ANWAR AHMAD, MEERUT V. ITO, WARD- 1(1), MEERUT

ITA 1321/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4417 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 23-02-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Keywords: Presumptive income
• Section: 44AD; 143(3); 142(1); 131

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC, NEW DELHI BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER ITA NO. 1321/DEL/2018 ASSESSMENT YEAR: 2013-14 ANWAR AHMAD VS. ITO, WARD 1(1), C/O VINOD KUMAR GOEL, CA MEERUT 282 BOUNDARY ROAD, CIVIL LINES, MEERUT (PAN: AJIPA6322J) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. VINOD KUMAR GOEL, CA REVENUE BY : SH. SL ANURAGI, SR. DR. ORDER THE ASSESSEE HAS FILED THE APPEAL AGAINST THE ORDE R DATED 05.12.2017 OF THE LD. CIT(A), MEERUT PERTAINING TO ASSESSMENT YEAR 2013-14 ON THE FOLLOWING GROUNDS:- 1. THAT THE ASSESSEE HAS SHOWN NET PROFIT AS GROSS TURNOVER OF RS. 9,65,000/- AND COMPUTED NET PROFIT @20% OF RS. 1,93,500/- WHICH IS IN THE SAME MANNER AS SHOWN IN EARLIER YEAR IN WHICH, TURNOVER WAS RS. 8,40,000/- AND NET PROFIT @20% WAS RS. 1,68,000/- BUT DOE TO CLERICAL MISTAKE IT APPEARS AS RS. 96,50,000/-. THEREFORE, AO HAS TAKEN NET PROFIT RATE ON RS. 96,50,000/- WHICH WAS NOT JUSTIFIED, NOR IT CORRECT IN VIEW OF ABOVE FACT. THEREFORE, THE AO HAS COMMITTED 2 ERROR AND CIT(A) THE ERROR IS AGAINST THE FACTS AND LAW. 2. THAT THE ASSESSEE HAS RIGHT TO ADD, MODIFY OR DELETE ANY GROUND DURING THE APPEAL PROCEEDINGS. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FI LED RETURN OF INCOME ON 24.7.2014 AT RS. 1,93,500/- LATER THE CASE OF TH E ASSESSEE WAS PICKED UP FOR SCRUTINY THROUGH CASS AND NOTICE U/S. 143(2) OF THE INCOME TAX ACT, 1961 (IN SHORT ACT) WAS ISSUED ON 28.8.2015. SUBSEQUENTLY, A DETAILED QUESTIONNAIRE ALONGWITH NOTICE U/S. 14291) OF THE ACT WAS ISSUED ON 6.10.2015. IN RESPONSE TO THE NOTICE U/S. 142(1) AND 143(2) OF THE ACT THE AR FOR THE ASSESSEE ATTENDED THE PROCEEDINGS FR OM TIME TO TIME AND FURNISHED THE REQUIRED DETAILS AND INFORMATION. THE ASSESSEE HAS DECLARED INCOME FROM BUSINESS AT RS. 1,93,500/- IN THE RETURN. A PERUSAL OF SCHEDULED OF RETURN IT WAS OBSERVED BY THE AO TH AT ASSESSEE HAD DECLARED GROSS TURNOVER / GROSS RECEIPT AT RS. 96,5 0,000/- FROM BUSINESS AND PROFIT WAS DECLARED U/S. 44AD AT RS. 1,93,500/- . ASSESSEE HAD DECLARED PRESUMPTIVE INCOME LESS THAN 8% OF GROSS R ECEIPT DECLARED IN THE RETURN OF INCOME. AO VIDE ORDER SHEET ENTRY DAT ED 6.1.2016, ASKED THE ASSESSEE TO EXPLAIN AS TO WHY PRESUMPTIVE INCOM E DECLARED U/S. 44AD BE NOT ASSESSED AT RS.7,72,000/- (8% OF TURNOVER/GR OSS RECEIPT) AND ALSO REQUIRED TO PRODUCE THE DOCUMENTARY EVIDENCE TO SUB STANTIATE THE TURNOVER / GROSS RECEIPT. IN RESPONSE TO THE QUERY ASSESSEE EXPLAINED THAT TURNOVER HAS BEEN WRONGLY OVERSTATED BY THE COUNSEL IN THE INCOME TAX RETURN AND ALSO ASSERTED THAT HE IS NOT ENGAGED WIT H ANY KIND OF BUSINESS 3 ACTIVITY. IT HAS BEEN STATED BY THE ASSESSEE THAT HE HAS ONLY AGRICULTURE INCOME AND THERE IS NO OTHER SOURCE OF INCOME EXCEP T AGRICULTURE INCOME. AFFIDAVIT TO THIS EFFECT WAS ALSO FILED. ASSESSEES STATEMENT U/S. 131 WAS ALSO RECORDED. ASSESSEE DEPOSED IN THE STATEMENT T HAT HE HAD APPROX. 1.2790 HECTARE AGRICULTURE LAND. HE IS ENGAGED IN A GRICULTURAL ACTIVITIES AND PRODUCED CASH CROPS VIZ. SUGAR CANE, VEGETABLE S ETC. RECEIPT FROM AGRICULTURAL PRODUCE ARE DEPOSITED IN HIS BANK AC COUNT. COPY OF BANK ACCOUNT STATEMENT WAS ALSO FILED. AO ON PERUSING THE BANK ACCOUNT OBSERVED THAT THERE ARE TOTAL CREDIT OF RS. 3,44,71 0/- AND ASSESSEE EXPLAINED THAT THESE DEPOSITS ARE RELATED TO SALE OF AGRICULTURAL PRODUCE. DURING THE COURSE OF SCRUTINY PROCEEDINGS, ASSESSE E WAS CATEGORICALLY ASKED TO PRODUCE THE COUNSEL WHO HAS FILED WRONG P ARTICULARS OF INCOME IN ITR FOR VERIFICATION. ASSESSEE STATED THAT HE W AS NOT IN A POSITION TO PRODUCE THE SAID COUNSEL AS HE WAS NO RESIDING AT THE ADDRESS KNOWN TO HIM. ACCORDINGLY, AO OBSERVED THAT ASSESSEE HAD DE CLARED INCOME OF RS. 1,93,500/- OUT OF TOTAL GROSS RECEIPTS OF RS. 96,50 ,000/- U/S. 44AD WHICH IS NOT ACCEPTABLE IN VIEW OF PROVISION U/S. 44AD OF THE ACT. HENCE, HE ASSESSED THE INCOME AT RS. 7,72,000/- @8% OF GROSS RECEIPT OF RS. 96,50,000/- AND MADE THE ADDITION OF RS. 5,78,500/- VIDE HIS ORDER DATED 18.3.2016 PASSED U/S. 143(3) OF THE ACT. AGAINST TH E SAID ASSESSMENT ORDER, ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 27.4.2018 HAS DISMISSED THE APPEAL OF T HE ASSESSEE. AGGRIEVED WITH THE IMPUGNED ORDER, ASSESSEE IS IN A PPEAL BEFORE THE TRIBUNAL. 4 3. DURING THE HEARING, LD. COUNSEL FOR THE ASSESSEE HAS STATED THAT THE ASSESSEE HAS SHOWN NET PROFIT AS GROSS TURNOVER OF RS. 9,65,000/- AND COMPUTED NET PROFIT @20% OF RS. 1,93,500/- WHICH IS IN THE SAME MANNER AS SHOWN IN EARLIER YEAR IN WHICH, TURNOVER WAS RS. 8,40,000/- AND NET PROFIT @20% WAS RS. 1,68,000/- BUT DUE TO CLERICAL MISTAKE IT APPEARS AS RS. 96,50,000/-. THEREFORE, AO HAS TAKEN NET PROFIT RATE ON RS. 96,50,000/- WHICH WAS NOT JUSTIFIED, NOR IT COR RECT IN VIEW OF ABOVE FACT. THEREFORE, THE AO HAS COMMITTED ERROR AND LD. CIT(A)S ERROR IS AGAINST THE FACTS AND LAW. HENCE, HE REQUESTED TO D ELETE THE ADDITION CONFIRMED BY THE LD. CIT(A) AND ALLOW THE APPEAL OF THE ASSESSEE. 4. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER OF THE LD. CIT(A) AND STATED THAT HE HAS PASSED A WELL REASONED ORDER , WHICH DOES NOT NEED ANY INTERFERENCE. 5. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS ESPECIALLY THE IMPUGNED ORDER. IT IS NOTED THAT ASSESSEE HAS APPOI NTED A NEW AR IN FIRST APPEAL AND NO EFFORT HAS BEEN MADE TO EITHER PRODUC E THE AR WHO FILED THE RETURN NOR ANY AFFIDAVIT OR EVEN A CONFIRMATION OF THE PREVIOUS AR HAS BEEN FILED TO CORROBORATE THE ERROR THAT WAS APPARE NTLY COMMITTED BY HIM. HOWEVER, BEFORE THE LD. CIT(A) A TECHNICAL GROUND WAS RAISED THAT THE PROCEEDINGS U/S. 143(3) OF THE ACT IS VOID SINCE TH E RETURN WAS DECLARED DEFECTIVE. IN THIS CONNECTION, IT IS OBSERVED, THAT NO SUCH PLEA WAS TAKEN DURING THE ASSESSMENT PROCEEDINGS IN WHICH THE ASSE SSEE NOT ONLY PARTICIPATED BUT EVEN HIS STATEMENT WAS RECORDED. I T IS ALSO TO BE NOTED 5 THAT THE CASE WAS SELECTED FOR SCRUTINY BY CASS WHI CH IS COMPUTER BASED SELECTION AND NOT MANUAL SELECTION OF THE CASES FO R SCRUTINY. SO, THE PLEA OF THE AR THAT THE RETURN WAS DEFECTIVE DOES NOT HA VE ANY BASIS. IN THE ABSENCE OF ANY THIRD PARTY EVIDENCE IN THE FORM OF CONFIRMATION OR ADMISSION BY THE ORIGINAL COUNSEL WHO FILED THE RET URN WITH REGARD TO THE ERROR ATTRIBUTED TO HIM, THE AFFIDAVIT OF THE ASSES SEE FILED AT THE TIME OF ASSESSMENT WHOSE UNSIGNED AND UNVERIFIED EXTRACT HA S BEEN FILED BEFORE THE LD. CIT(A), HAS VERY LITTLE EVIDENTIARY VALUE A S IT DOES NOT CORROBORATE THE VERSION OF THE ASSESSEE. IN VIEW OF THIS, THE L D. CIT(A) HAS RIGHTLY HELD THAT NO SUFFICIENT EVIDENCE WAS BROUGHT ON REC ORD TO INTERFERE THE FINDINGS OF THE AO IN THE ASSESSMENT ORDER, WHICH D OES NOT NEED ANY INTERFERENCE ON MY PART, HENCE, I UPHOLD THE ACTION OF THE LD. CIT(A) ON THE ISSUE OF DISPUTE AND REJECT THE GROUND RAISED B Y THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 15-02-2019. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE: 15/02/2019 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. D R, ITAT BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES