2013 (10) TMI 84 - HC - Income Tax

Addition made on account of doubtful payment of transportation charges - Held that - The assessee is a transporter who hired the services of the trucks from other transporter companies. For the payment of Rs.5,05,867/-, TDS certificate was already submitted. When tax is deducted on this amount, there is no question to make the addition again. There is a concurrent findings of both the appellate authorities that the payments were genuine and the Department has no adverse material in its possession except relying on the order of the A.O. Moreover, genuineness of payment is a question of fact, which has already been adjudicated Decided against the Revenue.

Issues:
1. Appeal filed by the Department under Section 260A of the Income Tax Act, 1961 against the judgment of the Income Tax Appellate Tribunal.
2. Addition made on account of doubtful payment of transportation charges.
3. Liability of income tax prior to the winding up of the company.
4. Verification of genuineness of transportation charges.
5. Power of appellate authority compared to original authority.
6. Tribunal as a final fact-finding authority.
7. Genuineness of payment as a question of fact.

Analysis:

1. The Department filed an appeal under Section 260A of the Income Tax Act, 1961 against the decision of the Income Tax Appellate Tribunal regarding the addition made on account of doubtful payment of transportation charges for the Assessment Year 1995-96.

2. The case involved a dispute over the genuineness of transportation charges paid by the assessee to different transport companies. The CIT(A) and the Tribunal both found the payments to be genuine based on the evidence presented, leading to the deletion of the additions made by the Assessing Officer.

3. The issue of liability for income tax prior to the winding up of the company was raised, with the Official Liquidator stating that the responsibility lies with the ex-Directors/Management, not the official liquidator. The appeal was to be considered in light of the winding up orders.

4. During the assessment proceedings, the Assessing Officer issued a notice to verify the genuineness of the transportation charges paid by the assessee to specific transport companies. The Tribunal upheld the findings of the CIT(A) regarding the authenticity of the payments based on the evidence presented.

5. The power of the appellate authority, in this case, the CIT(A), was discussed in comparison to the original authority. The CIT(A) was found to have coterminous power with the Assessing Officer, subject to any prescribed laws, as established in relevant legal precedents.

6. The Tribunal was recognized as a final fact-finding authority, and its decision was upheld based on established legal principles. The Tribunal's findings regarding the genuineness of the payments were considered conclusive in the absence of adverse material presented by the Department.

7. The genuineness of the payment was deemed a question of fact, and since both the CIT(A) and the Tribunal had found the payments to be legitimate, the High Court declined to interfere with the Tribunal's decision. The judgment favored the assessee, and the appeal filed by the Department was dismissed accordingly.

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