Transporting Petroleum products from Indian Oil Station to Petrol Pump through Tanker are not Contractual Receipt: ITAT quashes Revision Order [Read Order]

The Income Tax Appellate Tribunal (ITAT), Kolkata Bench, while quashing the revision order passed under Section 263 of the Income Tax Act, held that the transporting of petroleum products from Indian Oil station to the petrol pump through tankers is not a contractual receipt.

The assessee, Prabhakar Jha, ran a Petrol Pump in the name and style of ‘Kuldeep Service Station' and was engaged in the purchase and sale of petroleum products. After filing the return of income, the case of the assessee was selected for scrutiny assessment.

Thereafter, the AO determined the total income and made certain disallowances out of salary to staff, miscellaneous expenses, traveling expenses, etc., then passed the assessment order. When the assessee filed an appeal before the CIT(A), who dismissed the appeal, and thereafter the assessee filed an appeal before the tribunal.

Accordingly, the PCIT, after verifying the assessment order, observed that the assessee received contractual income of Rs. 15,84,602/- from Indian Oil Corporation Limited. This contractual receipt was not disclosed in the Profit & Loss Account.

Therefore, the PCIT concluded that the Assessing Officer did not raise any query in this regard. Hence, the order of the Assessing Officer is erroneous as well as prejudicial to the interest of revenue.

Aggrieved by the revision order, the assessee filed an appeal before the tribunal. K.N. Prasad, Counsel appearing for the assessee, submitted that the tanker was put into service for transporting the petroleum products from Indian Oil Station up to the Petrol Pump. There was no other commission income from Indian Oil on plying the oil tankers.

Rinku Singh, Counsel for Revenue, supported the order of PCIT. It was observed by the tribunal that the Commissioner cannot remit the matter to the Assessing Officer to decide whether the findings recorded are erroneous. Also, the assessee has explained the transaction, but the PCIT would not take any step for proving it was erroneous.

After reviewing the facts and records, the two-member bench of Rajesh Kumar (Accountant member) and Rajpal Yadav (Vice-President) quashed the revision order passed by the PCIT.

Therefore, the bench allowed the appeal filed by the assessee.

To Read the full text of the Order CLICK HERE

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