ITO, Ward - 42(1), Kolkata, Kolkata V. Raj Kumar Bansal, Kolkata

ITA 1404/KOL/2010

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6642 (ITAT-KOLKATA)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 09-05-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 06-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P P SARKAR
• Assessee Lawyers: S M SURANA
• Keywords: Reasonable cause; Assessment record
• Section: 143(3); 263

Judgement Text

, , , , , , ,, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA [ . . . . . . . . , , ,, , , ] [BEFORE HONBLE SRI B. R. MITTA L, JM & HONBLE SRI AKBER BASHA, AM] !' !' !' !' / I.T.A NO. 1404/KOL/2010 #$ %&' #$ %&' #$ %&' #$ %&'/ // / ASSESSMENT YEAR : 2004-05 INCOME TAX OFFICER/WARD-42(1) -VS.- RAJ KUMAR BANSAL KOLKATA. KOLKATA [PAN : A CYPB 1778 N] (*+ /APPELLANT ) (-.*+/ RESPONDENT ) / 0 / 0 / 0 / 0 /C.O.NO.111/KOL/2010 !' !' !' !' / A/O ITA NO . 1404/KOL/2010 #$ %&' #$ %&' #$ %&' #$ %&'/ // / ASSESSMENT YEAR : 2004-05 RAJ KUMAR BANSAL -VS.- INC OME TAX OFFICER/WARD-42(1) KOLKATA [PAN : ACYPB 1778 N] KOLKATA. (*+ /APPELLANT ) (-.*+/ RESPONDENT ) *+ / FOR THE DEPARTMENT : 1 /SHRI P. P. SARKAR -.*+ / FOR THE ASSESSEE : 1 / SHRI S. M. SURANA /O R D E R [ , ] PER AKBER BASHA, AM THE DEPARTMENT HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2004-05 AGAINST THE ORDER OF THE CIT(A)-XII, KOLKATA DATED 09.04.2010 ON THE FOLLOWI NG GROUNDS :- (1) THE LD. CIT(A) HAD ERRED BY ALLOWING A RELIEF OF RS .67,30,350/- ON ACCOUNT OF FREIGHT CHARGES. (2) THE LD. CIT(A) HAD ERRED BY DELETING A SUM OF RS.11 ,50,375/- ON ACCOUNT OF SUNDRY CREDITORS. (3) THE APPELLANT CRAVES LEAVE TO ADD, DELETE OR MODIFY THE GROUNDS OF APPEAL ANY TIME DURING THE APPEAL PROCEEDINGS. ITA NO. 1440 & C.O. NO.111/KOL/20 10 2 2. THE ASSESSEE HAS ALSO FILED CROSS OBJECTION ON T HE FOLLOWING GROUNDS :- 1. FOR THAT THE LD. CIT(A) IS ARBITRARY, ILLEGAL AND B AD AND NOT IN ACCORDANCE WITH LAW. 2. FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING T HE ADDITION OF RS.1,50,083/- WHEN THE BOOKS OF ACCOUNT WERE FULLY VERIFIABLE AND THE PROFIT DECLARED WERE QUITE REASONABLE. 3. FOR THAT THE ASSESSEE CRAVES LEAVE TO ADD, ALTER OR AMEND ANY GROUND BEFORE OR AT THE TIME OR HEARING. 3. THE CROSS OBJECTION FILED BY THE ASSESSEE IS TIM E BARRED BY 02 DAYS. THE ASSESSEE HAS FILED APPLICATION DATED 11.02.2011 PRAYING TO CONDO NE DELAY. LD. DEPARTMENTAL REPRESENTATIVE HAS NOT OBJECTED TO THE PRAYER OF ASSESSEE. AFTER H EARING BOTH THE PARTIES AND CONSIDERING THE CONTENTS OF THE APPLICATION, WE ARE OF THE CONSIDER ED VIEW THAT THERE IS A REASONABLE CAUSE FOR DELAY IN FILING APPEAL. HENCE, WE CONDONE THE DELAY AND CONSIDER THE APPEAL. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL. THE ORIGINAL ASSESSMENT WAS COMPLETED ON 31.08.2006 DETERMINING TOTAL INCOME O F RS.1,50,233/- AGAINST RETURNED INCOME OF RS.1,19,800/-. THE ASSESSEE IS IN THE BUSINESS OF T RANSPORTATION. SUBSEQUENTLY, CIT ASSUMING HIS JURISDICTION UNDER SECTION 263 OF THE ACT AND PASSE D AN ORDER ON 08.07.2008, WHICH IS AS UNDER:- ON CAREFUL CONSIDERATION OF ASSESSEES SUBMISSION AND ADDL. CITS COMMENTS AS WELL AS AFTER INSPECTION OF ASSESSMENT RECORD, I AM OF THE CONSIDERED OPINION THAT TAKING DETAILS OF FREIGHT PAYMENT OF R S.2,41,660/- ONLY OUT OF TOTAL PAYMENT OF RS.71,22,093/- CANNOT BE CONSIDERED AS P ROPER VERIFICATION OF THE ENTIRE CLAIM. THEREFORE, ON THIS POINT A DETAILED E NQUIRY, WHICH WAS NOT DONE BY THE ASSESSING OFFICER, REQUIRES TO BE MADE IN THE I NTEREST OF REVENUE. I AM THUS SATISFIED THAT ON THIS POINT THE IMPUGNED ASSESSMEN T IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. ACCORDINGLY, THE ASSESS MENT IS BEING SET ASIDE TO VERIFY THE GENUINENESS, REASONABLENESS AND ALLOWABILITY OF FREIGHT EXPENSES AS PER LAW. ON THE REMAND PROCEEDINGS, ASSESSING OFFICER COMPLE TED ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 263 OF THE ACT AND MADE THE FOLLOWING ADDITIONS :- (I) ON ACCOUNT OF FREIGHT CHARGES RS.68,80,433/- ON THE GROUND THAT NO PROPER DETAILS WERE FURNISHED AND GENUINENESS, REASONABLENESS AND ALLOWABILITY OF FREIGHT CHARGES PAYMENT REMAINED UNVERIFIED. (II) ON ACCOUNT OF SUNDRY CREDITOR OF RS.11,50,375/- ON THE GROUND THAT PARTY-WISE DETAILS OF SUNDRY CREDITORS WERE NOT FURNISHED. ITA NO. 1440 & C.O. NO.111/KOL/20 10 3 AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, AS SESSEE WENT IN APPEAL BEFORE CIT (A). ON APPEAL, CIT(A) HELD THAT, IN THE PRESENT ASSESSM ENT PROCEEDINGS, THE ASSESSING OFFICER ADDED THE ENTIRE FREIGHT CHARGES, EXCEPT RS .2,41,660/-, FOR WANT OF VERIFICATION FROM THE LORRY OWNERS AND ASSESSEE COULD NOT SUBSTA NTIATE FULLY THE TRANSACTION. THE CIT [A] ALSO OBSERVED THAT THE NET PROFIT SHOWN BY ASSE SSEE IS NOT FULLY REFLECTIVE OF THE NET PROFIT OF THE BUSINESS. ACCORDINGLY, HE ESTIMATED THAT NET PROFIT OF THE ASSESSEE AT 4% ON THE GROSS RECEIPT OF RS.75,05,353/- BY CONSIDERING PAST RECORDS OF THE ASSESSEE AND WHICH COMES TO RS.3,00,316/-. HENCE, ASSESSEE GOT A RELIE F OF RS.67,30,350/-. AGGRIEVED BY THIS FINDINGS OF THE CIT [A], THE DEPARTMENT IS IN APPEA L BEFORE US WHEREAS THE ASSESSEE IS IN CROSS OBJECTION BEFORE US FOR THE ADDITIONS SUSTAIN ED BY CIT(A) AT RS.1,50,083/-. 5. AT THE OUTSET, WE STATE THAT CIT(A) HAS APPLIED NET PROFIT RATE AT 4% ON THE GROSS RECEIPT AND NONE OF THE PARTIES I.E. IN THE APPEAL FILED BY DEPARTMENT AND CROSS OBJECTION FILED BY ASSESSEE, HAVE DISPUTED THE FINDING OF THE CIT (A) TO APPLY NET PROFIT RATE ESTIMATION. ON THE OTHER HAND, DEPARTMENT HAS DISPUTED THE DELETIONS O F THE ADDITIONS MADE BY ASSESSING OFFICER WHEREAS ASSESSEE HAS DISPUTED THE ADDITIONS CONFIRM ED BY THE CIT(A), WHICH COMES TO BY APPLYING NET PROFIT RATE. IN VIEW OF THE ABOVE, WE HOLD THAT THE ACTION OF THE CIT(A) TO APPLY NET PROFIT RATE IS CONFIRMED. 6 LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT IN SPITE OF NO DETAILS WERE FURNISHED BY ASSESSEE EVEN BEFORE THE PRESENT ASSESSMENT PROCEED INGS UNDER SECTION 263 OF THE ACT, CIT[A] WRONGLY DELETED THE ADDITION OF RS.67,30,350/- ON A CCOUNT OF LORRY FREIGHT CHARGES AND RS.11,50,375/- ON ACCOUNT OF SUNDRY CREDITORS. THE ASSESSEE DID NOT FURNISH FULL DETAILS OF SUNDRY CREDITORS AND LORRY FREIGHT CHARGES EITHER B EFORE THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT OR IN THE PRESENT REASSESSMENT PROCEEDIN GS. HENCE, IT IS PRAYED THAT THE ORDER OF ASSESSING OFFICER HAS TO BE RESTORED AND ORDER OF C IT (A) BE REVERSED. 7. ON THE OTHER HAND, THE LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT AT THE TIME OF PROCEEDINGS UNDER SECTION. 263 OF THE A CT, ASSESSEE FILED FULL DETAILS OF CONSIGNMENT REGISTER CONTAINING NAME OF THE PARTIES AS WELL AS LORRY NUMBERS ETC. BEFORE THE LOWER AUTHORITIES. HE SUBMITTED THAT CIT(A) SHOULD HAVE ACCEPTED THE I NCOME DISCLOSED BY THE ASSESSEE. ITA NO. 1440 & C.O. NO.111/KOL/20 10 4 8. ON CONSIDERATION OF THE RIVAL SUBMISSIONS AND TH E ORDERS OF THE AUTHORITIES BELOW, AS MENTIONED HEREINABOVE, WE HOLD THAT CIT(A) HAS RIGH TLY ESTIMATED THE NET PROFIT OF THE ASSESSEE AT 4% ON THE GROSS RECEIPTS. HENCE, ONCE ESTIMATION WAS RESORTED BY THE CIT [A], THERE IS NO QUESTION OF FURTHER DISALLOWANCE ON ACCOUNT OF FREI GHT CHARGES AND SUNDRY CREDITORS. OUR VIEW IS FURTHER SUPPORTED BY THE DECISION OF THE HON. ANDHR A PRADESH HIGH COURT IN THE CASE OF CIT VS. INDWELL CONSTRUCTION REPORTED IN 232 ITR 776. IN OU R OPINION, THE CIT (A) RIGHTLY ESTIMATED THE NET PROFIT OF THE ASSESSEE BY RESORTING TO THE ESTI MATION SINCE THE ASSESSEE HAS NOT FILED FULL PARTICULARS AND DETAILS OF SUNDRY CREDITORS. HENCE, THE GROUNDS OF APPEAL TAKEN BY THE DEPARTMENT ARE REJECTED. SINCE WE UPHOLD THE ORDER OF LD. CIT (A), THE CROSS OBJECTION FILED BY ASSESSEE BECOMES IN FRUCTUOUS. 9. IN THE RESULT, THE APPEAL OF THE REVENUE AS WELL AS CROSS OBJECTION OF ASSESSEE IS DISMISSED. 2 3 4# 5 26 7 ORDER PRONOUNCED IN TH E COURT ON 13. 05. 2011. SD/- SD/- [ . . , ] [ , ] [ B. R. MITTAL ] [ AKBER BASH A ] JUDICIAL MEMBER ACCOUNTANT MEMBER 7 / DATED : 13TH MAY, 2010. 8 -0 90&: - COPY OF THE ORDER FORWARDED TO: 1. % /APPLICANT- INCOME TAX OFFICER, WARD-42(1), 18, R ABINDRA SARANI, PODDAR COURT, 4 TH FLOOR, KOLKATA-700 001. 2 -.*+ / RESPONDENT : RAJ KUMAR BANSAL, 38, SOVABAZAR STRE ET, KOLKATA-700 005. 3. # / CIT 4. # ( )/ CIT(A) 5. %;5 -# / DR, KOLKATA BENCHES, KOLKATA [ .0 - / TRUE COPY] #4 / BY ORDER < / != /DEPUTY/ASSTT. REGISTRAR . [KKC %>? #@= A% /SR.PS]