JOTHLAKSHMI.V ,CHENNAI vs. ITO NON CORPORATE WARD 11(4), CHENNAI

The assessee filed this appeal against the order of Commissioner of Income Tax (Appeals)- 13, Chennai in dated 18.07.2017 for assessment year 2013-14.

Smt. Jothilakshmi, the assessee, an individual is in the transport business. While making the assessment for assessment year 2013-14, the AO noted that in the cases of Associate Road Carriers and M/s. Venkateswara Transports, the Sundry Creditors balance in the assessee’s books were of Rs. 1,24,21,147/- and Rs. 10,07,528/- respectively. However, they can confirmed credit to the extent of Rs. 50,87,604/- and Rs. 5,86,370/-, respectively.

The AR inviting our attention to the assessment order which is dated 31.03.2016 submitted by show cause notice dated 28.03.2016, the assessee was asked as to why the difference of amount should not be added to the total income. The assessee by her letter dated 30.06.2016 explained, inter alia, that logistic business is purely labour oriented. It is general practice in transport industries that whatever billed by buyers were always disputed by our clients. This happens because, generally the clients never agree for number of labour and rate of per labour. At a time when they pay the bill, invariably they deduct certain number of labours and rate of per labour. Since year long no proper reconciliation were carried out generally our balance with :-3-: & CO No: 39/Chny/2018 client balance differ. In general, transporters are not educated properly and they never agree for the corrected figures and unfortunately difference continues in the books of accounts. Further, we confirm that whatever balance given as per our books are correct etc. However, the Assessing Officer did not agree and made an addition. Unfortunately, the CIT(A) also without considering the entire facts and associated circumstances dismissed the appeal. Inviting our attention to the paper book, wherein, the copies of E-mails/telecommunications and copies of statements of outstanding issued by the Associate Road Carriers etc. are placed, the AR pleaded that the addition made by the Assessing Officer and sustained by the CIT(A) does not warrant. In fact, the AR pleaded that in the interests of justice, the issue may be remitted to the AO. Before him the assessee can explain each and every transaction.

Per contra, the DR submitted that though, the assessee has shown her inability before the Assessing Officer submitting that during the month of November, 2010 there was a fire accident in the godown, all the stocks stored are belonged to BILT was destroyed in fire, after the fire accident, BILT has completely stopped doing the business with the assessee and therefore they have received very little amount from the outstanding etc. However, the assessee could not confirm, and it took a different plea before the CIT(A).

We heard the rival contentions and gone through the relevant material.

In the result, the assessee’s appeal is treated as partly allowed for statistical purposes.