Income Tax Officer , Hardoi V. Vinod Kumar Singh, Hardoi

ITA 153/LKW/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8147 (ITAT-LUCKNOW)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-04-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 28-03-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA
• Assessee Lawyers: YOGESH AGARWAL
• Keywords: Business income
• Section: 144

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.153/LKW/2012 ASSESSMENT YEAR:2008 - 09 INCOME TAX OFFICER, HARDOI. VS. SHRI VINOD KUMAR SINGH, S/O SAHJADE SINGH BRICK FIELD, PATTHAR TALI BHARAWN, SANDILA, HARDOI. PAN:AVUPS2772B (APPELLANT) (RESPONDENT) APPELLANT BY SHRI ALOK MITRA, D.R. RESPONDENT BY SHRI YOGESH AGARWAL, ADVOCATE DATE OF HEARING 11/04/2014 DATE OF PRONOUNCEMENT 0 8 /05/2014 O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT (A), BAREILLY DATED 29/12/2011 FOR ASSESSMENT YEAR 2008 - 2009. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. THAT THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) IS ERRONEOUS IN LAW AND ON FACTS AS THE ASSESSING OFFICER HAS RIGHTLY DISALLOWED THE ADDITION OF RS.9,25,736/ - MADE BY APPLYING NET PROFIT RATE OF 13% ON ESTIMATED SALES OF BRIC KS OF RS.86,81,000/ - AS AGAINST DISCLOSED SALES OF RS.16,08,550/ - AFTER INVOKING PROVISIONS OF SECTION 145(3) OF THE INCOME - TAX ACT, 1961. THE LD. CIT(APPEALS) HAS NOT APPRECIATED THE FACTS AND CIRCUMSTANCES AS NARRATED BY THE ASSESSING OFFICER IN HIS ASSE SSMENT ORDER PASSED UNDER SECTION 144 OF THE I.T. ACT, 1961. 2. THAT THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) HAS WRONGLY ALLOWED THE ADDITION OF RS.2,55,000/ - WHICH WAS 2 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF TREATMENT OF AGRICULTURE INCOME AS IN COME FROM OTHER SOURCE. 3. THAT THE ORDER OF LD. COMMISSIONER OF INCOME - TAX (APPEALS) IS ERRONEOUS IN LAW AND ON FACT MAY BE CANCELLED AND THE ORDER OF THE ASSESSING OFFICER MAY BE RESTORED. 4. ANY OTHER GROUND OF APPEAL MAY BE TAKEN AT THE TIME OF HEARI NG OF APPEAL. 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 THE ISSUE RAISED BY THE REVENUE VIDE GROUND NO. 1 HAS BEEN DECIDED BY LEARNED CIT(A) AS PER FOLLOWING PARA ON PAGE NO. 11 AND 12 OF HIS ORDER: HOWEVER, THE FACT REMAINS THAT THE ASSESSEE DID NOT EXTEND COOPERATION TO THE A.O. DURING ASSESSMENT PROCEEDINGS, THEREFORE, HE WAS FORCED TO ADOPT THE FACTS AND FIGURES ON THE BASIS OF ESTIMATE ONLY. DURING APPEAL PROCEEDINGS, THE APPELL ANT DID NOT PRODUCE BOOKS OF ACCOUNT AND NO MATERIAL WAS SUBMITTED TO REBUT THE FINDINGS OF THE A.O. THEREFORE, LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, IT WOULD BE REASONABLE AND IN THE INTEREST OF JUSTICE TO RESTRICT THE ESTIMATED NET PROFIT @ 6% OF THE TURNOVER OF THE ASSESSEE. IT IS RELEVANT TO MENTION THAT FOR MAKING ESTIMATION OF PRODUCTION OF BRICKS IN THE LAST QUARTER OF THE FINANCIAL YEAR THE A.O. DID NOT HAVE ANY FACTUAL MATERIAL IN SUPPORT OF HIS ASSUMPTION THAT THE ASSESSEE HAD PURCHAS ED COAL OUT OF BOOKS AND CONSUMED THE SAME TO MANUFACTURE 15 LAKH BRICKS BY APPLYING HIS OWN FORMULA THAT ONE LAKH BRICKS WERE MANUFACTURED IN THE CYCLE OF EVERY 6 DAYS IN THE LAST QUARTER. HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE SUBM ISSION OF THE APPELLANT AND POSITION OF LAW ON THE ISSUE OF ESTIMATED ADDITION, I AM OF THE CONSIDERED VIEW THAT THE TURNOVER OF BRICKS SHOULD BE RESTRICTED TO 28 LAKH BRICKS AND THE SELLING RATE OF THE BRICKS SHOULD BE TAKEN AT RS.2,000/ - PER 1000 BRICKS AS ASSESSED BY THE COMMERCIAL TAX AUTHORITIES. THUS, THE NET ESTIMATED BUSINESS RECEIPTS WOULD BE OF RS.56 LAKHS AND NET PROFIT @6% WOULD WORK OUT TO RS.3,36,000/ - . 3 4.1 FROM THE ABOVE PARA OF CIT(A) S ORDER , WE FIND THAT A CLEAR FINDING HAS BEEN GIVEN THAT THE ASSESSING OFFICER DID NOT HAVE ANY FACTUAL MATERIAL IN SUPPORT OF HIS ASSUMPTION THAT THE ASSESSEE HAD PURCHASED COAL OUT OF BOOKS AND CONSUMED THE SAME TO MANUFACTURE 15 LAKH BRICKS BY APPLYING HIS OW N FORMULA THAT ONE LAKH BRICKS WERE MANUFACTURED IN THE CYCLE OF EVERY 6 DAYS IN THE LAST QUARTER. 5. LEARNED D.R. OF THE REVENUE COULD NOT CONTROVERT THIS FINDING OF LEARNED CIT(A). AFTER MAKING THIS OBSERVATION, THE LEARNED CIT(A) HAS HELD THAT THE TUR NOVER OF BRICKS SHOULD BE RESTRICTED TO 28 LAKH BRICKS AND THE SELLING RATE OF THE BRICKS SHOULD BE TAKEN AT RS.2,000/ - PER 1000 BRICKS AS ASSESSED BY THE COMMERCIAL TAX AUTHORITIES. ON THIS BASIS, HE ESTIMATED THE BUSINESS RECEIPTS OF THE ASSESSEE AT RS. 56 LAC AND ESTIMATED NET PROFIT RATE OF 6%. IN THE FACTS OF THE PRESENT CASE, THE ESTIMATION OF THE CIT(A) APPEARS TO BE REASONABLE IN THE ABSENCE OF ANY FACTUAL ADVERSE MATERIAL HAVING BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER OR BY LEARNED D.R. H ENCE, WE DECLINE TO INTERFERE IN THIS FINDING OF CIT(A). ACCORDINGLY, GROUND NO. 1 IS REJECTED. 6. REGARDING GROUND NO. 2, WE FIND THAT THE FINDING OF CIT(A) IS ON THE BASIS THAT THE ASSESSEE HAD CONSIDERABLE LAND IN HIS POSSESSION AND, THERE WERE 400 TR EES OF MANGOS AND 500 T REE S OF LIPTUS IN 2.717 HECTARE OF LAND AND SOLD THE SAME TO SHRI MUNSHI LAL BAJPAI. HE HAS ALSO NOTED THAT THESE FACTS WERE PRODUCED BEFORE THE ASSESSING OFFICER BUT HE DID NOT CONSIDER THE SAME. HE HAS ALSO GIVEN A FINDING THAT A S PER THE I.T. RETURN FILED FOR ASSESSMENT YEAR 2006 - 07 AND 2007 - 08, THE ASSESSEE HAS DISCLOSED AGRICULTURAL INCOME OF RS.80,000/ - AND RS.2,50,000/ - RESPECTIVELY. HE HAS ALSO GIVEN A FINDING THAT THE ASSESSING OFFICER DID NOT DISPUTE THE HOLDING OF AGRICU LTURAL LAND AS THE EVIDENCE OF THE SAME WAS PRODUCED BEFORE HIM WHICH HE MENTIONED IN THE BODY OF THE ASSESSMENT ORDER THAT THE ASSESSEE PRODUCED COPY OF KHATAUNI 4 WHICH ESTABLISHED THE LAND HOLDING OF THE ASSESSEE BUT IN ABSENCE OF KHASRA , THE NATURE OF C ROPS W AS NOT PROVED TO JUSTIFY HIS AGRICULTURAL INCOME. CONSIDERING ALL THESE FACTS, THE CIT(A) HAS DECIDED THIS ISSUE IN A REASONABLE MANNER AND HE HAS CONFIRMED THE DISALLOWANCE OF RS.55,000/ - AS AGAINST THE DISALLOWANCE OF RS.2,55,000/ - MADE BY THE ASS ESSING OFFICER ON THIS ACCOUNT. CONSIDERING THE FACTS OF THE PRESENT CASE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF CIT(A). 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS 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 8 /05/2014. *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