Rajmoti Road Movers v. Pr. CIT

Case Laws Analysis
REFERRED Royal Western India Turf Club v. Pr. CIT 2021 TaxPub(DT) 5618 (Mum-Trib)
REFERRED Designmate India (P) Ltd. v. CIT-1 2017 TaxPub(DT) 4234 (Guj-HC)
REFERRED CIT v. Jet Airways (I) Ltd. 2011 TaxPub(DT) 0218 (Bom-HC)

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The Tax Publishers2024 TaxPub(DT) 823 (Rkt-Trib) IN THE ITAT RAJKOT WASEEM AHMED, A.M. & TR SENTHIL KUMAR, J.M. Rajmoti Road Movers v. Pr. CIT ITA No. 157/RJT/2022 7 February, 2024 Assessee by: D.M Rindani, A.R Revenue by: Shramdeep Sinha, CIT. DR ORDER *Waseem Ahmed, A.M.* The captioned appeal has been filed at the instance of the assessee against the order of the Learned Principal Commissioner of Income Tax-1, Rajkot arising in the matter of assessment order passed under Section 263 of the Income Tax Act, 1961 (here-in-after referred to as 'the Act') relevant to the Assessment Year 2012-13. 2. The only grievance raised by the assessee is that the Learned PCIT under section 263 of the Act has held the assessment order passed by the Assessing Officer as erroneous in so far prejudicial to the interest of revenue under section 263 of the Act. 3. The necessary facts are that the assessee in the present case, a partnership firm, is engaged in the business of transportation of goods. The assessee filed its original return of income dated 22-12-2012, declaring an income at Rs. 2,53,12,550 only which was processed under section 143(1) of the Act. Thereafter, the case of the assessee was selected for scrutiny and therefore a notice vide letter dated 10-12-2013, was issued upon the assessee under section 143(2) of the Act. During the assessment, the gross profit was estimated at Rs. 2,86,52,160 being 3.40% of the net receipt Rs. 1,39,15,04,986 only which resulted in an addition of Rs. 33,39,612 to the total income of the assessee vide order dated 23-2-2015 passed under section 143(3) of the Act. 3.1 Subsequently, the proceedings under section 147 of the Act were initiated on account of escapement of income by issuing notice under section 148 of the Act, dated 27-3-2019. The proceedings under section147 of the Act were initiated on account of mismatch in the advance freight charges paid by the assessee vis-a-vis such advance freight charges shown under the balance sheet. However, the Assessing Officer after necessary verification accepted the income of the assessee computed by the Assessing Officer in the assessment framed under section 143(3) of the Act at Rs.2,86,52,160 vide order dated 18-12-2019. Later, the Learned PCIT on verification of the assessment records observed certain defects in the income escaping assessment order dated 18-12-2019 which are enumerated as under: I. Based on the different ledgers of freight advances, it was noticed that the total freight advances stand at Rs. 3,03,89,600 as on 31-3-2012, whereas in the financial statement as on 31-3-2012, such advances were shown at Rs. 20,45,967 only. However, such a mismatch in the amount of freight advances was not examined by the Assessing Officer during the assessment proceedings. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2024 TaxPub(DT) 823 (Rkt-Trib)

IN THE ITAT RAJKOT

WASEEM AHMED, A.M. & TR SENTHIL KUMAR, J.M.

Rajmoti Road Movers v. Pr. CIT

ITA No. 157/RJT/2022

7 February, 2024

Assessee by: D.M Rindani, A.R

Revenue by: Shramdeep Sinha, CIT. DR

ORDER

Waseem Ahmed, A.M.

The captioned appeal has been filed at the instance of the assessee against the order of the Learned Principal Commissioner of Income Tax-1, Rajkot arising in the matter of assessment order passed under Section 263 of the Income Tax Act, 1961 (here-in-after referred to as 'the Act') relevant to the Assessment Year 2012-13.

2. The only grievance raised by the assessee is that the Learned PCIT under section 263 of the Act has held the assessment order passed by the Assessing Officer as erroneous in so far prejudicial to the interest of revenue under section 263 of the Act.

3. The necessary facts are that the assessee in the present case, a partnership firm, is engaged in the business of transportation of goods. The assessee filed its original return of income dated 22-12-2012, declaring an income at Rs. 2,53,12,550 only which was processed under section 143(1) of the Act. Thereafter, the case of the assessee was selected for scrutiny and therefore a notice vide letter dated 10-12-2013, was issued upon the assessee under section 143(2) of the Act. During the assessment, the gross profit was estimated at Rs. 2,86,52,160 being 3.40% of the net receipt Rs. 1,39,15,04,986 only which resulted in an addition of Rs. 33,39,612 to the total income of the assessee vide order dated 23-2-2015 passed under section 143(3) of the Act.

3.1 Subsequently, the proceedings under section 147 of the Act were initiated on account of escapement of income by issuing notice under section 148 of the Act, dated 27-3-2019. The proceedings under section147 of the Act were initiated on account of mismatch in the advance freight charges paid by the assessee vis-a-vis such advance freight charges shown under the balance sheet. However, the Assessing Officer after necessary verification accepted the income of the assessee computed by the Assessing Officer in the assessment framed under section 143(3) of the Act at Rs.2,86,52,160 vide order dated 18-12-2019. Later, the Learned PCIT on verification of the assessment records observed certain defects in the income escaping assessment order dated 18-12-2019 which are enumerated as under:

I. Based on the different ledgers of freight advances, it was noticed that the total freight advances stand at Rs. 3,03,89,600 as on 31-3-2012, whereas in the financial statement as on 31-3-2012, such advances were shown at Rs. 20,45,967 only. However, such a mismatch in the amount of freight advances was not examined by the Assessing Officer during the assessment proceedings.