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Anil Transport Service, B-102 Harshad Apartments, Behind Evarad Nagar, E.E. Highway, Sion (East), Mumbai 400 022 Vs. ACIT, Central Circle 15(1), Room No. 104, Matru Mandir, 1st Floor, Tardeo Road, Mumbai 400007
September, 04th 2012
                          ITA No.5165 of 2011 & CO 74 of 2012 Anil Transport Service Mumbai A Bench

                        "A" Bench, Mumbai

             Before Shri B.R. Mittal, Judicial Member and
              Shri B. Ramakotaiah, Accountant Member

                      ITA No.5165/Mum/2011
                      (Assessment year: 2008-09)

ACIT, Central Circle 15(1),              Vs.      Anil Transport Service, B-
Room No. 104, Matru Mandir,                       102 Harshad Apartments,
1st Floor, Tardeo Road,                           Behind Evarad Nagar, E.E.
Mumbai 400007                                     Highway, Sion (East),
                                                  Mumbai ­ 400 022
                                                  PAN: AALFA 8944 J
(Appellant)                                           (Respondent)

                        C.O. No.74/Mum/2012
               (Arising out of ITA No.5165/Mum/2011)
                       (Assessment year: 2008-09)
Anil Transport Service, B-102            Vs.      ACIT, Central Circle 15(1),
Harshad Apartments, Behind                        Room No. 104, Matru
Evarad Nagar, E.E. Highway,                       Mandir, 1st Floor,
Sion (East), Mumbai ­ 400 022                     Tardeo Road,
PAN: AALFA 8944 J                                 Mumbai 400007
(Cross Objector)                                     (Respondent)

                     Department by: Shri T.D. Singh, DR
                     Assessee by:   Shri C.V. Dharkar

                     Date of Hearing:       23/8/2012
                     Date of Pronouncement: 31/8/2012


Per B. Ramakotaiah, A.M.

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

                                      Page 1 of 4
                         ITA No.5165 of 2011 & CO 74 of 2012 Anil Transport Service Mumbai A Bench

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.

3.    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

4.    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.

5.    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

                                     Page 2 of 4
                         ITA No.5165 of 2011 & CO 74 of 2012 Anil Transport Service Mumbai A Bench

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. Not only that, on the basis of the statement
made by assessee, substantial amounts were deleted without
subjecting them to verification by AO in remand proceedings. It is
also not proper to delete on the reason that assessee had paid the
entire amount to work done to various parties and this cannot leave
any scope for improper work done by assessee, without subjecting
the same to verification. This reasoning in our view is not correct
since any expenditure claim has to be verified whether the
expenditure had been spent wholly and exclusively for the purpose
of business under the provisions of section 37(1). Assessee had not
complied with notices before AO and since the CIT (A) also did not
have the benefit of any additional evidence to delete the additions,
we are of the opinion that the matter requires re-examination by
AO. Accordingly the order passed by AO under section 144 and
order of the CIT (A) are set aside and assessment proceedings for
the assessment year is restored to the file of AO. AO should give due
opportunity to assessee to explain various claims. AO should also
keep in mind that assessee has not come up in appeal on the 10%
of the expenditure disallowed and confirmed by the CIT (A). To that
extent if the balance expenditures are found genuine, the addition
has to be sustained as assessee accepted the same. With these
directions, the Revenue appeal is considered allowed for statistical

6.    In a way, assessee's objections with reference to the
proceedings under section 144 raised in the Cross Objection were
also covered in this decision.

                                     Page 3 of 4
                             ITA No.5165 of 2011 & CO 74 of 2012 Anil Transport Service Mumbai A Bench

7.        In the result both the appeal of Revenue and Cross Objection
filed by assessee are considered allowed for statistical purposes.

          Order pronounced in the open court on 31st August, 2012.

                 Sd/-                                          Sd/-
             (B.R. Mittal)                               (B. Ramakotaiah)
           Judicial Member                              Accountant Member

Mumbai, dated 31st August, 2012.


Copy to:

     1.   The   Appellant
     2.   The   Respondent
     3.   The   concerned CIT(A)
     4.   The   concerned CIT
     5.   The   DR, "A" Bench, ITAT, Mumbai

                                     By Order

                            Assistant Registrar
                       Income Tax Appellate Tribunal,
                         Mumbai Benches, MUMBAI

                                         Page 4 of 4
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