Sri Ajit Kumar Das, Howrah V. ITO, Ward - 48(1), Kolkata, Kolkata

ITA 1347/KOL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6114 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 07-06-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D C MONDAL
• Assessee Lawyers: A K CHANDRA; H MEHTA
• Keywords: Unexplained investment
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC, KOLKATA [BEFORE SHRI P.M. JAGTAP, AM] I.T.A. NO. 1347/KOL/2017 ASSESSMENT YEAR: 2008-09 SHRI AJIT KUMAR DAS............................................................APPELLANT PROP. AMIT TELECOM, SANKRAIL, CHAMPATALA, HOWRAH 711 313 [PAN: AMIPD 1801 C] INCOME TAX OFFICER KOLKATA................................RESPONDENT WARD NO. 48(1), KOLKATA 700 001. APPEARANCES BY: SHRI A.K. CHANDRA, ADVOCATE & SHRI H. MEHTA, FCA APPEARING ON BEHALF OF THE ASSESSEE. SHRI D.C. MONDAL, ADDL. CIT APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : MAY 29, 2018 DATE OF PRONOUNCING THE ORDER : JULY 06, 2018 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT (APPEALS) 14, KOLKATA DATED 17.11.2015. 2. AT THE OUTSET, IT IS NOTED THAT THERE IS A DELAY OF 478 DAYS ON THE PART OF THE ASSESSEE IN FILING THIS APPEAL BEFORE THE TRIBUNAL. IN THIS REGARD, THE ASSESSEE HAS MADE AN APPLICATION SEEKING CONDONATION OF THE SAID DELAY ON THE GROUND THE APPEAL COULD NOT BE FILED WITHIN THE PRESCRIBED TIME AS HE WAS NOT IN A POSITION TO PAY THE APPEAL FEE OF RS. 10,000/-. FINALLY THE SAID AMOUNT WAS ASSERTED BY TAKING SOME LOANS AND SINCE IT TOOK SOME TIME TO RAISE THE SAID LOAN, THERE WAS A DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL. SINCE THIS SUBMISSION MADE BY THE ASSESSEE IS DULY SUPPORTED BY AN AFFIDAVIT FILED BY THE ASSESSEE AFFIRMING THE RELEVANT FACTS ON OATH, I AM SATISFIED THAT THERE WAS A SUFFICIENT CAUSE FOR THE DELAY OF 478 DAYS ON THE PART OF THE ASSESSEE IN 2 I.T.A. NO. 1347/KOL/2017 ASSESSMENT YEAR: 2008-09 SHRI AJIT KUMAR DAS FILING THIS APPEAL BEFORE THE TRIBUNAL. EVEN THE LEARNED DR HAS NOT RAISED ANY OBJECTION IN THIS REGARD. THE SAID DELAY IS ACCORDINGLY CONDONED AND THIS APPEAL OF THE ASSESSEE IS BEING DISPOSED OF ON MERIT. 3. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL WHO IS ENGAGED IN THE BUSINESS OF DEALING IN MOBILE PHONES, ACCESSORIES AND RECHARGE VOUCHERS UNDER THE NAME AND STYLE OF HIS PROPRIETOR CONCERN, M/S. AMIT TELECOM. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY HIM ON 12.09.2008 DECLARING A TOTAL INCOME OF RS. 1,10,004/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS FOUND BY THE A.O. FROM THE RELEVANT TRANSACTIONS REFLECTED IN THE BANK ACCOUNTS OF THE ASSESSEE THAT TOTAL PURCHASES MADE BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION WERE RS. 99,77,334/- AS AGAINST THE PURCHASES OF RS. 20,94,087/- SHOWN BY THE ASSESSEE. APPLYING THE GP RATE OF 11.30% TO THE ACTUAL PURCHASES OF RS. 99,77,334/-, THE A.O. WORKED OUT THE ACTUAL SALE OF THE ASSESSEE AT RS. 1,11,04,772/- AS AGAINST THE SALE OF RS. 18,75,428/- SHOWN BY THE ASSESSEE. THE UNDISCLOSED SALE OF THE ASSESSEE THUS WAS WORKED OUT BY THE A.O. AT RS. 92,29,344/- (RS. 1,11,04,772/- MINUS RS. 18,75,428/-) AND GROSS PROFIT OF THE SAME AS WORKED OUT BY APPLYING A GP RATE OF 11.30% AT RS. 10,42,916/- WAS ADDED BY THE A.O. TO THE TOTAL INCOME OF THE ASSESSEE. HE ALSO MADE A FURTHER ADDITION OF RS. 3,00,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT MADE BY THE ASSESSEE IN WORKING CAPITAL FOR UNDISCLOSED SALES. ACCORDINGLY, THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE A.O. AT RS. 14,52,915/- IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 29 TH DECEMBER, 2010. 3 I.T.A. NO. 1347/KOL/2017 ASSESSMENT YEAR: 2008-09 SHRI AJIT KUMAR DAS 4. AGAINST THE ORDER PASSED BY THE A.O. UNDER SECTION 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(A) AND AFTER CONSIDERING THE SUBMISSION MADE BY THE ASSESSEE AS WELL AS MATERIAL AVAILABLE ON RECORD, THE LD. CIT(A) CONFIRMED THE ADDITION OF RS. 3,00,000/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT MADE BY THE ASSESSEE IN THE WORKING CAPITAL FOR UNDISCLOSED SALES. HE HOWEVER ACCEPTED THE CONTENTION OF THE ASSESSEE THAT PROFIT FROM UNDISCLOSED SALES OUGHT TO HAVE BEEN WORKED BY THE A.O. BY APPLYING NET PROFIT RATE OF 6.75% INSTEAD OF GP RATE OF 11.30%. THE LD. CIT(A) ACCORDINGLY RESTRICTED THE ADDITION MADE BY THE A.O. ON ACCOUNT OF INCOME EARNED BY THE ASSESSEE FROM THE UNDISCLOSED SALES. STILL AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 5. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ALTHOUGH THE ASSESSEE HAS RAISED TWO ISSUES IN THE GROUNDS TAKEN IN THIS APPEAL RELATING TO BOTH THE ADDITIONS MADE ON ACCOUNT OF PROFIT FROM THE UNDISCLOSED SALES AND UNEXPLAINED INVESTMENT MADE IN THE WORKING CAPITAL FOR ACHIEVING SUCH UNDISCLOSED SALES, THE LEARNED COUNSEL FOR THE ASSESSEE HAS NOT RAISED ANY CONTENTION TO DISPUTE THE ADDITION OF RS. 3,00,000/- MADE BY THE A.O. AND CONFIRMED BY THE LD. CIT(A) ON ACCOUNT OF UNEXPLAINED INVESTMENT MADE BY THE ASSESSEE IN THE WORKING CAPITAL. AS REGARDS THE ADDITION MADE ON ACCOUNT OF PROFIT FROM UNDISCLOSED SALES, THE LIMITED CONTENTION RAISED BY THE LEARNED COUNSEL FOR THE ASSESSEE IS THAT ALTHOUGH THE LD. CIT(A) ACCEPTED THE STAND OF THE ASSESSEE THAT SUCH PROFIT IS TO BE COMPUTED BY APPLYING A NET PROFIT 4 I.T.A. NO. 1347/KOL/2017 ASSESSMENT YEAR: 2008-09 SHRI AJIT KUMAR DAS RATE INSTEAD OF GROSS PROFIT, HE HAS ADOPTED A NET PROFIT RATE OF 6.75% AS WAS DISCLOSED BY THE ASSESSEE IN HIS BOOKS OF ACCOUNT. HE HAS CONTENDED THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE NOT RELIABLE AS FOUND BY THE A.O. AND SINCE THE ACTUAL PROFIT OF THE ASSESSEE AS A DISTRIBUTOR OF M/S. BHARTI AIRTEL IS ONLY 1.2%, THE ADDITION ON ACCOUNT OF PROFIT FROM UNDISCLOSED SALES CAN REASONABLY BE MADE BY APPLYING THE PROFIT RATE OF 1.2%. THE LEARNED DR ON THE OTHER HAND HAS CONTENDED THAT THE CLAIM OF THE LEARNED COUNSEL FOR THE ASSESSEE REGARDING THE ACTUAL PROFIT RATE OF 1.2% REQUIRES VERIFICATION BY THE A.O. AS THIS CLAIM IS BEING MADE BY THE ASSESSEE SPECIFICALLY FOR THE FIRST TIME BEFORE THE TRIBUNAL. I FIND MERIT IN THIS CONTENTION OF THE LEARNED DR AND SINCE THE LEARNED COUNSEL FOR THE ASSESSEE HAS ALSO NOT RAISED ANY OBJECTION IN THIS REGARD, I SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(A) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE A.O. FOR DECIDING THE SAME AFRESH AFTER VERIFYING THE CLAIM OF THE ASSESSEE THAT ACTUAL GROSS PROFIT EARNED BY HIM FROM THE BUSINESS OF DEALING IN MOBILE PHONE, ACCESSORIES AND RECHARGE VOUCHERS AS DISTRIBUTOR OF M/S. BHARTI AIRTEL IS ONLY 1.2%. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH JULY, 2018. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER DATED: 06/07/2018 BISWAJIT, SR. PS 5 I.T.A. NO. 1347/KOL/2017 ASSESSMENT YEAR: 2008-09 SHRI AJIT KUMAR DAS COPY OF ORDER FORWARDED TO: 1. SHRI AJIT KUMAR DAS, PROP. AMIT TELECOM, SANKRAIL, CHAMPATALA, HOWRAH 711 313. 2. ITO WARD 48(1), KOLKATA . 3. THE CIT(A) 4. THE CIT 5. DR TRUE COPY, BY ORDER, SR. P.S. / H.O.O. ITAT, KOLKATA