ITO, Ward - 32(1), Kolkata, Kolkata V. M/s. Ateet, Kolkata

ITA 1589/KOL/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8100 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 09-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K N JANA
• Assessee Lawyers: J M THARD PE
• Keywords: Rejection of books of accounts
• Section: 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA [BEFORE SHRI C.D.RAO, A.M. & SHRI GEORGE MATHAN, J. M. ] I.T.A. NO.1589/KOL/2010 ASSESSMENT YEAR : 2007-2008 I.T.O., WARD-32(1), KOLKATA -VS- M/S. ATEET 105, PARK STREET, GROUND FLOOR KOLKATA 700 016. (PAN:AALFA 7587P) ( APPELLANT ) ( RESPONDENT ) DATE OF CONCLUDING THE HEARING : 14.10.2012 DATE OF PRONOUNCING THE ORDER : 18.10.2012 APPEARANCES : FOR THE APPELLANT : SHRI K.N.J ANA, JCIT, SR.(DR) : FOR THE RESPONDENT : SHRI J.M. THARD, A DVOCATE O R D E R PER SHRI GEORGE MATHAN,J.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A)- XIX, KOLKATA IN APPEAL NO.82/CIT(A)-XIX/ITO.WD.32(1 )/KOL/09-10 DATED 17 TH MAY, 2010 FOR THE ASSESSMENT YEAR 2007-2008. 2. SHRI K.N.JANA, JCIT REPRESENTED ON BEHALF OF THE REVENUE AND SHRI J.M. THARD, ADVOCATE REPRESENTED ON BEHALF OF THE ASSESS EE. 3. IN THE REVENUES APPEAL, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION AND DISALLOW ING THE ASSESSING OFFICERS DECISION TO CONSIDER THE G.P. RATE OF THE ASSESSEE @16% AND DIRECTING THE A.O. TO ACCEPT THE TRADING RESULT DECLARED BY THE ASSESSEE DECLARING G.P. @5.50% AS PER THE AUDITED BOOKS OF ACCOUNT. 3. IT WAS SUBMITTED BY THE LD. D.R. THAT THERE WAS A SURVEY IN THE BUSINESS PREMISES OF THE ASSESSEE ON 16.02.2009. IN THE COUR SE OF SURVEY, A STATEMENT HAD 2 I.T.A. NO.1589/KOL/2010 M/S. ATEET ASSES SMENT YEAR : 2007-08 BEEN RECORDED FROM ONE OF THE PARTNERS OF THE ASSES SEE FIRM WHEREIN THE GROSS PROFIT HAD BEEN ESTIMATED AT 15% IN THE CASE WHOLES ALE AND 20% IN THE CASE OF RETAIL AND THE TOTAL 16% WAS ON AVERAGE G.P. CONSEQ UENTLY, THE AO HAD, IN THE COURSE OF ASSESSMENT, FOR THE ASSESSMENT YEAR 2007- 08, APPLIED THE RATE OF 16% BY REJECTING THE ASSESSEES BOOKS OF ACCOUNTS. IT WAS THE SUBMISSION THAT ON APPEAL, THE LD. CIT(A) HAD ALLOWED THE ASSESSEES APPEAL BY HOLDING THAT THE AO HAD FAILED TO POINT OUT ANY DEFECT OR DISCREPANCY IN THE BOOKS OF ACCOUNTS AND THAT THE PROVISIONS OF SECTION 145 CANNOT BE INVOKED ON THE BASIS OF STATEMENT ALONE. IT WAS A SUBMISSION THAT CONSEQUENTLY, THE LD. CIT(A) HAD DIRECTED THE AO TO ACCEPT THE TRADING RESULTS DECLARED BY THE ASSESSEE. IT WAS A SUBMISSION THAT IN THE COURSE OF SURVEY, THE PARTNER OF THE ASSESSEE FIRM HAVING ACC EPTED THAT AN AVERAGE OF 16% WAS CORRECT, THE REJECTION OF THE BOOKS OF ACCOUNTS AND THE ESTIMATION AS INCOME OF THE ASSESSEE BY THE AO AT 16% WAS LIABLE TO BE REST ORED AND THE ORDER OF THE CIT(A) BE REVERSED. 