Jairam Distributors, Hooghly V. ACIT, Cir-1, Hooghly, Hooghly

ITA 1008/KOL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1146 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 15-07-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: V N DATTA
• Section: 133A; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA A BENCH, KOLKATA [BEFORE SRI J. SUDHAKAR REDDY, A CCOUNTANT M EMBER & SRI S.S. VISWANETHRA RAVI , J UDICIAL M EMBER ] I .T.A. NO. 1 008 /KOL /201 5 ASSESSMENT YEAR: 20 1 0 - 1 1 JAIRAM DISTRIBUTORS . . . .. APPELLANT 10A, LENIN SARANI P.O. MULLICKPARA DIST. HOOGHLY 712 203 [PAN : AAACU 3732 E ] ADDITIONAL COMMISSIONER OF INCOME TAX, CIRCLE - 1, HOOGHLY. . . RESPONDENT RUPMATI MAHAL KHADINAMORE, CHINSURAH HOOGHLY 712 102 APPEARANCES BY: SHRI V.N. DATTA, ADVOCATE , APPEAR ED ON BEHALF OF THE ASSESSEE. SHRI SALLONG YADEN , ADDL. CIT , APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : AUGUST 2 4 , 2017 DATE OF PRONOUNCING THE ORDER : OCTOBER 31 , 2017 O R D E R PER J. SUDHAKAR REDDY : - THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 6 , KOLKATA (HEREINAFTER THE LD. CIT (A) ), PASSED U/S 2 50 OF THE INCOME TAX ACT , 1961 (THE ACT ), DT. 09 / 05 / 20 1 3 , FOR THE ASSESSMENT YEAR 20 1 0 - 11 , ON THE FOLLOWING GROUNDS: - 1. FOR THAT THE CONFIRMING THE ASSESSMENT ORDER IS OPPOSED TO REQUIREMENT OF LAW AND IS NEITHER TENABLE IN LAW NOR IN FACTS. 2. FOR THAT IN CONFIRMING THE DETERMINATION OF INCOME AT RS.50,41,405/ - IS OPPOSED TO REQUIREMENT OF LAW, UNJUSTIFIED AND IN NEITHER TENABLE IN LAW NOR IN FACTS. 2 I.T.A. NO. 1008/KOL /2015 ASSESSMENT YEAR: 2010 - 11 JAIRAM DISTRIBUTORS 3. FOR THAT THE CIT (A) ERRED IN CONFIRMING THE DETERMINATION OF GP RATE WHICH IS MADE ON WRONG NOTION, MISCONCEIVED AND MIS CONSTRUED. 4. FOR THAT THE APPELLANT CRAVES LEAVE TO AMEND, ALTER, ADD, DELETE OR SUBSTITUTE ANY OTHER GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 2. THE ASSESSEE IS A PARTNERSHIP FIRM AND IS IN THE BUSINESS OF WHOLESALE TRADING IN M EDICINE. IT FILED ITS RETURN OF INCOME ON 21/09/2010, D ECLARING TOTAL INCOME AT RS .24,18,623/ - . THE ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE INCOME IN HIS ORDER PASSED U/S 144 OF THE ACT. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL WITHOUT SUCCESS. 2.1. FURTHER AGGRIEVED, THE ASSESSEE IS BEFORE US. 3. AFTER HEARING RIVAL CONTENTIONS, WE FIND THAT THE ASSESSEE HAS NOT DISPUTED THE ACTIONS OF THE ASSESSING OFFICER IN REJECTION THE BOOKS OF ACCOUNT AND THEREAFTER PASSING AN ORDER U/S 144 OF THE ACT. THE ONLY GRIEVANCE IS THAT THE RATE OF GROSS PROFIT IS HIGH. THE ASSESSEE GIVES A COMPARATIVE CHART OF THE GROSS PROFIT AND THE NET PROFIT DECLARED BY IT FOR THE ASSESSMENT YEAR 2007 - 08 TO 2011 - 12. THE SAME IS AS FOLLOWS: - P.T.O. 3 I.T.A. NO. 1008/KOL /2015 ASSESSMENT YEAR: 2010 - 11 JAIRAM DISTRIBUTORS 3.1. THE ASSESSING OFFICER HAS TAKEN A COMPARATIVE CASE OF M/S. ECONOMIC MEDIAL STORES AND APPLIED THE GP RATE . THE LD. FIRST APPELLATE AUTHORITY HAS AT PARA 5, OF HIS ORDER, HELD AS FOLLOWS: - 5.0 APPELLANT'S SUBMISSION AND FACTS AVAILABLE ON RECORD IS CAREFULLY CONSIDERED. IN THIS SURVEY U/S, 133A WAS DONE DURING THE YEAR. AS HAS BEEN POINTED OUT BY A.O. IN HIS ORDER, DURING THE COURSE OF SURVEY NO BOOKS OF ACCOUNTS WERE FOUND. FURTHER POST SU RVEY