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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI CHANDRA POOJARI, ACCOUNTANT
आदेश / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER:
The appeal filed by the Department is directed against order of the Commissioner of Income-tax (Appeals)-3, Coimbatore in dt 29.10.2015 for the assessment year
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2011-2012 passed u/s.143(3) and 250 of the Income Tax Act, 1961 (herein after referred to as ‘the Act’).
The Revenue has raised the following grounds:- 2.
‘’2. The learned CIT(Appeals) erred in deleting the addition made on account of disallowance of transportation charges claimed by the assessee for Rs.5,06,40,696/-.
3. The learned CIT(Appeals), failed to appreciate the circumstances under which the transportation expense was disallowed by the AO. The said expense was not part of the original return and it was introduced only at the stage of filing the revised return. Moreover no TDS was deducted nor PAN and details about the transport agents were produced. Hence the genuineness was not proved before the Assessing Officer.
Whether the learned CIT(Appeals) was justified in allowing the clam of transportation by the assessee, just by relying on submission of some PAN without even verifying the genuineness of the same’’.
The Brief facts of the case are that the assessee is engaged in the business of Civil Contract works and filed Return of income on 30.09.2011 admitting �2,34,67,370/-. Subsequently, filed revised return on 04.08.2012 declaring a loss of �24,09,996/- and the case was selected for scrutiny and notice u/s.143(2) of the Act was issued. The ld. Assessing Officer on perusal of the Return of income found that the assessee company has filed revised return after considering transactions with the parties and receipts in the nature of contract and sub-contract accommodation transaction admitted by the assessee before
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Investigation Authorities of Income Tax Department and was reduced from the turnover as well as from the expenditure. Further, the assessee claimed Bad Debts in the revised return. The ld. Authorised Representative appeared from time to time and filed details. The ld. Assessing Officer found that there is difference in receipts and payments aggregating to �88,28,804/- and considered for disallowance. Further, the assessee has claimed an amount of �5,06,40,696/- as Transportation charges and the same was reduced in the revised returns. The assessee has not deducted TDS on transportation charges and PAN number of the persons not obtained from the owners of the goods vehicle as required u/s.194C(6) of the Act. On verification of the bills, the ld. Assessing Officer found that there is no signature, telephone numbers of the transporters. The ld. Assessing Officer doubted the claim of expenditure on comparison with transport charges received and further the assessee has not complied with the direction of submissions of the PAN number of goods vehicle owners. The ld. Assessing Officer not being satisfied with the genuineness of the transactions and the assessee company has not provided PAN number of the owners of the goods vehicle exceeding contract value �1,00,000/- and disallowed transport charges of �5,06,40,696/- and assessed total income with other disallowances and raised the demand. Aggrieved by ITA No.97/Mds/2016. :- 4 -: the order, the assessee filed an appeal before Commissioner of Income Tax (Appeals).
In the appellate proceedings, the ld. Authorised 4.
Representative of the assessee appeared and argued the grounds and reiterated the submissions made in the assessment proceedings and also filed explanations in respect of disputed issue referred at page 3 & 4 of Commissioner of Income Tax (Appeals) order were the ld. Commissioner of Income Tax (Appeals) has observed on non deduction of TDS on transport charges and the provisions of Sec. 194C(6) of the Act as under:-
“ No deduction shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of a contractor during the course of business or plying, hiring or lease goods carriages, on furnishing of his Permanent Account Number, to the person paying or crediting such sum’’. and further, ld. Commissioner of Income Tax (Appeals) has considered the statement of transport details filed partywise with PAN number for the said disputed assessed amount. The ld. Commissioner of Income Tax (Appeals) on verification found that out of thirty one contractors the assessee has not produced PAN number of seventeen contractors and partly allowed the appeal observing at para 6.1.1 of his order as under:-
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6.1.1 The appellant produced PAN of the transport contractors with whom charges paid exceeded Rs. 1 lakh. Out of the 31 contractors 17 parties PANs have not been produced. The disallowance will be restricted to the amounts to these parties. The· details furnished by the appellant is made as Annexure "A" to this appellate order. The disallowance of payment of transportation charges paid invoking the provisions of Section 194C(6) will be restricted to the total amount to the parties, who have not produced PAN numbers’’.
Aggrieved by the Commissioner of Income Tax (Appeals) order, the Revenue assailed an appeal before Tribunal.
Before us, the ld. Departmental Representative reiterated the grounds and explained the findings of the ld. Assessing Officer on disallowance of transport charges and the ld. Commissioner of Income Tax (Appeals) erred in deleting the addition irrespective of the fact that the assessee has claimed expenditure in the revised return and further the assessee has not provided the PAN number of owners of goods transport vehicle in assessment proceedings but in the appellate proceedings statement was filed and the ld. Commissioner of Income Tax (Appeals) relying on the statement and the submissions of the assessee without verifying the genuineness of the transaction partly allowed the appeal and prayed for set siding the order of Commissioner of Income Tax (Appeals).
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On the other hand, the ld. Authorised Representative relied on 6. the orders of the Commissioner of Income Tax (Appeals) and opposed the grounds.
We heard the rival submissions, perused the material on record. The only crux of the issue is the ld. Departmental Representative emphasized that the ld. Commissioner of Income Tax (Appeals) has considered the assessee’s submissions as per annexure A referred in the appellate order containing party wise PAN number, amount paid which is disputed by the Revenue. The ld. Commissioner of Income Tax (Appeals) relied on the evidence filed in the appellate proceedings and the same was not available to the ld. Assessing Officer for verification. We on perusal of the ld. Commissioner of Income Tax (Appeals) order found that there is no findings on Assessing Officer comments or remand report in respect of Annexure A filed by the assessee. Considering the apparent facts, material on record, we are of the opinion that ld. Assessing Officer should be provided an opportunity to verify the genuineness of transaction and compliance of provisions of sec. 194C(6) of the Act by the assessee. Therefore, we set aside the order of Commissioner of Income Tax (Appeals) on this ground and remit the entire issue to the file of the ld. Assessing Officer to verify the ITA No.97/Mds/2016. :- 7 -:
genuineness of transactions and pass the order after providing adequate of hearing heard to the assessee. This appeal of the Revenue is allowed for statistical purpose.
In the result, the appeal of the Department is allowed for 8. statistical purpose.
Order pronounced on Thursday, the 30th day of June, 2016, at Chennai.