Income Tax Appellate Tribunal - Chennai
Mgm Transports Pvt Ltd., Chennai vs Department Of Income Tax on 11 February, 2013
IN THE INCOME-TAX APPELLATE TRIBUNAL
'B' BENCH, CHENNAI.
Before Dr. O.K. Narayanan, Vice-President &
Shri S.S. Godara, Judicial Member
I.T.A. Nos.694 and 177/Mds/2010,
Assessment Years : 2005-06 and 2006-07
MGM Transport Pvt. Ltd., The Commissioner of Income Tax
No. 189, Waltax Road, Vs. Chennai III,
Chennai 600 003. Chennai 600 034.
[PAN:AACCM5458M]
(Appellant) (Respondent)
I.T.A. No.165/Mds/2010 and I.T.A. Nos.567, 1282 &1283/Mds/2011
Assessment Years : 2006-07 and 2007-08, 2005-06 & 2008-09
The Assistant Commissioner of MGM Transport Pvt. Ltd.,
Income Tax, Company Circle IV(2), No. 189, Waltax Road,
Aayakar Bhavan, Main building, IV Vs. Chennai 600 003.
Floor, 21, M.G. Road,
Nungambakkam, Chennai 34.
(Appellant) (Respondent)
Assessee by : Shri T. Vasudevan, Advocate
Department by : Dr. S. Moharana, CIT
Date of Hearing : 11.02.2013
Date of pronouncement : 25.02.2013
ORDER
PER S.S. Godara, Judicial Member
I.T.A. No. 694/Mds/2010 & I.T.A. No. 1282/Mds/2011 These appeals relating to the assessment year 2005-06 i.e., I.T.A. No. 694/Mds/2010 has been preferred by the assessee against the order of CIT, Chennai dated 18.03.2010 in C.No. 3033/17/III/2008-09 passed under 2 I.T.A. Nos Nos. 694, 177/M/10, 1282, &165/M/10, 567 & 1283/M/11 section 263 of the Income Tax Act 1961 [in short the "Act"]. Whereas, I.T.A. No. 1282/Mds/2011 has been preferred by the Revenue, against the order of the Commissioner of Income Tax (Appeals) V, Chennai dated 21.04.2011 passed in ITA No. 161/10-11 in consequential proceedings under section 143(3) r.w.s. 263 of the "Act".
2. Facts common to both cases are that the assessee is a company engaged in the business of transport contractor. For the impugned assessment year, it had filed its return on 31.10.2005 declaring loss of `.2,34,86,902/-. At the first instance, the same was processed under section 143(1) of the "Act. Thereafter, the Assessing Officer finalized 'regular' assessment on 28.12.2007 under section 143(3) of the "Act" computing loss of `.1,68,68,118/-. Subsequently, the CIT issued a notice to the assessee dated 23.11.2009 under section 263 of the "Act" by terming the assessment above said finalized on 28.12.2007 as prejudicial to interest of the Revenue. The reasons taken in the notice were that the assessee; in its profit and loss account, had debited hire charges payment of `.1,44,84,017/- and professional charges of `.1,76,080/- by following netting formula instead of deducting TDS on gross amount of payment. In CIT's opinion, the TDS provisions under section 194C and section 194 J of the "Act" were applicable which would invite disallowance under section 40(a)(ia) of the "Act" and the Assessing Officer had omitted to make the same.
3 I.T.A. Nos Nos. 694, 177/M/10, 1282, &165/M/10, 567 & 1283/M/11
3. In response, the assessee filed its reply defending the assessment finalized and submitted that the payee of the above said charges in question was its sister concern namely M/s. Namakkal South India Transports [NSIT] who was in the same business. Per assessee, instead of sub-contracting the obligations further, they utilized each other's fleet by resorting to cross engagement on daily basis per the given circumstances leading to a high frequency of the arrangement. It further clarified that at the end of the year, both entities would reconcile the services offered by each other followed by netting and payment would be made to the entity having excess account. However, the CIT was not satisfied with assessee's explanation above said; in whose opinion, the Assessing Officer had not applied above said provisions of the "Act" in making the disallowance under section 40(a)(ia) of the "Act". Therefore, vide order dated 18.03.2010, he set aside the assessment order by holding that it was erroneous and prejudicial to the interest of the Revenue and directed the Assessing Officer to frame fresh assessment.
In this backdrop of facts, the assessee has filed appeal I.T.A. No. 694/Mds/2010 challenging 263 order.
4. At the same time, we notice that in consequential proceedings, the Assessing Officer finalized assessment under section 143(3) r.w.s. 263 of the "Act" vide order dated 23.12.2010 holding therein that the assessee's 4 I.T.A. Nos Nos. 694, 177/M/10, 1282, &165/M/10, 567 & 1283/M/11 arrangement of reconciliation and netting and of making payments to the sister concern would attract the provisions of section 194C and 194J on gross basis and failure thereof, would lead to disallowance under section 40(a)(ia) of the "Act". Accordingly, he made disallowance under section 40(a)(ia) r.w.s. 194C of the "Act to the tune of `.1,44,84,017/-. Similarly, he also made disallowance of an amount of `.1,76,080/- towards professional charges (supra).
5. In assessee's appeal against the assessment order, the CIT(A) has held that the disallowance under section 40(a)(ia) is not attracted in case of netting formula adopted by the assessee. Accordingly, he has deleted disallowance of `.1,44,84,017/- under section 194C. At the same time, he had upheld the disallowance made under section 194J made by the Assessing Officer.
Therefore, the Revenue is aggrieved and is in appeal. In this backdrop, we take up appeal of the assessee in 263 proceedings first (supra).
6. The AR of the assessee submits in I.T.A. No. 694/Mds/2010 that the CIT has wrongly exercised jurisdiction under section 263 of the "Act" as the Assessing Officer had rightly finalized the assessment in question dated 28.12.2007.
7. Opposing this, the Revenue submits that since the Assessing Officer 5 I.T.A. Nos Nos. 694, 177/M/10, 1282, &165/M/10, 567 & 1283/M/11 had not considered the vital aspects of the case pertaining to assessee's transactions with its sister concern in detail, the CIT had invoked jurisdiction under section 263 of the "Act".
8. We have heard both parties and perused the CIT order. We notice that the Assessing Officer had passed the assessment order in question on 28.12.2007. However, the same is nowhere forthcoming in the paper book filed by the assessee, which could infer that the Assessing Officer had applied his mind before finalizing the assessment qua the factual aspect of the case aforesaid. In this regard, we are aware of the latest case law reported as [2012] 343 ITR 329 (Del), wherein it has been held when the Assessing Officer does not conduct a proper enquiry before finalizing the assessment in question, it itself is an instance causing prejudice to the interest of the Revenue giving rise to the exercise of jurisdiction by the CIT under section 263 of the "Act". Hence, on this score alone, we uphold the order of the CIT under challenge.
9. Now, we come to I.T.A. No. 1282/Mds/2011 filed by the Revenue. In this appeal, the sole argument of the Revenue is that the CIT(A) has wrongly deleted the addition made by the Assessing Officer under section 194C of the "Act" as the assessee was liable to deduct TDS qua gross amount instead of netting formula (supra) qua payments made in furtherance to cross engagement of the vehicles with its sister concern. Per Revenue, the 6 I.T.A. Nos Nos. 694, 177/M/10, 1282, &165/M/10, 567 & 1283/M/11 modus operandi adopted by the assessee is akin to sub-contractorship; wherein first it itself entered into an agreement with the payers and then, it entered into sub-contract with its sister concern in performing the obligation created by agreements. The DR vehemently reiterates the submissions raised in the grounds and by citing the case law of [2010] 236 CTR (Kar) 105 Smt. J. Rama vs. CIT and [2009] 225 CTR (Raj) 125 Shree Choudhary Transport Company as well as CBDT Circular 715 dated 08.08.1995, he contends that in case of sub-contractorship TDS has to be deducted in all transactions instead of applying netting formula. In the light thereof, he prays for acceptance of the appeal.
10. Opposing this, the assessee's submission is that the CIT(A) has rightly deleted the addition and draws support from the reasons contained in the order under challenge. It further submits that there is no evidence of sub- contractorship or any obligation having been performed by assessee's sister concern which would attract section 194C of the "Act". In the alternative, the assessee also submits that at the best, the present is an instance of deficiency in deducting TDS instead its non-compliance. Therefore, the AR contends that in such cases, disallowance under section 40(a)(ia) is not attracted. He also placed on record a paper book containing following particulars and prays for rejection of the appeal:
1. Terms of contract between assessee and Sri Vishnu Cement Ltd.
2. Terms of contract between assessee and The India Cements Ltd.
7 I.T.A. Nos Nos. 694, 177/M/10, 1282, &165/M/10, 567 & 1283/M/11
3. Terms of contract between assessee and RMC Readymix (India)
4. Decision of Gujarat High Court in CIT v. Prashant H Shah dated 09.10.2012.
5. CIT vs. Poompuhar Shipping Corp. Ltd. 282 ITR 3 (Mad.HC)
6. CIT v. United Rice Land Ltd. (P&H HC)
7. DCIT v. Satish Aggarwal & Co. (Amrt. Trib) 122 ITD 35
8. Mythri Transport Corporation vs. ACIY (Vizag Trib) 124 ITD 40.
9. Seven Hills Cargo Carrier vs. ITO (Vizag Trib) dt. 26.11.11.
10. Saibaba Transport vs. ITO, Ward 3, Nadiad (Ahm) dt. 15.6.12.
11. We have heard both parties at length and perused the assessment order, CIT(A)'s order as well as the above said material submitted by both parties. Undisputed facts of the case are that the assessee is a transport contractor having fleet of various categories of carriage vehicles. It also has a sister concern namely NSIT in the same line of business having its own fleet of same category of vehicles. As the records suggest, the assessee is having agreement with various entities for carriage of readymix cements, etc. In the paper book available, we find at page No. 3 in the agreement dated 31.07.2008 [clause 6.6] that the said contract is not transferrable/ assignable. Therefore, the assessee adopted cross hiring formula with its sister concern. Accordingly, both entities would cross engage each other's vehicles as and when the situation arose. They would take each other's vehicle and perform themselves the obligations created in the agreements.
Accordingly, the payments would be computed with regard to the vehicles and not for obligations. The same would lead to voluminous entries in favour of both sister concerns against each other. At the end of the relevant 8 I.T.A. Nos Nos. 694, 177/M/10, 1282, &165/M/10, 567 & 1283/M/11 assessment year, both chose to reconcile each other's entries and the one who had excess of them got paid as per the netting formula. The Revenue contends that instead of deducting TDS after netting formula, it should have treated each engagement with its sister concern as a separate transaction and computed TDS accordingly. This, in our opinion, is not the correct interpretation of the provision (supra) in its correct perspective. After perusal of section 194C, we find that the same is not only applicable in case of payment to a contractor, but also to a sub-contractor [194C Explanation iii]. However, we notice from the facts in hand that no liability arises as even the Assessing Officer nowhere disputes that the assessee had performed the contractual obligations itself instead of further delegating it to its sister concern. Risk and responsibility arising out of the contract have been performed by the assessee which have nowhere been passed upon to the sister concern. In our view, the cross hiring vehicles cannot be termed as sub-contract which would invite application of section 194C. So far as case law cited by the Revenue is concerned, we also express our respectful agreement that in case of a sub-contract, the provision is applicable. But, as clarified hereinabove, once the circumstances point towards non-existence of a sub-contract, we are unable to agree with the meticulous arguments submitted by the Revenue.
9 I.T.A. Nos Nos. 694, 177/M/10, 1282, &165/M/10, 567 & 1283/M/11
12. There is another aspect of the matter. The present is a case where there is no altogether default on the part of the assessee in deducting the TDS. Rather, the only issue between the parties is that the assessee had preferred to deduct the TDS of netting formula instead of gross transactions. In this regard, we notice that it is, at the best a case of shortfall of the TDS which does not attract disallowance under section 40(a)(ia) of the "Act". Whilst holding so, we find support from various Coordinate Bench decisions of ITAT namely I.T.A. No. 20/Mum/2010 titled as DCIT v. M/s. Chandabhoy & Jassobhoy, I.T.A. No. 2061/Mds/2012 decided on 29.01.2012 M/s. KEC International Ltd. v. ITO which have reasonably been also fortified by the decision of the Hon'ble Calcutta High Court in the case of CIT vs. S.K. Tekriwal 183 of 2012 [G.A. No. 2069/2012]. Therefore, On this score as well, we find no reason to interfere in the order of the CIT(A).
13. In view of the above discussion, both these appeals in I.T.A. No. 694/Mds/2010 filed by the assessee challenging order under section 263 of the "Act" as well as I.T.A. No. 1282/Mds/2011 filed by the Revenue challenging CIT(A)'s order in consequential proceedings are dismissed. I.T.A. Nos. 165 and 177/Mds/2010 [A.Y. 2006-07]
14. These cross appeals by the assessee and Revenue respectively; are directed against the order of the Commissioner of Income Tax (Appeals) V, 10 I.T.A. Nos Nos. 694, 177/M/10, 1282, &165/M/10, 567 & 1283/M/11 Chennai dated 27.11.2009 passed in ITA No. 530/2008-09 for assessment year 2006-07, in proceedings under section 143(3) of the Income Tax Act 1961 [in short the "Act"].
15. Facts apropos are that for the impugned assessment year, the assessee had 'returned' NIL income.
16. In 'scrutiny' proceedings, the Assessing Officer noticed that the assessee had debited an amount of `.1,20,38,214/- including hiring charges of `.65,82,357/- paid to its sister concern namely NSIT [same payee as in I.T.A. No. 694/Mds/2010] by adopting netting formula. Per Assessing Officer, instead of adopting netting formula and then deducting TDS, the assessee should have deducted TDS on gross amount of hiring charges. Therefore, in the assessment order dated 23.12.2008, he invoked section 40(a)(ia), and disallowed/added the difference amount of `.41,75,907/- in assessee's total income. In the said order, he also disallowed/added an amount of `.2,80,013/- and `.5,50,549/- paid by the assessee in the shape of pipeline gang expenses and labour gang expenses for shortfall and non-deduction of TDS respectively.
In the same manner, the Assessing Officer also made various other additions; namely an amount of `.28,17,700/- @ 10% as bata to drivers and cleaners by holding that in evidence, only self-made vouchers had been 11 I.T.A. Nos Nos. 694, 177/M/10, 1282, &165/M/10, 567 & 1283/M/11 produced by the assessee. Further, the Assessing Officer made another addition of loading and unloading charges of `.9,95,751/- as unnecessary expenditure. Qua miscellaneous expenses of `.23,13,179/-, the assessee itself is stated to have admitted that an amount of `.4,08,995/- was not related to business activity, which ultimately was added.
17. As the assessment order reveals, the Assessing Officer made other additions of `.29,16,964/- claimed as spares and repairs, `.16,55,230/- as administrative expenses, `.9,58,956/- as hire charges, `.4,02,724/- as foreign travel expenses by citing the reasons of assessee's failure in submitting bills and vouchers in support, estimation basis, lack of verification and want of details, etc. Accordingly, the assessee's total income stood computed as `.2,69,93,500/-.
18. Aggrieved, the assessee preferred appeal. We notice from the CIT(A)'s order under challenge that he has confirmed the addition under section 40(a)(ia) of `.41,75,907/- and foreign travel expenses. At the same time, he has restricted the addition of bata (supra) and spares and repairs @ 5% of the claim raised and deleted the addition of loading and unloading charges as made by the Assessing Officer.
In this factual backdrop, the assessee has impugned in CIT(A)'s order to the extent it confirms addition made by the Assessing Officer (supra).
12 I.T.A. Nos Nos. 694, 177/M/10, 1282, &165/M/10, 567 & 1283/M/11 Whereas, Revenue's only grievance is the loading and unloading charges, addition has been wrongly deleted.
19. In their arguments, both representatives reiterated their respective pleadings raised in the grounds and prayed for acceptance of the appeals. At the same time, they have also supported CIT(A)'s order to the extent it favours their respective interests.
20. We have heard both parties at length and also perused the findings of the Assessing Officer as well as CIT(A). So far as disallowance confirmed by the CIT(A) under section 40(a)(ia) is concerned, we find that in I.T.A. No. 1282/Mds/2011 decided hereinabove, we have held that the TDS was not liable to be deducted under section 194C of the "Act". Hence, this ground does not require any fresh adjudication. Accordingly it stands decided in favour of the assessee.
21. Coming to the other additions. We find that the lower appellate authority has applied its mind in detail and only after minutely examining the relevant material on record; it has proceeded to accept assessee's appeal in part (supra). Apart from raising bald assertions in support of the grounds raised in respective appeals, neither party before us has been able to pinpoint any illegality or infirmity in the well reasoned order of the CIT(A) by tendering some cogent material. It is trite preposition of law that unless there 13 I.T.A. Nos Nos. 694, 177/M/10, 1282, &165/M/10, 567 & 1283/M/11 is glaring error of fact or law in the case concerned is not highlighted by any aggrieved party, the opinion of the first appellate authority is not to be interfered with. In the present case, all expenses of assessee except foreign travel expenses (supra), pertaining to the particular line of business. In our opinion, the CIT(A) has an holistic view in confirming the addition of bata, spares & repairs by restricting the addition to 5%. Qua foreign travel expenses, the assessee admittedly fails to lead evidence proving the aim and object of the travel in question, without which an inference is necessarily to be drawn that the same was not for business promotion, etc. On the same analogy, the Revenue's grounds pertaining to loading and unloading charges (supra) has also been held to be a part of assessee's business by the CIT(A). Keeping in mind our above discussions, we see no reason to upset well reasoned findings of the CIT(A) except disallowance under section 40(a)(ia) of the "Act" as above.
22. Accordingly, assessee's appeal is partly accepted and Revenue's appeal is dismissed.
I.T.A. No. 567/Mds/2011[A.Y. 2007-08]
23. The Revenue has raised following substantive grounds in appeal:
"2.1. The learned CIT(A) has erred in deleting the disallowance u/s 40(a)(ia) of Rs. 1,75,30,888 on hire charges paid to M/s. NSIT without deduction of tax at source.
14 I.T.A. Nos Nos. 694, 177/M/10, 1282, &165/M/10, 567 & 1283/M/11 2.2 to 2.14 xxxxxxxxxxxxxx 3.1 The learned CIT(A) has erred in restricting the disallowance on payment of betta to drivers and cleaners to Rs. 10 lakhs as against Rs. 25,03,819 made by the AO.
3.2 xxxxxxxxxxxxxx 4.1 The learned CIT(A) has erred in allowing the amount Rs. 14,27,577 disallowed by the AO under the head loading and unloading charges.
4.2 xxxxxxxxxxxxxx 5.1 The learned .CIT(A) has erred in restricting the disallowance of miscellaneous expenses to Rs. 1,50 lakhs as against Rs. 3,65,551 disallowed by the AO for non production of vouchers.
5.2 xxxxxxxxxxxxxxx 6.1 The learned CIT(A) has erred in restricting disallowance under spares and repairs to 10% of amount claimed in respect of unrecognised service stations.
6.2 to 6.3 xxxxxxxxxxxxxx 7.1 The learned CIT(A) has erred in restricting the disallowance of Rs.14,13,908 made by A.O. to Rs. 2,50,000 on account of administrative expenses.
7.2 xxxxxxxxxxxxxx 8.1 The learned CIT(A) has erred in allowing the claim of the assessee of foreign travel expenses of ` 2,14,685 disallowed by the A.O. 8.2 to 8.3 xxxxxxxxxxxxx 9.1 The learned CIT(A) has erred in directing the A.O to allow the sum of TDS of Rs. 24,89,210 remitted before the due date for filing the R/I in this Assessment Year.
9.2 & 10 xxxxxxxxxxxxx"
24. By referring to ground No. 2.1, reproduced hereinabove, both representatives fairly concede that the same is covered in assessee's favour 15 I.T.A. Nos Nos. 694, 177/M/10, 1282, &165/M/10, 567 & 1283/M/11 in view of our discussion in I.T.A. No. 1282/Mds/2011 decided hereinabove. So, we reject the instant ground raised by the Revenue.
25. Qua other grounds, the Revenue reiterates the pleading above said and prays for acceptance of the appeal by setting aside CIT(A)'s order modifying/addition made by the Assessing Officer.
26. Per contra, the assessee chooses to strongly support the order under challenge passed by the CIT(A) and prays for rejection of the appeal.
27. We have heard both parties. The other grounds apart from ground No. 2.1 challenge deletion of disallowance/addition by the CIT(A) which were made by the Assessing Officer in the course of assessee's regular assessment. In the course of 'scrutiny' assessment pertaining to the impugned assessment year, the assessee had claimed bata to drivers and cleaners, loading and unloading charges, miscellaneous expenses, spares & repairs, administrative expenses, travel expenses and payments made qua other expenses to the tune of `.25,30,382/-, `.14,27,577/-, `.3,65,551/-, `.30,59,040/-, `.40,13,908/-, `.2,14,685/- and `.51,47,412/- respectively. In the assessment order dated 10.12.2009, the Assessing Officer disallowed/ added back the same in assessee's total income for want of satisfactory detailed verification and in the absence of cogent evidence produced. Accordingly, he computed the addition @ 10% qua bata claimed, full amount 16 I.T.A. Nos Nos. 694, 177/M/10, 1282, &165/M/10, 567 & 1283/M/11 of loading and unloading charges, 10% of miscellaneous expenses and spares & repairs, 25% of administrative expenses as well as gross amount of foreign travel expenses. Similarly, qua a claim of `.51,47,412/-, the Assessing Officer held that since the assessee had made the payments belatedly in Government account not in the previous year relevant to the impugned assessment year, it attracted disallowance under section 40(a)(ia) of the "Act".
Accordingly, the Assessing Officer computed total income of the assessee as `.3,95,24,480/- instead of `.1,44,00,639/- as declared by the assessee.
28. The assessee impugned the assessment order in appeal. We find from the CIT(A)'s order that the some of the additions have been modified i.e. 10% qua bata to drivers and cleaners, loading and unloading charges, addition had been deleted in toto, miscellaneous expenses stand restricted to 1.50 lakhs & addition of spares and repairs has been limited to `.8,69,264/-. Further, the CIT(A) has estimated disallowance of administrative expenses @ `.2.50 lakhs and granted relief of an amount of `.2,14,685/-. Regarding disallowance under section 40(a)(ia) made by the Assessing Officer (supra), the CIT(A) has placed reliance on the case law of CIT vs. Alom Extrusions Ltd. [319 ITR 306 (SC)] and deleted the addition.
Therefore, the Revenue is in appeal before us.
17 I.T.A. Nos Nos. 694, 177/M/10, 1282, &165/M/10, 567 & 1283/M/11
29. We have heard rival submissions and perused the findings of the Assessing Officer and CIT(A). We notice from the case file before us that additions made by the Assessing Officer have been deleted/partly confirmed by the lower appellate authority (supra). In our view, almost all additions [barring foreign travel expenses and addition under section 40(a)(ia)] relate to factual verifications. In our view, keeping in mind the line of assessee's business and reasons of lower appellate authority in support of the order, which are not controverted by the Revenue by leading some cogent evidence, we hardly see any reason to interfere with the relief granted. So far as disallowance under section 40(a)(ia) is concerned, the Hon'ble Apex Court has settled the law in the case of CIT v. Alom Extrusions Ltd. (supra) in favour of the assessee and against Revenue that even the belated payments made before the 'due' date are sufficient to reject the disallowance. Therefore this ground also fails.
30. This leaves us with Revenue's ground challenging CIT(A) order so far as deletion of addition of foreign travel expenses is concerned. In this context, we find that before the Assessing Officer, the assessee had failed to prove the correlation of the business purposes with the foreign visit in question by leading cogent evidence on record. The CIT(A) has simply deleted the addition by holding that the foreign travel in question was for maintaining good relationship and supply of vehicles. Even the assessee 18 I.T.A. Nos Nos. 694, 177/M/10, 1282, &165/M/10, 567 & 1283/M/11 before us does not dispute the vehement contention of the Revenue that there is no material on record to support the finding of the CIT(A). In preceding assessment year as well, the CIT(A) has confirmed the addition and we have upheld the order [I.T.A. No. 177/Mds/2010]. Therefore, we hold that the addition had been rightly made by the Assessing Officer, but wrongly interfered with by the CIT(A). Hence, ground No. 8.1 raised by the Revenue is accepted.
I.T.A. No. 1283/Mds/2011 [A.Y. 2008-09]
31. The effective grounds raised by the Revenue read as follows:
"2.1. The learned CIT(A) has erred in deleting the disallowance u/s 40(a)(ia) of Rs. 2,60,90,630 on hire charges paid to M/s. NSIT without deduction of tax at source.
3.1 The learned CIT(A) has erred in restricting the disallowance on payment of batta to drivers and cleaners to Rs. 7.5 lakhs as against Rs. 21,35,010/- made by the AO.
4.1 The learned CIT(A) has erred in allowing the amount Rs. 14,88,747 disallowed by the AO under the head 'loading and unloading charges'.
5.1 The learned .CIT(A) has erred in restricting the disallowance of miscellaneous expenses to Rs. 50,000 as against Rs. 2,41,826/- disallowed by the AO for non-production of vouchers.
6.1 The learned CIT(A) has erred in restricting disallowance under spares and repairs to Rs. 12 lakhs against disallowance of Rs.41,86,564.
7.1 The learned CIT(A) has erred in restricting the disallowance of Rs.27,50,408 made by A.O. to Rs. 2,50,000 on account of administrative expenses."
32. In the course of hearing, the DR reiterates the pleadings above said at 19 I.T.A. Nos Nos. 694, 177/M/10, 1282, &165/M/10, 567 & 1283/M/11 the behest of the Revenue and submitted that the additions in question made by the Assessing Officer have been wrongly modified by the CIT(A). Hence, he prayed for acceptance of the appeal.
33. Per contra, the assessee submits that all the grounds are covered by our findings in the appeals decided hereinabove in I.T.A. No. 567/Mds/2011 for the assessment year 2007-08.
34. In rebuttal, the Revenue fails to draw any distinguishing features.
35. We have heard both parties at length and also perused the assessment order, CIT(A)'s order as well as grounds raised in I.T.A. No. 567/Mds/2011 decided hereinabove. It transpires that in the said case, the Revenue has raised same very grounds challenging deletion of addition by the CIT(A) pertaining to disallowance under section 40(a)(ia), bata to drivers and cleaners, loading and unloading charges, miscellaneous expenses, spares & repairs, as well as administrative expenses. As already clarified, the Revenue merely asserts that the grounds require independent adjudication. We fail to agree with the above said submission since no distinguishing features have been pointed out by the Revenue. Since we have confirmed CIT(A)'s order qua assessment year 2007-08 except addition on foreign travel expenses, which is not an issue in the instant case, we see no reason to adopt a different approach. Accordingly, the well 20 I.T.A. Nos Nos. 694, 177/M/10, 1282, &165/M/10, 567 & 1283/M/11 reasoned findings of the CIT(A) are confirmed.
36. To sum up, assessee's appeal I.T.A. No. 694/Mds/2010 is dismissed whereas I.T.A. No. 177/Mds/2010 is partly accepted qua disallowance under section 40(a)(ia) of the "Act". Similarly, Revenue's appeals I.T.A. No. 1282, 165/Mds/2010 I.T.A. No. 1283/Mds/2011 are dismissed, whereas I.T.A. No. 567/Mds/2011 is partly accepted qua ground of foreign travel expenses.
Order pronounced on Monday, the 25th of February, 2013 at Chennai.
Sd/- Sd/- (Dr. O.K. NARAYANAN) (S.S. GODARA) VICE-PRESIDENT JUDICIAL MEMBER Chennai, Dated, the 25.02.2013 Vm/- To: The assessee//A.O./CIT(A)/CIT/D.R.