M/s Junagadh Dist. Co. Op. Purchase & Sales Union Ltd., RAJKOT-GUJARAT V. The Income Tax Officer, Ward-1(2), JUNAGADH

ITA 148/RJT/2014

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 1604 (ITAT-RAJKOT)
• Duration Of Justice: 8 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 02-03-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 142(1); 143(1); 80P; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT (THROUGH VIRTUAL COURT) BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & SHRI T. R. SENTHIL KUMAR, JUDICIAL MEMBER I.T.A. No.148/Rjt/2014 (Assessment Year: 2009-10) M/s. Junagadh Dist. Co- op. Purchase & Sales Union Ltd., Sahkar Bhavan, 1 st Floor, Opp. Bus Stand, Junagadh Vs. ITO Ward-1(2), Junagadh [PAN No.AAAAS2484D] (Appellant) .. (Respondent) Appellant by : None Respondent by : Shri S. S. Rathi, Sr. DR Date of Hearing 17/05/2022 Date of Pronouncement 20/05/2022 O R D E R PER T.R. SENTHIL KUMAR, JUDICIAL MEMBER: This is an appeal filed by the assessee against the order dated 02.01.2014 passed by the Commissioner of Income Tax (Appeals)-IV, Rajkot (in short “CIT(A)”) relating to the Assessment Year 2009-10 wherein assessment order dated 25.11.2011 passed under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by the ITO, Ward-1(2), Junagadh. 2. The brief facts of the case is that the assessee is registered under the cooperative society filed its return of income on 14.09.2009 declaring Nil income for the A.Y. 2009-10. The return was processed - 2 - ITA No.148/Rjt/2014 M/s. Junagadh Dist. Co. Op. Purchase & Sales Union Ltd. vs. ITO Asst.Year – 2009-10 under Section 143(1) and then taken for scrutiny assessment for verification of claim of deduction under Section 80P of the Act. Notices under Section 143(2) and 142(1) were issued and the assessee’s representative appeared and explained the case before the AO. On verification of the return the assessee has made a claim under Section 80P of Rs. 29,83,703/-. However, the AO restricted the same to Rs. 21,16,010/- being the net profit of the assessee. 3. On verification of profit and loss account, it is noticed that the assessee has gross profit on various business activities of Rs. 61,44,308/- and net profit of Rs. 22,35,873/- which is 36.39% of gross profit. This gross profit includes the gross profit earned on retail business carried out amounting to Rs. 27,42,110/- form LPG divisions are earned on sales and services provided to non-members. Applying the same ratio of net profit on retail trade to non-members is worked out at Rs. 9,97,854/-. This profit is not covered under any provisions of section 80P(2)(a), 80P(2)(b), 80P(2)(d), 80P(2)(e), 80P(2)(f) of the Act. The deduction out of the profit of Rs. 9,97,854/- is available as per provisions of section 80P(2)(c) to the extent of Rs. 1,00,000/-. 4. This being the fact, a show cause notice was issued to the assessee vide letter No. JND/1(2)/Scru./2011-12 dtd. 11.11.2011 as to why net profit, after allowing deduction u/s. 80P(2)(c), earned from retail trade (Rs. 9,97,854/- [-] Rs. 1,00,000/-) of Rs. 8,97,854/- should not be treated as taxable income of the society. - 3 - ITA No.148/Rjt/2014 M/s. Junagadh Dist. Co. Op. Purchase & Sales Union Ltd. vs. ITO Asst.Year – 2009-10 5. The assessee has not replied to the show-cause notice and also not offered any explanation or objection on the proposed disallowance. Therefore, the AO made a disallowance of Rs. 8,97,854/- as against the claim made under Section 80P(2) of the Act. 6. Aggrieved against the same the assessee filed appeal before the Ld. CIT(A)-IV. The Ld. CIT(A) after hearing the Authorized Representative confirmed the disallowance made by the Ld. AO as no details or evidences produced before him. The finding of the CIT(A) are as follows: “3. As can be seen from the above discussion by the assessing officer, the appellant has various business activities such as retail business from LPG division and petrol pump division. Out of the total gross profit of Rs. 61,44,308/-, the net profit of Rs. 22,35,873/- is taken as net profit from retail business. As per the information furnished by the appellant during assessment proceedings, the gross profit from LPG division and petrol pump division was shown at Rs. 27,42,110/-, which is included in the total gross profit of Rs. 61,44,308/-. Applying the ration of net profit to gross profit @36.39%, the assessing officer has worked out the net profit on retail rate to non-members at Rs. 9,97,854/-. After giving deduction of Rs. 1,00,000/- u/s. 80P(2)(c) the net profit from retail trade is worked out at Rs. 8,97,854/-. Neither before the assessing officer nor before the undersigned, during the appellate proceedings, the appellant could not substantiate the deduction claimed u/s. 80P at Rs. 21,16,010/-. The authorized representative could not give the break-up of sale of goods in retail business among members and non-members with the support of any documentary evidence. In the absence of any credible information, backed by documentary evidence, the explanation given by the authorized representative, Shri D. R. Adhia cannot be entertained. The disallowance made at Rs. 8,97,854/- out claimed made u/s. 80P stands confirmed. 4. In the result, the appeal of the appellant is dismissed.” 7. Aggrieved against the appellate order the assessee is in appeal before us on the solitary issue of disallowance of Rs. 8,97,854/-. This appeal is listed for hearing for the 20 th time before this Tribunal. Even the previous hearing none has appeared on behalf of the assessee in - 4 - ITA No.148/Rjt/2014 M/s. Junagadh Dist. Co. Op. Purchase & Sales Union Ltd. vs. ITO Asst.Year – 2009-10 spite of services of notices to the assessee. Hence with the assistance of the Ld. D.R. we need to proceed with the case being the 8 years old appeal. The Ld. D.R. appearing for the Department stated that the assessee has not produced any explanation, details or evidences before the AO as against the show-cause notice dated 11.11.2011 issued by the AO. In the absence of any details on the contravention of Section 80P(2)(c) the addition of Rs. 8,97,854/- was made by the AO. Even before the CIT(A) though the Ld. Representative appear before the CIT(A) could not give any credible information, backed by documentary evidence and therefore, the disallowance was confirmed by the Ld. CIT(A). Now on this juncture none appeared on behalf of the assessee and no details are furnished before the Tribunal, therefore, in the absence of any details the addition required to be sustained. 8. We have given our thoughtful consideration and perused the materials available on record. When the appeal is listed for hearing on 22.02.2022 the Ld. Authorized Representative Mr. D. R. Adhia informed in writing that some important details could not be obtained due to Covid-19 and allied matters prevailing in various staffs of the assessee, therefore, sought for short adjournment to produce the details. Taking note of the written request, the appeal was adjourned to 06.04.2022. None appeared on behalf of the assessee the case was adjourned to 17.05.2022, in both the days none appeared on behalf of the assessee. It is an admitted fact that the assessee could not produce details or evidences in claiming the deduction under Section - 5 - ITA No.148/Rjt/2014 M/s. Junagadh Dist. Co. Op. Purchase & Sales Union Ltd. vs. ITO Asst.Year – 2009-10 80P right from 2011. The Ld. AO has made the addition since the assessee failed to furnish any explanation or objection against the disallowance. Similar was the case with the Commission of Income Tax (Appeals), when he passed the appellate order in 2013. Even in 2022, though opportunity was given to the assessee to produce the details, the assessee is not present for the last two hearing. In the absence of any evidence before us, we are not in a position to delete the additions as claimed in the grounds of appeal raised by the assessee. Hence, the above grounds are rejected and the appeal filed by the assessee is hereby dismissed. 10. In the result, the appeal preferred by the assessee is dismissed. Order pronounced in the Court on 20 th May, 2022 at Ahmedabad. Sd/- Sd/- (WASEEM AHMED) ACCOUNTANT MEMBER (T.R. SENTHIL KUMAR) JUDICIAL MEMBER Ahmedabad, dated 20/05/2022 Tanmay TRUE COPY आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त)अपील (/ The CIT(A)- 5. वभागीय त न ध ,आयकर अपील(य अ धकरण,राजोकट/DR,ITAT, Ahmedabad, 6. गाड. फाईल /Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार Dy./Asstt.Registrar) आयकर अपील य अ धकरण, राजोकट / ITAT, Rajkot