Income Tax Appellate Tribunal - Lucknow
Shailendra Singh Bhadauria, Kanpur vs Assessee on 30 October, 2015
1
IN THE INCOME TAX APPELLATE TRIBUNAL
LUCKNOW BENCH "A", LUCKNOW
BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER
AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER
ITA No.262/LKW/2014
Assessment year:2006-07
Shri Shailendra Singh Bhadauria, Vs. Income Tax Officer,
453/5, Shastri Nagar, Range-2(4),
Kanpur. Kanpur.
PAN:AHFPB0116N
(Appellant) (Respondent)
Appellant by None
Respondent by Shri Alok Mitra, D. R.
Date of hearing 26/05/2014
Date of pronouncement 13/06/2014
ORDER
PER A. K. GARODIA, A.M.
This is an assessee's appeal directed against the order passed by learned CIT (A)-II, Kanpur dated 06/01/2014 for assessment year 2006-2007.
2. The grounds raised by the assessee are under:
"1. That in any view of the matter order passed u/s 143(3) of the Income Tax Act is bad in law and by said order income as determined at Rs.11,00,140.00 is highly unjustified in the facts and circumstances of the case hence the declared income is liable to be accepted.
2. That in any view of the matter addition of Rs.9,80,000.00 made by the assessing officer as per Para 2 of the assessment order by saying liability of trade creditors and his action as .confirmed by the Commissioner of Income Tax (Appeals) is highly unjustified and incorrect and even no opportunity was provided to the appellant.2
3. That in any view of the matter once the net profit rate was applied by the assessee as per the provisions of section 44AE of the Income Tax Act then no further addition should have been made in respect of trade creditors therefore the addition of Rs.9,80,000.00 made by the assessing officer and confirmed by the Commissioner of Income Tax (Appeals) is highly unjustified and incorrect in the facts and circumstances of the case.
4. That in any view of the matter observations and findings of the two lower authorities in their orders for making and confirming the addition are general, casual, vague and contrary to the actual facts of the case hence the addition is liable to be deleted.
5. That in any view of the matter the two lower authorities were absolutely wrong and incorrect in not considering benefit on account of TDS of Rs.39,568.00 on transportation charges, hence the credit for TDS is liable to be allowed.
6. That in any view of the matter interest charged under different Sections of the Income Tax Act is highly unjustified in the facts of the case.
7. That in any view of the matter the appellant reserves his right to take any fresh ground of the appeal before hearing of the appeal."
3. None appeared on behalf of the assessee on the date of hearing in spite of notice and hence, we proceed to decide the appeal of the assessee ex-parte qua the assessee.
4. Learned D.R. of the Revenue supported the order of learned CIT (A).
5. We have considered the submissions of Learned D.R. of the Revenue, perused the material available on record and gone through the orders of the authorities below. We find that the issue in dispute has been decided by CIT (A) as per Para 2 & 3 of his order and for the sake of ready reference, the same are reproduced below:
32. Notices dated 22-08-2012, 07-09-2012 and 20-11-2013 u/s 250 of the I.T. Act, 1961 are issued for assessee's compliance on 04-09-2012, 08-20-2012 and 28-11-2013 respectively. The compliance on the scheduled date and time was not made. Accountant, Shri Anil Kumar Singh appeared on 26-12-2013 as A.R. of the assessee, but did not file any details.
The case has been discussed with him.
3. The assessee is engaged in the business of plying of trucks and has filed return of income on 06-12-2006, disclosing income of Rs.1,20,140/-. The AO has found sundry creditors of Rs.9,80,000/- as per the statement of affairs filed by the assessee during the course of assessment proceedings as on 31- 03-2006. The AO, during the course of assessment proceedings has already extended number of opportunities for substantiating the claim of sundry creditors as made in the statement of affairs, but the assessee has failed to explain the same and has not submitted any confirmation, bank statement or the transactions details. During the appeal proceedings also, details regarding creditors have not been filed. Further in A.Y. 2005-06, sundry creditors are not shown. The assessee has 'failed to furnish the name, address, confirmation, bank statement and transactions details of the creditors. Under these circumstances, credit entry of Rs.9,80,0007- remains unexplained. Accordingly, the addition made by the AO is hereby confirmed."
5.1 From the above Paras of the order of CIT (A), we find that a clear finding is given by CIT(A) that the assessee has failed to give names, addresses, confirmation, bank statement and transactions details of the creditors. In the absence of these details, the claim of the assessee regarding sundry creditors is not acceptable particularly when there was no such creditor in the year ended on 31/03/2005 and the nature of business is stated to be the same. We also find that it is noted by Assessing Officer in Para 2 of the assessment order that the assessee is owning five trucks and the assessee has declared income of Rs.2.10 lacs u/s 44AE of the Act @Rs.3,500/- per month per truck resulting into income of Rs.42,000/- per year per truck. The Assessing Officer has also reproduced the cash flow statement on page No. 3 4 of the assessment order. In the said cash flow statement, the Assessing Officer has shown the following amounts as receipt on account of freight:
(i) Freight amount received from Rs.11,81,642/-
M/s Concrete Udyog
(ii) Freight amount received from Rs. 3,81,087/-
M/s Concrete Pvt. Ltd.
(iii) Freight amount received from Rs.12,84,000/-
M/s Adarsh Cement Products (P) Ltd.
(iv) Cash freight received from Rs. 2,09,000/-
Various places during the year ------------------
TOTAL Rs.30,55,729/-
5.2 Against this much receipt, the assessee is showing cash expenses of Rs.12,64,204.55 and other payments are Rs.7.09 lac on account of installment for vehicle loans from TATA Fin. Ltd. & HDFC Bank Ltd., Rs.0.50 lac being investment in SBI Life Insurance Co. Ltd., Rs.0.16 lac investment in LIC policies, tuition fees and others, Rs. 0.12 Lacs being drawings on account of house hold expenses. Bank deposits in three banks accounts is also shown to the extent of Rs.9,51,780/-. This goes to show that against the receipt of Rs.30.56 lac, the assessee is showing expenses of Rs.12.64 lac resulting into surplus of Rs.17.90 lac against which the assessee has declared income of Rs.2.10 lac u/s 44AE of the Act. As per the provisions of section 44AE, this much income is taxable even if the assessee does not maintain books of account but it does not mean that by declaring this much income under the provisions of section 44AE, the assessee can show any amount of cash surplus from such business of truck plying. When the assessee is showing cash surplus of Rs.17.92 lac as against declared income of Rs.2.10 lac, such excess cash surplus cannot be accepted. Out of this cash surplus of Rs.17.92 lacs, there may be allowable expenditure on account of interest on vehicle loans and depreciation on vehicles but the same cannot reduce the cash surplus to Rs.2.10 lacs because the fixed assets - trucks shown by the 5 assessee on 31/03/2006 is only Rs.16 lacs and therefore, the depreciation allowable on the trucks will be Rs.6.40 lacs (approx) i.e. 40% and loan shown by the assessee on 31/03/2006 is about Rs.12.74 lacs and even @15%, the interest burden will be less than Rs.2 lacs resulting into total interest and depreciation at Rs.6.40 lacs approx. This will lead the balance income at Rs.11.52 lacs as against Rs.2.10 lac. Under these facts, it cannot be accepted that the various investments shown by the assessee and the creditors shown by the assessee are reasonable. Considering all these facts, we find no reason to interfere in the order of CIT(A).
6. In the result, the appeal of the assessee stands dismissed.
(Order was pronounced in the open court on the date mentioned on the caption page) Sd/. Sd/.
(SUNIL KUMAR YADAV) ( A. K. GARODIA ) Judicial Member Accountant Member Dated: 13/06/2014. *C.L.Singh Copy of the order forwarded to : 1. The Appellant 2. The Respondent. 3. Concerned CIT 4. The CIT(A) 5. D.R., I.T.A.T., Lucknow Asstt. Registrar