Rajkumar Singhania , Howrah V. ITO, Ward - 48(3), Kolkata , Kolkata

ITA 1528/KOL/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4195 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 16-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P MAJUMDER CITSRDR
• Assessee Lawyers: CHIRAG DESAI ACA
• Keywords: Revenue expenditure
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC KOLKATA BEFORE SHRI S.S, GODARA, JUDICIAL MEMBER ITA NO.1528/KOL/2018 ASSESSMENT YEAR:2012-13 RAJKUMAR SINGHANIA 172, G.T. ROAD, BALLY, HOWRAH-711201 [ PAN NO.AKTPS 1297C ] / V/S . INCOME TAX OFFICER, WARD-48(3), 3, GOVT. PLACE (WEST), KOLKATA-001 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI CHIRAG DESAI, ACA /BY RESPONDENT SHRI P. MAJUMDER, ADDL. CIT-SR-DR /DATE OF HEARING 25-10-2018 /DATE OF PRONOUNCEMENT 31-10-2018 /O R D E R THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2012-13 , ARISES AGAINST THE COMMISSIONER OF INCOME-TAX (APPEALS)-14, KOLKATAS ORDER DATED 26.04.2018 PASSED IN CASE NO. 29/CIT(A)-14/WD-48(3)/2015-16 INVOLVIN G PROCEEDINGS U/S. 144 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. I HAVE GIVEN MY THOUGHTFUL CONSIDERATIONS TO RIV AL CONTENTIONS. CASE FILE PERUSED. THE CIT(A)S FINDINGS UNDER CHALLENGE AFFI RMING THE ASSESSING OFFICERS ACTION ESTIMATING THE ASSESSEES GROSS PROFIT @ 1.5 % READ AS FOLLOWS:- 3.1. AS ALL THE GROUNDS RELATE TO THE LONE EFFECTIV E ISSUE OF ADDITION OF RS14,69,040, THE SAME ARE CONSIDERED TOGETHER. THE CASE WAS SELE CTED FOR THE CASS (COMPUTER ASSISTED SELECTION FOR SCRUTINY) REASON FOR EXAMINI NG AMOUNT OF 'SUNDRY CREDITORS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO PROVIDED REPEATED OPPORTUNITIES TO THE APPELLANT VIDE HEARINGS NOTICES DATED 11 TH OF DECEMBER 2014, 7 TH OF JANUARY 2015, 13 TH OF FEBRUARY 2015 AND 20 TH FEBRUARY 2015. AS THERE WAS NO COMPLIANCE BY THE APPELLANT TO THESE HEARINGS NOTICES ON VARIOUS OCCASIONS, THE AO PROCEEDED TO COMPLETE THE ASSESSMENT ON EX PARTE BASIS UNDER SEC TION 144 OF THE IT ACT, 1961. IN THE ABSENCE OF DUE COMPLIANCE BY THE APPELLANT TO P RODUCE THE BOOKS OF ACCOUNTS AS DESIRED BY THE ASSESSING OFFICER FOR EXAMINATION OF THE SUNDRY CREDITORS, THE AO GIVES ITA NO.1528/KOL/2018 A.Y 201 2-13 RAJKUMAR SINGHANIA VS. ITO WD-48(3), KOL PAGE 2 THE FOLLOWING FINDINGS, 'THE ASSESSEE WAS REPEATEDL Y REQUESTED TO PRODUCE BOOKS OF ACCOUNTS AND OTHER DETAILS SO THAT THE HUGE AMOUNT OF CREDITORS COULD BE VERIFIED, THE AUTHENTICITY OF EXISTENCE OF CREDITORS, CREDITWORTH INESS OF THE CREDITORS COULD BE VERIFIED. OTHER REVENUE EXPENDITURE ALSO COULD NOT BE VERIFIED