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Income Tax Appellate Tribunal, “A” BENCH: KOLKATA
Before: Shri J.Sudhakar Reddy & Shri S.S. Viswanethra Ravi
ORDER Shri S.S.Viswanethra Ravi, JM:
This appeal by Revenue is against the order dated 22-06-2016 of CIT(A), 4, Kolkata for the assessment year 2011-12.
The only effective issue in this appeal is to be decided as to whether the CIT-A is justified in deleting the impugned addition without seeking a remand report from the AO in the facts and circumstances of the case.
The brief facts of the case are that the assessee is a private limited company and engaged in the business of transport. The assessee filed its return of income for the A.Y under consideration at Rs. Nil. Under scrutiny, the notices u/s. 143(2) and 142(1) of the Act were issued. In response to which, the assessee along with its authorized representative appeared to explain the return as filed. The AO found that the assessee has claimed lorry hire charges payable to an extent of Rs.2,01,16,200/- under the head ‘sundry creditors as on 31-03-2011 for 258 lorries. In support of which, the assessee filed the list of 258 lorries. The AO after examining of such details found that the assessee did not furnish the complete address of 199 lorry owners. For non-submission of such details in respect of 199 lorry owners, the AO treated the claim of assessee as bogus and added the sum of Rs. 1,66,00,368/- u/s. 69C of the Act to the total income of assessee.
Aggrieved, the assessee preferred an appeal before the CIT-A and contended that all the details of lorry hire charges along with sample bills and challans relating to impugned amount were filed before the AO. The assessee further contended that the said liabilities were subsequently discharged and there was no outstanding balance. The AO doubted the genuineness of these liabilities on the pretext that the complete details were not provided by the assessee. The assessee further contended that the AO did not take any step to send the notices to the said parties. The AO did not find any fault in the evidences and without considering the payment made to sundry creditors subsequently added the said amount on mere suspicion. The CIT-A considering the submissions of the assessee found that all the details were produced before the AO and without considering the payment made to sundry creditors as on 31-03-2014 deleted the impugned addition by observing as under:-
4.2 I have considered the submissions of the AR of the appellant and have also gone through the assessment order on the issue at hand. I find that the facts emerging from records reveal that the appellant submitted primary documents in support of e-return filed by it. The appellant has submitted its audited accounts, Tax Audit report u/s 44AB. computation of income etc. The appellant has also furnished details relating to its claim of sundry creditors of Rs.5,61,80.184/-. This sum included a sum of Rs.1,66,00,038/- as lorry hire charges payable to 258 numbers of lorries. The appellant has furnished list of such sundry creditors. The list contained the lorry numbers along with amounts and some addresses. I find that the AO has not conducted any enquiry on the pretext that the address furnished by the appellant was not complete. This according to me cannot be the sole ground for making the impugned addition. I find that the appellant has duly furnished M/s. SAR Parivahan P.Ltd the lorry numbers. The AO could have gathered any information relating to such lorries by writing to the Regional Transport Organization (RTO) office. The AO could have made enquiries with the bank and collected information with regard to payments made to these very creditors in subsequent year by the appellant. I find that no such enquiry was conducted by the AO in this regard. I further find from the assessment order that the AO himself has admitted· that these sundry creditors were paid off or squared up on or before 31.03.2014. Therefore, it is difficult to accept the AO's contention that the amount payable against lorry hire charges is bogus in nature. Once the payments made to these parties in subsequent year is accepted, it cannot be held that the lorry hire charges payable to various parties are bogus in nature. In my considered view, payments cannot be made to bogus persons. The AO has not brought any material on record to justify as to why these sundry creditors should be treated as bogus in nature, The AO has made the addition purely on suspicion without any justification. The details filed by the appellant have been accepted by the AO. I am also in agreement with the AR of the appellant that since the sundry creditors were all squared off, the appellant was constrained to produce such creditors for verification. I also agree with the contentions of the AR of the appellant that provisions of section 69C cannot be invoked in the present case. Here it is not the case of the AO that the appellant has failed to offer any explanation or the explanation of the appellant is not satisfactory in respect of the sundry creditors for lorry hire charges payable is concerned. I also agree with the appellant's contentions that provisions of section 68 and 69C cannot be invoked simultaneously for the same transaction. In view of the foregoing, it is held that the action of AO is bad in law. The addition of Rs.1,66,00,038/- made by the AO on account of bogus lorry hire charges payable is, therefore, directed to be deleted. This ground of appeal is allowed. “
The ld.DR submits that the assessee failed to substantiate its claim that the amount is payable as on 31-03-2011. He further submits that during the course of scrutiny proceedings the assessee did not provide complete details of 199 lorry owners. The CIT-A has given relief to the assessee basing on new submissions and additional documents filed before him. He supported the order of the AO.
The ld.AR submits that the transport business is an unorganized sector and the assessee provided all the details to the AO. The ld. AR further submits that at the time of assessment there was no outstanding balance payable as on 31-03-2014. He relied on the order of the CIT-A and urged to dismiss the appeal of revenue.
Heard rival submissions and perused the material available on record. The ld.DR could not bring any material on record to show that the assessee filed new/additional evidence before the CIT-A and basing on which the CIT-A has given relief to the assessee in deleting the impugned addition. We find that the assessee did not produce any new/additional evidence before the CIT-A. We find that the CIT-A examining the assessment record found that all the details were filed before the AO. The AO did not conduct any enquiry on pretext that some of the details were not filed before him. The CIT-A after examining and taking into consideration the submissions of the assessee that all the sundry creditors were paid off or squared up on or before 31. 03. 2014 Therefore, the CIT- A is justified in observing that when the payments made to said sundry creditors in subsequent years and the same is accepted and again treated the same as bogus by the AO is not correct. In view of the same, we find no infirmity in the impugned order of the CIT-A. We uphold the same. The ground raised by the revenue is dismissed.
In the result, the appeal of the revenue is dismissed. Order pronounced in the open court on 24-05-2017