Alok Garg, Ghaziabad V. DCIT, Circle- 1, Ghaziabad

ITA 1274/DEL/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 2648 (ITAT-DELHI)
• Duration Of Justice: 3 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 22-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K KATARIA
• Keywords: Opportunity of being heard
• Section: 143(3); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 1274/DEL/2018 : ASSTT. YEAR : 2014-15 ALOK GARG, AKHILESH KUMAR,ADV., CHAMBER NO. 206-207, ANSAL SATYAM, RDC RAJ NAGAR, GHAZIABAD, U.P. VS DCIT, CIRCLE-1, GHAZIABAD (APPELLANT) (RESPONDENT) PAN NO. AARPG7151K ASSESSEE BY : SH. AKHILESH KUMAR, ADV. REVENUE BY : SH. V. K. KATARIA, SR. DR DATE OF HEAR ING: 17 . 02 .20 2 1 DATE OF PRONOUNCEMENT: 22 .02 .20 2 1 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), GHAZIABAD DATED 03.11. 2017. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESS EE: 1. THAT, ID, CIT(A) ERRED IN SUSTAINING THE AD-HOC ADDITION AND REJECTION OF BOOK OF ACCOUNTS WITHOUT APPRECIATING THAT NO DEFECT WAS FOUND IN ACCOUNTS A ND THERE WAS NO FINDING IN TERMS OF S.145 OF THE ACT. 2. THAT, IN ADDITION TO ABOVE ID. CIT(A) GROSSLY ER RED IN SUSTAINING THE FLAT RATE OF 8% NP WHICH IS NOT O NLY AGAINST THE PAST HISTORY BUT IS CONTRARY TO ORDER D T. 21.04.2017 OF HON'BLE ITAT IN ASSESSEE'S OWN CASE O F EARLIER YEAR. ITA NO. 1274/DEL/2018 ALOK GARG 2 3. THAT, WITHOUT PREJUDICE TO ABOVE, LEARNED CIT (A ) ERRED IN DISMISSING THE APPEAL WITHOUT PROVIDING PROPER OPPORTUNITY OF BEING HEARD AS THE AR ENGAGED FOR REPRESENTING APPEAL HAD FALLEN ILL AND COULD NO T ATTEND ON THE LAST DATE OF HEARING ON 12.10.2017 AN D HENCE ASSESSEE WAS PREVENTED WITH SUFFICIENT CAUSE FOR NON- COMPLIANCE. IT IS, THEREFORE HUMBLY PRAYED THAT THE TOTAL ADDIT IONS AMOUNTING TO RS. 39,69,579/- MAY KINDLY BE DELETED. ALTERNATIVELY IT IS PRAYED THAT THE ADDITION MAY KI NDLY BE RESTRICTED IN TERMS OF NP RATE FINALLY UPHELD BY HONBLE ITAT. 3. HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERU SED THE MATERIAL AVAILABLE ON RECORD. 4. THE ISSUE STANDS COVERED IN THE CASE OF THE ASSE SSEE IN ITA NO.7023/DEL/2014 FOR THE A.Y. 2010-11 DATED 21.04.2 017, THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARAS 4 & 5 WH ICH READ AS UNDER: 4. IT IS THE ARGUMENT OF THE LD. AR THAT IN RESPEC T OF THE EARLIER YEARS NAMELY 2000-01, 2003-04, 2006-07, 2007-08 AND 2009- 10 ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT A CCEPTING THE PROFIT RATIO AT 3.31, 1.60, 2.63, 2.39, 2.30 AN D 2.46 RESPECTIVELY, AS SUCH IT IS NOT OPEN FOR THE REVENU E NOW TO STRAIGHTAWAY ESTIMATE THE PROFIT RATIO AT 8%. HE PR AYED THAT IT WOULD BE IN THE ORDER OF THINGS IF PROFIT RATIO IS ESTIMATED AT 2.46 WHICH WAS ACCEPTED IN THE IMMEDIATELY PRECEDIN G AY 2009- 10. PER CONTRA IT IS THE ARGUMENT OF THE LD. DR THA T THE AO HAS GIVEN THE COGENT REASONS FOR REJECTION OF THE BOOKS AND ESTIMATION OF 8% OF THE PROFIT RATIO. HE SUBMITTED THAT THE PROFIT RATIO SUGGESTED BY THE ASSESSEE AT 2.46 WHIC H IS EQUIVALENT TO THE PROFIT RATIO OF THE AY 2009-10 IS TOO LOW AND ITA NO. 1274/DEL/2018 ALOK GARG 3 CANNOT BE ACCEPTED. ACCORDING TO THE LD. DR AT THE LOWEST THE PROFIT RATIO COULD BE AROUND 4%. 5. AT THE OUTSET WE FIND THAT THERE IS NO DENIAL OF THE COMPLETION OF THE ASSESSMENT U/S 143(3) OF THE ACT FOR THE YEARS 2000-01, 2003-04, 2006-07, 2007-08 AND 2009-1 0 ACCEPTING THE PROFIT RATIO AT 3.31, 1.60, 2.63, 2.3 9, 2.30 AND 2.46. WITHOUT GOING INTO THE MERITS OF THE REASONS ASSIGNED BY THE AO FOR REJECTING THE BOOKS OF ACCOUNT OF THE AS SESSEE, WE FIND THAT FOR ALL THE YEARS STATED ABOVE THE DEPART MENT CONSISTENTLY ACCEPTED THE PROFIT RATIO IN THE BUSIN ESS OF THE ASSESSEE IS BETWEEN 1.60 AND 3.31 AND AT NO POI NT OF TIME ANY OBJECTION IS TAKEN BY THE AO ON THE GROUND THAT IN THE KIND OF BUSINESS OF THE ASSESSEE AVERAGE RAT E OF PROFIT WOULD BE ANYTHING AROUND 8%. IN THE CIRCUMSTANCES, WE DO NOT FIND ANY RATIONAL IN THE AO ESTIMATING THE PROFIT AT 8% AND THE CONSISTENCY OF THE NET PROFIT AS WAS ESTABLISHED BY THE ACCEPTED BOOKS OF ACCOUNT IN THE BUSINESS OF THE ASSESSEE WAS SOMETHI NG BETWEEN 1.60% AND 3.31% AS SUCH TAKING A PRAGMATIC VIEW, WE FIND THAT 3% OF THE PROFIT RATIO OF THE CO NTRACT RECEIPT WOULD MEET THE ENDS OF JUSTICE. WITH THIS V IEW OF THE MATER, WE DIRECT THE AO TO ESTIMATE THE PROFIT OF THE ASSESSEE AT 3% OF THE TOTAL TURNOVER. 5. HAVING GONE THROUGH THE TURNOVER OF THE ASSESSEE FOR THE INSTANT YEAR AND THE ORDER OF THE CO-ORDINATE BENCH OF ITAT IN THE CASE OF THE ASSESSEE, WE HEREBY HOLD THAT INTER EST OF JUSTICE WOULD BE WELL SERVED IF THE GP HAS BEEN DETERMINED AT THE RATE OF 3% FOR THIS YEAR. ITA NO. 1274/DEL/2018 ALOK GARG 4 6. WE ALSO HEREBY CLARIFY THAT THE GP RATE WOULD NO T BE CONSTANT FOR ALL THE YEARS TO COME AND MAY VARY FRO M YEAR TO YEAR BASED ON THE VARIOUS BUSINESS CONSIDERATIONS F OR ANY GIVEN YEAR. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22/02/2021. SD/- SD/- (SUCHITRA KAMBLE) (DR. B . R. R. KUMAR) JUDICIAL MEMBER ACCOU NTANT MEMBER DATED: 22/02/2021 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR