ASSTT COMMISSIONER OF INCOME TAX 1(1), RAIPUR (CG) V. SHRI SHARAD SHUKLA, RAIPUR (CG)

ITA 141/BIL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94020 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s) 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 20-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MEENA
• Assessee Lawyers: R B DOSHI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI MUKUL K. SHRAWAT , JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER IT A NO. 141 / BLPR./2011 ( ASSESSMENT YEAR : 20 08 09 ) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 1(1), CENTRAL REVENUE BUILDING CIVIL LINES, RAIPUR (C.G) APPELLANT V/S SHRI SHARAD SHUKLA NEAR DESHBANDHU SCHOOL STATION ROAD, RAIPUR PAN AJJPS8996D .... RESPONDENT REVENUE BY : SHRI S.K. MEENA ASSESSEE BY : SHRI R.B. DOSHI DATE OF HEARING 11 .06.2015 DATE OF ORDER 19 .06.2015 O R D E R PER SHAMIM YAH YA, A. M. T HIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 31 ST MARCH 2011 , PASSED BY THE LEARNED CIT(A), RAIPUR, FOR THE ASSESSMENT YEAR 20 08 09 . THE GROUND RAISED BY THE REVENUE IS AS UNDER: SHRI SHARAD SHUKLA 2 1. WHETHER IN LAW AND ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF ` 45,71,000, MADE BY THE A.O. BY APPLYING THE NET PROFIT @ 8% OF THE TOTAL RECEIPT. 2. AT THE OUTSET, THE LEARNED DEPARTMENTAL REPRESENTATIVE REQUEST ED FOR AN ADJOURNMENT, HOWEVER, THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE EARLIER YEAR. IN THIS VIEW OF THE MATTER, THE ADJOURNMENT HA S BEEN REJECTED AND THE CASE IS BEING ADJUDICATED AS UNDER: 3. WE MAY GAINFULLY REFER THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE WHICH ARE AS UNDER: 1. THE A.O. REJECTED BOOKS INVOKING SECTION 145(3), OBSERVING AT PARA 3, PAGE 10 & 11 OF AS SESSMENT ORDER . I) PROPER AND AUTHENTIC BILLS / VOUCHERS ARE NOT AVAILABLE; II) NO SUPPORTING DOCUMENTS WERE FOUND DURING SURVEY ON 24.08.2009; III) STATEMENT GIVEN DURING SURVEY WAS VOLUNTARY AND WITHOUT THREAT. 2. ASSESSEE PRODUCED BOOKS AND SUPPORTING BEFORE A.O. NO SPECIFIC DEFECTS IN BOOKS / SUPPORTING DOCUMENTS POINTED OUT; A.O. VERIFIED SUPPORTING BUT FAILED TO POINT OUT ANY DEFICIENCY THEREIN. 3. NO FINDING GIVEN BY A.O. AS TO HOW CONDITIONS OF SEC. 145(3) ARE FULFILLED. SHRI SHARAD SHUKLA 3 INVOKING SECTION 145(3) AND C ONSEQUENT ADDITION WAS THUS ILLEGAL AND NOT JUSTIFIED. 4. MATTER COVERED BY ORDER OF ITAT OF A.Y. 2007 08 I) IN A.Y. 2007 08, THOUGH BOOKS WERE PRODUCED, SUPPORTING DOCUMENTS WERE NOT PRODUCED. II) ASSESSMENT COMPLETED ASSESSING INCOME @ 8% ON THE STRENGTH OF S URRENDER MADE DURING SURVEY. III) NP DECLARED IN THAT YEAR WAS 5%. HON'BLE ITAT ESTIMATED IT @ 5.5%. 6. IN A.Y. 2007 08, NO SUPPORTING WERE PRODUCED BEFORE THE A.O. WHILE IN THE YEAR UNDER APPEAL, SUPPORTING DOCUMENTS WERE PRODUCED AND HAVE REMAINED UNCONTROVE RTED. 7. IN A.Y. 2009 10, A.O. HIMSELF ESTIMATED NP @ 5.5% IN ACCORDANCE WITH ORDER OF HON'BLE ITAT. 8. CASE OF THE ASSESSEE IN THE YEAR UNDER APPEAL IS ON MUCH BETTER FOOTING. 9. COMPARATIVE CHART: A.Y. CONTRACT RECEIPTS ( ` ) N.P. ( ` ) N.P (%) N.P RAT E ADOPTED BY A.O (%) FINAL OUTCOME I.E., NP (%) AFTER APPELLATE ORDER 2006 07 5,19,17,206 14,21,398 2.74% 5.00% 3.20% (1 ST APPEAL) 3.20% (2 ND APPEAL) 2007 08 11,99,41,799 59,99,345 5.00% 8.00% 5.00% (1 ST APPEAL) 5.50% (2 ND APPEAL) 2008 09 15,34,09,462 7 7,09,906 5.03% 8.00% 5.03% (1 ST APPEAL) YEAR UNDER APPEAL 2009 10 17,55,59,954 53,08,371 3.02% 5.50% 5.50% ASSESSED BY AO HIMSELF, NO APPEAL PREFERRED 4. PER CONTRA, THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF THE ASSESSING OFFICER, HOWEVER, THE HE COULD NOT SHRI SHARAD SHUKLA 4 POINT OUT THAT THE ITATS DECISION IN ASSESSEES OWN CASE IN EARLIER YEAR HAS BEEN REVERSED BY THE HON'BLE BOMBAY HIGH COURT. 5. UPON CAREFUL CONSIDERATION, WE NOTE THAT THE ASSESSING OFFICER HAS REJECTED BOOKS OF ACCOUNT IN THIS CA SE ON THE GROUND THAT PROPER AND AUTHENTIC BILLS / VOUCHERS ARE NOT AVAILABLE. HE HAS NOT POINTED OUT ANY SPECIFIC DEFECTS. THE ASSESSING OFFICER HAS ALSO TAKEN INTO ACCOUNT THAT THERE WAS SURVEY OPERATION IN ASSESSEES CASE ON 24 TH AUGUST 2009 WHICH IS WE LL AFTER THE CLOSE OF THE FINANCIAL YEAR UNDER ADJUDICATION THAT THE ASSESSEE HAD ACCEPTED THAT HIS GROSS PROFIT WAS 8%. IN THIS REGARD, WE NOTE THAT THE SUBMISSIONS BY THE ASSESSEE DURING SURVEY OF 24 TH AUGUST 2009, CANNOT BE SAID TO BE A CONCLUSIVE PROOF FOR THE GROSS PROFIT EARNED DURING THE ASSESSMENT YEAR 2008 09. THE ASSESSING OFFICER FOR THIS YEAR HAS NOT POINTED OUT ANY SPECIFIC DEFECT. IN IDENTICAL CIRCUMSTANCES, THE TRIBUNAL, IN THE ASSESSMENT YEAR 2007 08, HAS ESTIMATED GROSS PROFIT @ 5.5%. MOREO VER, IN THE ASSESSMENT YEAR 2009 10, THE ASSESSING OFFICER HAS HIMSELF ESTIMATED THE GROSS PROFIT @ 5.5%. WE MAY ALSO GAINFULLY REFER TO THE COMPARATIVE CHART OF THE PROFIT RATIO AS SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE REPRODUCED HEREIN ABOVE WHICH SHOWS THAT IN EARLIER ASSESSMENT YEAR, THE TRIBUNAL HAD HELD THAT PROFIT RATIO OF 5.5% SHRI SHARAD SHUKLA 5 WOULD MEET THE ENDS OF JUSTICE. SINCE THE FACTS ARE IDENTICAL, WE FIND THAT WE SHOULD FOLLOW PRECEDENCE OF THE TRIBUNALS DECISION IN ASSESSEES OWN CASE AS MENTIO NED ABOVE. WE MAY ALSO REFER TO THE OPERATING PART OF THE TRIBUNALS ORDER FOR THE ASSESSMENT YEAR 2007 08 DATED 21 ST OCTOBER 2011, AS UNDER: 4. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT THE SEARCH ACTION TOOK PLAC E IN ASSESSEES CASE ON 25.8.2009. BASED ON TRADING AND PROFIT AND LOSS ACCOUNT OBTAINED FROM THE COMPUTER, THE SURVEY TEAM CONFRONTED THE ASSESSEE AS TO WHY THE NP SHOWN THEREIN AT 7.8% SHOULD NOT BE ADOPTED AS BASIS FOR ESTIMATING NP @ 8%. THE NP AS PER AUDITED ACCOUNT FOR A.Y. 2009 10 WAS 3.02%. HOWEVER, DUE TO DISTURBED STATE OF MIND, THE ASSESSEE IN HIS STATEMENT ADMITTED THE NP @ 8%. IN FACT, THIS CONFESSION WAS RETRACTED WITHIN A WEEK TIME I.E., AFTER 2.9.2009. THE SAID CONFESSION OBTAINED WAS WITHOU T VERIFYING THE FACTS AND WITHOUT KNOWING THE CORRECT IMPLICATIONS OF THE LEGAL POSITION COUPLED WITH IMMENSE TENSION CREATED UNDER WHICH THE SAME WERE OBTAINED. IN FACT, IT WAS EXPLAINED BEFORE THE SURVEY TEAM THAT BOOKS OF ACCOUNT TOGETHER WITH THE DETAI LS AND VOUCHERS WERE FILED IN THE OFFICE OF CHARTERED ACCOUNTANT FOR AUDIT AND IF THEY NEEDED COULD HAVE BEEN CALLED FOR. DURING THE ASSESSMENT PROCEEDINGS, THE BOOKS OF ACCOUNT WERE EXAMINED. THE NP SHOWN THIS YEAR @ 5% IS HIGHER THAN THE NP @ 3.2% SUSTAI NED AS REASONABLE BY THE CIT(A) FOR A.Y. 2006 07 AND THE NP @ 3.02% SHOWN FOR A.Y. 2009 10. MOREOVER, THE ORDER OF THE CIT(A) FOR A.Y. 2006 07 HAS BEEN CONFIRMED BY THE TRIBUNAL IN ITA NO.53/BLPR/2009 DATED 14.10.2011 BY THE BENCH ITSELF. IN A.Y. 2006 07 T HE ASSESSEE HAS SHOWN NET PROFIT @ 2.74%. THE ASSESSING OFFICER ESTIMATED IT AT 5% AND THE CIT(A) RESTRICTED THE SAME TO 3.2% AS SHOWN IN THE IMMEDIATELY PRECEDING YEAR. THE ORDER OF THE CIT(A) FOR A.Y. 2006 07 HAS BEEN CONFIRMED BY THE TRIBUNAL AS DISCUSS ED ABOVE. TAKING ALL FACTS AND CIRCUMSTANCES INTO CONSIDERATION, WE HOLD THAT THE NP @ 5.5% WOULD MEET THE ENDS OF JUSTICE. THE ORDER OF THE CIT(A) IS ACCORDINGLY MODIFIED. SHRI SHARAD SHUKLA 6 6. ACCORDINGLY, FOLLOWING THE PRECEDENCE AS ABOVE, WE HOLD THAT THE NET PROFIT @ 5.5 % WOULD MEET THE ENDS OF JUSTICE. THE ORDER OF THE LEARNED CIT(A) IS ACCORDINGLY MODIFIED. WE MAY ALSO POINT OUT THAT THE HON'BLE SUPREME COURT IN HONDA SIEL POWER PRODUCTS LTD. V/S CIT, [2007] 295 ITR 466 (SC), HELD THAT NOT CONSIDERING THE CO ORDINATE BE NCH DECISION CAN GIVE RISE TO A MISTAKE APPARENT FROM RECORD IN THE ORDER OF THE TRIBUNAL. 7. IN THE RESULT, REVENUES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT O N 19 TH JUNE 2015 SD/ - MUKUL K. SHRAWAT JUDICIAL MEMBER SD/ - SHAMIM YAHYA ACCOUNTAN T MEMBER RAI PUR , DATED : 19 TH JUNE 2015 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE ; (2) THE REVENUE; (3) THE CIT(A ) ; (4) THE CIT, BILASPUR CITY CONCERNED ; (5) THE DR, ITAT, RAIPUR (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY SR. PRIVATE SECRETARY / A SS ISTANT REGISTRAR ITAT, RAIPUR