THE PR. COMMISSIONER OF INCOME TAX II, AMRITSAR Vs. SH. KULWINDER SINGH 66, GREEN PLAZA MARKET, COURT ROAD, AMRITSAR

JUDGEMENT

(1.) The appellant-revenue has filed the instant appeal under section 260A of the Income Tax Act, 1961 (in short, "the Act") against the order dated 23.6.2016, Annexure A.3, passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (in short, "the Tribunal") in ITA No. 149(Asr)/2016, claiming following substantial questions of law for the assessment year 2009-10:-

(2.) A few facts necessary for adjudication of the controversy involved, as narrated in appeal, may be noticed. The assessee-respondent is a Government Contractor in the business of road construction. A return declaring income of Rs. 55,81,540/- was filed by him. The case was selected for scrutiny and the assessment was made under Section 143(3) of the Act. During the course of assessment proceedings, on examination of books of account vis-a-vis balance sheet filed by the assessee, it was seen that he had shown a number of sundry creditors against registration number of the vehicles. When enquired, it was submitted by the assessee that he had purchased crusher through these vehicles on credit during the month of February and March, 2009. The amount shown against each vehicle numbers in the balance sheet was on account of Freight, Octroi and carriage as on 31.03.2009. The assessee was asked to furnish copies of account of all the above creditors mentioned in the balance sheet by way of vehicle numbers. He was also asked to produce the goods carrier owners in respect of whom payment exceeding Rs. 50,000/- was outstanding as on 31.03.2009. Summons under Section 131 of the Act were issued randomly on 21.11.2011 to find out the genuineness of creditors in respect of outstanding payments as on 31.03.2009, which were reflected against registration numbers of vehicles. All the summons were received back un-served with the remarks that "no such person available at this address", "address is incomplete". The assessee was asked to furnish ledger account of the aforesaid creditors, which were produced by him. It was found that credit entries in respect of all the vehicles had been made on account of freight, octroi and carriage. These entries had been made in the last days of March, 2009. A few entries pertained to the months of January and February, 2009. According to the appellant-revenue, the assessee had been able to satisfactorily explain the aforesaid creditors shown against Registration Number of the vehicles. The Assessing Officer passed an order dated 21.12.2011 under Section 143(3) of the Act making an addition of Rs. 83,18,322/- on account of freight, octroi and carriage. Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. Vide order dated 9.12.2015, Annexure A.2, the CIT(A) dismissed the appeal and confirmed the addition made by the Assessing Officer. Not satisfied with the order, the assessee filed appeal before the Tribunal. Vide order dated 23.06.2016, Annexure A.3, the Tribunal allowed the appeal holding that the provisions of Section 68 of the Act could be invoked in case some amount was received by an assessee. In the present case, the concerned transactions were only of supply of material and, therefore, provisions of Section 68 of the Act were applicable. It was further held that trade creditors in the earlier years stood accepted in scrutiny assessments. Thus, the genuineness of the expenses under consideration could be doubted. Hence the instant appeal by the appellant-revenue.

(3.) We have heard learned counsel for the appellant-revenue.