ITO, HANUMANGARH V. Shri Pankaj Chandak, HANUMANGARH TOWN

ITA 157/JODH/2013

• Counselvise Citation: 15723314 RSA 2013
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-10-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 14-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Keywords: Gross profit estimation; Opportunity of being heard; Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL: JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 157/JODH/2013 (A.Y. 2009-10) ITO, WARD-2, VS SHRI PANKAJ CHANDAK PROP. HANUMANGAR, M/S. CHANDAK AGRO EQUIPMENT, 12, NEW MARKET, HANUMANGARH TOWN. PAN NO. ABSPC5153H C.O. NO. 16/JODH/2013 (ARISING OUT OF ITA NO. 157/JODH/2013) (A.Y. 2009-10) PANKAJ CHANDAK VS. ITO, WARD-2, PROP. M/S. CHANDAK AGRO EQUIPMENT, HANUMANGARH. NEAR CHAWLA HOSPITAL, HANUMANGARH. PAN NO. ABSPC5153H (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. MAHAVEER JAIN. DEPARTMENT BY : SHRI N.A. JOSHI- DR. DATE OF HEARING : 24/10/2013. DATE OF PRONOUNCEMENT : 28/10/2013. 2 O R D E R PER HARI OM MARATHA, J.M. : THIS APPEAL OF THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE FOR A.Y. 2009-10,A RE DIRECTED AGAINST THE ORDER OF LD. CIT(A), BIKANER, DATED 05/12/2012. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE AS PROPRIETOR OF M/S. CHANDAK AGRO EQUIPMENTS, CARRIES ON A BUSINESS OF SEEDS AND PESTICIDES. FOR A.Y. 2009-10, HE FILED HI S RETURN OF INCOME (ROI) ON 15/09/2009, DECLARING TOTAL INCOME OF RS. 5,72,186/-. THE RETURN WAS ASSESSED AT A TOTAL INCOME OF RS. 23,99, 542/- VIDE ORDER DATED 26/12/2011. IN COMING TO THE ABOVE INCOME, TH E AO HAS MADE VARIOUS ADDITIONS. 2.1 AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE L D. CIT(A) WHO HAS GIVEN PART RELIEF. THAT IS WHY BOTH PARTIES HAVE FI LED THEIR RESPECTIVE APPEALS. THE REVENUE HAS RAISED FOLLOWING GROUNDS I N ITS APPEAL:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN: 3 I) DELE TING THE ADDITION OF RS. 9,91,232/- MADE ON ACCOUNT OF LOWER GROSS PROFIT RATE. II) DELETING THE DISALLOWANCE OF RS. 77,954/- MADE OUT OF VEHICLE AND MOBILE PHONE ETC. EXPENSES III) DELETING THE DISALLOWANCE OF RS. 1,74,308/- M ADE OUT OF COMMISSION ON SALE. IV) DELETING THE DISALLOWANCE OF RS. 71,168/- MADE OUT OF FOREIGN TRAVEL. AND, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN HIS CROSS OBJECTION: 1. THE LEARNED ITO MENTIONED IN GROUNDS OF APPEAL T HAT THE LEARNED CIT (APPEALS) ERRED IN DELETING ADDITIO N OF RS, 991232/- ON ACCOUNT OF LOWER G.P., RS. 77954/-, ON ACCOUNT OF VEHICLE, MOBILE, PHONE ETC EXP ENSES, RS.174308/- OUT OF COMMISSION ON SALES, RS . 71168/- OUT OF FOREIGN TRAVELS. BUT NOTHING IS MEN TIONED BY THE ITO THAT WHY THE DELETION OF ADDITION BY LEARNE D CIT (APPEALS) IS NOT REASONABLE. 