ZAHEER SALIMUDDIN, ALIGARH V. ACIT CIRCLE-1, ALIGARH

ITA 132/AGR/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8505 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 08-02-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Business income; Principle of natural justice
• Section: 271(1)(c); 143(3)

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI LALIET KUMAR, JUDICIAL MEMBER AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER ITA NO. 132/AGR/2018 ASSESSMENT YEAR: 2014-15 ZAHEER SALIMUDDIN, C/O DEEPAK SINGH ADVOCATE, 2 COURT OF WARDS COMPOUND, ALIGARH. PAN: AALPZ7409F (APPELLANT) VS. ACIT, CIRCLE 1, ALIGARH. (RESPONDENT) APPELLANT BY SH. DEEPAK SINGH, ADVOCATE RESPONDENT BY SH. WASEEM ARSHAD, SR. DR ORDER PER LALIET KUMAR, J.M.: THE PRESENT APPEAL IS FILED BY THE ASSESSEE, FEELIN G AGGRIEVED BY THE ORDER PASSED BY THE LD. CIT(A) ON 30.11.2017 FOR THE ASSE SSMENT YEAR 2014-15 ON THE FOLLOWING GROUNDS : 1. BECAUSE THE LD. CIT(A) WAS NOT JUSTIFIED IN CON FIRMING ESTIMATION OF THE NET PROFIT @0.20% OF THE GROSS RECEIPTS. 2. BECAUSE THE LEARNED CIT(APPEALS) HAS ERRED IN CON FIRMING THE ADDITION OF RS.19,16,312/- ON ACCOUNT OF OVER ESTIMATION OF NET PROFIT. 3. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY T O THE FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE. THE APPELLANT CRAVES LEAVE TO ADD, DELETE, MODIFY OR SUBSTITUTE ANY OR ALL THE GROUNDS OF APPEAL AT ANY APPROPRIATE TIME. DATE OF HEARING 01.07.2018 DATE OF PRONOUNCEMENT 02 .07.2018 ITA NO. 132/AGR/2018 2 2. AT THE OUTSET, THE LD. AR HAS DRAWN OUR ATTENTIO N TO THE ASSESSMENT ORDER TO THE FOLLOWING EFFECT : ANOTHER TWO CASES, I.E., SHRI SAHID QUERESHI AND M OHD HANEEF HAVE BEEN COMPLETED UNDER SECTION 143(3) OF THE ACT. THE NET P ROFIT IN THESE TWO CASES HAVE BEEN SHOWN AT 0.23% AND 0.17% RESPECTIVELY. IN THE PRECEDING YEAR I.E. A.Y. 2013-14, THE BUSINESS INCOME OF THE ASSESSEE WAS AS SESSED AT RS.12,85,927/- FROM THE TOTAL TURNOVER OF RS.55,34,75,107/- AND TH EREFORE, THE NET PROFIT COMES TO 0.23% FOR THE YEAR. BUT THE TURNOVER FOR THIS IS HIGHER THEREFORE, RATE OF 0.23% IS ON THE HIGHER SIDE. CONSIDERING ALL THE ABOVE FA CTS IN VIEW NET THE ASSESSMENT IS COMPLETED BY APPLYING NET PROFIT RATE OF 0.20% AFTE R REJECTING THE BOOKS OF ACCOUNTS U/S. 145(3). THEREFORE, NET PROFIT OF THE A SSESSEE IS COMPUTED AT 0.20% OF TOTAL TURNOVER OF RS.1,47,30,75,645/- WHICH COME S TO RS.29,46,151/-. AS PER PROFIT AND LOSS ACCOUNT OF THE ASSESSEE, THE NET PR OFIT SHOWN IS RS.10,29,839/-. THEREFORE, AN AMOUNT OF RS.19,16,312/- (29,46,151 10,29,839) IS HEREBY ADDED TO THE TOTAL INCOME OF THE ASSESSEE. SINCE THE ASSE SSEE HAS CONCEALED THE INCOME BY FURNISHING INACCURATE PARTICULARS OF SUCH INCOME , THEREFORE, PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT ARE BEING INI TIATED SEPARATELY. 3. ON THE BASIS OF THE ABOVE, IT WAS SUBMITTED BY T HE ASSESSEE BEFORE US THAT FEELING AGGRIEVED BY THE ORDER PASSED BY THE ASSESS ING OFFICER, THE ASSESSEE FILED AN APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX(APPEAL S). HOWEVER, THE COMMISSIONER HAD CONFIRMED THE FINDINGS RECORDED BY THE ASSESSING OFFICER. NOW, THE ASSESSEE IS BEFORE US ON THE GROUNDS MENTIONED HEREINABOVE. 4. AT THE OUTSET, IT WAS SUBMITTED THAT THE ASSESSI NG OFFICER HAS ESTIMATED THE INCOME BY APPLYING NET PROFIT RATE OF 0.20% AFTER R EJECTING THE BOOKS OF ACCOUNT. IT WAS SUBMITTED THAT IN PRECEDING ASSESSMENT YEAR, TH E NET PROFIT WAS 0.23% AND 0.17% IN RESPECT OF MR. SAHID QUERESHI AND MOHD. HA NEEF RESPECTIVELY. IT WAS SUBMITTED THAT THE NET PROFIT OF THE ASSESSEE SHOUL D BE ESTIMATED AT 0.17% INSTEAD OF 0.20% AND THEREFORE, THE APPEAL OF THE ASSESSEE IS REQUIRED TO BE ALLOWED. ITA NO. 132/AGR/2018 3 5. PER CONTRA, THE LD. DR RELIED UPON THE ORDERS PA SSED BY THE LOWER AUTHORITIES AND IT WAS SUBMITTED THAT THE ASSESSEE DO NOT REQUI RE ANY INDULGENCE OF THIS TRIBUNAL AND THE ORDERS OF THE AUTHORITIES BELOW AR E REQUIRED TO BE CONFIRMED. 6. IN REBUTTAL, THE LD. AR FOR THE ASSESSEE HAD SUB MITTED THAT THE ASSESSING OFFICER HAS WRONGLY CONSIDERED THE NET PROFIT OF THE TWO OT HER PARTIES DESPITE OF THE FACT THAT THE NATURE OF BUSINESS OF THESE TWO PARTIES WE RE DIFFERENT AS THEY WERE INTO THE TRADING OF ANIMALS WHEREAS THE ASSESSEE IS DOING TH E BUSINESS ON COMMISSION. IT WAS FURTHER SUBMITTED THAT EVEN FOR THE ASSESSMENT YEAR 2013-14, APPEAL OF THE ASSESSEE IS PENDING ADJUDICATION BEFORE THE CIT(A). THEREFOR E, THE RELIANCE BY THE ASSESSING OFFICER ON THE NET PROFIT RATE OF THE EARLIER ASSES SMENT YEAR WAS INCORRECT. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE RECORD. THE FINDING RECORDED BY THE LOWER AUTHORITI ES IS BASED ON THE NET PROFIT RATE FOR THE ASSESSMENT YEAR 2013-14 WHERE THE NET PROFI T RATE APPLIED WAS 0.23%. IN THE PRESENT CASE, AS NOTICED HEREINABOVE, THE ASSESSING OFFICER HAS APPLIED 0.20% AS AGAINST 0.23%, WHICH WAS THE NET PROFIT RATE FOR TH E ASSESSMENT YEAR 2013-14. PENDENCY OF APPEAL BEFORE THE FIRST APPELLATE AUTHO RITY IS NOT DISPUTED BY THE LD. DR FOR THE REVENUE. FURTHER, WE NOTICE THAT THE ASSESS ING OFFICER HAS MERELY TAKEN THE AVERAGE OF NET PROFIT OF THE TWO PARTIES, NAMELY, M R. SAHID QUERESHI AND MOHD. HANEEF WITHOUT BRINGING ON RECORD COMPARABILITY OF THE PROFILE OF THE ASSESSEE WITH THESE TWO PERSONS. IN THESE PECULIAR FACTS AND CIRC UMSTANCES OF THE CASE, WE HAVE TO VENTURE INTO THE ESTIMATION WITHOUT ANY FORMAL FOUN DATION. WE, ACCORDINGLY, HOLD THAT THE LOWER OF THE TWO, NAMELY, NET PROFIT RATE OF 0.17%, IS REQUIRED TO BE APPLIED INSTEAD OF 0.20%. ACCORDINGLY, THE ASSESSING OFFICE R IS DIRECTED TO APPLY NET PROFIT RATE OF 0.17% INSTEAD OF 0.20%. ACCORDINGLY, THE AP PEAL OF THE ASSESSEE IS PARTLY ITA NO. 132/AGR/2018 4 ALLOWED AND THE ORDER OF THE LOWER AUTHORITIES IS M ODIFIED TO THE EXTENT STATED HEREINABOVE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DR. MITHA LAL MEENA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 2 ND JULY, 2019 *AKS* COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR