ITO, Bangalore V. Sri. L.M. J. Fredrick, Bangalore

ITA 1205/BANG/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51244 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 04-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JACINTA ZIMIK VASHAI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO.1205/BANG/2010 ASSESSMENT YEAR : 2006-07 THE INCOME TAX OFFICER, WARD 1(2), BANGALORE. : APPELLANT VS. SHRI L.M.J. FREDRICK, NO.205, NIDHI APARTMENTS, NO.40, NETAJI TOWN, BANGALORE 560 065. PAN : AADPF7930P : RESPONDENT APPELLANT BY : SMT. JACINTA ZIMIK VASHAI, ADDL.CIT( DR) RESPONDENT BY : NONE DATE OF HEARING : 08.08.2011 DATE OF PRONOUNCEMENT : 12.08.2011 O R D E R PER A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE REVENUE AGGRIEVED BY THE ORDER OF LD. CIT(APPEALS)-I, BANGALORE IN ITA NO.45/W-1(2)/A-I/0 7-08 DATED 25.8.2010 FOR THE ASSESSMENT YEAR 2005-06 PASSED U/S. 250 R.W .S. 144 OF THE ACT. 2. THE REVENUE HAS RAISED FIVE GROUNDS IN ITS APPE AL. GROUND NOS.1, 4 & 5 ARE GENERAL IN NATURE AND DOES NOT SURVIVE FO R ADJUDICATION. FROM THE ITA NO.1205/BANG/10 PAGE 2 OF 4 OTHER TWO GROUNDS, THE ONLY ISSUE EMERGING IS THAT THE REVENUE IS AGGRIEVED BY THE ORDER OF LD.CIT(A) WHEREIN HE DELETED THE AD DITION MADE BY LD.AO BY ESTIMATING THE INCOME AT 8% OF TURNOVER. 3. THE ASSESSEE IS AN INDIVIDUAL HAVING BUSINESS OF CIVIL CONSTRUCTION IN THE NAMES OF THE PROPRIETARY CONCERNS, M/S. J.N. CO NSTRUCTION AND M/S. J.N. ENTERPRISES. DURING THE FINANCIAL YEAR 2004-05, TH E ASSESSEE HAS DECLARED A TURNOVER OF RS.1,51,80,973/- AND RS.3,67,960/- IN THE RESPECTIVE PROPRIETARY CONCERNS AND COMPUTED HIS INCOME AT RS. 5,41,675/- FROM HIS CONSTRUCTION ACTIVITIES. INITIALLY THE RETURN WAS PROCESSED U/S. 143(1) OF THE ACT AND SUBSEQUENTLY TAKEN UP FOR SCRUTINY U/S. 143 (3) OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE COULD NOT SUBMIT ANY EVIDENCE FOR THE EXPENDITURE INCURRED. FURTHER, TH E ASSESSEE WAS NOT CO- OPERATING IN THE ASSESSMENT PROCEEDINGS. THE ASSES SEE ALSO DID NOT SUBMIT ANY EVIDENCE IN RESPECT OF CERTAIN OUTSTANDI NG CREDITORS TO THE TUNE OF RS.14,40,421/- AND ON FURTHER ENQUIRIES, IT WAS FOUND THAT THE CREDITORS DID NOT EXIST AT THE GIVEN ADDRESS. DUE TO THE ABO VE REASONS, THE LD. ASSESSING OFFICER ESTIMATED THE INCOME OF THE ASSES SEE AT 8% OF THE RECEIPTS AMOUNTING TO RS.12,43,915/- AND NON-EXISTI NG LIABILITIES AMOUNTING TO RS.14,40,421 AS UNDISCLOSED INCOME. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A). AFTER OBTAINING THE WRITTEN SUBMISSIONS AND DETAILS, THE LD. CIT(A) ACCEPTED THE CONTENTION OF THE ASSESSEE THAT IN THE EARLIER YEAR S, THE NET PROFIT RATE WAS AROUND 4% OF GROSS RECEIPTS AND THEREFORE, THE ADOP TION OF NET PROFIT RATE AT 8% IS EXORBITANT AND FURTHER THE ASSESSEE HAD MADE REPAYMENT OF HIS LIABILITIES SUBSEQUENTLY BY WAY OF CHEQUES. THE LD . CIT(A) THEREFORE DID NOT ITA NO.1205/BANG/10 PAGE 3 OF 4 FIND ANY MERITS IN THE PRESUMPTION OF THE ASSESSING OFFICER IN REGARD TO THE ESTIMATION OF INCOME AT 8% AND THE SUNDRY CREDITORS TO BE ACCUMULATION OF UNDISCLOSED INCOME AND THUS DELETED THE ADDITION. 5. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE, THOUGH NOTICE WAS SERVED TO HIM, HOWEVER LD. DR WAS PRESENT. SINCE THE ISSUE WAS SIMPLE IN NATURE AND NO FURTHER MATERIALS WERE REQUIRED FOR ADJUDICATION, THE CASE WAS TAKEN UP FOR HEARING. 6. THE LD. DR VEHEMENTLY ARGUED IN SUPPORT OF THE R EVENUE AND RELIED UPON THE ORDER OF THE LD. ASSESSING OFFICER. 7. AFTER HEARING THE LD. DR AND AFTER CAREFULLY PER USING THE MATERIAL ON RECORD, WE FIND THAT THE LD. CIT(A) HAS MADE AN EXE RCISE BASED ON WHICH HE HAD COME TO A BONA FIDE CONCLUSION THAT THE ADDITIO N IS NOT WARRANTED. HE HAD TAKEN NOTE OF THE PAST NET PROFITS EARNED BY TH E ASSESSEE AND ALSO THE SUBSEQUENT PAYMENT TO THE CREDITORS BY WAY OF CHEQU ES IN ARRIVING AT HIS CONCLUSIONS. IN THESE CIRCUMSTANCES, WE DO NOT HA VE ANY REASON TO DOUBT THE FINDINGS OF THE LD. CIT(A). THEREFORE, WE CON FIRM THE ORDER OF THE LD. CIT(A). 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. PRONOUNCED IN THE OPEN COURT ON 12/08/2011. SD/- SD/- ( GEORGE GEORGE K. ) (A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 12 TH AUGUST, 2011. DS/- ITA NO.1205/BANG/10 PAGE 4 OF 4 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.