SHRI GOPAL MUNDRA, JAIPUR V. INCOME TAX OFFICER, WARD-4-1, JAIPUR

ITA 1296/JPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9917 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-03-2019
• Assessment Year: 2015-2016
• Appeal Filed On: 20-11-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business income
• Section: 69; 44AD; 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH JES'K LH 'KEKZ] YS[KK LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA , ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 1296/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2015-16 SHRI GOPAL MUNDRA, 101, KRISHNA KRIPA, SUBHASH NAGAR SHOPPING CENTRE, JAIPUR. CUKE VS. I.T.O., WARD 4(1), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AINPM 6185 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. PODDAR (ADV) JKTLO DH VKSJ LS@ REVENUE BY : MS. ANURADHA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 18/03/2019 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 02/04/2019 VKNS'K@ ORDER PER: R.C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD.CIT(A), AJMER DATED 25/10/2018 FOR THE A.Y. 2015- 16 IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED FOR TR ADING ADDITION SO UPHELD BY THE LD. CIT(A) BY APPLYING HIGHER N.P. RAT E ON THE ENHANCED TURNOVER OF ASSESSEE. THE ASSESSEE IS ALSO AGGRIEVED FOR UPHOLDING THE PART OF THE ADDITION MADE U/S 69 OF THE ACT AMOUNTI NG TO RS. 6,14,531/-. ITA 1296/JP/2018 GOPAL MUNDRA VS ITO 2 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. THE FACTS IN BRIEF ARE THAT THE ASSESSEE DERIVES INCOME FROM RETAIL BUSINESS OF PAPAD, MANGODI, SPICES ETC. THE RETURN OF INCOME WAS FILED DISCLOSING GROSS PROFIT OF RS. 12,27,950/- AND NET PROFIT OF R S. 6,53,731/- ON TOTAL SALES OF RS. 1,47,44,698/- DECLARING NET PROFIT RAT E OF 4.43%. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER FOUND THAT THE ASSESSEE HAD MAINTAINED FOLLOWING FIVE BANK ACCOUNTS: 1. CITY UNION BANK 2. BANK OF BARODA 3. PNB 4. SBI 5. ICICI BANK THE AO HAS GIVEN THE FINDING THAT THE APPELLANT HAD NOT DISCLOSED THE HANK ACCOUNTS MAINTAINED WITH PNB, SBI AND ICICI BAN K LTD. IN THE BOOKS OF ACCOUNTS. HENCE HE TREATED THE ENTIRE CRED IT OF RS.1,34,47,619/- APPEARING IN THESE THREE BANK ACCOUNTS AS UNDISCLOS ED TURNOVER OF THE APPELLANT AND WORKED OUT THE TOTAL TURNOVER OF THE A PPELLANT AT RS. 2,81,92,317/- (RS. 1,47,44,698 + RS. 1,34,47,619) A ND NET PROFIT @8.33% WAS COMPUTED ON THE TOTAL TURNOVER OF RS. 2,81 ,92,317/- AT RS. 23,48,420/-. 4. BY THE IMPUGNED ORDER, THE LD. CIT(A) GIVEN CRED IT OF RS. 80,90,350/- WHICH HE FOUND THAT THE CASH WAS WITHDRAWN BY THE ITA 1296/JP/2018 GOPAL MUNDRA VS ITO 3 ASSESSEE FROM ONE BANK ACCOUNT AND DEPOSITED IN ANO THER BANK ACCOUNT. AS PER THE LD. CIT(A), IT IS NOT A PART OF SALE BUT MERELY DEPOSIT OF CASH WITHDRAWN FROM THE BANK ACCOUNT. HOWEVER, THE LD. CIT(A ) HAS NOT ACCEPTED THE ASSESSEES CONTENTION WITH REGARD TO DE POSIT OF CASH IN THE BANK ACCOUNT OUT OF REALIZATION OF OLD DEBTORS IN SO FAR AS THE ASSESSEE HAS NOT FURNISHED ANY DETAILS OF DEBTORS AS ON 31/3 /2014 ALONGWITH THE RETURN FILED FOR THE A.Y. 2014-15. I FOUND THAT IN THE EARLIER YEAR, THE ASSESSEE HAD SHOWN THE TURNOVER OF RS. 60,43,444/- A ND RETURN WAS FILED UNDER PRESUMPTIVE TAX SCHEME WHEREIN NO DETAILS OF DEBTORS, CREDITORS, STOCK ETC. WAS GIVEN. UNDER THESE FACTS AND CIRCUMST ANCES IT IS REASONABLE TO PRESUME THAT LOOKING TO THE NATURE OF THE ASSESSEES BUSINESS, TWO MONTHS SALES REMAINED OUTSTANDING IN T HE FORM OF DEBTORS. ACCORDINGLY WE DIRECT THE ASSESSING OFFICER TO GIVE FURTHER CREDIT OF RS. 10.00 LACS WHILE UPHOLDING THE ADDITION ON ACCOUNT O F ENHANCED SALE. I MEAN THAT OUT OF ENHANCED SALES AS UPHELD BY THE LD . CIT(A), A FURTHER CREDIT OF RS. 10.00 LACS IS REQUIRED TO BE GIVEN AN D ON THE BALANCE, THE ASSESSING OFFICER IS TO ESTIMATE THE PROFIT. LOOKIN G TO THE NATURE OF THE ASSESSEE TRADE, ESTIMATION OF NET PROFIT @ 6% AS AGA INST N.P. DISCLOSED BY THE ASSESSEE @ 4.43% WILL BE REASONABLE WITHOUT GIV EN ANY REASON THE ASSESSING OFFICER HAS APPLIED NP RATE OF 8.33% WHICH WAS OFFERED BY ITA 1296/JP/2018 GOPAL MUNDRA VS ITO 4 THE ASSESSEE ON THE SALES OF RS. 60,43,444/- IN THE YEAR ENDING ON 31/3/2014. DURING THE YEAR UNDER CONSIDERATION THE TURNOVER OF ASSESSEE HAS INCREASED SUBSTANTIALLY WHICH IS POSSIBLE AT A S ACRIFICE OF SOME MARGIN PROFIT RATE. THUS, THERE IS NO JUSTIFICATION FOR APPLYING THE NP RATE AT 8.33% OF EARLIER YEAR WHEREIN THE ASSESSEE HAS FI LED RETURN U/S 44AD OF THE ACT. ACCORDINGLY THE ASSESSING OFFICER IS DI RECTED TO RECOMPUTE THE ADDITION BY APPLYING 6% NP RATE ON THE TURNOVER SUG GESTED BY ME HEREINABOVE. 5. THE ASSESSING OFFICER HAS ALSO MADE ADDITION U/S 69 OF THE ACT WITH RESPECT TO STOCK IN TRADE AMOUNT TO RS. 19,09,6 11/- AND CASH BALANCE OF RS. 62,730/- ON THE PLEA THAT THE ASSESS EE HAS NOT FILED ANY DETAILS OF SUCH STOCK AND CASH IN HAND IN ITS RETUR N OF EARLIER YEAR. BY THE IMPUGNED ORDER, THE LD. CIT(A) HAD GIVEN CREDIT OF R S. 13,57,810/- BY OBSERVING THAT THE ASSESSEE HAD SHOWN CLOSING STOCK WITH THE VAT RETURN AND THE VAT DEPARTMENT HAS ACCEPTED THE RETURN FILED BY THE ASSESSEE WHEREIN CLOSING STOCK WAS SHOWN AT RS. 13,57,810/-. THU S, THERE IS NO REASON TO GIVE ANY FURTHER RELIEF TO THE ASSESSEE I N RESPECT OF CLOSING STOCK. I FOUND THAT THE LD. CIT(A) HAS ALSO ACCEPTED THE CASH BALANCE OF RS. 62,730/-. ACCORDINGLY, GROUND NO. 2 RAISED BY T HE ASSESSEE IS DISMISSED. ITA 1296/JP/2018 GOPAL MUNDRA VS ITO 5 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND APRIL, 2019 SD/- JES'K LH 'KEKZ ( RAMESH C SHARMA ) YS[KK LNL;@ YS[KK LNL;@ YS[KK LNL;@ YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 2 ND APRIL, 2019 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI GOPAL MUNDRA, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE I.T.O., WARD 4(1), JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 1296/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR