ITO, Jaipur V. SANJAY JAIN, Jaipur

ITA 100/JPR/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4962 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 28-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Keywords: Depreciation; Rule of consistency; Tax effect

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH HKKXPAN] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF;D LN L; DS LE{K BEFORE: SHRI BHAGCHAND, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA- @ ITA NO. 100 & 101/JP/2015 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2010-11 & 2011-12 I.T.O., WARD 5(3), JAIPUR. CUKE VS. SANJAY JAIN, PROP.- M/S MAHAVEER TRANSPORT COMPANY, 14, TRANSPORT NAGAR, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: ACSPJ 2383 D VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT IZR;K{KSI.K @ C.O. NO. 04 & 05/JP/2015 (ARISING OUT OF VK;DJ VIHY LA-@ ITA NOS. 100 & 101/JP/2015) SANJAY JAIN, PROP.- M/S MAHAVEER TRANSPORT COMPANY, 14, TRANSPORT NAGAR, JAIPUR. CUKE VS. I.T.O., WARD 5(3), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA- @ PAN/GIR NO.: ACSPJ 2383 D IZR;K{KSID @ OBJECTOR IZR;FKHZ @ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : SHRI R.A. VERMA (ADDL.CIT). FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI MUKESH KHANDELWAL (CA) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 07/10/2016 MN?KKS'K.KK DH RKJH[ K @ DATE OF PRONOUNCEMENT: 21/10/2016 ITA 100 & 101/JP/2015 & C.O. 04 & 05/JP/2015_ ITO VS SANJAY JAIN 2 VKNS'K @ ORDER PER: LALIET KUMAR, J.M. BOTH THE APPEALS BY REVENUE AND CROSS OBJECTIONS B Y ASSESSEE ARISE FROM THE ORDERS, WHICH WAS PASSED ON 14/11/2014 BY THE LD. CIT (A)-II, JAIPUR FOR THE A.Y. 2010-11 AND 2011-12. RE SPECTIVE GROUNDS OF APPEAL AS WELL AS C.O. ARE AS UNDER:- GROUND IN REVENUES APPEAL FOR A.Y. 2010-11. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN:- (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN UPHOLDING THE NET PROFIT RATE OF 2.25% AND RESTRICTING THE TR ADING ADDITION OF RS. 51,51,404/- TO RS. 14,89,820/- GROUND IN REVENUES APPEAL FOR A.Y. 2011-12. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN:- (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN RESTRICTI NG THE TRADING ADDITION TO RS. 2546,265/- AS AGAINST T HE ADDITION OF RS. 56,39,874/- MADE BY THE A.O. GROUNDS IN ASSESSEES CROSS OBJECTION FOR A.Y. 201 0-11 1. THAT THE LD. CIT(A) HAS ERRED IN GRANTING RELIEF OF RS. 36,61,584/- ONLY AGAINST THE ADDITION OF RS. 51,51, 404 MADE BY THE LD. A.O. WHEREAS WHOLE ADDITION IS LIABL E TO BE DELETED UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT THE LD. CIT(A) HAS ERRED IN SUSTAINING THE A CTION OF THE LD. A.O. IN CONSIDERING THE INCOME FROM ITA 100 & 101/JP/2015 & C.O. 04 & 05/JP/2015_ ITO VS SANJAY JAIN 3 COMMISSION OF RS. 1,68,090/- AS SEPARATE INCOME OVE R AND ABOVE THE ESTIMATED ONE. GROUNDS IN ASSESSEES CROSS OBJECTION FOR A.Y. 201 1-12 1. THAT THE LD. CIT(A) HAS ERRED IN GRANTING RELIEF OF RS. 30,93,609/- ONLY AGAINST THE ADDITION OF RS. 56,39, 874 MADE BY THE LD. A.O. WHEREAS WHOLE ADDITION IS LIABL E TO BE DELETED UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT THE LD. CIT(A) HAS ERRED IN SUSTAINING THE A CTION OF THE LD. A.O. IN CONSIDERING THE INCOME FROM COMMISSION OF RS. 2,89,975/- AS SEPARATE INCOME OVE R AND ABOVE THE ESTIMATED ONE. 2. FIRSTLY, WE TAKE REVENUES APPEALS FOR BOTH THE Y EARS. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MAT ERIAL AVAILABLE ON THE RECORD. IT IS OBSERVED THAT THE DEMAND/ TAX EFFECT IN THE REVENUES APPEALS IN QUESTION ARE BELOW RS. 10.00 LA CS. UNDER THE POWERS VESTED BY SEC. 268A(1) OF THE I T ACT, CBDT HA S RECENTLY ISSUED CIRCULARNO.21 OF 2015 DATED 10.12.2015(F NO. 279/MISC. 142/2007-ITJ(PT) INSTRUCTING THE AUTHORITIES BELOW DEPARTMENTAL APPEAL SHOULD NOT BE FILED BEFORE ITAT WHERE THE DEMAND/TAX EFFECT DOES NOT EXCEED LESS THAN RS.10 L ACS. THE CIRCULAR IS SPECIFICALLY MENTIONED TO BE APPLICABLE FOR ALL PENDING APPEALS. 3. SUBJECT TO SOME EXCEPTIONS, IT IS FURTHER DIREC TED BY CBDT THAT ALL THE DEPARTMENTAL APPEALS PENDING BEFORE ITAT WHERE TH E DEMAND/TAX ITA 100 & 101/JP/2015 & C.O. 04 & 05/JP/2015_ ITO VS SANJAY JAIN 4 EFFECT IS LESS THAN 10 LACS SHOULD BE EITHER WITHDRA WN OR NOT PRESSED BY THE DEPARTMENTAL REPRESENTATIVES. 4. THE PRESENT APPEALS ARE NOT COVERED BY ANY EXCEPT IONS MENTIONED IN THE SAID CBDT CIRCULAR. SINCE THE TAX DEMAND IN D ISPUTES IN THE DEPARTMENTAL APPEALS ARE BELOW THE LIMIT SET OUT BY CBDT FOR THE APPEAL THE SAME IS NOT MAINTAINABLE IN VIEW OF FORE GOINGS. ACCORDINGLY THE APPEALS OF THE DEPARTMENT ARE DISMISSED AS NOT PRES SED/WITHDRAWN. 5. IN THE RESULT, BOTH THE APPEALS OF REVENUE ARE D ISMISSED. 6. NOW WE TAKE ASSESSEES C.OS. THE 1 ST GROUND OF THE ASSESSEES C.O. IS AGAINST GRANTING RELIEF OF RS. 36,61,584/- ONLY AGAINST THE ADDITION OF RS. 51,51,404/- MADE BY THE ASSESSING OFFICER. TH E BRIEF FACTS OF THE CASE IN THIS REGARD ARE THAT THE ASSESSEE CONTINUES TO DERIVE INCOME FROM TRANSPORTATION BUSINESS IN THE NAME & STYLE OF M/S. MAHAVEER TRANPSORT CO. BESIDES, THE ASSESSEE OWNS HEAVY VEHICLES AND AL SO USED TO HIRE VEHICLES FROM OTHER PARTIES TO EXECUTE TRANSPORT CO NTRACTS. THE ASSESSEE HAS SHOWN INCOME FROM SHARE BUSINESS AND ALSO EARNED SOME INTEREST INCOME. DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSEE FURNISHED THE TRADING RESULTS FOR THE LAST THREE YE ARS WHICH IS REPRODUCED HEREUNDER: ITA 100 & 101/JP/2015 & C.O. 04 & 05/JP/2015_ ITO VS SANJAY JAIN 5 A.Y. TRANSPORTATION C HARGES NET PROFIT SHOWN UNDER BUS. & PROF. HEAD NP (%) 2008 - 09 17,26,1 0,403 16,63,839/ - 0.96% 2009 - 10 15,31,53,579 18,58,935/ - 1.21% 2010 - 11 23,27,84,335 27,63,263/ - 1.87% REGARDING THE N.P. RATE THE ASSESSEE HAS SUBMITTED THERE HAS BEEN SUFFICIENT GROWTH IN THE N.P. RATE DURING THE YEAR U NDER CONSIDERATION AS COMPARED TO IMMEDIATELY PRECEDING YEAR. AS A MATTER OF FACT, THE ASSESSEE HAS CLAIMED A SUM OF RS.1,47,92,411/- AGAI NST DEPRECIATION (MAINLY ON COMMERCIAL VEHICLES) AS COMPARED TO SUCH CLAIM OF RS. 79,12,734/- IN THE IMMEDIATELY PREVIOUS YEAR. THIS V AST INCREASE IN DEPRECIATION HAS CONTRIBUTED MUCH FOR DECLINE IN NE T PROFIT IN ABSOLUTE TERMS. CONSIDERING SUCH STEEP UPS IN THE DEPRECIATI ON IT IS SUBMITTED THAT DECLARED NP RATE MAY PLEASE BE ACCEPTED AS REASONAB LE. THE ASSESSEE FURTHER STATED THAT THE PROFIT RATE HAS RECORDED SUFFICIENT INCREASE DURING THE YEAR UNDER CONSIDERATION AND HE NCE IT IS REQUESTED THAT THE SAME MAY PLEASE BE ACCEPTED. AS PER THE JU DGMENTS OF THE HONBLE TRIBUNAL, JAIPUR BENCH, JAIPUR THE PROFIT RA TE OF 2% WAS UPHELD BY IT FOR THE A.Y. 2006-07 AND 1.75% FOR THE A.Y. 2 007-08. 1. DURING EXAMINING THE BOOKS OF ACCOUNTS OF THE A SSESSEE, IT WAS FOUND THAT ASSESSEE HAS NOT MAINTAINED / PRODUCE D ANY VOUCHERS, GR NO. WITH RESPECT TO FREIGHT PAYMENTS AN D MOSTLY PAYMENTS BELOW RS. 20,000/- WERE MADE IN CASH TO THE PARTIES. FURTHER, IT WAS ALSO A FACT THAT THE AS SESSEE HAD ITA 100 & 101/JP/2015 & C.O. 04 & 05/JP/2015_ ITO VS SANJAY JAIN 6 NOT MAINTAINED ANY LOG BOOK IN RESPECT OF TRUCKS OWN ED BY HIM. THE ASSESSEE HIMSELF ADMITTED THAT HE HAD NOT MAINTAINED PROPER VOUCHERS FOR LOADING & UNLOADING CHARGES OF RS.55,720/, REPAIRS & MAINTENANCE OF RS. 1,16,00 ,307/-, TRIP EXPENSES OF RS.4,12,28,803/- AND TYRE & TUBE EX PENSES OF RS. 1,14,84,990/-. IT WAS ALSO FOUND THAT THE ASS ESSEE IS NOT MAINTAINING LOG BOOK TRUCK WISE AND CONSUMPTION OF DIESEL TRUCK WISE. CONSIDERING THESE FACTS, THE NET PROFIT DECLARED BY THE ASSESSEE IS NOT AMENABLE TO VERIFIC ATION AND N.P. RATE IS LIABLE TO ESTIMATED BY WAY OF REJECTING BOOKS OF ACCOUNTS OF THE ASSESSEE. BASED ON THESE FACTS, THE ASSESSEE VIDE ORDER SHEET ENTRY DATED 30.01.2013 WAS SHOW CAUS ED AS TO WHY N.P. RATE MAY NOT BE CALCULATED ON BEST JUDGM ENT AS BOOKS RESULTS ARE NOT SUBJECT TO VERIFICATION. 1.3 SUBMISSION OF THE ASSESSEE CONSIDERED CAREFULL Y BUT FOUND NOT SATISFACTORY FOR THE REASON THAT THE ASSESSEE H IMSELF ADMITTED THE DISCREPANCIES POINTED OUT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT IN THE F REIGHT ACCOUNT THE ASSESSEE HAS SHOWN PAYMENT OF RS 10,09,66,269/- TO OWNERS OF OTHER TRUCKS WHOSE TRUCKS WERE ITA 100 & 101/JP/2015 & C.O. 04 & 05/JP/2015_ ITO VS SANJAY JAIN 7 PLIED ON COMMISSION BASIS. MOST OF THESE PAYMENTS WE RE IN CASH BELOW RS.20,000/- EACH. IN THE FREIGHT A/C AGAI NST ALL SUCH PAYMENTS ONLY GR NOS. WERE MENTIONED. BUT THE ASSESSEE DID NOT PRODUCE ANY SUCH GR BOOKS FOR EXAMINATION. THE ASSESSEE HAS ALSO NOT MAINTAINED AN Y VOUCHERS OF SUCH PAYMENTS OF RS. 10,09,66,269/-, EV EN OF SELF. THE ASSESSEE HAS ALSO NOT MAINTAINED ANY NAME S OR ADDRESSES OF THE PERSONS TO WHOM SUCH PAYMENTS WERE MADE. THE TRUCK- WISE DETAILS OF THESE PAYMENTS WERE A LSO NOT MAINTAINED. 