in a goods carriage of - (a) agricultural produce, (d) milk, salt and food grain including flour, pulses and rice” are NIL. Therefore, the observation of Assessing Officer that Mr.Ananda Yashwanta Dubal was not registered under GST is not of any significance as there is no GST on Transportation of Food grains.
4 Ld.AR pleaded that similar payments were made in earlier and subsequent year. However, Assessing Officer has not discussed regarding the Opening Balance and Closing Balance appearing in the accounts of Mr.Ananda Yashwant Dubal in the books of Assessee.
In these facts and circumstances, since there have been errors as noted above, in the interest of justice, we set-aside the Assessment Order to the ld.Assessing Officer for denovo
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adjudication. Assessing Officer shall provide opportunity to the assessee. Assessee shall file all necessary details before the Assessing
Officer within
Three effective opportunities.
Accordingly, Ground No.1 and 2 raised by the assessee are allowed for statistical purpose.
1 Ground No.3 is general in nature, does not need any adjudication, hence, dismissed.
In the result, appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open Court on 23rd June, 2025. (VINAY BHAMORE)
ACCOUNTANT MEMBER
पुणे / Pune; ᳰदनांक / Dated : 23 June, 2025/ SGR
आदेशकᳱᮧितिलिपअᮕेिषत / Copy of the Order forwarded to :
1. अपीलाथᱮ / The Appellant.
2. ᮧ᭜यथᱮ / The Respondent.
3. The CIT(A), concerned.
4. The Pr. CIT, concerned.
5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, “ए” बᱶच, पुणे / DR,
ITAT, “A” Bench, Pune.
गाडᭅफ़ाइल / Guard File.
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आदेशानुसार / BY ORDER,
////
Senior Private Secretary
आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune.