Subash Chandra Bardhan, Balaramgadi V. ITO Ward-2, Balasore

ITA 108/CTK/2023

AI Insights

The case involves Subash Chandra Bardhan, an individual engaged in fish trading, who appealed against the order of the CIT(A), National Faceless Appeal Centre, Delhi. The dispute centered on the income estimation for the assessment year 2014-2015. Initially, Bardhan filed a return under Section 44AD of the Income Tax Act, declaring a turnover of Rs. 45,26,980. A revised return later disclosed a turnover of Rs. 1,10,65,800, accompanied by audited accounts. However, the ITO rejected the revised return's income declaration of 3.27% and estimated the income at 8% of the turnover. The Tribunal's decision partly favored the assessee by reducing the estimated income percentage to 3.5%, citing precedents and the nature of the perishable goods traded.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127112 (ITAT-CUTTACK)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 11-06-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 09-04-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 44AD

Judgement Text

आयकर अऩीऱीय अधधकरण, “एस.एम.सी” न्यायऩीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH CUTTACK श्री जाजज माथन, न्याययक सदस्य के समक्ष । BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER आयकर अऩीऱ सं/ITA No.108/C TK/2023 (ननधाारण वषा / Asses s m ent Year :2014-2015) Subash Chandra Bardhan, 1, Balaramgadi, PO/PS: Chandipur, DIST: Balasore-756021 Vs ITO, Ward-2, Balasore. PAN No. :AFEPB 0876 L (अऩीऱाथी /Appellant) .. (प्रत्यथी / Respondent) ननधााररती की ओर से /Assessee by : Shri P.K.Mishra, Advocate and Shri Himansu Bhusan Jena, Advocate राजस्व की ओर से /Revenue by : Shri S.C. Mohanty, Sr. DR स ु नवाई की तारीख / Date of Hearing : 12/06/2023 घोषणा की तारीख/Date of Pronouncement : 12/06/2023 आदेश / O R D E R This is an appeal filed by the assessee against the order of the ld CIT(A), National Faceless Appeal Centre (NFAC), Delhi dated 24.11.2021 in Appeal No.ITBA/NFAC/S/250/2022-23/1049793637(1) for the assessment year 2014-2015. 2. It was submitted by the ld AR that the assessee is an individual, who derives income from trading in fish, which is perishable item. It was the submission that the assessee has originally filed its return of income and on account of non-availability of books and had disclosed its turnover at Rs.45,26,980/-. While filing the original return, the assessee had adopted the provisions of Section 44AD of the Act. Subsequently, the assessee had filed a revised return showing total turnover of Rs.1,10,65,800/- and the said revised return was accompanied with audited accounts which was specially qualified auditors. It was the submission that the AO did not accept the return of income wherein the ITA No.108/CTK/2023 2 income as offered at 3.27% of the total turnover and the books of accounts being not available, the percentage of income declared by the assessee in the revised return has been rejected. The AO had adopted @8% of the total turnover of Rs.1,10,65,800/-. It was the submission that the estimation was done without applying any comparative case. It was submitted that the percentage of the net profit taken was high and the comparative case as decided by the coordinate bench of this Tribunal was in the range of 1% to 2.5%. It was the submission that the estimation of the income may be reduced. 3. In reply, ld. CIT-DR submitted that the assessee has not complied with the notices issued by the AO. It was submitted that the AO had applied 8% by adopting the same percentage as disclosed by the assessee in its original return. It was the submission that the estimation as done by the AO is liable to be upheld. 4. I have considered the rival submissions. A perusal of the facts of the present case show that the return filed by the assessee itself is not revised return. In any case, the return discloses higher turnover of Rs.1,10,65,800/-. This being so, the AO was right in adopting the higher turnover for the purpose of estimation. Coming to the issue of estimation, it is noticed that the AO has adopted 8%. Even if the estimation of the revised return is considered, the AO had adopted same percentage as adopted by the assessee in filing its original return, it is understood that the original return had been filed on presumptive basis u/s.44AD of the Act. The provisions of Section 44AD of the Act specifically provides of ITA No.108/CTK/2023 3 estimation. In the present case, the return has exceeded the presumptive basis turnover required; therefore, the provisions of Section 44AD of the Act itself cannot be made applicable to the said turnover. A perusal of the decision the coordinate bench of the Tribunal, in perishable item as fish, shows that net profit adopted by the coordinate benches vary between 1% to 2.5%. However, it is noticed that the assessee has disclosed 3.72%. In these circumstances, as the accounts of the assessee have been rejected, and the rejection has been upheld by me, therefore, I am of the view that the net profit of the assessee should be taken at 3.5% of the total turnover. 5. In the result, appeal of the assessee is partly allowed. Order dictated and pronounced in the open court on 12/06/2023. Sd/- (जाजज माथन) (GEORGE MATHAN) न्यानयक सदस्य / JUDICIAL MEMBER कटक Cuttack; ददनाांक Dated 12/06/2023 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतलऱपऩ अग्रेपषत/Copy of the Order forwarded to : आदेशान ु सार/ BY ORDER, (Assistant Registrar) आयकर अऩीऱीय अधधकरण, कटक/ITAT, Cuttack 1. अऩीऱाथी / The Appellant- Subash Chandra Bardhan, 1, Balaramgadi, PO/PS: Chandipur, DIST: Balasore-756021 2. प्रत्यथी / The Respondent- ITO, Ward-2, Balasore 3. आयकर आय ु क्त(अऩीऱ) / The CIT(A), 4. आयकर आय ु क्त / CIT 5. ववभागीय प्रयतयनधध, आयकर अऩीऱीय अधधकरण, कटक / DR, ITAT, Cuttack 6. गार्ज पाईऱ / Guard file. सत्यावऩत प्रयत //True Copy//