M/s Aditya Enterprises, Dakshina Kannada V. DCIT, Mangalore

ITA 1023/BANG/2012

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8654 (ITAT-BANGALORE)
• Duration Of Justice: 6 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 13-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: V SRINIVASAN
• Keywords: Tax effect
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANTMEMBER AN D SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NOS. 570 TO 572/BANG/2011 & 1023/B ANG /2012 ASSESSMENT YEARS : 2001 02, 2003 04, 2004 05 & 2005 06 M/S. ADITYA ENTERPRISES, LAKSHMI TOWERS, NEAR FOREST CHECK POST, N. H. 48, UPPINANGDI, PUTTUR, D. K. PAN: AAHFA2010R VS. THE ACIT, CENTRAL CIRCLE, MANGALORE. APPELLANT RESPONDENT & ITA NO. 1 119 /B ANG /20 12 ASSESSMENT YEARS : 2005 06 THE ACIT, CENTRAL CIRCLE, MANGALORE. VS. M/S. ADITYA ENTERPRISES, LAKSHMI TOWERS, NEAR FOREST CHECK POST, N. H. 48, UPPINANGDI, PUTTUR, D. K. PAN: AAHFA2010R APPELLANT RESPONDENT APPELLANT BY : SHRI V. SRINIVASAN, ADVOCATE RESPONDENT BY : MS . NEERA MALHOTRA , CIT (DR) DATE OF HEARING : 19 . 12 .2018 DATE OF PRONOUNCEMENT : 21 . 12 .2018 O R D E R PER BENCH OUT OF THESE FIVE APPEALS, FOUR APPEALS ARE FILED B Y THE ASSESSEE AND ONE APPEAL IS FILED BY THE REVENUE. ALL THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE . ITA NOS. 570 TO 572/BANG/2011, 1023 & 1119/BANG/201 2 PAGE 2 OF 4 2. REGARDING THE APPEAL OF THE REVENUE, LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE TAX EFFECT IN THIS APPEAL IS ONLY RS. 19,1 5,564/- AND HE SUBMITTED A COPY OF WORKING OF THIS TAX EFFECT. HE SUBMITTED THAT IN VI EW OF RECENT CBDT CIRCULAR NO. 3/2018 DATED 11.07.2018, THIS APPEAL OF THE REVENUE IS NOT MAINTAINABLE BECAUSE OF LOW TAX EFFECT. LEARNED DR OF THE REVENUE COULD NOT POINT OUT ANY DEFECT IN THIS WORKING OF TAX EFFECT. HENCE, WE DISMISS THIS APPEA L OF THE REVENUE BECAUSE OF LOW TAX EFFECT. 3. REGARDING FOUR APPEALS OF THE ASSESSEE, LEARNED AR OF THE ASSESSEE SUBMITTED THAT GROUND NO. 1 IN EACH YEAR EXCEPT A. Y. 2005 06 IS GENERAL AND GROUND NO. 2 & 3 ARE NOT PRESSED. ACCORDINGLY, THES E GROUNDS ARE REJECTED AS NOT PRESSED. 4. THEREAFTER HE SUBMITTED THAT IN A. Y. 2001 02, THERE IS ONLY ONE ISSUE ON MERIT REGARDING ADDITION OF RS. 37,059/- BY ESTIMAT ING THE G. P. AT 6.35% ON THE BASIS OF AVERAGE G. P. OF NEXT TWO YEARS. HE SUBMIT TED THAT THIS IS THE FIRST YEAR OF BUSINESS AND THAT TOO ONLY FOR 6 MONTHS BECAUSE BUS INESS WAS STARTED IN OCTOBER 2000 AS NOTED BY THE AO IN PARA 3 OF THE ASSESSMENT ORDER. HE SUBMITTED THAT BECAUSE OF THIS, IT IS NOT JUSTIFIED TO ADOPT G. P. PERCENTAGE OF SUCCEEDING YEARS WHERE THERE WAS WORKING FOR WHOLE YEAR. AT THIS JUN CTURE, THE BENCH POINTED OUT THAT IN PARA 8 OF THE ASSESSMENT ORDER ON PAGE 3, IT IS NOTED BY THE AO THAT BOOKS WERE NOT PRODUCED. THE BENCH POINTED OUT THAT BECAUSE OF THIS, THE AO HAD NO OPTION BUT TO ESTIMATE THE INCOME. THE BENCH ALSO OBSERVED THA T IF SUCCEEDING YEARS G. P. RATE IS NOT TO BE ADOPTED THAN THE ESTIMATION HAS TO BE MADE ON THE BASIS OF SOME OTHER COMPARABLE CASE. THE BENCH OBSERVED THAT WHETHER TH E ASSESSEE CAN BRING SOME COMPARABLE CASE ON RECORD IF THE MATTER IS RESTORED BACK. IN REPLY, HE SUBMITTED THAT THE ASSESSEE CANNOT DO IT. LEARNED DR OF THE REVENU E SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND IN VIEW OF THE FACTS DISCUSSED ABOVE, WE FIND NO REASON TO INTERFERE IN THE ORDER OF CIT (A) ON THIS ISSUE BECAUSE THE ASSESSEE HAS NOT PRODUCED THE BOOKS OF ACCOUNT. NO COMPARABLE CASE IS BROUGHT ON RECORD AND THE ASSESSEE IS SHOWING ITS I NABILITY TO BRING COMPARABLE CASE ON RECORD IF THE MATTER IS RESTORED BACK. IN THIS S ITUATION, ADOPTING OF AVERAGE G. P. RATE OF SUCCEEDING TWO YEARS OF THE SAME ASSESSEE I S NOT IMPROPER AND HENCE, WE DECLINE TO INTERFERE IN THE ORDER OF CIT (A) ON THI S ISSUE. ITA NOS. 570 TO 572/BANG/2011, 1023 & 1119/BANG/201 2 PAGE 3 OF 4 6. REGARDING THE REMAINING THREE YEARS, HE SUBMITTE D THAT THERE IS ONE COMMON ISSUE IN THESE ALL THREE YEARS ABOUT DISALLOWANCE U /S 40A (3) OF RS. 22,045/- IN A. Y. 2003 04, RS. 163,069/- IN A. Y. 2004 05 AND RS. 44,701/- IN A. Y. 2005 - 06. HE ALSO SUBMITTED THAT IN A. Y. 2004 05, THERE IS ON E MORE ISSUE BEING ADDITION U/S 69C OF RS. 52,842/- BEING ALLEGED PAYMENT MADE TO M/S S UPREME MOTORS. REGARDING THESE TWO ISSUES, HE REITERATED THE SUBMISSIONS MAD E BEFORE CIT (A). LEARNED DR OF THE REVENUE SUPPORTED THE ORDERS OF THE LOWER AUTHO RITIES. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. REGARD ING DISALLOWANCE U/S 40A (3), A CATEGORICAL FINDING IS GIVEN BY CIT (A) IN A LL THREE YEARS THAT THE CASE OF THE ASSESSEE DOES NOT FALL UNDER ANY OF THE CLAUSES (A) TO (M) OF RULE 6DD. ONLY CONTENTION RAISED BEFORE THE AO AND CIT (A) WAS THI S THAT THE PAYMENT TO THE SUPPLIERS WERE NOT MADE AS A SINGLE PAYMENT IN A DA Y BUT NO EVIDENCE HAS BEEN PRODUCED IN THIS REGARD. HENCE, ON THIS ISSUE ALSO, WE DECLINE TO INTERFERE IN THE ORDER OF CIT (A) IN ALL THREE YEARS. 8. REGARDING THE ADDITION OF RS. 52,842/- IN A. Y. 2004 05, A CATEGORICAL FINDING IS GIVEN BY CIT (A) IN PARA 2.5.3 OF HIS ORDER THAT THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE IN SUPPORT OF THIS CLAIM THAT NO SUCH PAYM ENT WAS MADE BY THE ASSESSEE TO THAT PARTY. AT LEAST A CONFIRMATION FROM SUPREME MO TORS COULD HAVE BEEN BROUGHT ON RECORD BY THE ASSESSEE. HENCE, ON THIS ISSUE ALSO, WE DECLINE TO INTERFERE IN THE ORDER OF CIT (A). 9. IN THE RESULT, ALL THESE FOUR APPEALS FILED BY T HE ASSESSEE AND ONE APPEAL FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (LALIET KUMAR) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 21 ST DECEMBER, 2018. /MS/ ITA NOS. 570 TO 572/BANG/2011, 1023 & 1119/BANG/201 2 PAGE 4 OF 4 COPY TO: 1. APPELLANT 4. CIT (A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.