Raja Jaspalsingh Bagga, Jalgaon V. Income-tax Officer, Ward - 1 (3), Jalgaon

ITA 1132/PUN/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0850 (ITAT-PUNE)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 23-07-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: IS DIRECTED AGAINS T PASSED
• Keywords: Rejection of books of accounts; Business income
• Section: 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE VIRTUAL COURT BEFORE SHRI R.S. SYAL, VICE PRESIDENT . / ITA NO.1132/PUN/2019 / ASSESSMENT YEAR : 2013-14 RAJA JASPALSINGH BAGGA, PROP. OF R.K. LOGISTICS, B-13, TRANSPORT NAGAR, NH-6, DIST. JALGAON 425001 PAN : AMUPB8971B VS. ITO, WARD-1(3), JALGAON (APPELLANT) (RESPONDENT) / ORDER PER R.S.SYAL, VP : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)-2, NASHIK ON 20-05-2019 IN RELATION TO THE ASSESSMENT YEAR 2013-14. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSE E IS A TRANSPORT CONTRACTOR, WHO FILED HIS RETURN DECLARING TOTAL INCOME AT RS. 2,64,280/-. THE ASSESSEES ACCOUNTS WER E AUDITED RECORDING TRANSPORTATION RECEIPTS AT RS.1.81CRORE AND TRANSPORTATION PAYMENTS AT RS.1.77 CRORE WITH NET PROFIT OF APPELLANT BY NONE RESPONDENT BY MS. NISHTHA TIWARI & SHRI PRATHAMESH J.LAWAND DATE OF HEARING 10-06-2020 DATE OF PRONOUNCEMENT 10-06-2020 ITA NO.1132/PUN/2019 RAJA J. BAGGA 2 RS.1,54,798/-, WHICH CAME TO BE 0.85%. THE ASSESSING OFFICER (AO) OBSERVED THAT THE FREIGHT PAYMENTS WERE ABOUT 98% OF TRANSPORTATION RECEIPTS. ON BEING CALLED UPON TO SUBSTANTIATE THE RECEIPTS OF FREIGHT, THE ASSESSEE FURNISHED P ART DETAILS, WITH WHICH THE AO WAS NOT SATISFIED. APART FROM THAT, THE AO ALSO FOUND THAT CERTAIN EXPENSES CLAIMED BY THE ASSESSEE WERE NOT PROPERLY BACKED BY NECESSARY EVIDENC E. HE REJECTED THE BOOKS OF ACCOUNTS U/S. 145 OF THE ACT AND APPLIED NET PROFIT RATE AT 10%, WHICH LED TO ESTIMATION OF BUSINESS INCOME AT RS.18,16,578/-. THE LD. CIT(A) GOT PARTLY CONVINCED WITH THE ASSESSEE AND REDUCED THE NET PROFIT RA TE TO 5%. AGGRIEVED THEREBY, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. I HAVE HEARD THE LD. DR THROUGH VIRTUAL HEARING AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD. THERE IS NO APPEARANCE FROM THE SIDE OF THE ASSESSEE. WHEN THE CA SE WAS EARLIER FIXED FOR HEARING ON 15-01-2020, NAMELY, THE PER IOD PRIOR TO LOCKDOWN, THE ASSESSEE AT THAT TIME ALSO REMAINED UNREPRESENTED AND ALSO DID NOT APPEAR IN PERSON. ON STILL EARLIER OCCASIONS ALSO, NAMELY, 26-09-2019 AND 11-11-201 9, ITA NO.1132/PUN/2019 RAJA J. BAGGA 3 THE ASSESSEE CHOSE NOT TO BE PRESENT BEFORE THE TRIBUNAL. UNDER SUCH CIRCUMSTANCES, I AM PROCEEDING TO DISPOSE OF THE APPEAL EX PARTE QUA THE ASSESSEE. 4. IT IS OBSERVED THAT THE ASSESSEE IS A TRANSPORT CONTR ACTOR. THERE IS NO DISPUTE ON THE AMOUNT OF FREIGHT CHARGES RECE IVED BY THE ASSESSEE. IN THE PREVAILING CIRCUMSTANCES AS RECORD ED ABOVE AND AS NOTED IN DETAIL IN THE ASSESSMENT ORDER, IT IS H ELD THAT THE AO WAS JUSTIFIED IN REJECTING THE BOOKS OF ACCOUNT AS THE ASSESSEE FAILED TO SUBSTANTIATE VARIOUS EXPENSES AND ALSO COULD NOT POINT OUT ALL THE DETAILS TO WHOM FREIGHT RECEIPTS WERE PAID/RECEIVED. HAVING REJECTED THE BOOKS OF ACCOUNTS , IT BECOMES OBLIGATORY ON THE PART OF THE AO TO COMPUTE FAIR INCOME OF THE ASSESSEE. IN THE GIVEN CIRCUMSTANCES, THE ON LY DISPUTE IS APPLYING THE APPROPRIATE NET PROFIT RATE. THE ASSESSEE, BEING, A TRANSPORT CONTRACTOR HAS BEEN SADD LED WITH THE NET PROFIT RATE OF 10%, WHICH IS OBVIOUSLY ON A MUCH HIGHER SIDE IN THIS LINE OF BUSINESS. THE ASSESSEE RELIED BEFORE THE LD. CIT(A) ON A JAIPUR TRIBUNAL ORDER DATED 05-06-2015 IN SHRI OM PRAKASH BANSAL CUKE VS. ITO (ITA NO.734/JP/2012), WHEREIN THE TRIBUNAL RESTRICTED THE ITA NO.1132/PUN/2019 RAJA J. BAGGA 4 ESTIMATION OF INCOME UNDER SUCH CIRCUMSTANCES AT 2.5%. CONSIDERING THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES PREVAILING IN THE INSTANT CASE, I AM OF THE CONSIDERED OPINIO N THAT IT WOULD BE JUST AND FAIR IF THE ASSESSEES NET PROFIT IS ALS O RESTRICTED TO 2.5% AS AGAINST 10% APPLIED BY THE AO AND RESTRICTED TO 5% BY THE LD. CIT(A). I ORDER ACCORDINGLY. 5. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH JUNE, 2020. SD/- (R.S.SYAL) / VICE PRESIDENT PUNE; DATED : 10 TH JUNE, 2020 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT (APPEALS)-2, NASHIK 4. THE PR.CIT-2, NASHIK 5. , , SMC / DR SMC, ITAT, PUNE; 6. / GUARD FILE. // TRUE COPY // / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE ITA NO.1132/PUN/2019 RAJA J. BAGGA 5 DATE 1. DRAFT DICTATED ON 10-06-2020 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 10-06-2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER -- JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. -- JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *