Akhilesh Kumar Kalra (Individual), Lucknow V. Commissioner Of Income Tax (Appeal) -II, Lucknow

ITA 141/LKW/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3216 (ITAT-LUCKNOW)
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2013
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 14-06-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 14-03-2013
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Assessee Lawyers: KUNAL SRIVASTAVA
• Keywords: Unexplained expenditure; Revised return
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. PRAMOD KUMAR, ACCOUNTANT MEMBER ITA NO. 141/LKW/2013 ASSESSMENT YEAR: 2009 - 10 AKHILESH KUMAR KALRA 10 - A, BUTLER ROAD LUCKNOW V. ACIT - II LUCKNOW PAN: AAGOJ4835A (APPELLANT) (RESPONDENT) S.P NO.12/LKW/2013 [IN ITA NO.141/LKW/2013] ASSESSMENT YEAR: 2009 - 10 AKHILESH KUMAR KALRA 10 - A, BUTLER ROAD LUCKNOW V. ACIT - II LUCKNOW PAN: AAGOJ4835A (APP LIC ANT) (RESPONDENT) ASS ESSEE BY: SHRI. KUNAL SRIVASTAVA, ADVOCATE DEPARTMENT BY: SMT. RANU BISWAS, D.R. DATE OF HEARING: 03.06.13 DATE OF PRONOUNCEMENT: 28.06.13 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CI T(A) MAINLY ON TWO GROUNDS ONE IS WITH REGARD TO THE ESTIMATION OF : - 2 - : PROFIT AND THE OTHER IS WITH REGARD TO THE ADDITION ON ACCOUNT OF UNEXPLAINED EXPENDITURE INCURRED ON FOREIGN TRIP TO MALAYSIA. 2 . STAY PETITION MOVED BY THE ASSESSEE WAS ALSO TAKEN UP FOR C ONSIDERATION. SINCE WE HAVE DECIDED TO HEAR AND ADJUDICATE THE APPEAL, STAY PETITION HAS BECOME INFRUCTUOUS AND ACCORDINGLY WE REJECT THE SAME. 3 . THE BRIEF FACTS ON THE IMPUGNED ISSUES CULLED OUT FROM THE RECORD ARE THAT THE ASSESSEE FILED HIS RETURN OF INC OME SHOWING TOTAL INCOME AT ` 28,80,373 AND THE ASSESSMENT WAS COMPLETED ON AN INCOME OF ` 72,87,365. 4 . WITH REGARD TO ADDITION MADE ON ACCOUNT OF ESTIMATION OF GROSS PROFIT, IT IS NOTICED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE DISCLOS ED GROSS RECEIPTS AT ` 1,29,70,483 AS AGAINST ` 1,01,45,600 SHOWN IN THE RETURN OF INCOME. ACCORDINGLY ADDITIONAL RECEIPT OF ` 28,24,883 WAS DISCLOSED . THE ASSESSING OFFICER ESTIMATED RECEIPT S OTHER THAN THOSE DISCLOSED DURING THE COURSE OF ASSESSMENT PROCE EDINGS AT ` 1,10,000,000 AND ESTIMATED THE PROFESSIONAL INCOME @ 40% AT ` 44,00 , 0 00 AS AGAINST ` 29,45,280 @ 29.03% SHOWN BY THE ASSESSEE AFTER REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE. 5 . THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), BU T DID NOT FIND FAVOUR WITH HIM. 6 . NOW THE ASSESSEE IS BEFORE US WITH THE SUBMISSION THAT THE ASSESSEE HAS EXPLAINED THE DETAILS OF ALL RECEIPTS AND EXPENDITURE S BEFORE THE ASSESSING OFFICER, BUT HE DID NOT ACCEPT THE SAME. THE LD. COUNSEL FOR THE ASSESSEE HAS CONTEN DED THAT THE ASSESSEE HAS OFFERED ADDITIONAL INCOME ALONG WITH EXPENDITURE S BEFORE THE ASSESSING OFFICER BUT HE HAS CONSIDERED ONLY ADDITIONAL INCOME BUT DID NOT GIVE ANY CREDIT OF THE EXPENDITURES AND REJECTED THE BOOKS OF ACCOUNT ON THE GROUND THAT THE B OOKS OF ACCOUNT HAVE NOT BEEN PRODUCED BEFORE HIM. THE LD. COUNSEL FOR : - 3 - : THE ASSESSEE HAS FURTHER CONTENDED THAT THE ASSESSEE IS A SENIOR ADVOCATE AND HAS BEEN MAINTAINING PROPER BOOKS OF ACCOUNT AND OPPORTUNITY WAS NOT AFFORDED TO HIM TO EXPLAIN THE NATURE OF RECEIPTS AND EXPENDITURES INCURRED BY HIM. 7 . THE LD. D.R., ON THE OTHER HAND, HAS STRONGLY OBJECTED THE CONTENTION OF THE ASSESSEE LD. COUNSEL FOR THE ASSESSEE WITH THE SUBMISSION THAT BEFORE THE ASSESSING OFFICER THE ASSESSEE N EITHER PRODUCE D THE BOOKS OF ACCOUNT NOR SUBMIT TED THE DETAIL S OF EXPENSES INCURRED BY HIM. THE LD. D.R. FURTHER CONTENDED THAT THE TIME FOR FILING THE REVISED RETURN WAS ALSO EXPIRED AND DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE OFFERED THE GROSS RECEIPTS WHICH W ER E TAKEN INTO ACCOUNT BY THE ASSESSING OFFICER WHILE MAKING THE ADDITION. THEREFORE, NO INTERFERENCE IS CALLED FOR IN THE ADDITIONS CONFIRMED BY THE LD. CIT(A). 8 . WE HAVE CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES AND WE FIND THAT THE ASSESSING O FFICER HAS FRAMED THE ASSESSMENT UNDER SECTION 144 OF THE INCOME - TAX ACT, 1961 AFTER REJECTING THE BOOKS OF ACCOUNT. WHATEVER PROFESSIONAL RECEIPT S WERE DECLARED BY THE ASSESSEE, THE ASSESSING OFFICER APPLIED GROSS PROFIT RATE ON THE SAME AND ESTIMATED TH E PROFIT. ADMITTED LY THE ASSESSEE IS AN ADVOCATE AND HE I S NOT ENGAGED IN ANY BUSINESS ACTIVITY. THEREFORE GROSS PROFIT RATE CANNOT BE APPLIED TO THE GROSS RECEIPTS FOR ESTIMATING THE INCOME OF THE ASSESSEE. THE INCOME OF THE ASSESSEE ON THE GROSS RECEI PTS CAN BE WORKED OUT AFTER ALLOWING EXPENDITURES INCURRED BY THE ASSESSEE TO EARN THAT INCOME. IN THE CASE OF PROFESSIONAL RECEIPTS , THE GROSS PROFIT RATE CANNOT BE APPLIED AS IS IN THE CASE OF ANY BUSINESS UNDERTAKING. THEREFORE, WE ARE OF THE VIEW THA T THIS ISSUE REQUIRES A FRESH ADJUDICATI O N BY THE ASSESSING OFFICER. ACCORDINGLY WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO RE - ADJUDICATE THE ISSUE AFRESH AFTER OBTAINING DETAILS OF EXPENDITURES AND THE INCOME FROM THE ASSESSEE. THE : - 4 - : ASSESSEE IS ALSO DIRECTED TO EXPLAIN ALL SORTS OF EXPENDITURES INCURRED BY HIM A ND TO PRODUCE ALL THE RELEVANT RECORD S WITH REGARD TO THE INCOME AND EXPENDITURE TO WORK OUT PROPER INCOME. IN CASE THE ASSESSEE IS FAILED TO DO SO, THE ASSESSING OFFICER MAY ACT IN ACCORDANCE WITH LAW. 9 . SO FAR AS THE OTHER ISSUE WITH REGARD TO THE ADDITION OF ` 1 LAKH ON ACCOUNT OF UNEXPLAINED EXPENDITURE INCURRED ON FOREIGN VISIT IS CONCERNED, SIMILAR IS THE POSITION IN T HIS REGARD ALSO , AS NO DETAILS WERE FURNISHED BEFORE THE ASSESSING OFFICER. SINCE WE ARE RESTORING THE ISSUE RELATING TO THE GROSS PROFIT RATE TO THE ASSESSING OFFICER , THIS ISSUE MAY ALSO BE EXAMINED BY THE ASSESSING OFFICER IN THE LIGHT OF EVIDENCE FURN ISHED BY THE ASSESSEE. 10 . ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 11 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES AND THE STAY PETITION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OP EN COURT ON 28.6.2013. SD/ - SD/ - [PRAMOD KUMAR] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28.6.2013 JJ: 1706 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR