9911796707
TMI Blog2017 (4) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in confirming addition of Rs. 4,99,986/-. 3. Brief facts of the case are that the assessee has filed his return of income on 31.10.2007 declaring total income at Rs. 3,74,066/-. At the relevant time, assessee, Shri Shankarbhai Udhavdas Jatwani was carrying on business through three concerns, viz. Amar Enterprise, New Amar Lignite and Amar Coal Traders. In fact, he was in the business of coal transportation. A notice under section 143(2) of the Income Tax Act was issued on 8.8.2008. Thereafter, the assessee died on 21.6.2009. According to the AO various notices issued upon the assessee could not be replied. On scrutiny of the accounts it revealed to the AO that the assessee has shown outstanding liability of Rs. 60,14,954/- in the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is genuine or non-genuine. It cannot be disallowed at the rate of 20%. Apart from the above, section 41(1) of the Income Tax Act has been incorporated to cover a particular fact situation. The section applies where a trading liability was allowed as a deduction in an earlier year in computing the business income of the assessee and the assessee has obtained a benefit in respect of such trading liability in a later year by way of remission or cessation of the liability. In such a case the section says that whatever benefit has arisen to the assessee in the later year by way of remission or cessation of the liability will be brought to tax in that year. The principle behind the section is that the provision is intended to ensure that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld.CIT(A) has erred in confirming the addition of Rs. 30,65,412/-. 8. Brief facts of the case are that the assessee in his proprietorship concern viz. New Amar Lignite has claimed transportation expenses of Rs. 1,53,27,061/-. The AO has further observed that the case of the assessee is that, basically, he was working as a middleman for arranging transportation to certain concerns. He has earned net supervision charge of Rs. 12,30,184/- which was offered as income. The AO was of the view that the assessee has received transportation charges from the persons for whom he has ultimately transported the goods. The assessee has paid transportation charges to the truck owners for transporting goods. Thus, the assessee ought to have deducted TDS u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bills and vouchers in respect of transportation expenses for A.Y. 2007-08 are available, except the figure of total amount of expenditure claimed in the return of income. Now, I come to the submissions of appellant. He has claimed that he receives only net supervision charges and transportation expenses which never form part of expenditure as it is incurred on behalf of three companies namely Atul Products, Garden Silk & Creative and in the third group he has kept 'Other Mills'. As per him, he incurres expenses by making payment to truck owners on behalf of these clients and later on the expenses are recovered from these companies. In view of this nature of business, appellant has claimed that he receives only net amount of supervi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee before the ld.CIT(A) was that the transportation expenditure was not the expenditure of the assessee. Assessee pays transportation charges to the transporters on behalf of his clients. It is a facility provided by the assessee to his client due to the fact that delivery of lignite and coal is done round the clock and clients of the assessee would not be available 24 hours in the factory to make payment. For such charges, the assessee gets supervision charges and the assessee has shown net amount of Rs. 12,30,184/- as net supervisions charges. 11. On due consideration of these submissions as well as finding of the ld.CIT(A), we are of the view that the ld.Revenue authorities have assumed existence of a contractor-ship betwe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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