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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri George Mathan, JM & Shri M. Balaganesh, AM
This is an appeal filed by the assessee against the order of the learned CIT(A), NFAC, Delhi in appeal No. CIT(A), Kozhikode/11164/2016-17 dated 17.03.2021 for AY 2014-15.
Shri R.V. Viswanathan, CA represented the assessee and Smt. J.M. Jamuna Devi, Sr. D.R. represented Revenue.
It was submitted by the learned A.R. that the assessee is in the business of C & F agency for Ultratech Cement Ltd. and JSW Cement Ltd. It was the submission that the assessee is not a dealer in cement. Its submitted that the learned CIT(A) went on the wrong presumption that the assessee is dealer in cement. It was the submission that the assessee receives payment on the basis of number of metric tonnes of cement transported by the assessee. It was also submitted that the assessee had raised and bill for Rs.1,05,81,214/- on Ultratech Cement Ltd. and they had reimbursed transportation charges of Rs.1,05,53,711/- after
2 M/s. Viju Enterprises deducting an amount of Rs.27,502/-. It was the submission that the AO disallowed an amount of Rs.6,00,000/- on adhoc basis out of the said reimbursed amount of RS.1,05,53,711/- on the allegation that there was inflation of transportation expenses. It was the submission that this transportation expense of Rs.1,05,53,711/- had no effect on the P & L Account of the assessee in so far as this was the expenditure incurred by the assessee on behalf of Ultratech Cement Ltd. which has been reimbursed by the company. The assessee had no benefit by inflating the said expense which was reimbursed by Ultratech Cement Ltd. It was the prayer that the disallowance may be deleted.
In reply the learned D.R. vehemently supported the orders of the assessing authorities.
We have considered the rival contentions. A perusal of the assessment order and the order of the CIT(A) clearly shows that the transportation charges out of which an amount of Rs.6,00,000/- has been disallowed is in fact a reimbursement of the transportation charges raised on Ultratech Cement Ltd. Admittedly the learned CIT(A) has gone on mistaken impression that the assessee is a dealer in cement. This being so as the amount is only a reimbursement of expense which has been clearly admitted by Ultratech Cement Ltd., no disallowance is called for. Consequently the addition as made stands deleted.
In the result, the appeal filed by the assessee is allowed.
Dictated and pronounced in the open Court on 17th March, 2022.