1.4 REGARDING THE NET FREIGHT RECEIPTS OF RS. 13,1 8,18,066/- (FREIGHT RECEIPTS OF RS.23,78,84,335/- FREIGHT PAID OF RS. 10,09,66,269/-) WHICH INCLUDES GROSS RECEIPTS OF OWN TRUCKS AND COMMISSION/PROFIT ON PLYING OF TRUCKS OF OTHERS AS DISCUSSED ABOVE, THE ASSESSEE HAS NOT MAINTAINED AN Y TRUCK- WISE DETAILS OF RECEIPTS AND EXPENDITURE OF OWN TRUCK S AND THE COMMISSION OR PROFIT EARNED ON PLYING OF OTHERS TRUCKS. THE ASSESSEE HAS CLAIMED TRIP EXPENSES OF RS.4,12,28, 803/- WHICH ARE INCURRED THROUGH DRIVERS AS WAY-SIDE EXPENS ES, THE ASSESSEE HAS NOT MAINTAINED ANY VOUCHERS ETC. T HE ITA 100 & 101/JP/2015 & C.O. 04 & 05/JP/2015_ ITO VS SANJAY JAIN 8 ASSESSEE HAS ALSO NOT MAINTAINED ANY LOG BOOKS OF O WN TRUCKS. THE ASSESSEE HAS CLAIMED LOADING AND UNLOADI NG CHARGES OF RS.55,720/- FOR WHICH NO VOUCHERS WHATSOEV ER HAVE BEEN MAINTAINED. 1.5 THUS, THE EXPENSES OF THE ASSESSEE ARE ALSO NOT SUBJECT TO ANY PROPER VERIFICATION, AS DISCUSSED EARLIER IN PA RAS ABOVE OF THIS ORDER. THEREFORE, PROVISIONS OF SECTION 145(3) ARE CLEARLY APPLICABLE IN THIS CASE. UNDER SIMILAR CIRCUMSTANCE S THE ASSESSEE HAD HIMSELF ADMITTED NET PROFIT RATE 3.4% ON TOTAL RECEIPTS OF RS. 16,78,82,493/- IN THE A.Y.2005-06 A ND HAD AGREED FOR ADDITION OF RS.46,99,955/-. IN VIEW OF ABOVE DISCUSSIONS, THE BOOKS OF ACCOUNTS OF THE ASSESSEE ARE REJECTED INVOKING THE PROVISIONS OF SECTION 145(3) AND NET PROFIT RATE OF 3.4% IS APPLIED AS APPLIED IN THE ASSESSEES OWN CAS E IN A.Y. 2007-08, 2008-09 AND 2009-10. THE NET PROFIT @ 3.4% ON GROSS R ECEIPTS OF RS.23,27,84,335/- GIVES NET PROFIT/INCOME OF RS.79, 14,667/- RESULTING IN ADDITION OF RS.51,51,404/- (RS.79,14,667 - 27,63,26 3) WHICH WILL BE ADDED TO THE INCOME OF THE ASSESSEE. SIMILAR IDENTICAL FACTS HAS ALSO BEEN GIVEN BY THE ASSESSEE IN ITS CASE FOR THE A.Y. 2011-12. ITA 100 & 101/JP/2015 & C.O. 04 & 05/JP/2015_ ITO VS SANJAY JAIN 9 7. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A), WHO HAD PA RTLY ALLOWED THE APPEAL BY OBSERVING AS UNDER:- 4.1 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSE SSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. I HAVE ALSO P ERUSED THE ORDERS OF HONBLE ITAT IN THE CASE OF THE APPELL ANT FOR THE EARLIER YEARS, AS WELL AS THE ORDER OF CIT(A) FO R A.Y. 2009-10. THE APPELLANT IS A TRANSPORTER PLYING VARI OUS COMMERCIAL VEHICLES. THE APPELLANT ALSO HIRES HEAVY VEHICLES FROM THE OPEN MARKET TO EXECUTE TRANSPORT CONTRACTS . THE AO, AFTER POINTING OUT VARIOUS DEFECTS IN THE BOOKS OF ACCOUNT OF THE APPELLANT, APPLIED THE PROVISIONS OF SECTION 145(3) OF THE INCOME TAX ACT AND ASSESSED THE INCOME OF THE ASSESSEE @ 3.4% OF THE TOTAL FREIGHT RECEIPTS. 4.2 THE AO HAS POINTED OUT SEVERAL DISCREPANCIES IN THE BOOKS OF THE APPELLANT WHICH ARE ENUMERATED AS UNDER: I) THE APPELLANT HAS MADE FREIGHT PAYMENT TO THE TRU CK OWNERS WHOSE TRUCKS WERE HIRED ON COMMISSION BASIS BY HIM. TH ESE PAYMENTS WERE MADE IN CASH BELOW RS 20,000/- IN THE FREIGHT ACCOUNT, ONLY GR NUMBER WAS MENTIONED AGAINS T EACH PAYMENT BUT THE APPELLANT COULD NOT PRODUCE GR BOOKS FOR EXAMINATION. EVEN SELF MADE VOUCHERS WERE NOT MAINTAINED BY THE APPELLANT FOR THE ABOVE FREIGHT P AYMENT. II) NO VOUCHERS WERE AVAILABLE WITH THE APPELLANT FO R REPAIRS & MAINTENANCE EXPENSES. ITA 100 & 101/JP/2015 & C.O. 04 & 05/JP/2015_ ITO VS SANJAY JAIN 10 III) NO VOUCHERS WERE AVAILABLE WITH THE APPELLANT FO R TRIP EXPENSES OR TYRE EXPENSES. 4.3 IN VIEW OF THE ABOVE DISCUSSION, THE ACTION OF THE ASSESSING OFFICER IN REJECTING THE BOOKS OF ACCOUNTS U/S 145( 3) IS UPHELD. IT IS SEEN THAT THE ITAT TOO HAS UPHELD THE REJECTION OF THE BOOKS RESULTS OF THE APPELLANT IN THE PRECED ING YEARS, ON THE BASIS OF THESE DEFECTS. 4.4 THE COUNSEL OF THE APPELLANT HAS EMPHASIZED THAT NET PROFIT OF 2% WAS UPHELD BY HONBLE ITAT IN AY 2006-07 AND 1.75% IN AY 2007-08 AND 1.50% IN A.Y. 2008-09. HOWEV ER, THE FACTS OF EACH YEAR ARE DIFFERENT. THE ITAT TOO WH ILE ESTIMATING THE NET PROFIT HAS VARIED THE RATE OF NE T PROFIT FROM YEAR. THE MAIN FACTS IN THIS YEAR ARE AS UNDER: I) THERE IS A SUBSTANTIAL INCREASE IN THE FREIGHT R ECEIPTS AS COMPARED TO LAST YEAR. II) A LARGE PART OF THE EXPENDITURE IN THE FORM OF FREIGHT PAYMENT TO THE TUNE OF RS 10.09 CRORES, REPAIRS AND MAINTENANCE TO THE TUNE OF RS 1.16 CRORES, TRIP EXP ENSES TO THE TUNE OF RS 4.12 CRORES, TYRE EXPENSES TO THE TU NE OF RS 1.14 CRORES, IS NOT AMENABLE TO VERIFICATION WHICH I S AN EXTREMELY LARGE PERCENTAGE OF THE TRANSPORTATION RE CEIPTS. III) IN THIS YEAR, THE DEPRECIATION ALLOWED IS RS. 1 ,47,92,411/- AS AGAINST DEPRECIATION OF RS. 74,73,422/- IN A.Y. 200 9-10. IV) THE NET PROFIT IN THIS YEAR IN THE TRANSPORTAT ION BUSINESS IS 1.61 %. 4.5 A NOTABLE FACT IN THIS YEAR IS THAT THE DEPRECI ATION HAS INCREASED TO RS. 1,47,92,411/- AS COMPARED TO DEPRE CIATION ITA 100 & 101/JP/2015 & C.O. 04 & 05/JP/2015_ ITO VS SANJAY JAIN 11 OF RS. 74,73,422/- IN A.Y. 2009-10. IN THE PRECEDIN G YEAR (A.Y. 2009-10), NET PROFIT OF 3.4% HAS BEEN SUSTAIN ED BY THE CIT(A). THE INCREASE IN DEPRECIATION WILL REDUCE THE N ET PROFIT OF THE APPELLANT. IN THE BACKGROUND OF THE ABOVE FA CTS, THE DISCUSSION GIVEN ABOVE ON THE NATURE OF DEFECTS, TH E HUGE EXPENDITURE WHICH IS NOT OPEN TO VERIFICATION AND TH E PAST HISTORY OF THE APPELLANT, THE NET PROFIT OF THE APP ELLATE IS ESTIMATED AT 2.25% OF THE TRANSPORTATION RECEIPTS. THIS WILL RESULT IN THE ADDITION MADE BY THE ASSESSING OFFICE R TO BE RESTRICTED TO RS. 14,89,820/-. THE BALANCE ADDITION IS DIRECTED TO BE DELETED. THIS GROUND IS PARTLY ALLOWED. SIMILAR IDENTICAL FINDINGS HAS ALSO BEEN GIVEN BY T HE LD. CIT(A) IN THE CASE OF A.Y. 2011-12. 8. NOW THE ASSESSEE IS IN C.O. BEFORE US. THE LD AR O F THE ASSESSEE HAS SUBMITTED THAT THE LD. CIT (A) CONFIRMED THE RA TE OF NET PROFIT @ 2.25% IGNORING THE BINDING JUDGMENTS OF THE HON'BLE BENCH IN THE CASE OF THE ASSESSEE WHEREIN FOLLOWING NET PROFIT RATES WE RE UPHELD: AY 2006-07 ITA NO. 45/JP/2010 (APB 17-20) 2.00% FREIGHT 20.53 CR AY 2007-08 ITA NO. 1203/JP/2010 (APB 24-26) 1.75% FREIGHT 21.49 CR AY 2008-09 ITA NO. 63/JP/2012 (APB 30-34) 1.50% F REIGHT 17.26 CR THE LD. CIT (A) BEFORE INSTRUCTING FOR APPLYING A RAT E OF 2.25% DID NOT CONSIDER A VITAL FACT THAT DURING THE YEAR UNDER CO NSIDERATION THE APPELLANT HAS DECLARED A FREIGHT RECEIPTS OF RS. 23 .28 CRORES AS AGAINST A ITA 100 & 101/JP/2015 & C.O. 04 & 05/JP/2015_ ITO VS SANJAY JAIN 12 FREIGHT OF RS. 15.32 CRORES IN IMMEDIATELY PRECEDIN G YEAR AND ITS CLAIM FOR DEPRECIATION HAS INCREASED FROM RS. 74,73,422 TO RS . 