ITO, WARD-1(1), KOLKATA, KOLKATA vs. M/S. ABHAY CARRIER PVT. LTD., KOLKATA

O R D E R

Per Dr.Arjun Lal Saini, AM:

1. That on the facts and circumstances of the case, the Ld.ClT (A) is not justified in deleting addition of Rs.4,60,785/- on account of discrepancies in respect of transactions with BPCL, without considering the fact that the discrepancies remained unreconciled even after submission of certificate by the assessee from the BPCL.

2. That on the facts and circumstances of the case, the Ld.ClT (A) is not justified in deleting of Rs. 10,64,212/- on account of discrepancies in respect of transactions with M/s Reliance Logistic Ltd.,ignoring the fact that the figures submitted by the assessee do not tally with the figures of the ITS details and the assessee could not furnish any ledger account in respect of the said concern during assessment stage. 3. That on the facts and circumstances of the case, the Ld.CIT (A) is not justified in restricting disallowance of Rs. 3,66,235/-against disallowance of Rs. 30,55,302/- made by the A.O. on trip expenses, fuel charges, repair maintenance and expenses on tyre & tubes without considering the fact that there is no mention in the ledger account in respect of payments whether made in cash or cheque and there is no mention of any person to whom payments were made. The assessee could not substantiate its claim during assessment stage by furnishing necessary details and documentary evidences. 4. That on the facts and circumstance of the case, the Ld.ClT (A) is not justified in deleting disallowance of Rs. 2,65,480/- on account of claim of loss without considering the fact that the assessee failed to furnish supporting documents in support of its claim of short payment received from its customers.

4.1 Brief facts qua the issue is that there was a difference of Rs.4,60,785/- between the amount disclosed in the ITS details and amount disclosed in the books of accounts of the assessee. The assessee stated that total receipts as per AO from BPCL was to the tune of Rs.4,95,47,169/- whereas according to the books of assessee it was Rs.4,90,86,363/-. The assessee made an effort to reconcile the receipt from BPCL as per TDS details, with the amount reflected in the ledger account maintained by the assessee in the name of BPCL. In spite of filing of reconciliation statement and certificate from BPCL stating the details of the transaction, ld. AO chose to ignore the reconciled statement as well as certificate from BPCL. Ld. AR for the assessee has submitted that AO has framed his assessment order on the sole figure obtained from ITS. He did not compare with the figure obtained from BPCL. The details available in ITS is incomplete because the data uploaded by the party was not sufficient or the party have uploaded the data incorrectly.

Therefore, there is a difference between the ITS and the statement from the BPCL. The assessee has submitted the certificate from BPCL stating the entire detail. Moreover, the figure shown by the assessee is more than the figure which is shown in the ITS, therefore, assessee is offering more Income Tax as compared to the ITS details.

4.2 Ld. AR for the assessee submitted before us the profit and loss account, balance sheet, ledger account and other details. He explained to us that, it is quite clear from these documents and the reconciliation statement that the assessee stood by his right and he has shown the income more than what is reflected in the ITS. Ld. AR has also relied in the case of Seth Gurumukh Singh, 12 ITR 393 (LAH), wherein it has been held as under :-

"Where the ITO under an analogous provision proposes to make an assessment in disregard of the material produced by the assessee, natural justice demands that he should draw the assessee's attention to it and give him an opportunity to produce evidence in rebuttal. It may be noted that the A.O in the discharge of their duties under the Act receives a good deal of information which is not at all evidence according to accepted notion of Law. Consequently, it is only fair and just that the accuracy or otherwise of such information will have to be ascertained and the only way of doing so is to give an opportunity to the assessee who can urge his plea as to whether the ITO/AO is misinformed at any rate after giving this opportunity. The AO/ITO will always in a better position to know as to what extent the information is right and whether he should act upon it or not."

4.3 Ld. DR for the revenue has primarily reiterated the stand taken by the AO, which we have already noted in our earlier para and is not being repeated for the sake of brevity.

4.4 Having heard the rival contentions, various material available on record, we are of the view that there is a merit in the submissions of the assessee, as the proposition canvassed by the ld. AR for the assessee are supported by the above cited judgment and facts narrated by him. As, he has explained before us that ITS details should not be the entire base to make the assessment. The assessee has shown more income than what is shown in the ITS and he has submitted a reconciliation statement also, therefore, considering the above factual position, we confirm the order of the ld. CIT(A).

