S S TRANSPORT COMPANY,YAMUNA NAGAR vs. INCOME TAX OFFICER, WARD-4, YAMUNA NAGAR , YAMUNA NAGAR

(िनधा�रणवष� / Assessment Year: 2015-16 M/s S.S. Transport Company ITO-Ward No.4 C/o Tejmohan Singh Yamunanagar. बनाम/ Vs. #527, Sector 10-D Chandigarh – 160011 �थायीलेखासं./जीआइआरसं./PAN/GIR No. ABHFS-5575-J (अपीलाथ�/Appellant) : (��थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Shri Tej Mohan Singh (Advocate )– Ld. AR ��थ�कीओरसे/Respondent by : Dr. Ranjit Kaur (Addl. CIT )– Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 20-03-2025 घोषणाकीतारीख /Date of Pronouncement : 24-03-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2015-16 arises out of an order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 30-04-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) on 28-12-2017. The grievance of the assessee is confirmation of addition of Rs.34.91 Lacs and confirmation of adhoc disallowance of expenses. The registry has noted delay of 48 days in the appeal which stand condoned. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. Proceedings before lower authorities 2.1 The assessee is stated to be engaged in transport business. The assessee made payment of Rs.34.91 Lacs to M/s Krishna Roadlines which happened to be a specified entity u/s 40A(2)(b). That entity reflected freight receipts of Rs.62.93 Lacs in its financial statements. However, Ld. AO doubted the payments as made by the assessee on the ground that the payments were in cash. The bills as issued by M/s Krishna Roadlines were not specific but having short details of weight of goods being transported. In response to notice issued u/s 133(6), that entity confirmed the transaction and furnished relevant documents. The Ld. AO alleged that the assessee raised bills at Rs.70/- per quintal but paid the same at Rs.90/- per quintal. 2.2 The assessee refuted the allegation of Ld. AO and stated that the payment was made at Rs.65/- per quintal which was evident from the copies of invoices. However, not convinced with assessee’s reply and finding discrepancies in the documents, Ld. AO held that it was not only a case of excessive payment but the overall genuineness of the transactions was not proved. It was an internal arrangement between the partners of the assessee firm and alleged transporter M/s Krishna Roadlines whose proprietor Sh. Mohit Sawhney was son of one of the partners. Accordingly, the sum so paid was disallowed in toto and the assessment was framed. The Ld. AO also made adhoc disallowance of 2% of expenses of Rs.541.53 Lacs and made another addition of Rs.10.83 Lacs to account for un-vouched expenses. 2.3 The Ld. CIT(A) confirmed the assessment order against which the assessee is in further appeal before us. Our findings and Adjudication 3. First, we take up the issue of freight payment to M/s Krishna Roadlines. Upon perusal of factual matrix as enumerated in preceding paragraphs, it could be ascertained that the whole case of Ld. AO has proceeded at the threshold of excessive payments since the payee happened to be a specified entity u/s 40A(2)(b) but ultimately Ld. AO has ended up disallowing full expenditure on the ground that it was colorable device to reduce tax burden. The aforesaid conclusion, in our considered opinion, is quite opposite to facts as available on record. It could be seen that the assessee has made freight payment to M/s Krishna Roadlines which is duly supported by the copies of invoices. That entity has confirmed the payment and admittedly, reflected freight income in its Income tax Return. The Ld. AO has made allegations of internal arrangement to reduce overall tax burden but the same is merely on suspicion and without there being any concrete evidence on record to support the same. Once the assessee has furnished relevant documentary evidences and the payee has also confirmed the transaction coupled with the fact that the impugned payments stood reflected in the Income Tax Return of the payee, the onus of the assessee stood discharged. It is another fact that the assessee ahs refuted the allegation of Ld. AO of excessive freight payment and brought on record the fact that the payments were made at Rs.65/- per quintal. The provisions of Sec.40A(2)(b) mandate Ld. AO to bring on record a fact that the prices paid for goods and services was excessive and unreasonable having regard to the market price of such goods or services in case the same was procured from specified persons. However, none of such an exercise has been done by Ld. AO and no comparative case has been brought on record to show that the payment so made by the assessee was excessive and unreasonable having regard to the market price of these services. It is trite law that no addition can be made on mere suspicion. Therefore, the facts of the case do not convince us to concur with the stand of lower authorities. Consequently, the addition of Rs.34.91 Lacs stand deleted. The corresponding grounds stands allowed.