Shalini Bhut, Cuttack V. ITO, Cuttack

ITA 129/CTK/2014

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4633 (ITAT-CUTTACK)
• Duration Of Justice: 5 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2019
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 21-04-2014
• Court: TRIBUNAL
• Department Lawyers: RABIN CHOUDHURY
• Assessee Lawyers: D K SHETH
• Section: 143(3); 10

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH , CUTTACK [ , . . , BEFORE SHRI SUNIL KUMAR YADAV , J M & SHRI B.P.JAIN , A M ./ ITA NO . 129 /CTK/201 4 ( [ [ / ASSESSMENT YEAR S : 20 09 - 20 10 ) SHALINI BHUT, PROP. GOPAL TRADERS, BALU BAZAR, CUTTACK - 753002 VS. ITO, WARD - 2(4), CUTTACK. ./ ./ PAN/GIR NO. : A FEPB 2662 N ( / APPELLANT ) .. ( / RESPONDENT ) [ /ASSESSEE BY : SHRI D.K.SHETH /REVENUE BY : SHRI RA B I N CHOUDHURY / DATE OF HEARING : 2 7 TH MAY , 201 5 / DATE OF PRONOUNCEMENT 29 TH MA Y ,2015 / O R D E R PER SUNIL KUMAR YADAV (J.M) : THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A), CUTTACK DATED 30 - 1 - 2014 FOR THE ASSESSMENT YEAR 2009 - 2010 , INTER ALIA, ON THE FOLLOWING GROUNDS : - 1. FOR THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE ASSESSMENT AS MADE BY REJECTION OF BOOKS OF ACCOUNT IS IMPROPER AND UNJUSTIFIED. 2. FOR THAT THE ESTIMATE OF GROSS PROFIT AT 3.5% AS SUSTAINED BY THE LEARNED COMMISSIONER IS ARBITRARY AND UNRE ASONABLE AND A/SO UNJUSTIFIED. 3. FOR THAT THE LEARNED COMMISSIONER IS NOT JUSTIFIED TO DIRECT THE LEARNED AO TO ADD RS. 57,200/ - UNDER HEAD INCOME FROM OTHER SOURCES WHICH WAS DULY DISCLOSED BY THE APPELLANT AND ALSO ASSESSED BY THE AO, HENCE, SUCH DIRECTION AMOUNTED TO DOUBLE ADDITION OF THE SAME INCOME. 4. FOR THAT THE WHOLE ASSESSMENT AS MADE IS ARBITRARY, IMPROPER AND OTHERWISE EXCESSIVE.' ITA NO . 129 /14 2 2. THE MAIN GROUND RELATES TO ESTIMATION OF GROSS PROFIT AT 3.5% AS SUSTAINED BY THE CIT(A). IN THIS REGARD, IT IS NOTICED FROM THE ORDERS OF THE LOWER AUTHORITIES THAT ASSESSEE DID NOT PRODUCE BOOKS OF ACCOUNT BEFORE, THE AO AND THE AO REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE NET PROFIT AT 5.32% OF THE TOTAL TURNOVER. AGAINST WHICH THE ASSESSEE PREFERRED APPEAL BEFORE THE C1T(A) AND THE C1T(A) HAS REDUCED THE SAME TO 3.5%. BESIDES ESTIMATING THE GROSS PROFIT AT 3.5% OF THE TOTAL TURNOVER, THE CIT(A) HAS DIRECTED THE AO TO MAKE ADDITION OF RS.57,200/ - DISCLOSED AS INCOME FROM OTHER SOURCES. DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT IN THE PAST YEARS, THE ASSESSEE HAS DECLARED THE NET PROFIT AT 2.02% TO 2.85%, THEREFORE THE SAME MAY BE ADOPTED IN THE IMPUGNED ASSESSMENT YEAR. BESIDES, IT WAS ALSO CONTEND ED THAT THE CIT(A) HAS ENHANCED THE INCOME BY RS.57,200/ - WITHOUT ISSUING ANY NOTICE OF ENHANCEMENT TO THE ASSESSEE, THEREFORE, ENHANCEMENT BY RS.57,200/ - IS BAD IN LAW. 3. LD. DR PLACED RELIANCE UPON THE ORDERS OF LOWER AUTHORITIES. 4. HAVING CAREFU LLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSION, WE FIND THAT IN THE EARLIER ASSESSMENT YEARS I.E. A.YS.2004 - 05 TO 2008 - 09, ASSESSEE HAS DECLARED THE GROSS PROFIT BETWEEN 2.02% TO 2.85% BUT ALL THE ASSESSMENTS ARE FRAM ED U/S.143(1) OF THE ACT, THEREFORE, THERE IS NO APPLICATION OF MIND OF THE AO TO THE PROFITS DECLARED BY THE ASSESSEE. IN THE IMPUGNED ASSESSMENT YEAR, THE ASSESSMENT WAS FRAMED U/S. 143(3) AND THE AO ASKED THE ASSESSEE TO ITA NO . 129 /14 3 PRODUCE THE BOOKS OF ACCOUNT. ON NON - PRODUCTION OF THE BOOKS OF ACCOUNT, THE AO HAS NO OPTION BUT TO REJECT THE BOOKS OF ACCOUNT AND ESTIMATED THE GROSS PROFIT AT 5.32% FOLLOWING THE GROSS PROFIT DECLARED IN THE CASE OF M/S UNITED SALES CORPORATION AND M/S SHREE GANESH PAPER MART. THEREAF TER IN APPEAL, THE CIT(A) HAS REDUCED THE SAME TO 3.5%, AGAINST WHICH THE REVENUE IS NOT IN APPEAL. THEREFORE, THE NET PROFIT RATE ESTIMATED BY THE AO CANNOT BE ADOPTED. DURING THE COURSE OF HEARING LEARNED COUNSEL FOR THE ASSESSEE HAS NOT PLACED ANY COMPA RABLE CASE WHICH CAN BE FOLLOWED FOR ESTIMATING THE NET PROFIT. WE, THEREFORE, OF THE VIEW THAT THE CIT(A) HAS REASONABLY ESTIMATED THE GROSS PROFIT RATE AT 3.5% OF TOTAL TURNOVER, AND, THEREFORE, NO INTERFERENCE IS CALLED FOR. 5. SO FAR AS THE ADDITION OF RS.57,200/ - IS CONCERNED, WE FIND THAT THE AO HAS MADE DISCUSSION OF THIS ADDITIONAL INCOME BUT HE DID NOT MAKE ANY ADDITION, HOWEVER, THE CIT(A) HAS DIRECTED THE AO TO MAKE THE ADDITION OF THE SAME, WHICH AMOUNTS TO ENHANCEMENT OF INCOME BY MAKING FURTHE R ADDITION ON DIFFERENT HEADS. UNDISPUTEDLY NO NOTICE OF ENHANCEMENT WAS ISSUED TO THE ASSESSEE, THEREFORE, ENHANCEMENT IS NOT PROPER. ACCORDINGLY, WE DELETE THIS ADDITION OF RS.57,200/ - . 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS PARTLY ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 / 05 / 201 5 . SD/ - SD/ - ( . . ) (B. P. JAIN) ( ) (SUNIL KUMAR YADAV) / ACCOUNTANT MEMBER / JUDICIAL MEMBER CUTTACK ; DATED 29 /0 5 / 201 5 . . /PKM , . / PS ITA NO . 129 /14 4 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, CUTT ACK 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), 4. / CIT 5. , , / D R, ITAT , CUTTACK 6. [ / GUARD FILE. //TRUE COPY//