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Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH, AHMEDABAD
Before: Ms. SUCHITRA KAMBLE & SHRI BHAGIRATH MAL BIYANI
PER SUCHITRA KAMBLE, JUDICIAL MEMBER :
These two appeals have been filed by the assessee against two different orders dated 24.03.2014 & 07.11.2016 passed by the CIT(A)-XVI, Ahmedabad & CIT(A)-9, Ahmedabad respectively for the Assessment Years 2009-10.
The grounds of appeal are as under:
ITA No.1358/Ahd/2014 for A.Y. 2009-10
“1. The Learned Commissioner of Income Tax (Appeals)-XVI, Ahmedabad has erred in law and on facts of the case by confirming that the addition made by the Assessing Officer on account of freight receipt to the extent of Rs.57,13,150/- has been rightly made, and accordingly, upheld the addition made by the Assessing Officer to that extent.
2. The Learned Commissioner of Income Tax (Appeals)-XVI, Ahmedabad has erred in law and on facts of the case by confirming the disallowance made by the Assessing Officer out of foreign travelling expenditure at 90% of total expenditure i.e. Rs.1,79,147/- out of total expenditure of Rs.1,99,052/-“
& 33/Ahd/2017 Assessment Years: 2009-10 Page 2 of 5
“1. The Learned Commissioner of Income Tax (Appeals)-9, Ahmedabad has erred in law and on facts of the case in confirming the penalty u/s. 271(1)(c) in respect of excessive deduction of Rs.51,25,850/- of short freight receipts, which had been debited to Freight Account.”
The assessee is in the business of transportation services. The return of income for Assessment Year (A.Y.) 2009-10 was filed on 27.09.2009 declaring total income at Rs.6,61,87,630/-. During the course of assessment proceedings, the assessee was requested to reconcile the freight receipts as per the TDS certificate and as recorded in its books of account. The Assessing Officer made addition of Rs.57,13,150/- in respect of short freight receipts from the various parties. The Assessing Officer also made addition of Rs.1,99,052/- towards foreign travel expenses, addition of Rs.44,228/- towards employees’ contribution to the Provident Fund, disallowance of Rs.34,899/- towards interest expenses, disallowance of Rs.9,46,400/- towards bad debt provisions and disallowance of Rs.68,28,903/- in respect of depreciation.
Being aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee.
As regards ground no.1 relating to addition of freight receipt of Rs.51,25,850/- by the CIT(A), the Ld. A.R. submitted that the Assessing Officer as well as the CIT(A) has wrongly mentioned/observed that the assessee has not filed the details of confirmation from the respective parties. In fact, the assessee has given the details related to total freight in the Profit & Loss Account amounting to Rs.33,56,94,032/- and also given details related to TDS deducted amounting to Rs.28,59,99,898/-. In fact, the amount credited as freight in the Profit & Loss Account is higher than TDS and, therefore, there is no short disclosing of freight. The Ld. A.R. further submitted that all freight receipts were duly accounted in the books. The Ld. A.R. submitted that the parties related to whom the assessee was asked about short freight by the Assessing Officer as well as CIT(A), the details were before both the authorities related to Praj Industries Limited, Global Eco Logistics Limited, Suzlon Energy Limited, BHEL, Bhopal, BHEL, Mumbai, Geofigykya Torun, ISGEC, Dahej, Inox India, Baroda, ANS Construction, BHEL, Chennai, L&T Hazira and others. The breakup of addition of Rs.51,25,850/- into short freight amount and TDS amount is as follows : & 33/Ahd/2017 Assessment Years: 2009-10 Page 3 of 5 BREAKUP OF ADDITION OF Rs.51,25,850/- INTO SHORT FREIGHT AMOUNT & TDS AMOUNT SR. A.O. NAME OF ADDITIONS ADDITIONS ADDITIONS SHORT TDS NO. ORDER PARTY MADE BY DELETED CONFIRMED FREIGHT PARA A.O. BY CIT(A) BY CIT(A) NO. 1 Para 3.1 Praj 391800 150000 241800 241800 70 Industries Ltd 2 Para 3.2 Global Eco 30800 30800 - - - Logistics Ltd 3 Para 3.3 Suzlon 556500 556500 - - - Energy Ltd. 4 Para 3.4 BHEL, 1610467 1610467 334337 1276130 Bhopal 5 Para 3.5 BHEL, 1505527 1505527 388362 1117165 Mumbai 6 Para 3.6 Geofigykya 164144 164144 - 164144))) Torun 7 Para 3.7 ISGEC, 35029 35029 - 35029 Dahej 8 Para 3.8 Inox Ibndia, 99000 99000 99000 Baroda 9 Para 3.9 ANS 622200 622200 622200 Construction 10 Para BHEL, 678820 678820 678820 3.10 Chennai 11 Para L&T Hazira 3000 3000 3000 3.11 12 Para Others 15863 15863 15863 3.12 Total 5713150 587300 5125850 2383382 2592468
As regards ground no.2, the Ld. A.R. submitted that the confirmation of the disallowance in respect of foreign travelling expenditure at 90% was unreasonable as the assessee has given all the details related to foreign travel which were only for the purpose of business and there is no element of personal expenses.
The Ld. D.R. submitted that the assessee did not give any evidence related to parties especially that of confirmations and, therefore, onus of the details was not discharged by the assessee relating to short freight and TDS amount. As regards ground no.2, the Ld. D.R. submitted that the CIT(A) has rightly disallowed 10% of the expenses as there is element of personal expenses.
We have heard both the parties and perused all the relevant materials available on record. As regards ground no.1 relating to short freight of 10 parties for which details have been given in the submissions of the Ld. A.R., after going through the & 33/Ahd/2017 Assessment Years: 2009-10 Page 4 of 5 Paper Book filed by the assessee before us, it can be seen that the Assessing Officer as well as CIT(A) was very well aware that all the details were minutely accounted in assessee’s Profit & Loss Account as well as all freights were duly accounted in books. In fact, TDS was also properly deducted and, therefore, the observation of the CIT(A) that no confirmation was filed and no evidence was filed is incorrect. Therefore, ground no.1 is allowed.
As regards ground no.2 relating to foreign travel expenditure, the assessee has given details before the Revenue Authorities that there is no element of personal expenses and all the expenditures were incurred for business purposes only. Thus, the CIT(A) was not right in disallowing the same to the extent of 10%. Ground no.2 is allowed.
In the result, appeal of the assessee is allowed.
Section 271(1)(c) of the Act, Since the quantum appeal is allowed, penalty does not sustain. Therefore, is allowed.
In the result, both the appeals of the assessee are allowed.
Order pronounced in the open Court on this 6th day of April, 2022.