1,47,92,411 I.E. THE CLAIM OF DEPRECIATION HAS DOUBLED IN THE YEAR UNDER CONSIDERATION, T HE APPELLANT HIMSELF HAS DECLARED A RATE OF 1.62% WHIC H IS MORE THAN UPHELD BY THE HON'BLE ITAT IN THE ASSTT. YEAR 2008-0 9 AND HENCE THE DECLARED INCOME IS REQUIRED TO BE ACCEPTED. HE HAS DRAWN THE ATTENTION TOWARDS EARLIER ORDERS OF THE HON'BLE ITAT, JAIPUR B ENCH AS DETAILED HEREINABOVE WHEREIN VARYING RATES OF NET PROFIT HAS BEEN SUSTAINED AFTER CONSIDERING PECULIAR CIRCUMSTANCES OF THAT PARTICUL AR YEAR. THE CHART SHOWING INCOME OFFERED BY THE ASSESSEE SUBJECT TO DE PRECIATION IS AT APB 3 WHICH SHOWS THAT THE ASSESSEE HAS OFFERED HANDSOME GROWTH IN DECLARING THE INCOME AND HENCE NO FURTHER DISALLOWAN CE WAS CALLED FOR. SIMILAR IDENTICAL SUBMISSIONS HAS ALSO BEEN MADE B Y THE LD AR OF THE ASSESSEE IN THE CASE OF A.Y. 2011-12. 9. AT THE OUTSET, THE LD. DR HAS VEHEMENTLY SUPPORT ED THE ORDERS OF THE LOWER AUTHORITIES AND FURTHER BROUGHT TO OUR NOT ICE THAT THE ORDER OF THE TRIBUNAL PASSED IN THE ASSESSEES OWN CASE IN A. Y. 2009-10, WHEREIN THE HONBLE TRIBUNAL HAS HELD AS UNDER:- 2.6 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIALS AVAILABLE ON RECORD. WE FIND MERIT IN THE CONTENTIONS OF THE LD. DR THAT THE ASSESSEE HAS NOT ITA 100 & 101/JP/2015 & C.O. 04 & 05/JP/2015_ ITO VS SANJAY JAIN 13 MAINTAINED PROPER RECORDS AND BOOKS OF ACCOUNT. THE ASSESSEE'S NON-EXPLANATION OF HUGE EXPENSES AROUND RS. 1.00 CRORE AND WAYSIDE EXPENSES OF RS. 92,01,739/- C ANNOT BE TAKEN LIGHTLY AS THEY ARE INCURRED IN CASH. IT I S THE BURDEN ON THE ASSESSEE TO DEMONSTRATE THAT THE EXPENSES CL AIMED BY HIM ARE CORROBORATED AND REASONS FOR NON-MAINTEN ANCE OF RECORDS ARE DULY EXPLAINED. IT HAS NOT BEEN DEMONST RATED BY THE ASSESSEE THAT DISTINGUISHING FEATURES AS POINTE D OUT BY THE LD. CIT(A) IN RESPECT OF EARLIER YEARS AND CURRE NT YEAR ARE UNJUSTIFIED. CONSEQUENTLY, THE NATURE OF INFERENCE LEADS TO BELIEVE THAT IN THIS YEAR THE SEVERITY AND NATURE O F DEFECTS IN THE BOOKS OF ACCOUNT ARE DIFFERENT THAN EARLIER YEA RS. WE THUS FIND MERIT IN THE CONTENTIONS OF THE LD. DR TH AT PRINCIPLES OF RES JUDICATA DO NOT APPLY TO ITAT PROCEEDINGS AND PRINCIPLES OF CONSISTENCY ARE ALSO NOT APPLICABLE A S FACTS ARE DISTINGUISHABLE. IT IS SETTLED LAW THAT ESTIMATE BAS ED ON BEST JUDGMENT ASSESSMENT DUE TO REJECTION OF BOOKS OF AC COUNTS, SHOULD NOT BE ORDINARILY INTERFERED BY APPELLATE AU THORITIES, UNLESS THERE ARE DEMONSTRATIVELY COGENT REASONS TO DO SO. IN THIS CASE, THE ASSESSEE HAS FAILED TO POINT OUT THA T ORDER OF THE LD. CIT(A) AS TO ESTIMATION OF NET PROFIT RATE I S CONTRARY OR EXCESSIVE. IN VIEW THEREOF, WE SEE NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHICH IS UPHELD. THUS THE AP PEAL OF THE ASSESSEE IS DISMISSED. ON THE BASIS OF THE ABOVE, IT WAS CONTENDED THAT THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THE FACTS OF THE CASE FOR THE A SSESSMENT YEAR 2009-10 ITA 100 & 101/JP/2015 & C.O. 04 & 05/JP/2015_ ITO VS SANJAY JAIN 14 AND THEREFORE, THE PRINCIPLE AS LAID DOWN IN THE CA SE OF A.Y. 2009-10, SHOULD BE APPLIED IN THE PRESENT CASE. 10. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. SINCE THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THE FACTS OF THE CASE O F A.Y. 2009-10, THEREFORE, APPLY THE SAME PRINCIPLE. WE HEREBY, DO NOT FIND ANY MERIT IN THE C.O. OF THE ASSESSEE AND ACCORDINGLY, THE SAME IS DISMISSED RELYING UPON THE ORDER OF THE COORDINATE BENCH IN ITA NO. 5 62/JP/2014 ORDER DATED 30/03/2016. SIMILAR IDENTICAL FINDINGS IS ALSO GIVEN IN THE AS SESSEES C.O. FOR THE A.Y. 2011-12. 11. THE 2 ND GROUND OF THE ASSESSEES C.O. IS AGAINST SUSTAININ G THE ACTION OF THE ASSESSING OFFICER IN CONSIDERING THE INCOME FROM COMMISSION OF RS. 1,68,090/- AS SEPARATE INCOME OVE R AND ABOVE THE ESTIMATED ONE. THE LD ASSESSING OFFICER OBSERVED THA T THE ASSESSEE IN THE COMPUTATION OF TOTAL INCOME HAS SHOWN INCOME FROM O THER SOURCES AT RS.7,263/- WHICH INCLUDES ONLY INTEREST RECEIVED FRO M BANKS AND OTHER PARTIES. ON PERUSAL OF DETAILS FILED BY THE ASSESSE E IT WAS NOTICED THAT THE ASSESSEE HAS SHOWN OTHER INCOME AS COMMISSION OF RS. 1,68,090/- AND ITA 100 & 101/JP/2015 & C.O. 04 & 05/JP/2015_ ITO VS SANJAY JAIN 15 DISCOUNT RECEIVED OF RS.2,33,026/- TOTALING TO RS.4 ,01,116/- IN THE CREDIT SIDE OF THE P&L WHICH WAS EARNED BY THE ASSESSEE BESI DES TO TRANSPORT BUSINESS AND SHARE BUSINESS. HENCE, THE INCOME EARN ED APART FROM FREIGHT RECEIPTS AND SHARES ARE LIABLE TO BE TREATE D AS INCOME FROM OTHER SOURCES. THEREFORE, INCOME FROM OTHER SOURCE IS WORK S OUT TO RS.4,08,379/-. SIMILAR IDENTICAL FACTS HAS ALSO BEEN GIVEN BY THE ASSESSEE IN ITS CASE FOR THE A.Y. 2011-12. 12. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING O FFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A), WHO HAS PA RTLY ALLOWED THE APPEAL BY OBSERVING AS UNDER:- 5.3.1 I HAVE PERUSED THE FACTS OF THE CASE, THE AS SESSMENT ORDER AND THE SUBMISSIONS OF THE .APPELLANT. THE ASSESSING OFFICER HAS TREATED INTEREST, COMMISSION, AND DISCOUNT AS INCOME FROM OTHER SOURCES. THE APPELLANT HAS STATED THAT INTEREST HAS BEEN RECEIVED FROM CUSTOMERS ON ACCOUNT OF LATE PAYMENT AND DISCOUNT H AS BEEN RECEIVED ON REPAIRING OF TRUCKS. COMMISSION HA S BEEN RECEIVED FROM TRUCK OWNERS WHOSE TRUCKS ARE PLIE D BY THE ASSESSEE. 5.3.2 THE DISCOUNT RECEIVED ON REPAIRS OF TRUCKS WOUL D REDUCE THE TRUCK REPAIRING EXPENDITURE AND THEREFORE, CANN OT BE CONSIDERED AS INCOME FROM OTHER SOURCES. SIMILARLY, THE ITA 100 & 101/JP/2015 & C.O. 04 & 05/JP/2015_ ITO VS SANJAY JAIN 16 INTEREST RECEIVED OF RS. 7263/- IS LINKED TO THE BU SINESS OF THE ASSESSEE. THEREFORE, THESE INCOMES CANNOT BE TAXED SEPARATELY AND THE TRADING ADDITION WOULD TAKE CARE OF THE ABOVE INCOMES. AS REGARDS COMMISSION INCOME, THE SAME IS SHOWN NET OF EXPENSES. THEREFOR E, WHILE THIS RECEIPT FALLS UNDER THE HEAD - PROFIT & GAINS FROM BUSINESS AND PROFESSION, IT WILL BE TAXED SEPA RATELY AS IT IS NET OF EXPENSES. THIS GROUND IS PARTLY ALLO WED. SIMILAR IDENTICAL FINDINGS HAS ALSO BEEN GIVEN BY T HE LD. CIT(A) IN THE CASE OF A.Y. 2011-12. 