Yashwant Dadasaheb Bandigare, Kolhapur vs Principal Commisisoner of Income-tax : 2,

आयकर आयकर आयकर आयकर अपीलीय अपीलीय अपीलीय अपीलीय अिधकरण अिधकरण अिधकरण अिधकरण, पुणे पुणे पुणे पुणे
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यायपीठ “बी बी बी बी” पुणे पुणे पुणे पुणे मममम IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE ी ी ी ी डी डी डी डी. क णाकरा क णाकरा क णाकरा क णाकरा राव राव राव राव , लेखा लेखा लेखा लेखा सदय सदय सदय सदय एवं एवं एवं एवं ी ी ी ी िवकास िवकास िवकास िवकास अवथी अवथी अवथी अवथी,
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याियक सदय सदय सदय सदय केकेकेके सम सम सम सम BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM आयकर आयकर आयकर आयकर अपील अपील अपील अपील संसंसंसं. / ITA No.1721/PUN/2015 िनधारण िनधारण िनधारण िनधारण वष वष वष वष / Assessment Year : 2011-12 Shri Yashwant Dadasaheb Bandigare, Plot No.46, Ajinkyatara Society, Jaysingpur, Dist.

Kolhapur – 416 101 PAN : ABAPB9866C …. अपीलाथ/Appellant Vs.

Pr.

CIT-2, Kolhapur ….  यथ / Respondent अपीलाथ क ओर से / Appellant by : Shri M.K.

Kulkarni
थ की ओर से / Respondent by : Dr.

Vivek Aggarwal, CIT-DR सुनवाई क तारीख / Date of Hearing : 01.03.2018 घोषणा क तारीख / Date of Pronouncement: 09.03.2018 आदेश आदेश आदेश आदेश / ORDER PER D.

KARUNAKARA RAO, AM : This appeal is filed by the assessee against the revision order of Pr.CIT-2, Kolhapur, dated 27-11-2015 u/s.263 of the Act for the Assessment Year 2011-12.

The claim on account of Transportation expenses of Rs.61,18,650/- is the issue under the revision order of the Pr.CIT.

2.

Briefly stated background facts of the case include that the assessee is an individual and filed the return of income declaring income of Rs.8,47,430/-.

During the scrutiny proceedings after examining the books of account filed by the assessee, AO noticed that there is a claim of expenditure on account of ‘transport expenses’ 2 amounting to Rs.61,18,650/-.

On finding that the said claim is not fully supported by documentary evidences and they are only supported by self-made vouchers, on agreed basis, a round-sum of Rs. sum of Rs.3 lakhs was disallowed by the AO on adhoc basis on that account u/s.37(1) of the Act.

Accordingly, the assessed income was determined at Rs.11,47,430/- vide his assessment order dated 03-01-2013.

3.

On verification of records by the Pr.

CIT, on finding that the AO failed to call for the details of these transport expenses, details of the names of the payees, their PAN numbers and compliance to the provisions of section 194C(6) of the Act etc., the Pr.CIT held that the said order passed by the AO on 03-01-2013 is erroneous and prejudicial to the interest of the Revenue.

Accordingly, in accordance with the provisions of section 263 of the Act, a show cause notice was issued as well as the repeated opportunities were granted to the assessee.

Eventually, the Pr.CIT held that the AO did not properly verified the claims, applied his mind and has failed to examine the facts from the angle as to whether there is any violation to the provisions of section 194C of the Act.

The Pr.CIT set-aside the regular assessment order of the AO and directed him to call for relevant details and examine them before making denovo assessment after granting reasonable opportunity of being granted to the assessee.

4.

In Para No.6, the Pr.CIT analysed the allegations and the details of erroneous assessment of law relating to the provisions of section 194C(6) and 194C(7) of the Act.

He also relied on the Supreme Court judgment in the case of Malabar Industrial Company Ltd.

Vs.

CIT 243 ITR 83 (SC) and Delhi High Court judgment in the case of Gee Vee Enterprises Vs.

Addl.CIT 99 ITR 375 apart from many others.

Para No.8 along with its sub-paragraphs contains the detailed discussion 3 supporting his view for holding the order of the AO as erroneous and prejudicial to the interest of the Revenue.

Aggrieved with the same, the assessee is in appeal before us.

5.

Ld.

Counsel for the assessee narrated the above facts and submitted that the assessee made payments amounting to Rs. ing to Rs.61,18,650/- to the transporters on account of transport charges.

Referring to the requirement of furnishing of the PAN details as specified u/s.194C(6) of the Act by the payees relating to the said transport charges, Ld.

Counsel for the assessee submitted that he has obtained the PAN numbers of the payees, which run into around 360 transporters, and stated that assessee has complied with the provisions of sub-section (6) of section 194C of the Act.

In this regard, Ld.

Counsel for the assessee filed a chart containing the names of the payees giving Truck Numbers and amount of cash paid by the assessee.

Counsel submitted that the PAN details are not fully furnished to the assessee.

To the extent they are available, the same are gathered and are in the possession of the assessee.

In other words, assessee failed to ensure the furnishing of PAN numbers by the payees and also furnishing of the same to the Department as per the law.

Further, mentioning about the assessee’s failure to furnish the PAN details of the payees to the competent authority, Ld.

Counsel for the assessee submitted that in the absence of prescribed form as required u/s.194C (6) of the Act, assessee cannot be asked to do the impossible and therefore, this is the reason for failure to furnish the PAN details to the income-tax authorities in compliance with the provisions of section 194C(7) of the Act.

Further, he mentioned that the AO has already passed fresh assessment order giving effect to the revision order of the Pr.CIT disallowing entire claim of transportation charges.

Counsel for the assessee submitted that 4 the revision order passed by the Pr.CIT is not correct and unsustainable in law.

Referring to the absence of erroneous assumption of fact or law, Ld.

Counsel relied on the judgment of Supreme Court in the case of Malabar Industrial Company Ltd. (supra) apart from many others.

6.

On the other hand, Ld.

DR for the Revenue justified the revision order of the Pr. of the Pr.CIT and stated that the AO is not aware of the fact about the requirement of the assessee to furnish the PAN particulars of the payees to the Revenue.

Further, the AO’s failure to make proper enquiries into the claim of transportation charges is obvious from the way the assessment is made by the AO by merely resorting to an adhoc addition of Rs.3 lakhs.

Further, he submitted that this is the case where AO has not applied his mind to the facts of the case as well as not complied with the legal requirement etc.

He justified the revision order of the Pr.CIT dated 27-11-2015 in its entirety.

7.

We heard both the parties on the validity of the revision order by the Pr.CIT.

We have to examine whether the order passed by the AO originally constitutes an erroneous order in so far as it is prejudicial to the interest of the Revenue or otherwise.

On hearing both the parties and on perusal of the orders of the AO and the Pr.CIT, we find the regular assessment order has a reference to the solitary issue of transportation charges.

Contents of Para No.4.2 are relevant as the same is an operational para disallowing Rs.3 lakhs after conducting a test-check of the evidences.

In other words, it is a case where AO has not gone into the details, scrutinized the account thoroughly after proper examination of the evidences in full.

Making an assessment by relying on the principle of test-checking, in our view, is not a sustainable proposition of the AO.

Therefore, in our view, the procedure 5 adopted by the AO falls short of the requirement of making of an assessment under the statute.

Regarding the erroneous assumption of law qua the verification by the AO, we find the provisions of sub-section (6) and (7) of section 194C of the Act have not been examined by the AO while making the assessment u/s.143(3) of the Act.

On observing the particulars furnished by the Ld. by the Ld.

Counsel for the assessee before us regarding the PAN particulars, it is evident that the PAN particulars were not fully furnished to the assessee by the payees and there is no examination whatsoever regarding the requirement of making TDS as per the provisions of sub-section (6) of section 194C of the Act.

It is an admitted fact that provisions of sub-section (7) of section 194C of the Act deals with furnishing of PAN particulars to the income-tax authorities and the same were not complied with by the assessee.

In our view, the reason given by the Ld.

Counsel for the assessee about the absence of any proforma is not sustainable.

Therefore, we are of the opinion that the finding of Pr.CIT given in Para No.8.2 onwards is fair and reasonable and it does not call for any interference.

Accordingly, the grounds raised by the assessee are dismissed.

8.

In the result, appeal of the assessee is dismissed.

Order pronounced in the open court on this 09th day of March, 2018.

Sd/- Sd/- (VIKAS AWASTHY) (D.

KARUNAKARA RAO)
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याियक सदय सदय सदय सदय /JUDICIAL MEMBER लेखा लेखा लेखा लेखा सदय सदय सदय सदय / ACCOUNTANT MEMBER पुणे Pune;
दनांक Dated : 09th March, 2018 सतीश 6 आदेश आदेश आदेश आदेश क क क क ितिलिप ितिलिप ितिलिप ितिलिप अेिषत अेिषत अेिषत अेिषत/Copy of the Order forwarded to : आदेशानुसार आदेशानुसार/ BY ORDER,स स यािपत ित //True Copy// //True Copy// Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune 1. अपीलाथ / The Appellant 2. यथ / The Respondent 3.

The CIT-2, Kolhapur 4. िवभागीय
ितिनिध, आयकर अपीलीय अिधकरण, “B Bench” Pune; 5. गाड फाईल / Guard file.