IN THE ABSENCE OF ANY BILLS, VOUCHERS OR REGISTERS. THE AO THEREAFTER, C ONSIDERING THE MINIMUM PROFIT TURNOVER RATIO IN THE SAME TYPE OF BUSINESS BEING 1 .5% AS AGAINST SUCH REPORTED RATIO OF 0.49% AS RETURNED BY THE APPELLANT, PROCEEDED TO ADD A SUM OF RS 14,69,040 TO THE TOTAL INCOME BY DETERMINING THE PROFIT AT THE RATE OF 1.5% OF THE TURNOVER. AGGRIEVED WITH THIS THE APPELLANT IS IN APPEAL. DURING THE AP PELLATE PROCEEDINGS; IT IS SUBMITTED THAT IN THE SUCCEEDING YEAR I.E., ASSESSMENT YEAR 2 013-14, DURING THE SCRUTINY PROCEEDINGS, THE AO ACCEPTED THE PROFIT RATIO AS RE TURNED BY THE APPELLANT WHICH IS ALMOST SIMILAR TO THAT RETURNED FOR THE INSTANT YEA R UNDER CONSIDERATION. IT IS THEREFORE, SUBMITTED THAT THE ADDITION MADE BY RE-D ETERMINING THE PROFIT AT A HIGHER PERCENTAGE IS LEGALLY NOT TENABLE. APPELLANT'S CONT ENTIONS WERE CAREFULLY EXAMINED FROM ALL ASPECTS. HOWEVER, I OBSERVE THAT THERE IS NO DISPUTE WITH REGARD TO THE NON- COMPLIANCE ON THE PART OF THE APPELLANT BEFORE THE ASSESSING OFFICER DURING THE SCRUTINY PROCEEDINGS IN SPITE OF REPEATED OPPORTUNI TIES HAVE BEEN PROVIDED. THE AO IS DUTY BOUND TO EXAMINE THE ASPECT OF AND GENUINENESS OF SUNDRY CREDITORS. THE ONUS SQUARELY RESTS ON THE APPELLANT TO PROVE WITH VERIF IABLE EVIDENCES THE IDENTITY, CREDITWORTHINESS OF THE CREDITORS AS WELL AS GENUIN ENESS OF THE TRANSACTION OF CREDIT INVOLVED OF THE ALLEGED CREDITORS. THE APPELLANT, B Y NOT PROVIDING ANY DOCUMENTARY EVIDENCE OR BOOKS TO SUPPORT ITS CLAIM OF CREDITORS . AS DESIRED BY THE ASSESSING OFFICER, FAILED TO DISCHARGE THIS ONUS ABYSMALLY. THE AO, TH EREFORE, HAD NO OTHER GO OTHER THAN DO AN EX PARTE ASSESSMENT UNDER SECTION 144 OF THE IT ACT. I FURTHER OBSERVE THAT THE AO WAS VERY REASONABLE AND JUST IN DETERMINING THE PROFIT RATIO OF THE APPELLANT BY COMPARING THE SAME IN THE SIMILAR LINE OF BUSINE SS IN OTHER INSTANCES RATHER THAN ADDING THE ENTIRE AMOUNT OF SUNDRY CREDIT. WITH RES PECT TO THE APPELLANT'S SPECIFIC CONTENTION THAT IN THE SUCCEEDING YEAR THE PROFIT P ERCENTAGE WAS ACCEPTED AS RETURNED BY THE APPELLANT, I OBSERVE THAT IN THE ASSESSMENT ORDER FOR THAT YEAR THE AO HAS NOT GIVEN ANY FINDINGS WITH RESPECT TO THE ISSUES OF PR OFIT RATIO OR THE SUNDRY CREDITORS AND THE ISSUES REFERRED TO BY THE AO ARE COMPLETELY DIF FERENT ONES. MOREOVER, IN THAT YEAR THE APPELLANT APPEARED BEFORE THE AO AND PRODUCED R ELEVANT MATERIAL AND HENCE THE SITUATION IS NOT COMPARABLE WITH THE INSTANT YEAR U NDER CONSIDERATION. IT IS ALSO NOTEWORTHY TO MENTION THAT THE PRINCIPLE OF RES JUD ICATA IS NOT APPLICABLE IN INCOME TAX PROCEEDINGS AND EVERY ASSESSMENT YEAR IS AN IND EPENDENT AND SELF-SUSTAINING PERIOD. IN INSTANT CASE, THE ESSENCE OF THE MATTER IS THE APPELLANT FAILED TO DISCHARGE ITS ONUS ABYSMALLY IN PROVING THE SUNDRY CREDITORS WHICH THE AO FORAYED TO EXAMINE BY NOT PROVIDING ANY DOCUMENTS OR BOOKS OF ACCOUNTS OR ANY OTHER MATERIAL EVIDENCE. IN VIEW OF THIS, THE AO HAD NO OTHER WAY OF CORRECT LY COMPUTING THE INCOME OF THE APPELLANT RATHER THAN RESORTING TO THE EX PARTE ASS ESSMENT AND ADOPTING THE PROFIT RATIO OR A REASONABLE COMPETITIVE BASIS, WHICH HE D ID, IN A FAIR- AND JUST MANNER. THE APPELLANT HAS NOT PRODUCED ANY COUNTER EVIDENCES WI TH RESPECT TO TILE PROFIT RATIO ADOPTED BY THE AO. RELIANCE BY THE APPELLANT ON THE ASSESSMENT ORDER OF THE SUCCEEDING YEAR, WHERE THE SITUATION IS COMPLETELY DIFFERENT AND THE MATTERS AT HAND FOR EXAMINATION WERE COMPLETELY DISTINCT AND DIFFER ENT FROM THE ONES IN THE YEAR UNDER CONSIDERATION, IT IS ALSO ACTUALLY AND LEGALLY UNSU STAINABLE. IN VIEW (IF THIS, THE UNDERSIGNED IS NOT INCLINED TO INTERFERE WITH THE O RDER O THE AO AND THE SAME IS CONFIRMED. APPELLANTS GROUNDS, THEREFORE, FAIL. ITA NO.1528/KOL/2018 A.Y 201 2-13 RAJKUMAR SINGHANIA VS. ITO WD-48(3), KOL PAGE 3 3. BEFORE ME LEARNED DEPARTMENTAL REPRESENTATIVE ST RONGLY SUPPORT BOTH THE LOWER AUTHORITIES ACTION RE-ESTIMATING ASSESSEES GROSS PROFIT @ 1.5% INSTEAD OF .5% AS DECLARED IN HIS COMPUTATION. I FIND THAT BOTH TH E LOWER AUTHORITIES HAVE ALLEGEDLY GONE BY A COMPARABLE INSTANCES IN THE RELEVANT BUSI NESS OF IRON AND SCRAP BUSINESS. I NEITHER FIND ANY SUCH COMPARABLE FORTHCOMING IN ASS ESSMENT ORDER NOR IN CIT(A)S APPELLATE FINDINGS. THE ASSESSEES BOOKS HAVE ALSO NOWHERE BEEN REJECTED IN THE LOWER PROCEEDINGS. THIS IS NOT THE REVENUES CASE THAT AS SESSEES PROFIT DECLARED IN ITS BOOKS HAVE SEEN A DECREASE IN THE IMPUGNED ASSESSMENT YEA R VIS--VIS THOSE IN PRECEDING ASSESSMENT YEARS. I THEREFORE ACCEPT ASSESSEES SOL E SUBSTANTIVE GROUND RAISED IN THE INSTANT APPEAL. THIS IMPUGNED ADDITION OF 14,69,040/- STANDS DELETED ACCORDINGLY WITH A RIDER THAT THE SAME SHALL NOT BE TAKEN AS A PRECEDENT IN ANY EARLIER OR LATTER ASSESSMENT YEAR IN ASSESSEES CASE. 4. THIS ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 31/10/2018 SD /- (S.S. GODARA) JUDICIAL MEMBE R KOLKATA, *DKP/SR.PS - 31/10/2018 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-RAJMUMAR SINGHANIA 172, G.T.ROAD, BALLY, HOWRAH-711201 2. /RESPONDENT-ITO WARD-48(3), 3 GOVT. PLACE (WEST), K OLKATA-001 3. ' % / CONCERNED CIT 4. % - / CIT (A) 5. & ))' , ' / DR, ITAT, KOLKATA 6. + / GUARD FILE. BY ORDER/ , /TRUE COPY/ / ',