ITA No.5165 of 2011 & CO 74 of 2012 Anil Transport Service Mumbai A Bench
IN THE INCOME TAX APPELLATE TRIBUNAL
"A" Bench, Mumbai
Before Shri B.R. Mittal, Judicial Member and
Shri B. Ramakotaiah, Accountant Member
ITA No.5165/Mum/2011
(Assessment year: 2008-09)
ACIT, Central Circle 15(1), Vs. Anil Transport Service, B-
Room No. 104, Matru Mandir, 102 Harshad Apartments,
1st Floor, Tardeo Road, Behind Evarad Nagar, E.E.
Mumbai 400007 Highway, Sion (East),
Mumbai 400 022
PAN: AALFA 8944 J
(Appellant) (Respondent)
C.O. No.74/Mum/2012
(Arising out of ITA No.5165/Mum/2011)
(Assessment year: 2008-09)
Anil Transport Service, B-102 Vs. ACIT, Central Circle 15(1),
Harshad Apartments, Behind Room No. 104, Matru
Evarad Nagar, E.E. Highway, Mandir, 1st Floor,
Sion (East), Mumbai 400 022 Tardeo Road,
PAN: AALFA 8944 J Mumbai 400007
(Cross Objector) (Respondent)
Department by: Shri T.D. Singh, DR
Assessee by: Shri C.V. Dharkar
Date of Hearing: 23/8/2012
Date of Pronouncement: 31/8/2012
ORDER
Per B. Ramakotaiah, A.M.
The Revenue appeal was preferred against the order of the
CIT (A)-26 Mumbai dated 28.04.2011 and assessee preferred cross
objection.
2. Briefly stated, assessee is a registered firm engaged in the
business of transportation of debris and other materials arising of
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ITA No.5165 of 2011 & CO 74 of 2012 Anil Transport Service Mumbai A Bench
demolitions. Since details called for are not filed by assessee, AO
rejected the books of account and disallowed 25% of the
expenditure at `85,01,277 claimed in the books of account. Further,
since assessee has not furnished any details, an amount of
`68,84,302/- was also added as income under section 68 as
increase in current liability. The assessment was completed under
section 144.
3. Before the CIT (A) assessee submitted that out of the
expenditure claim, disallowance of `85,01,277/- i.e. 25% of the total
expenses aggregating to `2,07,15,422/- was not appropriate. It was
submitted that major expenditure pertain to the payments towards
work to eight parties including Offbeat Developers Pvt. Ltd and
balance of expenditure was towards day-to-day maintenance. It was
also further submitted that expenses on Oil, diesel and payments to
other transport shown as purchases, on which TDS has been made.
Therefore, as against `85,01,277/- disallowed by AO, the CIT (A)
sustained 10% of the disallowances of other expenses at
`4,29,384/-. After considering the submissions that the credits
were trade credits and not loan credits the CIT (A) deleted the
addition under section 68. Therefore, the Revenue is aggrieved. No
opportunity was given to AO and no details were furnished in the
course of assessment. The Revenue has raised four grounds in this
regard.
4. In the cross objection, assessee contends that AO was not
correct in completing the assessment under section 144 which was
bad in law suffering from legal infirmities.
5. We have heard the learned DR and the learned Counsel. At
the outset in the assessment proceedings, assessee has not
furnished information which lead to AO for disallowance of 25% of
the expenses and also making addition as unexplained cash credits
under section 68. Even though the estimation was little high
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ITA No.5165 of 2011 & CO 74 of 2012 Anil Transport Service Mumbai A Bench
pitched which is not according to the spirit of the provision of
section 144, we are of the opinion that the CIT (A) also equally erred
in deleting the amounts. First of all there was no additional
information before the CIT (A) in the form of additional evidence so
as to differ from AO. Not only that, on the basis of the statement
made by assessee, substantial amounts were deleted without
subjecting them to verification by AO in remand proceedings. It is
also not proper to delete on the reason that assessee had paid the
entire amount to work done to various parties and this cannot leave
any scope for improper work done by assessee, without subjecting
the same to verification. This reasoning in our view is not correct
since any expenditure claim has to be verified whether the
expenditure had been spent wholly and exclusively for the purpose
of business under the provisions of section 37(1). Assessee had not
complied with notices before AO and since the CIT (A) also did not
have the benefit of any additional evidence to delete the additions,
we are of the opinion that the matter requires re-examination by
AO. Accordingly the order passed by AO under section 144 and
order of the CIT (A) are set aside and assessment proceedings for
the assessment year is restored to the file of AO. AO should give due
opportunity to assessee to explain various claims. AO should also
keep in mind that assessee has not come up in appeal on the 10%
of the expenditure disallowed and confirmed by the CIT (A). To that
extent if the balance expenditures are found genuine, the addition
has to be sustained as assessee accepted the same. With these
directions, the Revenue appeal is considered allowed for statistical
purposes.
6. In a way, assessee's objections with reference to the
proceedings under section 144 raised in the Cross Objection were
also covered in this decision.
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ITA No.5165 of 2011 & CO 74 of 2012 Anil Transport Service Mumbai A Bench
7. In the result both the appeal of Revenue and Cross Objection
filed by assessee are considered allowed for statistical purposes.
Order pronounced in the open court on 31st August, 2012.
Sd/- Sd/-
(B.R. Mittal) (B. Ramakotaiah)
Judicial Member Accountant Member
Mumbai, dated 31st August, 2012.
Vnodan/sps
Copy to:
1. The Appellant
2. The Respondent
3. The concerned CIT(A)
4. The concerned CIT
5. The DR, "A" Bench, ITAT, Mumbai
By Order
Assistant Registrar
Income Tax Appellate Tribunal,
Mumbai Benches, MUMBAI
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