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TAXAP/47420/2008 6/ 6 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 474 of 2008
=========================================================
THE
COMMISSIONER OF INCOME TAX-II - Appellant(s)
Versus
MARUTI
MOTORS TRANSPORT CO. PVT. LTD. - Opponent(s)
=========================================================
Appearance
:
MRS
MAUNA M BHATT for
Appellant(s) : 1,MR MANISH R BHATT for Appellant(s) : 1,
None for
Opponent(s) :
1,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE K.A.PUJ
and
HONOURABLE
MR.JUSTICE BANKIM.N.MEHTA
Date
: 26/08/2008
ORAL
ORDER
(Per
: HONOURABLE MR.JUSTICE K.A.PUJ)
The Revenue has filed
this Tax Appeal under Section 260A of the Income-Tax Act, 1961 for
the assessment year 2003-04 proposing to formulate the following
substantial question of law for determination and consideration of
this Court.
Whether the Appellate
Tribunal is right in law and on facts in confirming the order of the
CIT(A) in deleting the addition of Rs.23,25,000/- u/s.69C being
unexplained expenditure/investment in respect of body building of 31
trucks ?
The brief facts giving
rise to the present Tax Appeal are that during the course of
assessment proceedings, it was noticed that the assessee had claimed
body building expenses of Rs.15,50,000/-, at the rate of Rs.50,000/-
per truck, on 31 trucks acquired during the year. The bodies of the
trucks were claimed to have been built by Shri Bajrang Body
Builders. According to the Assessing Officer, this concern was not
traceable at the address given in the bills produced by the assessee
in support of its claim of expenditure. Subsequently, the
authorised representative of Shri Bajrang Body Builders had attended
and had filed affidavit stating that he has received Rs.50,000/- per
truck from the assessee. However, Shri Bajrang Body Builders had not
filed its income-tax return. Further the books of accounts were
also not audited even though the same were required to be audited in
view of receipts shown at Rs.46,52,075/- for the financial year
2002-03. The Assessing Officer compared the cost of body building
shown by the assessee, with the cost prevailing in the market. The
Assessing Officer had comparative study of the rates claimed by
similar concerns, during the financial year under consideration and
concluded that the average rate of body building for a half truck
body comes to Rs.1,25,000/- per truck against the assessee’s rate of
Rs.50,000/- per truck. The difference of Rs.75,000/- per truck
amounting to Rs.23,25,000/- was added to the assessee’s income
u/s.69C of the Act.
Being aggrieved by the
order of the Assessing Officer the respondent assessee preferred an
appeal before the CIT(A). The CIT(A) by allowing appeal of the
assessee has observed that the basis for making the addition as
mentioned by the Assessing Officer in his order is not correct. He
has further observed that no other evidence direct or indirect,
verbal or documentary have been relied upon by the Assessing Officer
which supports his conclusion that the appellant has spent more than
Rs.50,000/- in body building. He has further observed that the
assessee’s account was audited and no discrepancy has been noted in
the account by the Assessing Officer when he has test checked these
accounts. On the basis of these, he has come to the conclusion that
the addition made by the Assessing Officer is purely on the basis of
comparison of rates quoted by other body builders. However, while
doing so he has also not given any finding regarding the quality of
materials used, the discount that a person giving bulk order is
entitled to etc. lower comparative cost by other concerns. Thus,
CIT(A) has come to the conclusion that the Assessing Officer was not
justified in making addition of Rs.23,25,000/- under Section 69C of
the Act.
Being aggrieved by the
order of the CIT(A) the Revenue took up the matter before the
Tribunal and the Tribunal while confirming the order of the CIT(A)
has come to the conclusion that the Assessing Officer has made
impugned addition only on the basis of the rates as compared to
other parties with that of the assessee, in the same field,
however, the Assessing Officer failed to bring on record any
evidence or finding against the assessee’s claim that it has done
the work on bulk basis and also the quality of material used for
body building of trucks. In absence of such material evidence and
because of the Assessing Officer has failed to justify that the
assessee has spent more than Rs.50,000/- per truck the CIT(A) has
rightly deleted the addition made by the Assessing Officer.
Since both the appellate
authorities have given categorical finding that there was no
evidence on the basis of which one would come to the conclusion that
the assessee has incurred expenditure on body building more than
Rs.50,000/- per truck. In absence of any material or evidence,
simply on the basis of comparative instances, without minutely
examining the details thereof, addition could not have been made.
Since no substantial question of law arises out of the order of
Tribunal, we dismiss this appeal.
(K. A. PUJ, J.) (
B. N. MEHTA, J.)
kks
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