2. THE PAPER BOOK WAS NOT RECEIVED BY ASSESSEE THA T ON WHAT BASIS CIT (APPEALS) ERRED IN REDUCING THE ADDI TION. 4 3. THE LEARNED ASSESSING AUTHORITY MENTIONED IN ASSESSMENT ORDER IN PARA NO. 2 REGARDING SPARE PART S: THERE IS NO OPPORTUNITY IS GIVEN. NOTHING IS MENTIO NED IN ORDER SHEET. THE ASSESSEE MAINTAINS DAY TO DAY STOC K REGISTER. THE STOCK REGISTER MAINTAIN SUBMITTED TO CIT (APPEALS) AT THE TIME OF HEARING OF APPEAL. THERE W AS NO OTHER SPECIFIES DEFECTS WAS MADE OUT BY THE ASSESSI NG OFFICER. 4, THE ASSESSEE AT THE TIME OF ASSESSMENT PROCEEDIN G SUBMITTED ALL THE VOUCHER OF EXPENSES. NO ANY SPECI FIC DEFECT WAS SHOWN BY ASSESSING AUTHORITY HENCE ADDIT ION SUSTAINED BY CIT (APPEAL) RS. 779S4/- BE DELETED. T HE EXPENSE IS ONLY FOR BUSINESS, NOT OF PERSONAL NATUR E. 5. REGARDING COMMISSION PAID TO NARESH KUMAR DISALLOWANCE, THE ASSESSEE PAID THE COMMISSION ON S ALE'S 3 % FROM LAST 6 YEARS. ON THIS POINT STATEMENT OF NAR ESH KUMAR RECORDED BY ITO. THE COPY OF STATEMENT WAS SUBMITTED AT THE TIME OF APPEAL HEARING. BUT NOT CO NSIDER BY ITO & CIT (APPEALS). NARESH KUMAR IS INCOME TAX PAYER AND LIABLE FOR HIGHER RATE TAX SLAB. THE COPY OF HI S I. TAX RETURN ALSO SUBMITTED BEFORE THE ITO & CIT (APPEALS ). SH. NARESH KUMAR HIMSELF SPEND RS. 74672/- ON TRAVELLIN G AND CONVEYANCE FOR SEEKING ORDER FOR ASSESSEE. NOTHING IS CONSIDERED BY ITO & CIT (APPEALS).SO ADDITION SUSTA INED BY THE CIT (APPEALS) BE RS.100000/- BE DELETED. THIS I NCOME ASSESSED TWICE IN THE HAND OF ASSESSEE & WHO RECEIV ED 5 COMMISSION. THIS IS AGAINST LAW OF NATURAL JUSTICE. 6. THE ADDITION SUSTAINED RS.16674/- ALSO BE DELETE D. THE ASSESSEES GO CHINA FOR FULLY BUSINESS PURPOSE. THE EXPENSES ON FOOD, TAXI, TRANSLATOR PAID BY ASSESSEE. BESIDES ITS THERE ARE SO MANY EXPENSES LIKE ON WATER, NEWSPAPER & OTH ER BUSINESS BULLETIN NO BILL WAS GIVEN BY THE PERSON W HO GIVE THE SERVICES. HENCE THERE IS NO REASON OF DISALLOWA NCE RS. 16674/- BY CIT (APPEALS). THE APPELLANT RESERVES THE RIGHT TO ADD AMEND OR AL TER THE GROUND OF CROSS OBJECTION BEFORE OR AT THE HEARING OF APPEAL. 2.2 WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE CAREFU LLY PERUSED THE ENTIRE RECORD. 2.3 IN THE REVENUES APPEAL, THE FIRST GROUND IS RE GARDING DELETION OF ADDITION OF RS. 9,91,232/- MADE ON ACCOUNT OF LOWER G.P. RATE. THE FACTS APROPOS THIS ISSUE ARE THAT THE ASSESSEE DERI VED HIS INCOME AS WHOLESALER AND RETAILER OF PESTICIDES ITEMS. IT WA S NOTICED BY THE A.O. THAT THE ASSESSEE WAS NOT MAINTAINING ANY STOCK REG ISTER. HE PREPARED INVENTORY OF STOCK AT THE FAG-END OF THE YEAR. THE ASSESSEE COULD NOT GET THE CLOSING STOCK VERIFIED WITH THE SUPPORT OF PURCHASE BILLS. MOREOVER, THE ASSESSEE WAS UNABLE TO JUSTIFY WITH T HE HELP OF 6 BILLS/VOUCHERS OF VARIOUS EXPENSES TOTALING TO RS. 7,79,542/-. THE POSITION OF SALES, GROSS PROFIT AND GROSS PROFIT RA TE SHOWN IN THREE A.YS. IS AS UNDER: A.Y. SALES GROSS PROFIT GROSS PROFIT RATE 2009 - 10 1,83,86,453 45,48,606 24.74% 2008 - 09 1,41,66,656 42,68,015 30.13% 2007 - 08 1,08,84,740 33,79,119 31.04% CONSEQUENTLY THE A.O. REJECTED THE BOOKS AND ESTIMA TED THE GROSS PROFIT BY APPLYING 30.13% AS AGAINST 24.74% DECLAR ED BY THE ASSESSEE AND MADE THE IMPUGNED ADDITION. HOWEVER, IN APPEAL , THE ASSESSEE WAS SUCCESSFUL IN GETTING THIS ADDITION DELETED. N OW THE REVENUE IS AGGRIEVED. 2.4 AFTER CONSIDERING THE RIVAL SUBMISSIONS WHICH A RE ALMOST SAME AND SIMILAR AS TAKEN BEFORE THE LD. CIT(A), WE HAVE FOUND THAT THE LD. CIT(A) HAS NOT DECIDED THIS ISSUE BY WAY OF A SPEA KING ORDER. HE HAS NOT DISCUSSED FULL AND COMPLETE FACTS OF THIS ISSUE AND HAS VERY CURSORILY DECIDED THIS ISSUE BY RELYING ON THE TRIB UNAL ORDER CULLING OUT CORRECT FACTS OF THIS ISSUE. THEREFORE, WE ALLOW G ROUND NO. (I) OF REVENUES APPEAL FOR STATISTICAL PURPOSES AND RESTO RE THIS ISSUE TO THE 7 FILE OF THE A.O WITH THE DIRECTION THAT HE SHALL DE CIDE THIS ISSUE AFRESH AND PASS A SPEAKING ORDER AFTER HEARING BOTH THE SI DES. WE MAY MENTION THAT THE ASSESSEE HAS ALSO TAKEN GROUND NO. 3 IN HIS CROSS OBJECTION WHEREIN IT IS MENTIONED THAT THE A.O. DID NOT GIVE PROPER OPPORTUNITY TO THE ASSESSEE. THEREFORE, WE DECIDE GROUND NOS. 1 TO 3 OF THE ASSESSEES CROSS OBJECTION IN THE SAME MANNE R BY RESTORING THEM TO THE FILE OF THE A.O. 3. GROUND NOS. (II), (III) AND (V) IS REGARDING DIS ALLOWANCE OF RS. 77,954/- OUT OF VEHICLE EXPENSES AND MOBILE PHONE E XPENSES WHICH WAS ADDED BY THE A.O. ON ESTIMATION BASIS. THE LD. CIT(A) MADE DELETIONS OUT OF THESE EXPENSES AND THAT IS WHY BOT H THE PARTIES ARE AGGRIEVED. THE ASSESSEE HAS ALSO RAISED GROUND NOS . 4 AND 5 IN THIS REGARD. 4. AFTER HEARING BOTH THE SIDES, WE HAVE FOUND THAT NEITHER THE A.O. NOR THE LD. CIT(A) HAVE PROPERLY DEALT WITH THESE I SSUES. NO CLEAR FACTS ARE ARISING FROM THE ORDERS OF THE AUTHORITIES BELO W. THEREFORE, WE DEEM IT FIT AND PROPER TO RESTORE GROUND NOS. 2 AND 3 OF ASSESSEES CROSS OBJECTION TO THE FILE OF THE A.O. WITH THE DI RECTION THAT HE SHALL DECIDE THESE CONNECTED ISSUES AFRESH AFTER AFFORDIN G OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8 5. IN THE RESULT BOTH THE APPEAL OF THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE ARE ALLOWED FOR STATISTIC AL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 28 TH OCTOBER, 2013. SD/- SD/- (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28 TH OCTOBER, 2013 VL/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT BY ORDER 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR ITAT, JODHPUR