4. IN REPLY, THE LD. A.R. SUBMITTED THAT THERE WAS NO DISCREPANCY FOUND IN THE COURSE OF SURVEY RELATABLE TO THE ASSESSMENT YEAR 2 007-08. IT WAS A SUBMISSION THAT THE SURVEY WAS CONDUCTED ON 16.02.2009 RELEVANT TO THE ASSESSMENT YEAR 2009- 2010. IT WAS A FURTHER SUBMISSION THAT IN THE COURS E OF ASSESSMENT, NO DEFECTS IN THE BOOKS OF ACCOUNTS HAD ALSO BEEN POINTED OUT WHI CH COULD BE GROUND FOR REJECTING THE ASSESSEES BOOKS OF ACCOUNTS. IT WAS A SUBMISSION THAT IN THE ABSENCE OF VALID REJECTION OF BOOKS OF ACCOUNTS, THE ESTIMA TION OF THE ASSESSEES INCOME WAS NOT PERMISSIBLE. THE LD. A.R. VEHEMENTLY SUPPOR TED THE ORDER OF THE LD. CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ON PER USING THE ASSESSMENT ORDER, IT IS NOTICED THAT THE AO HAS REJECTED THE B OOKS OF ACCOUNTS BY HOLDING THAT THE ASSESSEES BOOKS OF ACCOUNTS ARE NOT REFLECTING THE ACTUAL SALES OF THE FIRM. HOWEVER, THE AO HAS NOT TINKERED WITH THE TOTAL SAL ES. IN FACT, THE AO HAS ESTIMATED THE G.P. ON THE SALES AS DISCLOSED BY THE ASSESSEE. THIS, ITSELF, CLEARLY 3 I.T.A. NO.1589/KOL/2010 M/S. ATEET ASSES SMENT YEAR : 2007-08 SHOWS THAT THE VERY FOUNDATION, ON THE BASIS OF WHI CH THE AO HAD REJECTED THE BOOKS OF ACCOUNTS, HAS NO MORE LEGS TO STAND ON. TH EN, OBVIOUSLY, THE REJECTION OF BOOKS OF ACCOUNTS WOULD NOT BE VALID. FURTHER, EVEN IN THE CASE OF REJECTION OF THE BOOKS OF ACCOUNTS, ESTIMATION OF THE TOTAL INCOME O R THE ESTIMATION OF THE GROSS PROFIT OF AN ASSESSEE SHOULD CLEARLY BE DONE ON THE BASIS OF THE PAST OR IMMEDIATELY SUBSEQUENT ASSESSMENT YEARS. THE ESTIMATION OF THE G.P. CANNOT BE MADE ON THE BASIS OF STATEMENT RECORDED. IN FACT, A PERUSAL OF THE STATEMENT RECORDED, WHICH HAVE BEEN EXTRACTED BY THE AO, CLEARLY SHOWS THAT E VEN IN THE STATEMENT RECORDED, NO FOUNDATION HAS BEEN LAID FOR THE PURPOSE OF COMP UTING THE ESTIMATE OF G.P. IN FACT, A PERUSAL OF THE STATEMENT RECORDED WHICH IS ALSO PART OF THE PAPER BOOK FILED CATEGORICALLY SHOWS THAT NOTHING MAJOR HAS BEEN FOU ND IN THE COURSE OF SURVEY AND THE STATEMENT HAD BEEN RECORDED BASICALLY FOR GETTI NG A CONFESSION IN RESPECT OF PERCENTAGE OF G.P. AS ALSO TO GET THE ASSESSEE TO S URRENDER HIGHER AMOUNT AND PAY ADVANCE TAX. A PERUSAL OF THE STATEMENT ALSO CLEARL Y SHOWS THAT NO EVIDENCE WHATSOEVER HAS BEEN FOUND IN THE COURSE OF SURVEY T O SHOW THAT THERE WAS ANY DEFECT IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2007-08. THUS, WE ARE OF THE VIEW THAT THE FINDING OF THE LD . CIT(A) IN DELETING THE ADDITION MADE BY THE AO BY ESTIMATING THE G.P. OF THE ASSESS EE AT 16% IS ON RIGHT FOOTING AND DOES NOT CALL FOR ANY INTERFERENCE. IN THE CIR CUMSTANCES, THE APPEAL OF THE REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. THIS ORDER IS PRONOUNCED IN THE COURT ON 18 TH OCTOBER, 2012. SD/- SD/- (C. D. RAO) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 18 TH OCTOBER, 2012 4 I.T.A. NO.1589/KOL/2010 M/S. ATEET ASSES SMENT YEAR : 2007-08 COPY OF THE ORDER FORWARDED TO: 1. M/S. ATEET, 105, PARK STREET, GROUND FLOOR, KOLKATA 700 016. 2 I.T.O., WARD-32(1), KOLKATA 3. THE CIT(A), KOLKATA 4. CIT, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, ASSTT. REGISTRAR , ITAT, KOLKATA TALUKDAR(SR.P.S.)