Shri Dipak Goswami, Purba Mednipur V. ITO, Ward - 1, Haldia, Presently ITO, Ward - 27(1), Haldia, Purba Medinipur

ITA 1271/KOL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1267 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 31-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: MAHADEB GHOSH
• Keywords: Business income
• Section: 143(3)

Judgement Text

I.T.A. NO. 1271/KOL./2017 ASSESSMENT YEAR: 2010-2011 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA SMC BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER I.T.A. NO. 1271/KOL/2017 ASSESSMENT YEAR: 2010-2011 SHRI DIPAK GOSWAMI,................................ ............................APPELLANT PROP. M/S. DIAS ENTERPRISE, RISTEY COMPLEX, FLAT NO. G/2/A, MAHAPRABHU CHAK, HALDIA TOWNSHIP, PURBA MEDINIPUR-721 607 [PAN: AFSPG 9898 P] -VS.- INCOME TAX OFFICER,.............................. .................RESPONDENT WARD-1, HALDIA, PRESENTLY WARD-27(1), HALDIA-721 602 APPEARANCES BY: SHRI MAHADEB GHOSH, ADVOCATE, FOR THE ASSESSEE SHRI ARUP BHATTACHARJEE, ADDL. CIT, D.R., FOR THE D EPARTMENT DATE OF CONCLUDING THE HEARING : SEPTEMBER 21, 201 7 DATE OF PRONOUNCING THE ORDER : OCTOBER 13, 2017 O R D E R PER SHRI P.M. JAGTAP, A.M. .: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-7, KOLKATA DAT ED 17.04.2017 AND THE SOLITARY ISSUE INVOLVED THEREIN RELATES TO THE DETERMINATION OF NET PROFIT RATE TO BE APPLIED FOR DETERMINING THE INCOM E OF THE ASSESSEE FROM THE BUSINESS OF SUPPLY OF LABOUR ON CONTRACT BASIS ON ESTIMATED BASIS. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO IS ENGAGED IN THE BUSINESS OF SUPPLY OF LABOUR ON CONTRACT BASIS AND SUPPLY OF GENERAL BUILDING MATERIALS. THE RETURN OF INCOME FOR THE YE AR UNDER CONSIDERATION WAS FILED BY HIM ON 29.03.2010 DECLARING TOTAL INCO ME OF RS.11,39,370/-. IN THE SAID RETURN, THE NET PROFIT FROM THE BUSINE SS OF SUPPLY OF LABOUR ON CONTRACT BASIS WAS SHOWN BY THE ASSESSEE AT RS.4,68 ,327/- ON THE TOTAL RECEIPTS OF RS.1,43,55,378/- GIVING NET PROFIT RATE OF 3.26%. THE PROFIT I.T.A. NO. 1271/KOL./2017 ASSESSMENT YEAR: 2010-2011 PAGE 2 OF 4 FROM THE BUSINESS OF GENERAL SUPPLY OF BUILDING MAT ERIALS WAS SHOWN BY THE ASSESSEE AT RS.8,69,631/- ON THE TOTAL TURNOVER OF RS.5,24,72,936/- GIVING NET PROFIT RATE OF 1.66%. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS CALLED UPON BY THE AS SESSING OFFICER TO PRODUCE THE BOOKS OF ACCOUNT ALONG WITH SUPPORTING BILLS AND VOUCHERS FOR VERIFICATION. THE ASSESSEE, HOWEVER, FAILED TO COMPLY WITH THE SAID REQUIREMENTS. HE ALSO ACCEPTED THAT THE BOOKS OF AC COUNT IN RESPECT OF HIS BUSINESS WERE NOT REGULARLY MAINTAINED BY HIM. IN T HE ABSENCE OF THE BOOKS OF ACCOUNT, THE ASSESSING OFFICER PROCEEDED T O DETERMINE THE INCOME OF THE ASSESSEE ON ESTIMATED BASIS BY APPLYI NG NET PROFIT RATE OF 8% ON THE RECEIPTS OF THE ASSESSEE FROM THE SUPPLY OF LABOUR ON CONTRACT BASIS AND NET PROFIT RATE OF 2% ON THE TURNOVER OF THE BUSINESS OF THE ASSESSEE OF GENERAL SUPPLY OF BUILDING MATERIALS. A CCORDINGLY, THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE ASSESS ING OFFICER AT RS.21,97,888/- IN THE ASSESSMENT COMPLETED UNDER SE CTION 143(3) VIDE AN ORDER DATED 20.03.2013. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEF ORE THE LD. CIT(APPEALS) AND AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE AS WELL AS THE MATERIAL AVAILABLE ON RECORD, THE LD . CIT(APPEALS) FOUND THE NET PROFIT RATE OF 2% APPLIED BY THE ASSESSING OFFI CER FOR DETERMINING THE INCOME OF THE ASSESSEE FROM THE BUSINESS OF GENERAL SUPPLY OF BUILDING MATERIALS TO BE FAIR AND REASONABLE. HE, HOWEVER, F OUND THE NET PROFIT RATE OF 8% APPLIED BY THE ASSESSING OFFICER FOR DETERMIN ING THE INCOME OF THE ASSESSEE FROM SUPPLY OF LABOUR ON CONTRACT BASIS TO BE EXCESSIVE AND REDUCED THE SAME TO 6%. AGGRIEVED BY THE ORDER OF T HE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE T RIBUNAL. 4. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IN THE PRESE NT APPEAL FILED BEFORE THE TRIBUNAL, THE ASSESSEE HAS NOT DISPUTED THE NET PROFIT RATE OF 2% APPLIED BY THE ASSESSING OFFICER AND CONFIRMED BY T HE LD. CIT(APPEALS) TO I.T.A. NO. 1271/KOL./2017 ASSESSMENT YEAR: 2010-2011 PAGE 3 OF 4 ESTIMATE THE INCOME OF THE ASSESSEE FROM THE BUSINE SS OF GENERAL SUPPLY OF BUILDING MATERIALS AND THE ONLY DISPUTE RAISED I S RELATING TO THE NET PROFIT RATE APPLIED TO DETERMINE HIS INCOME FROM TH E BUSINESS OF SUPPLY OF LABOUR ON CONTRACT BASIS, WHICH AS REDUCED BY THE L D. CIT(APPEALS) IS 6%. IN THIS REGARD, THE LD. COUNSEL FOR THE ASSESSEE HA S SUBMITTED THAT THE NET PROFIT DECLARED BY THE ASSESSEE AT LOWER RATE IN TH E EARLIER YEAR WAS ACCEPTED BY THE ASSESSING OFFICER AND KEEPING IN VI EW THAT THE NET PROFIT DECLARED BY THE ASSESSEE AT 3.98% FOR THE IMMEDIATE LY PRECEDING YEAR, I.E. A.Y. 2009-10 WAS ALSO ACCEPTED BY THE ASSESSING OFF ICER, THE RATE OF 6% APPLIED BY THE LD. CIT(APPEALS) IS CLEARLY EXCESSIV E AND UNREASONABLE. I FIND SOME MERIT IN THIS CONTENTION OF THE LD. COUNS EL FOR THE ASSESSEE. EVEN THOUGH THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNT AND OTHER SUPPORTING DOCUMENTS WAR RANTING DETERMINATION OF HIS BUSINESS INCOME ON ESTIMATED B ASIS, SUCH ESTIMATE IS REQUIRED TO BE MADE ON THE BASIS OF MATERIAL AVAILA BLE ON RECORD AND THE PAST HISTORY OF THE ASSESSEES CASE. SINCE THE NET PROFIT RATE OF 3.98% DECLARED BY THE ASSESSEE FOR THE IMMEDIATELY PRECED ING YEAR, I.E. A.Y. 2009-10 WAS ACCEPTED BY THE ASSESSING OFFICER, I AM OF THE VIEW THAT THE NET PROFIT RATE OF 6% APPLIED BY THE LD. CIT(APPEAL S) IS SLIGHTLY ON THE HIGHER SIDE AND IT WOULD BE FAIR AND REASONABLE TO APPLY NET PROFIT RATE OF 5% TO ESTIMATE THE INCOME OF THE ASSESSEE FROM THE BUSINESS OF SUPPLY OF LABOUR ON CONTRACT BASIS. I ACCORDINGLY MODIFY THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) ON THIS ISSUE AND DIRECT THE ASSES SING OFFICER TO RECOMPUTE THE INCOME OF THE ASSESSEE BY APPLYING TH E NET PROFIT RATE OF 5% TO ESTIMATE THE INCOME OF THE ASSESSEE FROM THE BUSINESS OF SUPPLY OF LABOUR ON CONTRACT BASIS. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON OCTOBER 13, 2 017. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA, THE 13 TH DAY OF OCTOBER, 2017 I.T.A. NO. 1271/KOL./2017 ASSESSMENT YEAR: 2010-2011 PAGE 4 OF 4 COPIES TO : (1) SHRI DIPAK GOSWAMI, PROP. M/S. DIAS ENTERPRISE, RISTEY COMPLEX, FLAT NO. G/2/A, MAHAPRABHU CHAK, HALDIA TOWNSHIP, PURBA MEDINIPUR-721 607 (2) INCOME TAX OFFICER, WARD-1, HALDIA, PRESENTLY WARD-27(1), HALDIA-721 602 (3) COMMISSIONER OF INCOME TAX (APPEALS)-7, KOL KATA; (4) COMMISSIONER OF INCOME TAX ,KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/DDO INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.