TMI Blog2012 (9) TMI 617X X X X Extracts X X X X X X X X Extracts X X X X ..... )A No.40/CTK/2012 - - - Dated:- 29-6-2012 - Shri K.K.Gupta, And Shri K.S.S.Prasad Rao, JJ. For the appellant: Shri P.S.Panda/Kamal Agarwalla, ARs For the respondent: Shri M.R. Panigrahi, CIT-DR ORDER Shri K.K.Gupta, AM : The assessee is in appeal on a solitary issue which reads as under : On the facts and circumstances of the case, the Id. CIT (A) has erred inconfirming the order of the Ld. A.O. who has wrongly considered Rs.36,33,642 as suppression of receipt being reimbursement of freight charges paid to railway on behalf of M/s. Phoolchand Exports Ltd. based on TDS Certificate which includes the above amount without considering the corresponding payments made to Railway. 2. The learned Counsel for the assessee initiating his arguments submitted the brief facts as follows : The assessee is an individual running her business in the name style of M/s Varsha Trading Co. The return for the Assessment Year under consideration was filed on 01.10.2007 showing gross total income at Rs.4,57,092. A search and seizure operation u/s 132 of the Income Tax Act., 1961, was carried out in the business and residential premises of the appellant on 26.06.2008. In re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lready been claimed in the P L Account and there is also no claim from the side of the assessee to allow any further expenditure. 3. Aggrieved, the assessee appealed before the CIT(A). Before him, the assessee submitted the copy of the certificate confirming the above transaction of reimbursement of expenses which could have also been submitted before the A.O. if the same would have been asked for. However, ignoring the submission filed before the Id. CIT (A), he confirmed the order of the A.O. on the following observations. - The claim of the appellant is that she had deposited Rs.35,00,387 with Railway Department on behalf of Phulchand Exports Ltd. The fact remains that there exists a difference of Rs.36,33,642 between the gross receipts shown in the P L A/c. and the gross receipts from which TDS has been made as per the TDS certificates. - The appellant has claimed credit for the TDS on the entire amount of receipts of Rs.99,63,131 though receipts of Rs.63,29,489 have been credited to the P L A/c. Section 199 provides that any deduction made with the provisions of Chapter-X VII and paid to the Central Government shall be treated as a payment of tax on behalf of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red a income. Further the Ld. CIT(A) confirmed the addition supporting the view of AO who took the contention that the documents filed is merely a self servicing evidence, especially when no confirmations of accounts could be filed from M/s Phulchand Exports (P) Ltd. is not correct. During the assessment proceedings, the Ld. A.O. had never asked for any confirmation from the party and made the additions. Before the Ld. CIT(A), the appellant filed the confirmation along with the certified ledger copy which was ignored by him and the fact of this is not find place in the order. The learned AR of the assessee submitted that during the year the assessee had deposited railway freight and incurred other incidental expenses aggregating Rs.35,00,386 on behalf of M/s Phulchand Exports (P) Ltd. against which the party made the payment. However, while reimbursing the above expenditure to the assessee, the party made TDS which is the matter of dispute. During the assessment proceedings the assessee had also produced the books of accounts wherein the above expenditure incurred on behalf of the party was not found to be claimed. He submitted that if the above reimbursement of expenditure is cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rendered by the deductee in the impugned Assessment Year and not because somebody has deducted tax but expenses reimbursed by him which was technically wrong in the first place. The payments of railways were subjected to TDS either by the assessee or the deduction. The case of the CIT(A) to confirm the same after having appreciated the facts as cryptic insofar as holding that the finding of the Assessing Officer that the ledger copy merely a self serving evidence specially no confirmation of amounts were filed from M/s.Phulchand Exporters Ltd., becomes contradictory to the findings of the Assessing Officer when the financial statements filed along with the return and income and verified by it indicates that the sum total amount owed by M/s.Phulchand Exporters Ltd., at Rs.13,14,088. It is not the case of misstatement the facts as inscribed in the accounts just because an authority does not believe a double entry system of book keeping. The ledger copy is the copy of business transaction conducted which balance finally finds as balance in the balance sheet when the certificate was obtained only to satisfy the anxiety of the Assessing Officer. The learned CIT(A) therefore erred in dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profit, if any, is only the tax deducted at source by the deductor. The assessee cannot be said to have made the profit from railways insofar as due to provisions for Railways the freight has to be paid by the owner of goods and not the contractor. The Railway receipts are drawn in the name of holder of goods therefore were directly debited to the said party being the consignor on whose behalf the assessee had undertaken the composite contract for transportation. We are therefore of the considered view that a hypothetical figure of income cannot be thrust upon the assessee merely because the tax was deducted at source by the deductor on the premise that the expenses reimbursed on behalf of the deductor could whether be subjected to deduction of tax at source when the TDS so deposited did not render income to it. It was only a portion of the amount owed to the deductee which was paid to the Government Exchequer. The assessee could therefore only claim this amount back from deductor as adjustment of amount on account of railway freight to be borne by the deductor by filing its return under the provisions of the I.T.Act for claiming the tax paid as TDS has been noted by the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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