Income TAx Officer Ward-1 , Chitradurga V. M/s Vidya Poultary Farm , Chitradurga

ITA 1359/BANG/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4726 (ITAT-BANGALORE)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 14-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V SRINIVASAN

Judgement Text

ITA.1359/BANG/2017 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU BENCH 'C', BENGALURU BEFORE SHRI. A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI. LALIET KUMAR, JUDICIAL MEMBER I.T.A NO.1359/BANG/2017 (ASSESSMENT YEAR : 2012-13) INCOME-TAX OFFICER, WARD -1, CHITRADURGA .. APPELLANT V. M/S. VIDYA POULTRY FARM. H R ROAD, MOLAKALMRU, CHITRADURGA DISTRICT .. RESPONDENT PAN : AADFV58885H ASSESSEE BY : SHRI. V. SRINIVASAN, ADVOCATE REVENUE BY : DR. P. V. PRADEEP KUMAR, ADDL.CIT HEARD ON : 24.05.2018 PRONOUNCED ON : 01.06.2018 O R D E R PER LALIET KUMAR, JUDICIAL MEMBER : THE PRESENT APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT (A), DAVANGERE, DT.20.02.2017, FOR THE A SSESSMENT YEAR 2011-12, ON THE FOLLOWING EFFECTIVE GROUND : 2. THE COMMISSIONER OF INCOME TAX (APPEALS), DAVANGERE, ERRED IN DIRECTING RECOMPUTATION OF THE INCOME BY APPLYING GROSS PROFIT AT 25% ON THE SAID ITA.1359/BANG/2017 PAGE - 2 QUANTUM OF SUPPRESSION OF SALES TO THE EXTENT OF RS.48,28,626/- DETERMINED, WHEN THE ASSESSEE HAS NO T PRODUCED ANY EVIDENCE TO SHOW THAT EXPENSES WERE INCURRED FOR SUPPRESSED PRODUCTION. 02. BRIEFLY FACTS ARE, THE ASSESSEE IS A PARTNERSHI P FIRM. THE AO CONCLUDED THE ASSESSMENT DETERMINING THE TOTAL INCO ME OF RS.52,58,960/- AS AGAINST THE RETURNED INCOME OF RS .4,30,334/-. THE ADDITION OF RS.48,28,626/- IS MADE AS SUPPRESSED VA LUE OF SALE OF EGGS. BEING AGGRIEVED THE ASSESSEE FILED AN APPEAL BEFORE THE CIT (A). 03. THE CIT (A) IN PARA 4 OF THE ORDER HAS OBSERVED AS UNDER : 4. IN GROUND NOS.2 TO 7, ADDITION OF RS.48,28,626/- ON ACCOUNT OF UNACCOUNTED SALES OF EGGS IS CONTESTED. THE AR HAS RELIED ON THE DECISION OF THE HONBLE ITAT B BENCH IN THE CASE OF M/S. KARTHIK POULTRY FARM, CHITRADUR GA IN ITA NO.1106 (B)/2014. THIS DECISION ON THE JURISDI CTIONAL ITAT HAS GONE IN DEPTH AND ALSO REFERRED TO VARIOUS CASE LAWS INCLUDING THAT REFERRED TO BY THE ASSESSEE IN HIS GROUNDS OF APPEAL. THEREFORE, RESPECTFULLY FOLLOWI NG THE RATIO OF THE ABOVE DECISION, I HOLD THAT 25% OF THE SALE VALUE AS ASSESSED BY THE AO IS FAIR AND REASONABLE AS GUIDED BY THE DECISION OF THE HONOURABLE ITAT, BANGALORE. FROM THE ABOVE, WE FIND THAT THE CIT (A) HAS UPHELD THE ADDITION MADE BY THE AO. BEING AGGRIEVED, THE ASSESSEE IS I N APPEAL BEFORE THIS TRIBUNAL. 04. BEFORE US, THE LD. DR SUBMITTED RELIES UPON THE ORDER PASSED BY THE AO. ITA.1359/BANG/2017 PAGE - 3 05. PER CONTRA THE LD. AR SUBMITTED THAT THE CASE I S COVERED IN FAVOUR OF THE ASSESSEE BY VIRTUE OF THE DECISION RE NDERED BY THE TRIBUNAL IN THE MATTER OF KARTIK POULTRY FARM (SUPR A), WHERE THE TRIBUNAL BY RELYING UPON VARIOUS DECISIONS HAS PASS ED THE ORDER IN FAVOUR OF THE ASSESSEE. 06. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE FACTS OF THE PRESENT CASE ARE PARA MATERIAL SIM ILAR TO THE FACTS OF THE CASE OF KARTHIK POULTRY FARM (SUPRA). FOR THE PURPOSE OF CLARITY, WE HEREBY REPRODUCE PARAS 5.3.2 AND 5.3.3 OF THE OR DER OF THE COORDINATE TRIBUNAL (SUPRA), TO THE FOLLOWING EFFEC T : 5.3.2 ON A CAREFUL APPRECIATION OF THE FACTS ON REC ORD IN RESPECT OF THE ISSUE BEFORE US, WE ARE OF THE CONSI DERED VIEW THAT THE AFORESAID CONCLUSION OF THE LEARNED CIT (A) 9SU PRA) APPEARS TO BE IN ORDER. IT IS WELL SETTLED LAW THAT THE EN TIRE AMOUNT OF SALE DOES NOT REPRESENT INCOME OF THE ASSESSEE. IT IS ONLY A PRICE RECEIVED BY THE SELLER OF THE GOODS AND ONLY THE REALIZATION OVER COST THAT CAN BE THE PROFIT. IN CO MING TO THE AFORESAID CONCLUSION, THE LEARNED CIT(A) HAS RE LIED UPON BY THE JUDGMENTS OF THE ITO VS GURUBACHAN SINGH JUN EJA (216 ITR 99 (ITAT AHMEDABAD) CIT VS S.M.OMAR (201 ITR 60 8) (CAL.) ANIS AHMED & SONS VS CIT (297 ITR 441) (SC) AND FIT VS PRESIDENT INDUSTRIES (258 ITR 654) (GUJ.), WHICH . HAS BEEN APPROVED BY THE HON'BLE MADHYA PRADESH HIGH CO URT IN THE CASE OF CIT VS BAICHAND AJIT KUMAR (263 ITR 610) (MP) AND WHICH, IN OUR VIEW, ARE APPLICABLE TO THE FACTS OF THE CASE ON HAND. 5.3.3 IN THE CASE ON HAND, THE GRIEVANCE OF THE REV ENUE IS THAT THE ASSESSEE HAS NOT SHOWN THAT IT HAS INCURRED EXP ENDITURE IN RESPECT OF UNDISCLOSED/ SUPPRESSED SALES. THE LEARN ED CIT(A) HAS PROCEEDED TO ESTIMATE THE ASSESSEE'S PROFIT @18 % OF THE TURNOVER AFTER RECORDING THAT ENTITIES IN THE SAME LINE OF BUSINESS, AS THAT OF THE ASSESSEE IN THE CASE ON HA ND, HAVE SHOWN LESSER PROFITS IN THE REGION OF 9% TO 12% OF ITA.1359/BANG/2017 PAGE - 4 TURNOVER. MERELY BECAUSE THE EXPENDITURE INCURRED B Y THE ASSESSEE IN RESPECT OF THIS TURNOVER HAS NOT BEEN P ROVED DOES NOT MEAN THAT THERE WAS NO EXPENDITURE INCURRED AT ALL AND SUCH A PLEA CANNOT BE ACCEPTED. IN SUCH CIRCUMSTANC ES, AN ESTIMATE OF THE PROBABLE PROFIT HAS TO BE MADE HAVI NG REGARD TO THE SURROUNDING CIRCUMSTANCES, GROUND REA LITIES, CORROBORATIVE EVIDENCE IN THE FORM OF PROFITS SHOWN IN COMPARATIVE CASES AND OTHER FACTORS THAT ARE RELEVA NT TO DETERMINE THE REAL INCOME OF THE ASSESSEE. WE ARE O F THE VIEW, THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS LAID OUT ABOVE, THE LEARNED CIT(A) HAS FOLLOWED THE CORRECT AND REASONABLE APPROACH IN ESTIMATING THE PROFIT ON THE SUPPRESSED TURNOVER WORKED OUT BY THE AO WHICH HAS NOT BEEN QUESTIONED BY THE ASSESSEE. IN OUR VIEW, REVENUE EX CEPT FOR RAISING THE GROUND HAS NOT BEEN ABLE TO CONTRAVENE THE FINDING OF THE LEARNED CIT(A) AND WE ARE, THEREFORE , NO 'INTERFERENCE IS CALLED FOR IN THE FINDING OF THE L EARNED CIT(A) IN THE IMPUGNED ORDER ON THIS ISSUE. CONSEQU ENTLY, GROUND NO.2 OF THE REVENUE'S APPEAL STANDS DISMISSE D. THEREFORE, FOLLOWING THE ABOVE DECISION OF THE COOR DINATE BENCH, WE UPHOLD THE ORDER OF THE LOWER AUTHORITIES. 07. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST DAY OF JUNE, 2018. SD/- SD/- (A. K. GARODIA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER BENGALURU DATED : 01.06.2018 MCN* ITA.1359/BANG/2017 PAGE - 5 COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.