13. NOW THE ASSESSEE IS IN C.O. BEFORE US. THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE LD. CIT (A) HAS CONFIRMED THE ACTION OF THE LD. AO WHEREIN HE HAS ASSESSED THE COMMISSION INCOME OF RS. 1,68,090 DECLARED IN PROFIT AND LOSS ACCOUNT IN ADDITION TO ESTIMATED INCOME AS REFERRED HEREINABOVE. THE ASSESSEE OBJECTS TO THE SA ME AS THE SAID COMMISSION WAS DERIVED BY THE ASSESSEE FROM PLYING O F COMMERCIAL VEHICLES OF OUTSIDERS. THIS ACTIVITY IS CLOSELY CONN ECTED WITH THE BUSINESS ACTIVITY OF THE ASSESSEE AND HENCE WAS NOT BE TO BE CONSIDERED SEPARATELY AND MUST HAVE BEEN ASSUMED TO BE INCLUDE D IN THE ESTIMATED INCOME ONLY. IT IS NOT OUT OF PLACE TO STATE THAT I N THE AY 2006-07, 2007- 08 AND 2008-09 THE ASSESSEE WAS HAVING SIMILAR INCOM E IN ITS PROFIT AND LOSS ACCOUNTS, WHEREIN ALSO THE ID. AO ASSESSED THE INCOME BY MAKING ITA 100 & 101/JP/2015 & C.O. 04 & 05/JP/2015_ ITO VS SANJAY JAIN 17 ESTIMATION ABOUT NP RATE AND IN THOSE YEARS SAID IN COME WAS NOT SEPARATELY ASSESSED. THEREFORE IN VIEW OF PRINCIPLE OF CONSISTENCY THE APPROACH OF THE LD. AO AND THE LD. CIT (A) IS WRONG A ND DESERVES TO BE DELETED. THE HON'BLE SUPREME COURT HAS APPRECIATED T HIS PRINCIPLE IN THE CASE OF RADHASOAMI SATSANG VS. CIT (1992) 193 ITR 321 (SC) AND HELD THAT ALTHOUGH STRICTLY SPEAKING UNDER INCOME TAX LAW EVERY ASSESSMENT YEAR IS A SEPARATE UNIT STILL A MATTER DECIDED ON S AME SET OF FACTS MUST BE FOLLOWED TO MAINTAIN CONFIDENCE OF PUBLIC IN LAW. SIMILAR IDENTICAL SUBMISSIONS HAS ALSO BEEN MADE BY THE LD AR OF THE ASSESSEE IN THE CASE OF A.Y. 2011-12. 14. AT THE OUTSET, THE LD. DR HAS VEHEMENTLY SUPPOR TED THE ORDERS OF THE LOWER AUTHORITIES. 15. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THIS I SSUE WAS ALSO DECIDED BY THE EARLIER ORDERS OF THE TRIBUNAL IN A.Y. 2006-0 7 TO 2008-09, WHEREIN THE INCOME OF THE COMMISSION HAS BEEN CONSIDERED AS INCOME FROM THE BUSINESS BY THIS TRIBUNAL. THEREFORE, BY RESPECTFULL Y FOLLOWING THE PRINCIPLE OF CONSISTENCY AND THE ORDER PASSED BY TH IS TRIBUNAL IN THE EARLIER YEARS NAMELY FOR THE AY 2006-07, 2007- WE AL LOW THE C.O. ON THIS GROUND ONLY. ITA 100 & 101/JP/2015 & C.O. 04 & 05/JP/2015_ ITO VS SANJAY JAIN 18 SIMILAR IDENTICAL FINDINGS IS ALSO GIVEN IN THE ASS ESSEES C.O. FOR THE A.Y. 2011-12. 16. IN THE RESULT, THE REVENUES APPEALS FOR BOTH T HE YEARS ARE DISMISSED AND THE ASSESSEES C.O. FOR BOTH THE YEAR S ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21/10/2016. SD/- SD/- HKKXPAN YFYR DQEKJ (BHAGCHAND) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 21 ST OCTOBER, 2016 *RANJAN. VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE I.T.O., WARD 5(3), JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- SHRI SANJAY JAIN, JAIPUR. 3. VK;DJ VK;QDR @ THE CIT 4. VK;DJ VK;QDRVIHY @ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 100 & 101/JP/2015 & CO 04 & 05/JP/2015) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR