Nasim Gorey, Howrah V. DCIT, C ircle- 48, Kolkata, Kolkata

CO 15/KOL/2010

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 6662 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 18 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 29-11-2011
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 04-05-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 10-02-2010
• Court: TRIBUNAL
• Department Lawyers: S K ROY
• Assessee Lawyers: P B SAHA
• Section: 131

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH B, KOLKATA () BEFORE . .. . , , , , !, SHRI N.VIJAYAKUMARAN, JUDICIAL MEMBER. ' ' ' ' /AND . .. .#$ #$#$ #$. .. . , %& ! SHRI C.D.RAO, ACCOUNTANT MEMBER '( '( '( '( ') ') ') ') / ITA NOS . 51 & 52/KOL/2010 *+ ,-/ ASSESSMENT YEARS : 2004-05 & 2005-06 (/0 / APPELLANT ) D.C.I.T., CIRCLE-48, KOLKATA - - - VERSUS - . (23/0/ RESPONDENT ) NASIM GOREY, KOLKATA (PAN: AELPG 5679 Q) 4 ( 4 ( 4 ( 4 ( /C.O. NOS.15 & 16/KOL2010 ') ') ') ') / A/O ITA NOS . 51 & 52/KOL/2010 *+ ,-/ ASSESSMENT YEARS : 2004-05 & 2005-06 (/0 / APPELLANT ) NASIM GOREY, KOLKATA (PAN: AELPG 5679 Q) - - - VERSUS - . (23/0/ RESPONDENT ) D.C.I.T., CIRCLE-48, KOLKATA /0 5 6 %/ FOR THE DEPARTMENT: SHRI S.K.ROY 23/0 5 6 %/ FOR THE ASSESSEE : SHRI P.B.SAHA 7 5 $& /DATE OF HEARING : 22.11.2011. 8, 5 $& /DATE OF PRONOUNCEMENT : 29.11.2011. %9 / ORDER ( (( ( . .. .#$ #$#$ #$. .. . ) )) ), , , , %& ! PER SHRI C.D.RAO, AM THE ABOVE TWO APPEALS FILED BY THE REVENUE AND THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE AGAINST ORDERS DATED 27.10.2009 O F THE CIT(A)-XXX, KOLKATA PERTAINING TO A.YRS. 2004-05 & 2005-06. 2 2. IN BOTH THE APPEALS REVENUE HAS TAKEN THE FOLLO WING GROUNDS :- THE LD. CIT(A) HAS FAILED TO NOTICE THAT THE ASSES SEE HAD CLAIMED HUGE PAYMENT OF WAGES AND BY DELIBERATELY EVADING THE PRODUCTION OF DETAILS PERTAINING TO EXAMINATION U/S 40(A)(IA) HE HAS ATTEMPTED TO ESCAPE LARGE DISA LLOWANCE UNDER THIS SECTION WHICH COULD HAVE EVEN EXCEEDED THE NET PROFIT ASSESSED BY A.O. 3. AT THE TIME OF HEARING BEFORE US, THE LD. DR AP PEARING ON BEHALF OF THE REVENUE SUBMITTED THAT ASSESSEE HAD DELIBERATELY EVADING TH E PRODUCTION OF DETAILS PERTAINING TO THE LABOUR CHARGES AND BECAUSE OF THE SAME THE REV ENUE COULD NOT ESTIMATE THE DISALLOWANCE U/S 40(A)(IA) OF THE IT ACT. THEREFORE THE LD. CIT(A) WHO IS HAVING CO- TERMINUS POWERS THAN THAT OF THE AO HAS DIRECTED TH E A.O. TO ESTIMATE THE INCOME AT 5% AS AGAINST 10% OF THE NET PROFIT AS ESTIMATED BY THE AO. 4. ON THE OTHER HAND, THE LD. COUNSEL APPEARING ON BEHALF OF ASSESSEE BY REFERRING TO THE ASSESSMENT ORDER AS WELL AS IMPUGNED ORDER P OINTED OUT THAT THE GROUNDS RAISED BY THE REVENUE IS NOT ARISING OUT OF THE ORDERS OF EITHER AO OR THAT OF THE LD. CIT(A). THEREFORE, HE REQUESTED TO DISMISS THE APPEAL OF RE VENUE AS THEY ARE NOT ARISING OUT OF THE ORDERS OF THE REVENUE AUTHORITIES. 5. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CARE FUL PERUSAL OF MATERIALS AVAILABLE ON RECORD, THE ASSESSING OFFICER HAS REJE CTED THE BOOKS AND ESTIMATED THE INCOME AT 10% BY OBSERVING AS UNDER :- A LETTER WAS ALSO ISSUED TO THE ASSESSEE BY REGIST ERED POST ON 16.4.2006, WHICH WAS SERVED UPON THE ASSESSEE (RECEIVED BY AYESHA SIDDIK A) REQUESTED HIM TO EXPLAIN THE REASON. ON 10.2.2006 A LETTER RECEIVED FROM THE ASS ESSEE ACCEPTING THE MISTAKE IN AUDIT REPORT DUE TO OVERSIGHT. ON THE DATE OF HEARI NG ON 20.9.2006 NONE APPEARED NEITHER PRODUCE ANY EVIDENCE AS CALLED FOR. FINALLY NOTICE U/S 131 ISSUED TO THE ASSESSEE ON 27.2.2007 DIRECTING HIM TO PRODUCE EVID ENCES AND THE CASE WAS FIXED FOR HEARING ON 13.3.2007. BUT NONE APPEARED NEITHER PRO DUCE ANY EVIDENCE OR BOOKS OF ACCOUNTS. AS THE ASSESSEE IS FIALED TO CO-OPERATE I N THE ASSESSMENT STAGE, IT APPEARS THAT THE ASSESSEE DID NOT MAINTAIN ANY BOOKS OF ACC OUNTS OR ANY EVIDENCE. HENCE I REJECT THE BOOKS OF ACCOUNTS IF HE MAINTAINED. AS S UCH NO PURPOSE WILL BE SERVED IN WAITING ADINFINITUM FOR HIS APPEARANCE. DURING THE ASSESSMENT YEAR 2003-04 THE ASSESSEE AHS SHOWN NET PROFIT @11% ON LABOUR CHARGE S RECEIVED. CONSIDERING THE NATURE OF BUSINESS NET PROFIT IS TAKEN IN THIS YEAR @10% WHICH COMES TO RS.21,05,020/- LESS INCOME DISCLOSED IN THE RETURN PROFIT RS.8,30,500/- WHICH COMES TO RS.12,74,520/- IS ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 3 5.1. THE LD. CIT(A) HAS RESTRICTED THE ADDITION FRO M 10% TO 5%WITHOUT EVEN DISCUSSING THE APPLICABILITY OF SECTION 40(A)(IA) O F THE IT ACT BY OBSERVING AS UNDER :- THE APPELLANT CONTENDS THAT THE TURN OVER OF ASSES SMENT YEAR 2003-04 WAS MUCH LESS COMPARED TO THE TURN OVER OF THIS YEAR. IT IS SEEN THAT THE TURN OVER OF THIS YEAR IS RS.2.10 CRORES AGAINST RS.24.64 LAKHS OF 2003-04. T HE NET PROFIT PERCENTAGE OF THIS YEAR IS 3.94% COMPARED TO 11% OF THAT YEAR. SINCE, THE TURN OVER HAS SUBSTANTIALLY INCREASED, THERE IS A DROP IN THE NET PROFIT PERCEN TAGE. HOWEVER, THE NET PROFIT DISCLOSED IS HIGHER COMPARED TO 2003-04. FURTHER, I N THE COMPARABLE CASES, FOR ASSESSMENT YEARS 2005-06 AND 2006-07 THE NET PROFIT RATE ACCEPTED IN THE ASSESSMENTS VARIES FROM 1.91% TO 3.04%. HOWEVER, TH E APPELLANT FAILED TO FURNISH NECESSARY PARTICULARS BEFORE THE AO IN SUPPORT OF T HE PROFIT. CONSIDERING THE INCREASE IN THE TURN OVER AND THE RESULTS DISCLOSED BY THE C OMPARABLE CASES, ASSESSING THE NET PROFIT AT 5% OF THE TURN OVER WOULD MEET THE ENDS O F JUSTICE. THE AO IS DIRECTED TO ESTIMATE THE NET PROFIT AT 5% INSTEAD OF 10% ADOPTE D. THE AO IS DIRECTED TO RE- COMPUTE THE INCOME ACCORDINGLY. 5.2. ON PERUSAL OF THE ABOVE OBSERVATIONS OF ASSESS ING OFFICER AS WELL AS CIT(A) AND THE GROUNDS TAKEN BY THE REVENUE WE ARE OF THE VIEW THAT NEITHER AO NOR THE LD. CIT(A) HAS DISCUSSED IN THEIR ORDER REGARDING THE D ISALLOWANCE U/S 40(A)(IA) OF THE IT ACT. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THIS GROUND IS NOT ARISING OUT OF THE IMPUGNED ORDER OF THE LD. CIT(A). HENCE WE DISMISS THE APPEALS OF THE REVENUE. 6. AS REGARDING THE CROSS OBJECTIONS RAISED BY ASSE SSEE SINCE THE LD. COUNSEL APPEARING ON BEHALF OF ASSESSEE HAS NOT PRESSED FOR THE SAME THE CROSS OBJECTIONS OF ASSESSEE ARE DISMISSED AS BEING NOT PRESSED. 7. IN THE RESULT THE APPEALS OF THE REVENUE AS WELL AS THE CROSS OBJECTIONS OF ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 29.11.2011. SD/- SD/- . .. . , , , , * * * * ! ! ! ! N.VIJAYAKUMARAN, JUDICIAL MEMBER . .. .#$ #$#$ #$. .. . , ,, , %& %& %& %& ! ! ! !, C.D.RAO, ACCOUNTANT MEMBER. ( (( ($& $& $& $&) )) ) DATE: 29.11.2011. R.G.(.P.S.) 4 %9 5 2** :%,;- COPY OF THE ORDER FORWARDED TO: 1. NASIM GOREY, VILL-CHENGAIL, HIGH MADRASHA P.O. ULUB ERIA, HOWRAH- 711306. 2 THE D.C.I.T., CIRCLE-48, KOLKATA. 3. THE CIT, 4. THE CIT(A)-XXX, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA 3 2*/ TRUE COPY, %9/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES