I.T.O.-3(2), Gwalior V. Sh. Pramod Kumar Jain Prop., Gwalior

ITA 162/AGR/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67462 (ITAT-AGRA)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 15-10-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 16-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PJ R
• Keywords: Business income; Income from undisclosed sources

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER ITA NO. 162/AGRA/2013 ASSTT. YEAR : 2008-09 INCOME-TAX OFFICER, VS. SHRI PRAMOD KUMAR JAIN, 3(2), GWALIOR. PROP. M/S. PRAMOD KUMAR JAIN, CHIK SANTAR, MORAR, GWALIOR. (PAN: ABYPJ 5897 R) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.K. MISHRA, JR. D.R. RESPONDENT BY : SHRI MAHESH AGARWAL, C.A. DATE OF HEARING : 15.10.2013 DATE OF PRONOUNCEMENT OF ORDER : 18.10.2013 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A), GWALIOR DATED 26.02.2013 FOR THE ASSESSMENT YEAR 20 08-09. 2. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND CONSIDERED TH E MATERIAL AVAILABLE ON RECORD. 3. ON GROUND NO. 1, THE REVENUE HAS CHALLENGED THE DELETION OF ADDITION OF RS.4,01,822/- ON ACCOUNT OF UNDISCLOSED FREIGHT REC EIPTS. THE AO EXAMINED THE ITA NO. 162/AGRA/2013 2 PROFIT AND LOSS ACCOUNT AND BALANCE SHEET AND FOUND THAT THE ASSESSEE HAS RECEIVED FREIGHT OF RS.1,19,10,612/- FROM VARIOUS PARTIES. T HE AO ON PERUSAL OF THE TDS CERTIFICATE FOUND THAT ASSESSEE HAS CONCEALED FREIG HT INCOME OF RS.4,01,822/- DURING THE ASSESSMENT YEAR UNDER APPEAL BECAUSE AS PER BREAK-UP, THE TOTAL RECEIPTS WERE IN A SUM OF RS.1,23,12,434/- WHEREAS THE ASSESSEE HAS OFFERED THE FREIGHT RECEIPTS OF RS.1,19,10,612/- ONLY. THE ASSE SSEE FURNISHED COMPLETE DETAILS, BUT THE EXPLANATION OF THE ASSESSEE WAS NOT ACCEPTE D AND ADDITION WAS, ACCORDINGLY, MADE. 4. THE ASSESSEE SUBMITTED BEFORE THE LD. CIT(A) THA T COMPLETE BOOKS OF ACCOUNT AND VOUCHERS WERE PRODUCED, WHICH HAVE BEEN VERIFIED BY THE AO. IT WAS SUBMITTED THAT IN THE BOOKS OF ACCOUNT, THE ASSESSE E HAS SHOWN TOTAL FREIGHT RECEIPTS IN A SUM OF RS.1,19,10,612/- AND ALSO SHOW N RECEIPTS FROM CIVIL WORK IN A SUM OF RS.5,09,513/- AND PROFIT FROM CIVIL CONTRACT WORK WAS SHOWN IN THE PROFIT AND LOSS ACCOUNT AS OTHER INCOME IN A SUM OF RS.44, 768/-. THEREFORE, THERE IS NO DIFFERENCE AND THE AO HAS WRONGLY ADDED THE INCOME FROM CIVIL WORK IN THE TOTAL FREIGHT RECEIPTS. IT WOULD, THEREFORE, TALLY WITH T HE TDS CERTIFICATES ALSO. IT WAS SUBMITTED THAT ALL THE BOOK ENTRIES HAVE BEEN PROPE RLY RECORDED AND THE CIVIL WORK ASSIGNED BY THE CENTRAL INDIA TELECOM INFRASTRUCTUR E WAS ALSO SUPPORTED BY THEIR BILLS AND CERTIFICATES. THE LD. CIT(A) ON EXAMINAT ION OF ALL THE MATERIAL ON RECORD ITA NO. 162/AGRA/2013 3 ACCEPTED THE CONTENTION OF THE ASSESSEE THAT THE AS SESSEE HAS EXECUTED THE CIVIL WORK IN A SUM OF RS.5,09,513/- AND IN THE TDS CERTI FICATE, DEDUCTION IS ALSO MADE U/S. 194C. THEREFORE, THE AMOUNT IN QUESTION IS NOT A TRANSPORTATION RECEIPT, BUT IS AN INCOME FROM CIVIL WORK. THE ADDITION WAS, ACCORD INGLY, DELETED. 5. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE LD. DR MERELY RELIED UPON THE ORDER OF THE AO WITHOUT POINTING OUT ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A). THE LD. COUNSEL FOR THE ASSESSEE FILED THE DETAILS OF THE S AME IN THE PAPER BOOK AND RECONCILIATION WHICH IS SUPPORTED BY ALL THE ANNEXU RES AND DOCUMENTS. IT IS PROVED ON RECORD THAT THE ASSESSEE HAS DONE CIVIL W ORK IN A SUM OF RS.5,09,513/-, WHICH HAS BEEN DULY ACCOUNTED FOR IN THE PROFIT AND LOSS ACCOUNT. THE ASSESSEE HAS SHOWN OTHER INCOME IN THE PROFIT AND LOSS ACCOU NT IN A SUM OF RS.73,605/- AND BREAK-UP OF THE SAME IS GIVEN AT PAGE 7 OF THE RECONCILIATION WHICH INCLUDES JOB WORK INCOME IN A SUM OF RS.44,768/-. THE ASSESS EE HAS ALSO GIVEN FURTHER RECONCILIATION THAT FROM THE FIGURE OF AO IN A SUM OF RS.1,23,12,434/-, IF THE RECEIPT FROM CIVIL WORK IN A SUM OF RS.5,09,513/- I S REDUCED, THE SAME WOULD SHOW THE BALANCE TOWARDS TRANSPORTATION RECEIPTS IN A SUM OF RS.1,18,02,921/-. IF THE FIGURE OF TRANSPORT RECEIPTS ON WHICH NO TDS WA S DEDUCTED IS ADDED IN A SUM OF RS.1,07,651/-, THE TOTAL TRANSPORTATION RECEIPTS WOULD COME TO RS.1,19,10,572/- ITA NO. 162/AGRA/2013 4 AND THE ASSESSEE HAS SHOWN SLIGHTLY HIGHER FREIGHT RECEIPT. AS SUCH, THERE WAS NO JUSTIFICATION TO MAKE THE ADDITION AGAINST THE ASSE SSEE. THE LD. CIT(A) ON PROPER APPRECIATION OF FACTS AND MATERIAL ON RECORD, CORRE CTLY DELETED THE ADDITION. GROUND NO. 1 OF APPEAL OF THE REVENUE HAS NO MERIT AND IS, ACCORDINGLY, DISMISSED. 6. ON GROUND NO. 2, THE REVENUE HAS CHALLENGED THE DELETION OF ADDITION OF RS.2,20,370/- ON ACCOUNT OF APPLYING THE HIGHER NET PROFIT RATE. THE AO FOUND CERTAIN DISCREPANCIES IN THE BOOKS OF ACCOUNT AND A LSO FOUND THAT THERE IS FALL IN GROSS PROFIT RATE AS COMPARED TO THE EARLIER YEAR. THEREFORE, BOOK RESULTS OF THE ASSESSEE WERE REJECTED U/S. 145(3) AND NET PROFIT W AS ESTIMATED AT RS.17,86,519/- AND BY APPLYING NET PROFIT RATE OF 15%, MADE ADDITI ON OF RS.2,20,370/-. 7. IT WAS SUBMITTED BEFORE THE LD. CIT(A) THAT EVER Y YEAR, THERE CANNOT BE SAME PROFIT RATE. THEREFORE, NO COMPARISON COULD BE MADE AND INCURRING OF THE EXPENSES DEPENDS UPON VARIOUS FACTORS. THE AO HAS N OT POINTED OUT ANY DISCREPANCIES IN THE ACCOUNTS. THEREFORE, THE HIGHE R NET PROFIT RATE APPLIED IS UNJUSTIFIED. THE LD. CIT(A), HOWEVER, CONFIRMED THE ORDER OF THE AO WITH REGARD TO ESTIMATE OF INCOME BECAUSE THERE WAS FALL IN GRO SS PROFIT, FOR WHICH NO EXPLANATION HAS BEEN GIVEN. HOWEVER, SINCE DISALLOW ANCE OUT OF FREIGHT EXPENSES ITA NO. 162/AGRA/2013 5 IN A SUM OF RS.1,84,915/- WAS ALREADY CONFIRMED, TH EREFORE, THE LD. CIT(A) HELD THAT THE G.P. ADDITION WOULD AMOUNT TO DOUBLE ADDIT ION AND ACCORDINGLY, ADDITION WAS DELETED. 8. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE ASSESSEE IS NO T IN APPEAL AGAINST THE FINDING OF THE LD. CIT(A) WITH REGARD TO REJECTION OF BOOKS OF ACCOUNT. THE LD. CIT(A) HAS CONFIRMED THE ADDITION OF RS.1,84,915/- ON ACCOUNT OF FREIGHT EXPENSES WHICH IS RELATED TO THE BUSINESS INCOME OF THE ASSESSEE, AGA INST WHICH THERE IS NO APPEAL BY THE ASSESSEE. THEREFORE, THE LD. CIT(A) WAS JUSTIFI ED IN HOLDING THAT IF SEPARATE ADDITION ON ACCOUNT OF REJECTION OF BOOKS OF ACCOUN T IS MADE, IT WOULD AMOUNT TO DOUBLE TAXATION. THE LD. CIT(A) WAS, THEREFORE, JUS TIFIED IN DELETING THE ADDITION. GROUND NO. 2 IS, ACCORDINGLY DISMISSED. 9. ON GROUND NO.3, THE REVENUE CHALLENGED THE DELET ION OF ADDITION OF RS.3,87,767/- BEING INCOME RECEIVED FROM SECL. THE AO MADE ABOVE ADDITION AS INCOME FROM UNDISCLOSED SOURCES. THE AO STATED T HAT THERE IS RECEIPT FROM SALE OF COAL IN A SUM OF RS.3,87,767/-, WHICH IS NOT OFF ERED FOR TAXATION. THEREFORE, THE ADDITION WAS MADE. THE ASSESSEE SUBMITTED BEFORE TH E LD. CIT(A) THAT THE ASSESSEE HAS PURCHASED COAL OF RS.3,87,767/- FROM S ECL, NAGPUR, WHICH IS ITA NO. 162/AGRA/2013 6 GOVERNMENT COMPANY AND THE SAME WAS SOLD BY ADDING SOME PROFIT MARGIN BY THE ASSESSEE. ALL THE DETAILS ARE NOTED IN THE BOOK S OF ACCOUNT AND INCOME FROM COAL IS OFFERED FOR TAXATION IN THE PROFIT AND LOSS ACCOUNT. THEREFORE, THE ADDITION IS UNJUSTIFIED. THE LD. CIT(A) ON EXAMINATION OF RE CORD ACCEPTED THE EXPLANATION OF THE ASSESSEE THAT ALL THE TRANSACTIONS OF PURCHA SES AND SALES HAVE BEEN ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. THEREFORE, T HE ADDITION IS WHOLLY UNJUSTIFIED. THE SAME WAS, ACCORDINGLY DELETED. 10. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE D O NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE ASSESSEE AT PA GE 8 OF THE PAPER BOOK FILED COAL LEDGER ACCOUNT TO SHOW THAT PURCHASE OF COAL W AS MADE FROM SECL IN A SUM OF RS.3,87,767/-, WHICH WAS SOLD IN A SUM OF RS.4,0 5,767/-, ON WHICH THE ASSESSEE HAS A CREDIT BALANCE OF RS.18,000/-. THE S UM OF RS.18,000/- WAS SHOWN AS OTHER INCOME ON TRANSIT COMMISSION COAL, COPY OF WHICH IS FILED AT PAGE 7. THE TOTAL OTHER INCOME IS SHOWN IN A SUM OF RS.73,605/- INCLUDING COMMISSION COAL OF RS.18,000/- AND IS SHOWN IN THE PROFIT AND LOSS ACCOUNT AS OTHER INCOME IN A SUM OF RS.73,605/- THUS, ALL THE TRANSACTIONS OF PU RCHASE AND SALE OF COAL HAVE BEEN SHOWN IN THE BOOKS OF ACCOUNT AND PROFIT ON TH E SAME IS ALSO OFFERED FOR TAXATION. FURTHER, THE ENTIRE RECEIPTS ON SALE OF C OAL COULD NOT BE TREATED AS INCOME ITA NO. 162/AGRA/2013 7 OF THE ASSESSEE. THEREFORE, THE LD. CIT(A) WAS JUST IFIED IN DELETING THE ADDITION. IN THE RESULT, GROUND NO. 3 OF THE APPEAL OF THE REVEN UE IS DISMISSED. 11. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (PRAMOD KUMAR) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY