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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: S/SHRI N.S SAINI & PAVAN KUMAR GADALE
IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR
BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER
ITA No. 69/Rpr/2015 Assessment Year : 2010-2011
Pradeep Chandra Jha, M/s. Vs. DCIT, Circle 1(1), Bilaspur Phil Systems, B-11, Sai Plaza, Link Road, Bilaspur PAN/GIR No.AFHPJ 2341 B (Appellant) .. ( Respondent)
Assessee by : Shri G.S.Agarwal, AR Revenue by : Shri O.P. Chaudhury, DR
Date of Hearing : 18/01/ 2018 Date of Pronouncement : 19 /01/ 2018
O R D E R Per Pavan Kumar Gadale, JM This is an appeal filed by the assessee against the order of the CIT(A)-
Bilaspur, dated 6.12.2014 for the assessment year 2010-2011.
The assessee has raised the following grounds of appeal:
“1. That under the facts and the law, the learned CLT(Appeals) erred in maintaining disallowance of Rs.21,86,0317- made by the learned AO u/s 40(a)(ia) for non deduction of tax u/s 194A from financial charges paid to M/s Tata Motors Finance Ltd. And M s Magma Fin. Corp. Ltd., rejecting the explanations filed, Prayed that disallowance of Rs, 21,86,031/- is unjustified and be deleted.
That under the facts and the law, the learned CIT (A) erred in not following the judicial discipline in confirming the disallowance
2 ITA No. 69/Rpr/2015 Assessment Year : 2010-2011
u7s 40(a)(ia) amounting to Rs.21,86,031/- by not considering the decision of Agra Bench of Hon'ble Income Tax Appellate Tribunal in Rajiv Kuniar Vs CIT reported in 109 DTR 33 relied upon by the appellant wherein it was held that proviso inserted to sec. 201(1) & 40(a)(ia) by Finance Act 2012 w.e.f 01. 02.2012 was having retrospective effect.
That the learned CIT (Appeals) further erred in maintaining the disallowance of Rs.8.00,000/- out of truck running & transportation expenses by rejecting the explanations.
That the learned CIT (A) further erred in confirming the adhoc disallowance of Rs.1,39,9047- which is 1/6th of Rs.8,39,4247- out of conveyance expenses, car expenses, office expenses & telephone expenses made by the learned AO which is unjustified & be deleted.”
The brief facts of the case are that the assessee is engaged in the
business of trading of coal and coal transportation through his proprietorship
concern 'M/s. Phil System, Bilaspur'. It filed the Return of income for the
A.Y. 2010-11 on 02-10-2010 showing total income at Rs. 69.75,440/-. The
case was selected for scrutiny through CASS and therefore, the Assessing
Officer issued notice u/s 143(2)/142(1), in response to which, the counsel
of the assessee appeared from time to time, produced the books of account,
bills and vouches and other documents for verification. The Assessing officer
completed the assessment at Rs. 1,01,41,550/- by making additions on
different grounds to the total income.
3 ITA No. 69/Rpr/2015 Assessment Year : 2010-2011
In respect of dispute issue of non-deduction of TDS, the Assessing
officer found that the assessee has not deducted TDS in respect of payment
to NBFCs u/s. 194A of the Act and, therefore, by invoking the provisions
u/s.40(a)(ia), the Assessing Officer made addition towards finance charges
of Rs.24,51,131/-.
Similarly, the assessee is in the business of transportation and the
Assessing Officer found that the assessee has claimed an amount of
Rs.4,10,46,223/- under the head truck running and Rs.9,17,00,267/- under
the head “transportation”. The Assessing Officer found that some vouchers
are missing and most of them are internal and, therefore, not amenable for
verification. Further the management of records is also very poor. As the
vouchers are not complete and are not available, the Assessing Officer found
that there is possibilities of inflation of expenditure in order to reduce the tax
and, accordingly, disallowed Rs.8,00,000/- on adhoc basis.
Similarly, the Assessing Officer, on perusal of profit and loss account
found that the assessee has claimed various expenses on conveyance, car
expenses, office expenses and telephone expenses. He has made
disallowance as the vouchers are self made and some are unvouched and
not fully open to verification. In view of above, the Assessing Officer
4 ITA No. 69/Rpr/2015 Assessment Year : 2010-2011
disallowed Rs.1,39,904/- and added the same to the total income of the
assessee.
Aggrieved by the order of the Assessing Officer, the assessee carried
the matter in appeal before the CIT(A).
The CIT(A) has confirmed the action of the Assessing Officer on the
dispute issues. Hence, the assessee is in appeal before us.
Before us, the ld A.R. submitted that the CIT(A) erred in estimating
the addition without considering the fact that that the assessee has obtained
certificate from C.A. in respect of NBFCs where the finance charges have
been paid. Ld A.R. also produced the copy of balance sheet and profit and
loss account and the CIT(A) has not considered application of Rule 46A and
no remand report from the Assessing Officer and prayed for allowing the
appeal of the assessee.
Contra, ld D.R. supported the orders of lower authorities.
We have heard the rival submissions, perused the orders of lower
authorities and materials available on record. In respect of first disputed
issue u/s.40(a)(ia) of the Act, the contention of ld A.R. that the assessee is
having certificate of C.A. issued in respect of TDS and demonstrated before
us in paper book at page 1 to 4 explaining Form No.27A issued by the C.A.
5 ITA No. 69/Rpr/2015 Assessment Year : 2010-2011
On this issue, ld D.R. submitted that this information was not available with
the Assessing Officer. Considering the overall aspect of the fact that NBCSs
have offered its income, the matter has to be verified by the Assessing
officer. Accordingly, we remit this issue to the Assessing Officer to verify the
claim of the assessee and pass order as per law.
On the second disputed issue with respect of disallowance on truck
running and transportation expenses, ld A.R. emphasized that the assessee
is maintaining books of account and having vouchers. The Assessing Officer
has not specified any particular voucher which is not verifiable and making
adhoc disallowance. The Assessing Officer has not specified that the bills are
not genuine. The Assessing officer has not doubted the genuineness of the
said vouchers but made the adhoc disallowance. Looking into the facts and
circumstances of the case, we remit this issue to the file of the Assessing
officer. The assessee is directed to submit all the details and the Assessing
officer is directed to pass the order.
In respect of third issue, we are of the considered view that the claim
of the assessee in respect of adhoc disallowance of Rs.1,39,904/- which is 1/6th of Rs.8,39,424/- out of conveyance expenses, car expenses, office
expenses and telephone expenses the findings of the CIT(A) is in order.
Hence, we confirm the same.
6 ITA No. 69/Rpr/2015 Assessment Year : 2010-2011
In the result, appeal filed by the assessee is partly allowed for
statistical purposes.
Order pronounced on 19 /01/2018. Sd/- sd/- (N.S Saini) (Pavan Kumar Gadale) ACCOUNTANT MEMBER JUDICIALMEMBER Raipur; Dated 19 /01/2018 B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellant : Pradeep Chandra Jha, M/s. Phil Systems, B-11, Sai Plaza, Link Road, Bilaspur 2. The Respondent. DCIT, Circle 1(1), Bilaspur 3. The CIT(A)-Bilaspur 4. Pr.CIT-Bilaspur 5. DR, ITAT, Raipur 6. Guard file. //True Copy//
BY ORDER,
SR.PRIVATE SECRETARY ITAT, Raipur