Taxap/275/2019 Of Pr. Commissioner Of Income Tax, Rajkot I v. Kewar Carrier Handling And Transport Co

C/TAXAP/275/2019 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 275 of 2019 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR.JUSTICE A.C. RAO ==========================================================1 Whether Reporters of Local Papers may be allowed to see the judgment ?2 To be referred to the Reporter or not ?3 Whether their Lordships wish to see the fair copy of the judgment ?4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ?==========================================================PR. COMMISSIONER OF INCOME TAX, RAJKOT I VersusKEWAR CARRIER HANDLING AND TRANSPORT CO. ==========================================================Appearance:MRS MAUNA M BHATT(174) for the Appellant(s) No. 1 for the Opponent(s) No. 1========================================================== CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR.JUSTICE A.C. RAO Date : 15/07/2019 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) This Tax Appeal under Section 260A of the Income Tax Act, 1961 is at the instance of the Revenue and is directed against the order passed by the Income Tax Appellate Tribunal, Rajkot Bench, Rajkot, in the ITA No.148/RJT/2007 for the A.Y.2003-04 dated 07/12/2018 2.The Revenue has proposed the following two questions of law :- "(A) Whether the Appellate Tribunal has erred in law and on facts upholding the order of the CIT(A) deleting the addition made on account of unexplained cash credit of Rs 47,00,044/- under section 68 of the Income Tax Act, 1961 particularly when the identity, genuineness and creditworthiness of the unsecured loan lender parties were not proved by the assessee to he satisfaction of the Assessing Officer ? (B) Whether Appellate Tribunal has erred in law an don facts in upholding the order of the CIT(A) deleting the addition made on account of bogus expenses amounting to Rs 2,15,68,848/- without considering the detailed remand report of the Assessing officer that the genuineness of he unpaid expenses in outstanding sundry creditors was not established and proved by the assessee ?" 3.So far as the first question as proposed by the Revenue is concerned, the finding of fact recorded by the Tribunal is as under : "We have heard the rival submission and perused the material on record. We find that he assessee has taken loan from Shri M. Mehta, Proprietor of Amit Handling Agencies on October 19th November 22nd and December 19th total to Rs 14 lakhs. The perusal of bank statement shows that the assessee Shri M. Mehta has deposited cash of Rs 3 lakhs on 19.10.2002, Rs 5.5 lakhs on 22.11.2002 and 6.5 lakhs on 19.12.2002 and immediately thereafter cheques were given to the assessee on respective date. Further, this fact is also confirmed by the Shri M. Mehta recorded on oath under section 131 of the Act wherein he deposed that he has given 3 cheques to Shri Latif Ayub Kewar, partner M/s kewar Handling and Transporting Company and he deposited those in his bank account and he was the person who deposited those amount in his bank account and got the cheques cleared, the addition confirmed by the CIT(A) as therefore upheld. Accordingly, this ground of appeal of the assessee is dismissed." 4 So far as the second question as proposed by the Revenue is concerned, the finding of fact recorded by the Tribunal is as under : Further, this fact is also confirmed by the Shri M. Mehta recorded on oath under section 131 of the Act wherein he deposed that he has given 3 cheques to Shri Latif Ayub Kewar, partner M/s kewar Handling and Transporting Company and he deposited those in his bank account and he was the person who deposited those amount in his bank account and got the cheques cleared, the addition confirmed by the CIT(A) as therefore upheld. Accordingly, this ground of appeal of the assessee is dismissed." 4 So far as the second question as proposed by the Revenue is concerned, the finding of fact recorded by the Tribunal is as under : " 15. We have heard the rival submissions and perused the material on record we find that it is imperative of such type of expenses remaining unpaid are outstanding for 2 or 3 months. The AO has stated in para 5.6 of his order that cash must be paid to these labourers and truck drivers from source which are not disclosed to the data. This, itself states that there is no doubt in genuineness of he expenditure but AO had made estimation of the undisclosed sources for such expenditure, We further find that on similar facts in the case of sister concern of the assessee M/s AyubBhecha Shipping and Allied Services & Ayub Bahachan (sup) the ITAT had estimated the net profit @1.4%. Similarly, int he case of assessee, the ITAT has accepted the profit margin of 1.39% shown by the appellant. We find that the CIT(A) has considered net profit @ 2% instead of 1.79% shown by the assessee. Therefore, this ground of appeal is covered by the decision of the Tribunal in the case of sister concern cited(supra) accordingly we do not find any consequently appeal of the Revenue and appeal of the assessee on this ground is accordingly dismissed." 5.Having heard Ms. Bhatt, the learned senior standing counsel appearing for the revenue and having gone through the materials on record, we are of the opinion that both the two questions as proposed by the Revenue cannot be termed as substantial questions of law involved in the present Tax Appeal. The Tribunal has concurred with the findings of fact recorded by the CIT (A). We do not find any perversity in the findings of fact recorded by the two Revenue authorities. 6.In the result, this Appeal fails and is hereby dismissed. (J. B. PARDIWALA, J) MARY VADAKKAN (A. C. RAO, J)