TMI Blog1986 (9) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... o this, he has also done work for local parties. 3. The ITO during the course of the assessment proceedings observed that the assessee had total receipts in respect of this line of business amounting to Rs. 8,34,967 as against which it had spent a sum of Rs. 4,47,512 towards transportation charges to other parties. According to the ITO, it was not possible to ascertain the quantum of work done by the truck belonging to the assessee. He further observed that the expenses were not fully vouched and there were possibilities of leakages in this line of business. He also felt that the receipts and consumption of fuel could not be linked pro-rata. He accordingly made a lumpsum addition of Rs. 10,000 in respect of this line of business. 4. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of an assessee who had been subjected to tax for the last number of years and his trading results had been accepted all along and no addition had been made. He drew our attention to page 21 of his paper book which contained a summary of the assessments for the asst. yrs. 1974-75 upto 1980-81. He contended that no addition had been made all along in the past. He accordingly argued that no addition was called for under the circumstances. 6. The ld. D.R. on the other hand, supported the order of the ITO and the CIT(A) and vehemently argued that the addition be confirmed inasmuch as in this line of business there was possibility of leakages and inflated expenditure. 7. We have considered the rival contentions and have also perused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was further contended that both these rates were fixed as far as GSFC was concerned the assessee had to pay more to other parties for hiring their trucks to fulfil the obligations under the contract. At the assessment stage, the assessee filed particulars of certain bills where parties were paid more than the fixed rate under the contract. The ITO, however, proceeded to make further enquiries and checked further bills pertaining to such payments. According to him from some of the bills which are mentioned in the assessment order, the ITO found that charges paid were less than that fixed under the contract. The ITO also observed that payments made to parties were in cash and verification was not possible. Considering all these facts, the IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct executed with the GSFC appearing at page 24 of his paper book. He also drew our attention to page 26 of the paper book which was a copy of letter dt. 19th July, 1980 received from the GSFC in response to assessee's request for increase in the rates. The relevant portion of the said letter is reproduced as under: "We refer to your letter dt. 16th July, 1980 requesting us for consideration of the enhancement in the rate agreed for the transportation of our materials from the above two ports. You have also made a reference of the representation/ discussion you had with us earlier in this connection. You will please recall that at the time you discussed this matter with us, we had categorically advised you that considering the circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee even realised that it had been committed to a loss by accepting the contract at the rates mentioned therein and made a representation for revision, which was turned down. In case it was a matter of inflated and unvouched expenditure leading to the aforesaid loss, then such a representation may not have been made at all. We are accordingly satisfied at the reasoning and arguments advanced by the ld. counsel for the assessee and after considering them as well as the facts and details placed on record in the paper book, delete the addition of Rs. 10,000 in the fertiliser account. 12. As a result ITA No. 580/Ahd/1986 pertaining to asst. yr. 1980-81 is allowed. 13. As regards appeal for asst. yr. 1981-82 (ITA No. 1322/85) it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the aforesaid order the AAC was requested to cancel the letter and to rehear the appeal. 16. The ld. counsel, however, proceeded to argue the appeal before us in respect of the lumpsum addition of Rs. 5,000 and disallowance of expenses amounting to Rs. 3,000 in the fertiliser account. He has addressed to us more or less the same arguments as advanced in the appeal pertaining to asst. yr. 1980-81. The ld. D.R. on the other hand, repeated the arguments as in the earlier appeal and has supported the orders of the ITO and the CIT(A). 17. We after hearing both sides and going through the records find that the ITO has disallowed expenses of Rs. 5,000 over and above the lumpsum addition of Rs. 5,000 which is at variance with the procedure ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
