ITO-3(3), Kanpur V. M/S National Detective Agency, Kanpur

ITA 142/LKW/2011

• Counselvise Citation: 14223714 RSA 2011
• Duration Of Justice: 3 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 25-07-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 28-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.142/LKW/2011 ASSESSMENT YEAR:2006 - 07 INCOME TAX OFFICER - 3(3), KANPUR. VS. M/S NATIONAL DETECTIVE AGENCY, 74 - D/8, VIVEKPURI, MAYA MARKET, KANPUR. PAN:AAEFN9487C (APPELLANT) (RESPONDENT) APPELLANT BY SHRI AMIT NIGAM, D. R. RESPONDENT BY SHRI RAKESH GARG, ADVOCATE DATE OF HEARING 25/07/2014 DATE OF PRONOUNCEMENT 0 5 /09/2014 O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - II, KANPUR, DATED 11/11/2010 FOR THE ASSESSMENT YEAR 2006 - 2007. 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE NET PROFIT @7.5% INSTEAD OF ADDITIONS ON ACCOUNT OF DISALLOWANCES UNDER VARIOUS EXPENSES AMOUNTING TO RS.19,52,805/ - WITHOUT ASSIGNING AND REASON FOR DOIN G SO. WHEREAS THE ASSESSING OFFICER HAS PASSED THE ORDER AFTER TAKING INTO CONSIDERATION THE FACTS AND MATERIAL OF THE CASE AND ALSO AFTER GIVING PROPER OPPORTUNITY TO THE ASSESSEE. 2 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN RELYING IN DIRECTING THE ASSESSING OFFICER TO TAKE NET INCOME OF RS.2,49,500/ - FROM 'AIRTEL BUSINESS' WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND WITHOUT ASSIGNING AND REASON FOR DOING SO. 3. THAT THE ORDER OF TH E LD. CIT (A) - II, KANPUR DATED 22.11.2010 NEEDS TO BE QUASHED AND THE ORDER PASSED BY THE ASSESSING OFFICER DATED 10.12.2008 BE RESTORED. 4. THAT THE APPELLANT CRAVES LEAVE TO MODIFY ANY OF THE GROUNDS OF APPEAL MENTIONED ABOVE AND / OR TO ADD ANY FRESH G ROUNDS AS AND WHEN IT IS REQUIRED TO DO SO. 3. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT IT IS HELD BY CIT(A) IN PARA 3.1 OF HIS ORDER THAT IN THE BILLS RAISED BY THE ASSESSEE, THE ASSESSEE HAS CHARGED ADMINISTRATION CHARGES @15%. HE HAS DIRECTED THE ASSESSING OFFICER TO COMPUTE THE NET PROFIT @7.5% OF GROSS RECEIPTS. IT MEANS THAT AS AGAINST CHARGING OF TOTAL 15% AS ADMINISTRATIVE CHARGES, IT IS HELD BY CIT(A) THAT 7.5% OF THE GROSS RECEIPTS IS INCOME OF THE ASSESSEE. WHEN THE BOOKS ARE REJECTED, THE INCOME OF THE ASSESSEE HAS TO BE CO MPUTED ON REASONABLE BASIS. CONSIDERING THE FACTS OF THE PRESENT CASE, THE BASIS ADOPTED BY THE CIT(A) IS REASONABLE AND HENCE, WE DECLINE TO INTERFERE IN THE ORDER OF CIT(A). WE ALSO FIND THAT IN ADDITION TO DIRECTING THE ASSESSING OFFICER TO COMPUTE TH E INCOME OF THE ASSESSEE TO THE EXTENT OF 7.5%, THE CIT(A) HAS ALSO DIRECTED THE ASSESSING OFFICER TO CONSIDER THE NET INCOME OF RS.2,49,500/ - SHOWN BY THE ASSESSEE AS INCOME FROM AIRTEL BUSINESS IN THE PROFIT & LOSS ACCOUNT AND HAS ALSO 3 DIRECTED THAT NO F URTHER DEDUCTION SHOULD BE ALLOWED ON ACCOUNT OF SALARY OR INTEREST PAYMENT TO PARTNERS. CONSIDERING ALL THESE FACTS, WE FIND NO REASON TO INTERFERE IN THE ORDER OF CIT(A). 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 0 5 /09/2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR