M/s Sahani Transport Corporation, Cuttack V. DCIT, Sambalpur

ITA 100/CTK/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81455 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-10-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 18-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: S N SAHU
• Keywords: Business income
• Section: 144

Judgement Text

1 I.T.A. NO.100/CTK/2013 ASSESSMENT YEAR: 2008-09 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH , CUTTACK BEFORE S/SHRI S.V.MEHROTRA (AM) AND GEORGE MATHAN (JM) I.T.A. NO.100/CTK/2013 ASSESSMENT YEAR: 2008-09 M/S. SAHANI TRANSPORT CORPORATION, PANJABI PARA, BARBIL, KEONJHAR, PA NO.ABJFS 5148 P VS DCIT, CIRCLE - 1(1), SAMBALPUR APPELLANT RESPONDENT FOR THE APPELLANT: SHRI S.N.SAHU FOR THE RESPONDENT:SHRI S.C.MOHANTY DATE OF HEARING: 15/10/.2014 DATE OF PRONOUNCEMENT: 17 /10/2014 ORDER PER S.V.MEHROTRA, AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST ORDER DATED 9.11.2012 OF LD CIT(A), BERHAMPUR, CAMP: SAMBALPUR FOR THE ASSESSMENT YEAR 2008-09. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FI RM, IN THE RELEVANT ASSESSMENT YEAR, DERIVED INCOME FROM TRANSPORTATION WORK. IT FILED RETURN OF INCOME SHOWING TOTAL INCOME OF R.7,13,270/-. THE ASSESSMENT WAS COMPLETED UNDER S ECTION 144 AT A TOTAL INCOME OF RS.23,69,720/- AS UNDER: 1. IN ABSENCE OF BOOKS OF ACCOUNT NET PROFIT IS ESTIMATED @ 8% OF GROSS RECEIPT SHOWN AT RS.1,87,25,469/- : RS.14,98,037.52 2. IN ABSENCE OF DETAIL/EXPLANATION CREDITORS SHOW N AT RS.8,71,683/- IS TREATED AS UNEXP LAINED CREDIT UNDER THE PROVISION 68 OF THE ACT, AND ADDED IN THE TOTAL INCOME. : RS. 8,71,6 83/- RS.23,69,720/- 2 I.T.A. NO.100/CTK/2013 ASSESSMENT YEAR: 2008-09 3. LD CIT (A) PARTLY ALLOWED THE ASSESSEES APPEAL, INTER ALIA, DIRECTING THE AO TO TAKE BUSINESS INCOME AT 6% OF THE TURNOVER AS AGAINST 8% ESTIMATED BY THE AO. AS FAR AS ADDITION REGARDING SUNDRY CREDITORS IS CONCERNED, LD CIT(A) CONFIRMED THE ADDITION, INTER ALIA, OBSERVING THAT IN CASE OF SAI CONSTRUCTION VS ITO, 127 TTJ 15 (CTK) AND ITO VS. NITYANANDA SWAIN (ITA NO.491/CTK/2011/C.O.NO.35/CTK/2011 AND NITYANANDA S WAIN V ITO (ITA NO.529/CTK/2011) DATED 22.3.2012, IT HAS BEEN HELD THAT NOTWITHSTAN DING THE ESTIMATION OF PROFIT ADDITION ON ACCOUNT OF UNEXPLAINED DEPOSITS CAN BE MADE. BEING AGGRIEVED BY THE ORDER OF LD CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US AND HAS TAKEN THE C ONCISE GROUNDS OF APPEAL AS UNDER: 1. THAT THE ESTIMATE OF PROFIT @ 6% MADE BY THE CI T(A) IS EXCESSIVE, ARBITRARY AND WITHOUT ANY BASIS. 2. THAT ONCE THE ACCOUNTS ARE REJECTED AND PROFIT E STIMATED AT A FLAT RATE UNDER SECTION 68 IS NOT PERMISSIBLE UNDER THE LAW. 4. AS FAR AS GROUND NO.1 IS CONCERNED, HAVING HEARD BOTH THE PARTIES, WE ARE OF THE OPINION THAT KEEPING IN VIEW THE ASSESSEES TURNOVE R AND THE NATURE OF BUSINESS BEING TRANSPORT BUSINESS, IT WOULD MEET THE ENDS OF JUSTICE, IF THE BUSINESS INCOME IS ESTIMATED AT 5% OF THE TURNOVER OF RS.1,87,25,469/- AS AGAINST 6% DETERMIN ED BY THE CIT(A). WE ORDER ACCORDINGLY. THIS GROUND IS PARTLY ALLOWED. 5. AS FAR AS GROUND NO.2 IS CONCERNED, LD D.R. RELI ED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. DEVI PRASAD VISHWANATH , 72 ITR 194 (SC), WHEREIN, IT HAS BEEN HELD THAT THERE IS NOTHING IN LAW WHICH PREVENTS TH E ITO IN AN APPROPRIATE CASE IN TAXING BOTH THE CASH CREDIT, THE SOURCE AND NATURE OF WHICH IS NOT SATISFACTORILY EXPLAINED AND THE BUSINESS INCOME ESTIMATED BY HIM UNDER SECTION 13 AFTER REJE CTING THE BOOKS OF ACCOUNT OF THE ASSESEE 3 I.T.A. NO.100/CTK/2013 ASSESSMENT YEAR: 2008-09 AS UNRELIABLE. THE HONBLE SUPREME COURT IN ITS DE CISION REFERRED THE DECISION IN THE CASE OF KALE KHAN MOHAMMED HANIF VS CIT, 50 ITR 1(SC). HE A LSO RELIED ON THE DECISION OF CUTTACK ITAT IN THE CASE OF SAI CONSTRUCTION VS ITO, 127 TT J 15 (CTK). 6. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH PARTI ES AND PERUSED THE RECORD OF THE CASE. THE HONBLE SUPREME COURT IN THE CASE OF DEVI PRASA D VISHWANATH (SUPRA) HAS, INTER ALIA, OBSERVED THAT WHETHER IN A GIVEN CASE THE INCOME TA X OFFICER MAY TAX THE CASH CREDIT ENTERED IN THE BOOKS OF ACCOUNT OF THE BUSINESS, AND AT THE SAME TIME ESTIMATE THE PROFIT MUST, HOWEVER, DEPEND UPON THE FACTS OF EACH CASE. THERE FORE, THE FACTS HAVE TO BE EXAMINED BEFORE ARRIVING AT ANY CONCLUSION. THE GROSS RECEIPTS OF THE ASSESSEE WERE AT RS.1,87,25,469/-, 5% OF WHICH WILL COME TO RS.9,36,273/-, WHICH IS MORE THA N THE SUNDRY CREDITORS SHOWN AT RS.8,81,683/-. FURTHER, SINCE BOOKS OF ACCOUNT WEE REJECTED, THE DETAILED SCRUTINY OF SUNDRY CREDITORS WAS NOT DONE. THERE IS NO OTHER SOURCE OF INCOME EARNED BY THE ASSESSEE. IN VIEW OF ABOVE DISCUSSION, WE ARE OF THE OPINION THAT NO SEP ARATE ADDITION IS CALLED FOR IN REGARD TO SUNDRY CREDITORS. HENCE, THIS GROUND IS ALLOWED. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS P ARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 10 TH OCTOBER, 2014. SD/- SD/- ( GEORGE MATHAN) (S.V.MEHROTRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, CUTTACK 17 /10/2014 B.K.PARIDA, SR. PS 4 I.T.A. NO.100/CTK/2013 ASSESSMENT YEAR: 2008-09 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT: M/S. SAHANI TRANSPORT CORPORATION, PANJABI PARA, BARBIL, KEONJHAR 2. THE RESPONDENT: DCIT, CIRCLE-1(1),SAMBALPUR 3. THE CIT, SAMBALPUR 4. THE CIT(A), SAMBALPUR 5. DR, CUTTACK BENCH 6. GUARD FILE. TRUE COPY// BY ORDER ASST. REGISTRAR, ITAT, CUTTACK