Income Tax Officer vs Hylam Securities and Finance (P.) Ltd.

D.A. Mehta, J.—Appellant-revenue has proposed following two questions:

(i) Whether, on the facts and circumstances of the case and in law, the Income Tax Appellate Tribunal is right in deleting addition of Rs. 71,26,502 made by the Assessing Officer and confirmed the Commissioner of Income Tax (Appeals)-I, Surat?

(ii) Whether, on the facts and circumstances of the case and in law, the impugned order passed by the Income Tax Appellate Tribunal is perverse or not?

The assessment year in question is 2003-04, the relevant accounting period being financial year ended on 31-3-2003. The Assessing Officer, while confirming assessment u/s 143(3) of the Income Tax Act, 1961 (''the Act''), disallowed/added back a sum of Rs. 71,57,277 towards outstanding creditors for freight u/s 69C of the Act. According to the Assessing Officer, the expenses claimed and shown as outstanding towards freight charges payable could not be treated as real and genuine as the assessee had failed to discharge the onus by producing the creditors for verification. This order was confirmed by Commissioner (Appeals).

When the matter was taken up before Tribunal by way of Second Appeal, after hearing the parties. The Tribunal has deleted the addition. Learned Standing Counsel appearing on behalf of the appellant-revenue reiterated the reasons which weighed with the Assessing Officer for making the disallowance/addition. According to the learned Counsel the Assessing Officer had brought on record enough material to make the addition and the Tribunal was not justified in disturbing the concurrent findings recorded by the Assessing Officer and the Commissioner (Appeals).

In the impugned order dated 30-3-2007 in Paragraph No. 12 the Tribunal has referred to the primary and subsidiary records maintained by the assessee in the form of lorry receipt registers, vouchers, lorry receipts containing each and every aspect regarding movement of trucks, date, parties and details of Tax Deducted at Source. Names of the contractors, from whom the vehicles have been hired, are found to have been mentioned in the vouchers produced before the Assessing Officer and no defects have been found by the Assessing Officer. Though the vouchers are signed by the recipients and are verifiable from parallel record maintained by the assessee, the Assessing Officer has rejected vouchers only on the basis the vouchers being internally generated, but the Tribunal has found that such a rejection is not warranted. The Tribunal has further found that complete details of Tax Deducted at Source qua the payments made including Permanent A/c. Numbers, names and addresses of parties are available and the entries in regular books of account are made on a day-to-day basis in a chronological manner. It has further been found by the Tribunal that identical method of accounting and maintenance of record has been accepted in earlier years and higher claim of unpaid transport charges is accepted in assessment proceedings u/s 143(3) of the Act. The Tribunal has further found that the Assessing Officer has not been able to produce a single incident to establish the conjecture of payments having been made in cash. That in fact subsequent payments have been made by A/c. Payee Cheques.

On a cumulative appreciation of the entire evidence on record the Tribunal has deleted the additioni

Considering the findings recorded by the Tribunal, it is not possible to state that any legal infirmity exists in the impugned order of the Tribunal so as to warrant interference. It is also not possible to state that the order suffers from vice of perversity in absence of any evidence to point out as to which of the parameters like consideration of irrelevant evidence, or ignoring relevant evidence stand attracted.

In the circumstances, in absence of any question of law, much less a substantial question of law, as proposed or otherwise arising from the impugned order of the Tribunal, the appeal is dismissed.