M/S Anant Metals Pvt Ltd, Ranchi V. DCIT CENT. CIRCLE-1, Ranchi

ITA 107/RAN/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9661 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 05-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 02-06-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P K MONDAL
• Assessee Lawyers: VINAY KUMAR JALAN; RAJIV RANJAN
• Section: 142(1)

Judgement Text

1 ITA NO. 107 /RAN/ 20 1 7 IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE SHRI N.S.SAINI , ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE , JUDICIAL MEMBER ITA NO. 107 /RAN/201 7 A.Y. : 2006 - 2007 M/S ANANT METALS PVT. LTD. C/O - SRI VINAY KUMAR JALAN, M/S O.P.JALAN & A SSOCIATES CONSULTANTS LLP, 48 CART SARAI ROAD, UPPER BAZAAR, RANCHI, JHARKHAND - 834001 V S ITO, WARD - 1 ( 1 ), JAMSHEDPUR P AN NO. : A ABCA 6546 P (APPELLANT ) . RESPONDENT ASSESSEE BY : SHRI VINAY KUMAR JALAN & RAJIV RANJAN, ADV REVENUE BY :SHRI P.K.MOND AL , JCIT DATE OF HEARING : 2 9 . 05 .201 8 DATE OF PRONOUNCEMENT : 30 . 05 .201 8 O R D E R PER PAVAN KUMAR GADALE, JM : TH IS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER OF CIT ( A ) , RANCHI , ALL DATED 15.03.2017 FOR THE ASSESSMENT YEAR 2006 - 2007, WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. FOR THAT, THE LD.CIT(A) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, ERRED IN CONFIRMING THE ADDITION OF RS.10,251/ - DEBITED BY THE APPELLANT AS OTH ER CHARGES SUCH AS SERVICE TAX, DEMAT EXPENSES ETC. IN THE PROFIT AND LOSS ACCOUNT. 2. FOR THAT, THE LD.CIT(A) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, ERRED IN CONFIRMING THE ADDITION OF RS. 10,21,999/ - CONSIDERING IT TO BE PROFIT @8% OF THE TURNOV ER ON AN ESTIMATE BASIS IN SPITE OF THE FACT TAKEN ON RECORD THAT THE ASSESSEE HAS SUBMITTED THE VOLUMINOUS RECORDS WHICH WAS 2 ITA NO. 107 /RAN/ 20 1 7 VERIFIED BY THE HONBE CIT(A) BY CALLING FOR THE REMAND REPORT. 2. AT THE OUTSET, LD. AR OF THE ASSESSEE HAS NOT PRESSED THE GROU ND NO.1 AND MADE ENDORSEMENT. ACCORDINGLY, WE DISMISS THE GROUND NO.1 AS NOT PRESSED. 3 . BRIEF FACTS RELATING TO THE GROUND NO.2, ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING AND FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006 - 2007 ON 30.11.2006 WITH TOTAL INCOME OF RS. 202,982/ - AND THE RETURN OF INCOME WAS DULY PROCESSED U/S.143(1) OF THE ACT AND THE CASE WAS SELECTED FOR SCRUTINY. SUBSEQUENTLY, NOTICE U/S.143(2) & 142(1) OF THE ACT WERE ISSUED TO THE ASSESSEE. IN COMPLIANCE, THE AR OF THE ASSESSEE APPEARED FROM TIME TO TIME AND CASE WAS DISCUSSED. THEREAFTER THE AO COMPLETED THE ASSESSMENT AND MADE VARIOUS ADDITIONS AND ASSESSED TOTAL INCOME AT RS. 36,48,643/ - AND PASSED ORDER U/S.14 4 OF THE ACT, DATED 26.12.2008. 4 . AGGRIEVED B Y THE ASSESSMENT ORDER, THE ASSESSEE HAS FILED AN APPEAL WITH THE CIT(A). IN THE APPELLATE PROCEEDINGS THE ASSESSEE ARGUED THE GROUNDS AND REITERATED THE SUBMISSIONS MADE BEFORE THE AO. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE AND THE FINDI NGS OF AO, PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5 . AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. 3 ITA NO. 107 /RAN/ 20 1 7 6 . LD. AR BEFORE US SUBMITTED THAT THE AO CONSIDERED THE SALE OF THE ASSESSEE FROM THE PROFIT AND LOSS ACCOUN T AND ESTIMATED THE INCOME IRRESPECTIVE OF THE FACT THAT THE ASSESSEES BOOKS OF ACCOUNTS ARE AUDITED. THE AO AT THE TIME OF HEARING HAS FOUND THAT NO BOOKS OF ACCOUNTS HAVE BEEN PRODUCED AND NO SUBMISSION HAS BEEN MADE. THEREFORE, THE AO ESTIMATED THE INC OME AT 10% OF TURNOVER OF RS. 1,53,09,970/ - AND MADE ADDITION OF RS.15,30,099/ - . ON APPEAL, THE LD.CIT(A) HAS RESTRICTED THE ADDITION TO THE EXTENT OF 8% AFTER GIVING CREDIT TO THE PROFIT ALREADY OFFERED BY THE ASSESSEE AT RS.2,02,091/ - , THEREFORE, EFFECTIV E ADDITION SUSTAINED BY THE CIT(A) IS RS.12,24,980/ - . 7 . CONTRA, L D.DR RELIED ON THE ORDERS OF LOWER AUTHORITIES . 8 . WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE SOLE DISPUTED ISSUE WITH REGARD TO ESTIMATING THE INCOME BY THE AO AT 10% ON THE TOTAL TURNOVER, WHEREAS THE CIT(A) GRANTED RELIEF RESTRICTING THE ESTIMATION AT 8% AS AGAINST 10% ESTIMATED BY THE AO. THE CONTENTION OF THE ASSESSEE BEFORE US THAT THE ESTIMATION IS AT HIGHER SIDE AND THE ASSESSEE HAS BEEN OFFERING NET PROFI T AT THE FOLLOWING RATES FOR THE PRECEDING AND SUBSEQUENT YEARS : - ASSESSMENT YEAR SALES NET PROFIT (PROFIT BEFORE TAX AS PER P&L ACCOUNT) NP/SALES % 2016 - 2017 (AS ON 31.03.2016) 3,86,19,303 2,17,017 0.562 2015 - 2016 (AS ON 31.03.2015) 5,14,58,514 6,6 1,549 1.286 2014 - 2015 (AS ON 31.03.2014) 4,42,49,819 7,05,796 1.595 2013 - 2014 (AS ON 31.03.2013) 3,69,25,356 6,45,747 1.749 2012 - 2013 (AS ON 31.03.2012) 2,90,91,405 13,03,886 4.482 2011 - 2012 (AS ON 31.03.2011) 1,37,02,359 8,02,552 5.857 2010 - 2011 (AS ON 31.03.2010) 1,46,96,797 4,956 0.034 4 ITA NO. 107 /RAN/ 20 1 7 2009 - 2010 (AS ON 31.03.2009) 1,62,66,757 - 53,392 - 0.328 2008 - 2009 (AS ON 31.03.2008) 2,27,20,602 17,128 0.075 2007 - 2008 (AS ON 31.03.2007) 1,69,10,354 9,271 0.055 2006 - 2007 (AS ON 31.03.2006) 1,5 3,09,970 9,71,513 6.346 2005 - 2006 (AS ON 31.03.2005) 1,37,88,682 10,77,862 7.817 2004 - 2005 (AS ON 31.03.2004) 1,58,60,903 54,739 0.345 2003 - 2004 (AS ON 31.03.2003) 1,47,29,124 26,960 0.183 2002 - 2003 (AS ON 31.03.2002) 1,22,32,522 29,083 0.238 2001 - 2002 (AS ON 31.03.2001) 74,42,693 1,23,130 1.654 2000 - 2001 (AS ON 31.03.2000) 60,75,630 61,809 1.017 THEREFORE, THE LD.AR SUBMITTED THAT THE ADDITION MADE BY THE AO IS HIGHER AND CONSIDERING THE CHART GIVEN BY THE ASSESSEE REGARDING NET PROFIT RATE OFFERED FOR THE SUBSEQUENT AND PRECEDING ASSESSMENT YEARS, THE NET PROFIT MAY BE ESTIMATED AT A REASONABLE RATE. LD. AR BEFORE US ALSO FILED AUDIT REPORT, BALANCE SHEET AND PROFIT AND LOSS ACCOUNT FOR THE ASSESSMENT YEAR 2006 - 07 ALONG WITH COMPUTATION OF INCOME. LD. AR DREW OUR ATTENTION TO THE COMPUTATION OF INCOME AND SUBMITTED THAT THE AMOUNT OF RS.2,02,981/ - IS THE GROSS TOTAL INCOME OF THE ASSESSEE WHICH INCLUDES INCOME FROM VARIOUS OTHER SOURCES OTHER THAN THE HEAD PROFITS & GAINS FROM BUSINESS & PROFESSION AND ALSO IT EXCLUDES THE INCOMES WHICH ARE EXEMPT UNDER THE INCOME TAX ACT. LD. AR FURTHER DREW OUR ATTENTION TO THE PROFIT AND LOSS ACCOUNT AND SUBMITTED THAT THE AMOUNT OF RS.9,71,513/ - IS THE PROFIT BEFORE TAX, WHICH INCLUDES PROFIT ON SALE OF LONG TERM INVESTMEN TS RS.7,45,252/ - , PROFIT ON SALE OF CURRENT INVESTMENT R S.1,77,877/ - , DIVIDEND REC EIVED RS.70,607/ - AND INTEREST FROM INCOME TAX REFUND RS.5,842/ - AND SUBMITTED THAT IF THESE AM OUNTS ARE REDUCED FROM THE AFOREMENTIONED PROFIT BEFORE TAX, THE NE T AMOUNT COMES TO RS.( - )28,065/ - AS SHOWN IN THE COMPUTATION 5 ITA NO. 107 /RAN/ 20 1 7 OF INCOME. WE HAVE PERUSED THE CHART PLACED BY THE ASSESSEE CONTAINING THE NET PROFIT RATE SHOWN BY THE ASSESSEE FOR THE DIFFERENT ASSESSMENT YEARS A ND CONSIDERING THE SAME, WE ARE OF THE CONSIDERED VIEW THAT THE MATTER NEEDS VERIFICATION AND EXAMINATION AT THE END OF AO, WHO SHALL CONSIDER THE CLAIM OF THE ASSESSEE AS PER THE CHART PLACED BEFORE US WITH RESPECT TO NET PROFIT O N THE TOTAL TURNOVER SHOWN BY THE ASSESSEE IN THE DIFFERENT ASSE SSMENT YEARS . THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 9 . IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 / 05 /201 8 SD/ - SD/ - ( N.S.SAINI ) ( PAVAN KUMAR GADALE ) ACCOUNTANT MEMBER JUDICIAL MEMBER RANCHI, DATED 30 / 05 /201 8 PRAKASH KUMAR MISHRA , SR. PS CO PY OF THE ORDER FORWARDED TO : BY ORDER, //TRUE COPY// SR.PS, ITAT, RANCHI 1. THE APPELLANT M/S ANANT METALS PVT. LTD. C/O - SRI VINAY KUMAR JALAN, M/S O.P.JALAN & ASSOCIATES CONSULTANTS LLP, 48 CART SARAI ROAD, UPPER BAZAAR, RANCHI, JHARKHAND - 834001 2. THE RESPONDENT ITO, WARD - 1(1), JAMSHED PUR 3. THE CIT(A) CONCERNED 4. CIT , CONCERNED 5. DR, ITAT, RANCHI 6. GUARD FILE.