IN - SPITE OF ISSUE OF SUMMONS, NO BOOKS OF ACCOUNTS WERE EVER PRODUCED. EVEN DURING THE COURSE OF ASSESSMENT PROCEEDING IN - SPITE OF REPEATED OPPORTUNITY GRANTED, AS HAS BEEN HIGHLIGHT BY A.O. IN HIS ORDER, NO COMPLIANCE WAS EVER MADE TO A.O.'S NOTICES. IN VIEW OF THE ABOVE A.O. HAD NO OTHER ALTERNATIVE OTHER THAN CARRYING OUT BEST JUDGMENT ASSESSMENT UNDER SECTION 144 OF THE I.T. ACT., AS PER PROVISIO N OF THE SECTION 145(3) OF THE I. T. ACT. AS HAS BEEN CORRECTLY CITED BY 4 I.T.A. NO. 1008/KOL /2015 ASSESSMENT YEAR: 2010 - 11 JAIRAM DISTRIBUTORS A.O., HON'BLE S.C. IN THE CASE O F KACHEWALA GEMS VS. JCIT (2007) 158 TAXMANN 71(SC)HAS HELD THAT WHICH CARRYING OUT BEST JUDGMENT ASSESSMENT CERTAIN DEGREE OF GUESS WORK IS INVOLVED. APPELLANT'S CLAIM THAT IN SUCH EVENTUALITY, ASSESSEE'S PROFIT FROM EARLIER YEAR NEEDS TO BE TAKEN, IS WI THOUT ANY BASIS AS DURING SURVEY & POST SURVEY IT WAS FOUND THAT REGULAR BOOKS OF ACCOUNTS WERE NOT MAINTAINED. EVEN THE ASSESSEE WAS NOT IN A POSITION TO PRODUCE THE BOOKS POST SURVEYOR EVEN DURING ASSESSMENT. UNDER SUCH CIRCUMSTANCES, ASSESSEE'S ACCOUNTS ARE COMPLETELY UNRELIABLE AND CANNOT BE THE BASIS FOR ACCEPTING THE EXTREMELY LOW PROFIT SHOWN IN HIS BUSINESS FOR ALL THE YEARS. ON THE OTHER HAND A.O HAD TAKEN THE PROFIT OF A PERSON CARRYING OUT SIMILAR BUSINESS, HAVING ALMOST SIMILAR TURNOVER, BUT SHO WING MUCH HIGHER PROFIT. OTHER THAN STATING IN GENERAL TERMS, NOTHING SPECIFIC HAS BEEN STATED BY ASSESSEE TO EXPLAIN WHY THE EXTREMELY LOW PROFIT SHOWN BY IT THAN FROM A COMPARABLE CASE SHOULD BE ACCEPTED ESPECIALLY WHEN NO BOOKS/ AND OTHER SUPPORTING EVI DENCES WERE FOUND DURING SURVEYOR EVEN PRODUCED DURING ASSESSMENT. IN VIEW OF THE ABOVE IT IS HELD THE A.O. HAD CORRECTLY DETERMINED INCOME DURING THE YEAR BY COMPLETING ASSESSMENT U/S. 144 IN THE MANNER LAID DOWN IN SECTION 145(3) OF THE I.T. ACT. 4. WE HAVE NO GROUND OR REASON TO INTERFERE WITH THESE FINDING OF THE REVENUE AUTHORITIES. WHEN THE ASSESSEE DOES NOT MAINTAIN PROPER BOOKS OF ACCOUNT, WE SEE NO REASON AS TO WHY THE PERCENTAGE OF PROFITS DECLARED IN 5 I.T.A. NO. 1008/KOL /2015 ASSESSMENT YEAR: 2010 - 11 JAIRAM DISTRIBUTORS THE EARLIER ASSESSMENT YEARS, SHOULD FORM THE GUIDELINES FOR DETERMINATION OF THE PROFITS OF THIS YEAR. THE FACT THAT THE BOOKS ACCOUNT CANNOT BE RELIED UPON IS NOT DISPUTED. THE ASSESSEE HAS NOT SUBMITTED AS TO WHY THE COMPARABLE TAKEN BY THE ASSESSING OFFICER I.E., M/S. ECONOMIC MEDICAL STORES IS NOT A CORRECT COMPARA BLE . HENCE, WE ARE UNABLE TO REJECT THIS COMPARABLE. UNDER THESE CIRCUMSTANCES, WE UPHOLD THE ORDER OF THE LD. FIRST APPELLATE AUTHORITY AND DISMISS THIS APPEAL OF THE ASSESSEE. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSE D. KOLKATA, THE 31 ST DAY OF OCTOBE R, 2017. SD/ - SD/ - [ S.S. VISWANETHRA RAVI ] [ J. SUDHAKAR REDDY ] JUDICIAL MEMBE R ACCOUNTANT MEMBER DATED : 31 . 10 .2017 {SC SPS} COPY OF THE ORDER FORWARDED TO: 1. JAIRAM DISTRIBUTORS 10A, LENIN SARANI P.O. MULLICKPARA DIST. HOOGHLY 712 203 2. ADDITIONAL COMMISSIONER OF INCOME TAX, CIRCLE - 1, HOOGHLY RUPMATI MAHAL KHADINAMORE, CHINSURAH HOOGHLY 712 102 3. CIT(A) - 4. CIT - , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY 6 I.T.A. NO. 1008/KOL /2015 ASSESSMENT YEAR: 2010 - 11 JAIRAM DISTRIBUTORS HEAD OF OFFICE/ D.D.O. ITAT, KOLKATA BENCHES