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Facts
The assessee, a contractor holding a transportation contract with BPCL, filed an appeal against an order dated 26.03.2025. The assessing officer had determined total receipts at Rs. 2,45,50,534/- against the assessee's declared turnover of Rs. 64,08,123/-, treating the difference as suppressed turnover.
Held
The Tribunal held that the differential amount of Rs. 1,81,42,395/- represented expenses for tanker and lorries, as shown in the reconciliation provided by the assessee. The reconciliation details were available with the Assessing Officer and showed payments through various modes, including bank and fleet card, and also shortages. The Tribunal found no error to warrant an estimated addition for suppressed turnover.
Key Issues
Whether the addition made by the Assessing Officer on account of alleged suppressed turnover is justified, or if the differential amount represents legitimate expenses.
Sections Cited
Income Tax Act
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Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK
Before: SHRI GEORGE MATHAN & SHRI RAJESH KUMAR
आदेश / O R D E R Per Bench : This is an appeal filed by the assessee against the order dated 26.03.2025 passed by ld. Add/JCIT(A), Aurangabad, for the assessment year 2016-2017. 2. It was submitted by the ld. AR that the assessee is a contractor, who is holding the transportation contract in respect of BPCL. It was submitted by the ld. AR that during the impugned assessment year the assessee had contracted for transportation with 19 lorries. It was the submission that 4 lorries belonged to the assessee and 15 lorries have been taken on hire. It was the submission that the lorries hired by the assessee have been extracted by the Assessing Officer at pages 6 & 7 of the order. It was the submission that the assessee has disclosed Rs.7,59,763/- as the net profit. It was the submission that the Assessing Officer had determined the total receipts of the assessee from the contract at Rs.2,45,50,534/- and as the assessee had only shown the gross receipt/turnover of Rs.64,08,123/- in his return of income, the differential receipt of Rs.1,81,42,411/-, which represented the turnover in respect of 15 lorries as the suppressed turnover of the assessee and had estimated the income from the said suppression at 11.86% being the percentage of gross profit shown by the assessee in its return and had made the addition. It was the submission that the reconciliation of the turnover as disclosed by the assessee and as arrived at by the Assessing Officer at pages 3 & 4 of the assessment order, reads as follows :-
It was the submission that the differential amount of Rs.1,81,42,395/- was the expenses towards the tanker & lorries. It was the submission that this was shown in the reconciliation at para 8 of the said reconciliation. It was submitted that the ledger copy was produced before the Assessing Officer and copy of the same is enclosed at page 145 of the paper book, which reads as follows :-
4 It was the submission that as the assessee has disclosed the entire turnover as has been received by the assessee from the contract with BPCL, no estimated addition is called for in respect of alleged suppressed turnover, insofar as there is no suppression of turnover. 5. In reply, ld. Sr. DR vehemently supported the order of the ld.AO & ld. CIT(A). It was the submission that the details of 15 lorries and their owners were not provided. It was the submission that the notice has been issued to the owners of the 15 lorries and they have not appeared before the Assessing Officer.
In rejoinder, the ld. AR drew our attention to page 8 of the Assessing Officer’s order wherein the Assessing Officer has categorically recognized that the evidences have been filed by the 15 lorry owners for attach of their tanker and lorries.
We have considered the rival submissions. A perusal of the reconciliation statement filed by the assessee which are placed at pages 3 & 4 of the paper book, which has also been extracted above, clearly shows that the differential amount of Rs.1,81,42,395/- were on account of deduction for shortages and payments made through bank account of the assessee which has been routed through the assessee and also payment through Fleet Card and payments for other expenses. A perusal of page 145 of the paper book which has been extracted above, these details were very much available before the Assessing Officer also. As the assessee has provided the reconciliation of the said differential amount of Rs.1,81,42,411/- before the Assessing Officer and before us as has been extracted above, we find no error which attracts for an estimated addition of the differential amount of Rs.1,81,42,411/- as suppressed turnover on which net profit estimation is called for. Consequently, the addition as made by the Assessing Officer and as confirmed by the ld.CIT(A) stands deleted.