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ITA No. 5165/Mum/2011 (Assessment Year: 2008-09) and C.O. No. 74/Mum/2012. Case: 1. ACIT, Central Circle 15(1), Room No. 104, Matru Mandir, 1st Floor, Tardeo Road, Mumbai 400007, 2. Anil Transport Service, B- 102 Harshad Apartments, Behind Evarad Nagar, E.E. Highway, Sion (East), Mumbai - 400 022 Vs 1. Anil Transport Service, B- 102 Harshad Apartments, Behind Evarad Nagar, E.E. Highway, Sion (East), Mumbai - 400 022, 2. ACIT, Central Circle 15(1), Room No. 104, Matru Mandir, 1st Floor, Tardeo Road, Mumbai 400007. ITAT (Income Tax Appellate Tribunal)

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Case Number:ITA No. 5165/Mum/2011 (Assessment Year: 2008-09) and C.O. No. 74/Mum/2012
Party Name:1. ACIT, Central Circle 15(1), Room No. 104, Matru Mandir, 1st Floor, Tardeo Road, Mumbai 400007, 2. Anil Transport Service, B- 102 Harshad Apartments, Behind Evarad Nagar, E.E. Highway, Sion (East), Mumbai - 400 022 Vs 1. Anil Transport Service, B- 102 Harshad Apartments, Behind Evarad Nagar, E.E. Highway, Sion (East), Mumbai - 400 022, 2. ACIT, Central Circle 15(1), Room No. 104, Matru Mandir, 1st Floor, Tardeo Road, Mumbai 400007
Judges:Shri B.R. Mittal, J.M. and Shri B. Ramakotaiah, A.M.
Issue:Income Tax Act, 1961 - Sections 144, 37(1), 68
Judgement Date:August 31, 2012
Court:ITAT (Income Tax Appellate Tribunal)

Order:

B. Ramakotaiah, A. M., (Mumbai 'A' Bench)

  1. The Revenue appeal was preferred against the order of the CIT (A)-26 Mumbai dated 28.04.2011 and assessee preferred cross objection. Briefly stated, assessee is a registered firm engaged in the business of transportation of debris and other materials arising of 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.

  2. 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.

  3. 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.

  4. 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 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...

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