2018 (2) TMI 1283 - AT - Income Tax

Addition on account of mileage rebate - AO rejected the claim of the assessee on the basis of the earlier years figures as well as the statement of three dealers without verifying the documentary evidence filed by the assessee - Held that - The documentary evidence placed on record by the assessee is very much relevant to decide the issue relating to the assessee s claim that the entire mileage rebate having been distributed to the concerned dealers, there was no income that actually accrued to the assessee on account of mileage rebate and since neither the A.O. nor the Ld. CIT(A) appear to have verified the same, consider it fair and proper and in the interest of justice to give one more opportunity to the assessee to putforth its case. The impugned order of the Ld. CIT(A) is accordingly set aside and the matter is restored to the file of the A.O. for deciding the same afresh after giving the assessee one more opportunity to establish its case. - Decided in favour of assessee for statistical purposes.

Summary

Issues involved:
1. Addition of ?9,79,323/- on account of mileage rebate.

Analysis:
The appeal before the Appellate Tribunal ITAT Kolkata was directed against the order of Ld. CIT (Appeals) regarding the addition of ?9,79,323/- made by the Assessing Officer (AO) and confirmed by the Ld. CIT(A) concerning mileage rebate. The assessee, a partnership firm operating as M.R. Distributor, explained that the amount received was from the Government as mileage rebate for eligible dealers situated over 8 km from the distributor's godown. However, the AO did not accept this explanation as the rebate received in previous years was not distributed to dealers, leading to the addition of the amount to the assessee's income. The Ld. CIT(A) upheld this decision, emphasizing the lack of accounting for the received rebate and the absence of sufficient evidence to support the claim that the amount was distributed to dealers. Consequently, the Tribunal set aside the Ld. CIT(A)'s order, giving the assessee another opportunity to present evidence supporting the distribution of the rebate to dealers, as the documentary evidence submitted was not adequately considered by the AO and Ld. CIT(A).

The Tribunal's decision to allow the appeal for statistical purposes was based on the need for a more thorough examination of the evidence regarding the distribution of the mileage rebate amount. The assessee's contention that the entire rebate was distributed to dealers, thus not constituting income for the assessee, was deemed worthy of further investigation. The Tribunal found the documentary evidence provided by the assessee to be relevant and crucial in determining whether the rebate amount was indeed disbursed to the concerned dealers. Despite objections raised by the Revenue, the Tribunal considered it necessary to grant the assessee another opportunity to substantiate its claim, emphasizing the importance of verifying the documentary evidence to ensure a just and fair decision. Therefore, the matter was remanded back to the AO for a fresh assessment, allowing the assessee to present additional evidence to support its case regarding the distribution of the mileage rebate amount, with the ultimate aim of achieving a more informed and equitable resolution.