D.C.I.T CIR - 3 ,KOLKATA, KOLKATA vs. M/S ABHIYAN CARGO PVT LTD., KOLKATA

The Revenue raised the following grounds: “i) That on the facts and circumstances of the case the Ld. CIT(A) erred in allowing the relief amounting to Rs.4,28,11,040/- to the assessee without appreciating the fact that the Ld. A.O. specifically and clearly addressed and rejected the submission of the assessee on the ground that vouchers, bills were self-made and fabricated. ii) That on the facts and circumstances of the case the Ld. CIT(A) erred in allowing the relief to the assessee without allowing the opportunity or calling for the remand report from the A.O. to rebut the grounds of appeal taken by the assessee.

The brief facts of the case are that the assessee is a company and engaged in transport business of goods.. The return of income was filed declaring the total income at loss of Rs.32,90,270/- and was accepted. The AO initiated proceedings U/Sec 147 of the Act for the reason of income escaped assessment and served notices U/Sec 148 of the Act. The assessee contested the same through its letter dt:13-08-2008 to treat the earlier return filed in normal procedure as return U/Sec 147 of the Act.

During the reassessment proceedings, the AO found that the assessee has claimed Rs.4,28,11,040/- as expenditure under the head lorry hire charges stating that it has paid lorry hire charges mainly to the truck drivers by issuing consignment notes as reimbursement of trip expenses and the said payments were in cash and did not exceed Rs.19,999/-. The assessee produced all the details relating to lorry hire charges, lorry hire payment statement, vouchers and books of account. The AO was of the opinion that all the details relating to said claim are self made by the assessee and assessee failed to produce any documentary evidence issued by any third party receipt of such charges. AO added the above said amount for violation of Section 194C of the Act by invoking Section 40(a)(ia) of the Act. The CIT-A deleted the said addition and found that there was no violation of Sec 194C of the Act in view of the fact that all the details relating to lorry hire charges paid to various drivers did not exceed Rs.20,000/- evidencing the same relevant vouchers were available and same were examined by the AO during reassessment proceedings.

The Ld. DR submitted before us that the assessee failed to produce the evidence before the AO in support of its claim and CIT-A found that all the details produced before the AO and deleted said addition without offering an opportunity to the AO and relied on the order of AO. The Ld.AR relied on the order of CIT-A.

Heard rival submissions and perused the relevant material on record. The contention of the revenue is that the assessee did not produce any details of lorry hire charges in support of the claim but it is evident from the assessment order that the AR representing asseessee vide its letter dated 22-12-2009 produced details of lorry hire charges, lorry hire payment statement, vouchers and books of accounts. It is also noticed that the AO examined ledgers, bills and vouchers but however having examined the same the AO disbelieved the said details and he suspected the said details were self made and any of such details were not issued by the 3rd parties. In our view the said finding of the AO is not tenable and is based on mere presumptions. The assessee claimed expenses consisted of running its own vehicles i.e., diesel, lubricants, repairs, maintenance and also involving payment to truck drivers under consignment notes thus it all shows the assessee produced all the relevant details as requested by the AO in the reassessment proceedings. The CIT-A also found the same as all the details available before the AO. The CIT-A further examined lorry hire payment statements of all five branches wherein it contained details of lorries and date wise payment. It is pertinent to mention the very lorry hire statement was available before the AO as it was submitted through AR vide its letter dated 22-12-2009. So it can be visualized having all details with AO did not appreciate the same in right perspective in turn he suspected that all the details are self made by the asseessee. Therefore the order of the CIT-A is justified in finding that there is no violation of section 194(C) of the Act and deleting the said addition made under sec40(a)(ia) is justified consequently ground no.1 is dismissed.

Regarding ground no-2 involving violation of Rule 46A as discussed above the assessee produced all the details in support of its claim before the AO and we found no additional documents or evidence as the case may be filed before the CIT-A. The CIT-A only discussed in detail of all the evidence available on record. AO also acknowledged and examined all such details but as discussed above he did not believe such details. Thus, we hold that there is no violation of Rule 46A, therefore, we find no merits in ground no.2 accordingly it is dismissed.

In the result, the appeal of the Revenue is dismissed.