Sh. Nazir Ahmed Sheikh, Kishtwar ( J&K) V. The Income Tax Officer, UDHAMPUR

CO 25/ASR/2015

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 3134 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 9 month(s) 8 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 18-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 09-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAHUL DHAWANLD
• Keywords: Tax effect
• Section: 44AD

Judgement Text

IN THE INCOME TAX APPELLAT E TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH.T.S. KAPOOR, ACCOUNTANT MEMBER AND SH.N.K.CHOUDHRY, JUDICIAL MEMBER CROSS OBJECTION NO.25(ASR)/2015 (ARISING OUT OF ITA NO.474(ASR)/2015) ASSESSMENT YEAR:2010-11 SH. NAZIR AHMED SHEIKH, S/O SH. MUSTAFA SHEIKH, R/O VILLAGE SARKOOT, TEHSHIL & DISTRICT KISHJTWAR. PAN:CNGPS-2698K VS. INCOME TAX OFFICER, WARD-2(4), UDHAMPUR, J&K. (CROSS OBJECTOR) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY: SH. RAHUL DHAWAN (LD. DR) DATE OF HEARING: 02.08.2017 DATE OF PRONOUN CEMENT: 18.08.2017 ORDER PER N. K. CHOUDHRY (JM): THE ASSESSEE PREFERRED THE INSTANT CROSS OBJECTION BY PARTL Y FEELING AGGRIEVED AGAINST THE ORDER DATED 18.06.201 5 PASSED BY THE LD. CIT(A), JAMMU, IN APPEAL NO.146/13-14. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF CROSS OBJECTIONS. (I) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS BEEN JUSTIFIED IN LAW IN ACCEPTING THE APPEAL O F THE RESPONDENT SH. NAZIR AHMED SHEIKH EXCEPT AN ADDITION OF RS.2,5 7,440/- ON ACCOUNT OF TWO MONTHS STOCK WHICH HAS BEEN DETERMIN ED ON GUESS WORK AS THE WHOLE OF TURNOVER WAS ACCESSED U/S 44AD OF THE INCOME TAX ACT, 1961. (II) THAT NEITHER ON FACTS NOR ON LAW THE APPELLANT HAS POINTED OUT ANY ERROR IN THE IMPUGNED ORDER OF THE LD. CIT(A) W HICH MAY ENTITLED THE APPELLANT TO CHANGE THE ORDER OF THE LD. CIT(A) . C.O.25(ASR)/ 2017 ASST. YEAR: 2010-11 2 (III) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, IT IS HUMBLY PRAYED THAT THE ADDITION OF RS.2,57,440/- MADE BY T HE LD. CIT(A) WITHOUT ANY MATERIAL ON RECORD MAY KINDLY BE DELETE D. 3. THE ASSESSEE ALTHOUGH RELIED UPON THE ORDER PASSED BY TH E LD. CIT(A) BUT CHALLENGE THE SAME BY FILING CROSS OBJECTIONS ONLY UPTO TO THE EXTENT ON ADDITION OF RS.2,57,440/- ON ACCOUNT OF TWO MONTHS STOCK. 4. THE LD. AR ARGUED THAT THE CIT(A) HAS DONE THE GUE SS WORK AND CONFIRM THE ADDITION ONLY ON ASSUMPTION AND SURMISES WHICH CANNOT STAND IN THE EYES OF LAW AND LIABLE TO BE DELETED. 5. ON THE CONTRARY, THE LD. DR SUBMITTED THAT THE ORDER PASSED BY THE LD. CIT(A) BASED ON REASONING DOES NOT SUFFER FROM ANY ILLEGALITY, IMPROPRIETY, HENCE, LIABLE TO BE AFFIRMED TO THE EXT ENT AS CHALLENGED BY THE ASSESSEE. 6. WE HAVE GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE AS WE REALIZE THAT THE ORDER PASSED BY THE LD. CIT(A) WAS CHALLENGED BY THE REVENUE DEPARTMENT FOR DELETION OF RS.11,58,4 82/- AND OF RS.3,00,000/- WHICH LATER ON DUE TO NOTIFICATION OF T HE CBDT CIRCULAR BECAUSE THE TAX EFFECT WAS LESS THAN 10 LACS, THEREFORE, TH E SAME WAS ALLOWED TO DISMISSED AS WITHDRAWN, HOWEVER, THE CROSS O BJECTIONS FILED BY THE ASSESSEE REMAINED IN EXISTENCE. FROM THE ORDER IT REFLECTS THAT THE LD. CIT(A ) ADOPTED A REASONABLE PROFIT RATE @ 18% AS APPROPRIATE AND IN ACCO RDANCE WITH C.O.25(ASR)/ 2017 ASST. YEAR: 2010-11 3 STATUTORY PROVISIONS OF SEC. 44AD OF THE ACT, HOWEVER, WHILE DECIDING THE ISSUE THE LD. CIT(A) HAS TAKEN THE VIEW ON TOTAL G ROSS RECEIPT OF RS.15,44,642/- REQUIRES AT LEAST TWO MONTHS STOCK AND TH E AVERAGE SALE AS PER CREDIT IN THE BANK WORKS OUT AT RS.1,28,720/ - PER MONTH. THEREFORE, CONSIDERING THE TWO MONTHS STOCK AS INVESTMEN T IN THE BUSINESS THE LD. CIT(A) CONFIRMED THE ADDITION TO THE EXTENT OF RS.2,57,440/-. IN OUR CONSIDERED VIEW, THE ORDER PASSED BY THE LD. CI T(A) IS A LOGICAL, REASONABLE AND BASED ON REASONING AS WE ARE IN AGREEMENT THAT FOR MAKING THE TURN OVER OF RS.15,44,642/-, THE ASSESSEE REQUIRES AT LEAST TWO MONTHS STOCK, HENCE, THE CONFIRMATION OF THE ADDITION DOES NOT REQUIRE TO BE INTERFERED WITH BECAUSE WE DO N OT FIND ANY INFIRMITY, PERVERSITY AND ILLEGALITY IN THE ORDER PA SSED BY THE LD. CIT(A), HENCE, THE CROSS OBJECTION FILED BY THE ASSESSEE STA NDS DISMISSED. 7. IN THE RESULT, THE CROSS OBJECTION NO.25(ASR)/2015 FI LED BY ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.08.2017. SD/- SD/- (T. S. KAPOOR) (N.K.CHOUDHRY ) ACCOUNTANT MEMBER JUD ICIAL MEMBER DATED:18.08.2017. /PK/ PS. C.O.25(ASR)/ 2017 ASST. YEAR: 2010-11 4 COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A) (4) THE CIT, ASR. (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER