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Income Tax Appellate Tribunal, ‘B’ (SMC
Before: SHRI ABRAHAM P. GEORGE]
आदेश / O R D E R
In this appeal filed by the assessee which is directed against an order dated 14.03.2017 of Commissioner of Income Tax (Appeals)- 13, Chennai, it is aggrieved on a disallowance of Rs.21,12,000/- claimed as lorry hire charges.
ITA No. 928/Mds/2017. :- 2 -:
Facts apropos are that assessee a goods transporter had filed his return for the impugned assessment year declaring an income of Rs.21,10,190/- During the course of assessment proceedings, it was noted by the ld. Assessing Officer that assessee had claimed Rs.21,12,000/- as ‘’lorry hire charges payable’’. This figure was split into 117 entries, each of which were in the vicinity of Rs.19,000/-. Three of such entries were on31st January, 2012, whereas all the balance 114 entries appeared on 31st March, 2012.
Though assessee was required to produce details for the above claim, it seems this was never furnished, except for ledger copies. Ld. Assessing Officer disallowed the claim of Rs.21,12,000/- and completed the assessment.
Aggrieved, assessee moved in appeal before the ld. 3.
Commissioner of Income Tax (Appeals). Contention of the assessee was that he was never given proper opportunity by the ld. Assessing Officer, for supporting the claim of lorry hire charges. Assessees’ submissions before the ld. Commissioner of Income Tax (Appeals) were as under:-
1. ‘’Details of freight charges payable showing the details of payment made to such lorry owners and also details of the lorry registration number and PAN number of the lorry owner.
2. Payment vouchers for lorry freight charges paid’’.
ITA No. 928/Mds/2017. :- 3 -:
Ld. Commissioner of Income Tax (Appeals) sought a remand report from the ld. Assessing Officer. The ld. Assessing Officer in his remand report dated 01.02.2017, stated as under:-
During the course of scrutiny assessment it was seen that the assessee has shown lorry expenses payable amounting to �21,12,000/-. During the course of scrutiny assessment, it was held that the assessee was unable to substantiate as to how the amount of rs.21,12,000/- was payable and accordingly, the sum was added back to the income of the assessee.
2. In this context it is submitted that the assessee had not produced any documentary evidences, bills, vouchers etc. Pertaining to the above provisions during the course of scrutiny proceedings, in order to check the veracity of the transactions.
The assessee has also not sated as to the reason for the large number of transactions being done in cash mode nor were any TDS details furnished so as to verify the veracity of the said transactions despite having been given ample opportunities.
The assessee has booked the expenditure in the range of �19,000/- and above only to circumvent the provisions of TDS applicable to cash transactions.
It is also seen from the vouchers provided by the assessee that all the payments shown as payable are shown as cleared in the month of April, 2014 itself and vouchers were self made. It is amply clear that the creation of vouchers was an afterthought and that was the reason the vouchers were not produced during the course of scrutiny assessment. Hence, it is humbly requested that the additional evidences submitted by the assessee may not be considered upon.
ITA No. 928/Mds/2017. :- 4 -:
Ld. CIT(A) after considering the remand report affirmed the disallowance.
4. Now before me, ld. Authorised Representative strongly assailing the orders of the lower authorities submitted that PA number of each of the lorry owners were given. According to him, in the nature of the business of the assessee, payments were required to the made in cash. Further, according to him, the vouchers, though they were self made could not have been rejected without pointing out the defects in it. As per ld. Authorised Representative the disallowance had to be deleted.
5. Per contra, ld. Departmental Representative supported the orders of the authorities below.
I have perused the orders and heard the rival contentions. 6.
What I find is that the sum of Rs.21,12,000/- was shown by the assessee as lorry hire charges payable and it appeared in its balance sheet as ‘’ freight payable’’. It is mentioned by the ld. Assessing Officer in the remand report the such amounts were, even as per the assessee cleared only in April, 2014, which is more than two years after the end of the relevant previous year. Since the amount was represented by 117 entries all of which were below Rs.20,000/-, it is clear that the concerned parties, if at all they were there, were all
ITA No. 928/Mds/2017. :- 5 -: small business persons. To presume that such small business people would have waited for more than 24 months for getting their payments is beyond preponderance of probability. Assessee was having a net profit of Rs.19,39,154/- for the relevant previous year and a turnover of Rs.9,46,63,745/-. Hence, there was no reason to postpone he payment to small parties for a period of 24 months. In my opinion, mere production of self vouchers and PAN will not be sufficient to believe an expenditure, which otherwise show by itself as quite against all reasonable probability. In such circumstances, I am of the opinion that lower authorities had every reason to disbelieve the claim and make the disallowance. I do not find any reason to interfere with their order. In the result, appeal of the assessee is dismissed.
Order pronounced on Friday, the 30th day of June , 2017, at Chennai.