4.5 In the result, appeal filed by the revenue on this ground is dismissed.

Rs.10,64,212/- on account of discrepancies in respect of transactions with M/s Reliance Logistic Ltd. 5.1 The brief facts qua the issue is that the figures submitted by the assessee in respect of transactions with M/s Reliance Logistic Ltd, do not tally with the figures of the ITS details. The AO in his impugned assessment order has observed that ‘as an attempt to explain the difference, the assessee filed a statement from Reliance Logistics Ltd. claiming that the difference was received from the said refinery, through Reliance Logistic Ltd., but the figures available in the statement of Reliance Logistics Ltd. do not tally with the figures in the ITS details and the figure available in the ledger maintained by the assessee in the name of Bongaigaon Refinery.

5.2 Ld. AR of the assessee has submitted that ledger account maintained in the name of Reliance Logistics Ltd. by the assessee has not been produced in the course of assessment proceedings, therefore, the difference of Rs.10,64,212/- as mentioned above, is considered to be the receipt of the assessee during the financial year 2004-05. Ld. AR for the assessee has contended that the assessment is based on surmise and conjecture and as such should be struck down. Where the AO consider the material placed before him by an assessee has not been reliable, he cannot proceed to make an arbitrary assessment, if the AO thinks that profits shown by an assessee is not acceptable, which is for the taxiing authority to prove that the assessee has made high profits. The AO has to relate his estimate to evidence materials on records. But in the case of the assessee no such material was brought on record by the ld. AO to prove that the statement filed by the assessee was not genuine.

5.3 On the other hand, ld. DR for the revenue has primarily reiterated the stand taken by the AO, which we have already noted in our earlier para and is not being repeated for the sake of brevity.

5.4 Having heard the rival contentions, perused the material available on record, we are of the view that there is a merit in the submissions of the ld. AR, as the proposition canvassed by the ld. AR of the assessee are supported by facts narrated above. The ld AR explained us that the assessee has submitted before the CIT(A) the complete reconciliation which says that there is no any mistake in accounts. Thus, the AO did not bring any cogent evidence to prove that the assessee’s reconciliation is not genuine. Moreover, the AO did the addition based on surmise and conjecture. Therefore, considering the above factual position we confirm the order of the CIT(A).

5.6 In the result, appeal filed by the revenue on this ground is dismissed.

6.1 Brief facts qua the issue is that the AO made adhoc addition on account of trip expenses, fuel expenses, repairs and maintenance expenses, tyre & tube expenses.

6.2 Ld. AR for the assessee has submitted that the instant appeal relates to adhoc disallowance of Rs.300,5577/- i.e. 10% of Rs.3,00,55,772/- of business expenses under the head trip expenses, fuel expenses, repairs and maintenance expenses, tyre & tube expenses.

During the assessment proceedings, the assessee has produced books of accounts and filed copy of ledger accounts showing the details of expenditure except trip expenses. Payment of all expenses were made by cheque except a few trip expenses. The Ld AR further added that Assessing Officer has made adhoc addition based on surmise and conjecture without bringing any cogent evidence on record.

6.3 On the other hand, ld. DR for the revenue has primarily reiterated the stand taken by the AO, which we have already noted in our earlier para and is not being repeated for the sake of brevity.

6.4 Having heard the rival contentions, perused the material available on record, we are of the view that there is a merit in the submissions of the assessee, as the proposition canvassed by the ld. AR of the assessee are supported by facts narrated by him. Ld AR has explained that all the expenses have been paid by account payee cheque except a few expenses. There is a complete details, reconciliation statement, proper vouchers and bills are available. Therefore, considering the above cited factual position, we do not hesitate to confirm the order of the ld. CIT(A).

6.5 In the result, appeal of the revenue on this ground is dismissed.

7.1 Brief facts qua the issue is that the assessee has issued various bills to the purchaser. The purchaser while making payment to the assessee deducted some amount on account of less quantity received by them. It is a short amount received from customers. Therefore, assessee has claimed the same as loss and debited the same in the profit and loss account.

7.2 Ld. AR for the assessee has submitted that ledger copies of accounts where such receipts were also filed by the assessee. The AO did not care to verify the details on the reasons for such details were not furnished. The additions/disallowances were made in an arbitrary manner without giving the assessee adequate opportunity of being heard.

7.3 On the other hand, ld. DR for the Revenue has primarily reiterated the stand taken by the AO, which we have already noted in our earlier para and is not being repeated for the sake of brevity.

7.4 Having heard the rival contentions, perused the material available on record, we are of the view that there is a merit in the submissions of the assessee, as the proposition canvassed by the ld. AR of the assessee are supported by facts narrated by him. Considering the size of turnover, petty loss is bound to incur. Therefore, considering the factual position cited above, we do not hesitate to confirm the order of CIT(A), 7.5 In the result, appeal filed by the revenue on this ground is dismissed.