Deccan Express Transport Pvt. Ltd v. Income Tax Officer -6 (2)-2

IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. INCOME TAX APPEAL NO.2615 OF 2009WITH INCOME TAX APPEAL NO.2616 OF 2009 Deccan Express Transport Pvt. Ltd.Vs.Income Tax Officer -6 (2)-2 .... Mr. K.G. Gopal with Mr. Jitendra Singh for the Appellant.Mr. Suresh Kumar for the Respondent. ..... ..Appellant. ..Respondent. CORAM : DR.D.Y.CHANDRACHUD & J.P.DEVADHAR, JJ. P.C. : 1.The Appeals by the assessee against the order of the Income Tax Appellate Tribunal dated 17[th] April, 2009 pertain to assessment years 2003-04 and 2004-05. Basically, two issues have been raised in the Appeals and they relate to : (i) The disallowance of freight payment amounting to Rs.7.74 lacs in the first appeal and Rs.5.10 lacs in the second of the two Appeals; (ii) The disallowance of 50% of the freight expenses. 2.Counsel appearing on behalf of the assessee has during the course of the hearing urged submissions only in respect of the first of the two issues. 3.The CIT(A) had allowed the entire payment of freight charges. In appeal the Tribunal has effected a disallowance at 10% of the cash payments in respect of freight charges. The Tribunal has noted that the assessee had not procured the signatures of the truck drivers at the time of making payment of freight in cash to them and in response to a query from the Bench the assessee could not show any evidence of the payment of freight charges having been received by the truck drivers when the goods were unloaded at the destination. Hence, the Tribunal held that the payment of freight in cash is not wholly verifiable and, the onus being on the assessee, a disallowance of 10% has been effected. 4.Counsel appearing on behalf of the assessee submitted that both before the assessing officer and before the CIT(A) the assessee had produced the record relating to the payment of freight charges in its entirety including the receipts of the truck drivers. However, it has been stated that on the day when the Appeals were argued before the Tribunal, counsel appearing on behalf of the assessee was not in possession of the receipts. 5.We are of the view that the interests of justice would require that an opportunity should be granted to the assessee to meet the query which was raised by the Tribunal on the question as to whether receipts of the truck drivers in respect of the payment of freight in cash are available for verification. For the purpose aforesaid, it would be appropriate to remand the proceedings only on this aspect to the Tribunal. The Tribunal would be at liberty to verify whether the receipts are genuine and whether they were produced by the assessee during the course of the assessment proceedings or in appeal before the CIT(A). In order to enable a fresh determination to be made on this aspect, the impugned order of the Tribunal is set aside to the aforesaid extent and the proceedings are remitted back to the Tribunal for a fresh decision. The Appeal is disposed of. In the circumstances, there shall be no order as to costs. (Dr. D.Y.Chandrachud, J.) (J.P. Devadhar, J.)