Leo Distributors, Thrissur V. ITO, Trichur

ITA 17/COCH/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1038 (ITAT-COCHIN)
• Duration Of Justice: 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 01-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUSAN GEORGE VARGHESE
• Assessee Lawyers: S SIVARAMAKRISHNAN
• Section: 144

Judgement Text

1 ITA NO.17 /COCH/2012 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 17/COCH/2012 (ASSESSMENT YEAR 2008-09) LEO DISTRIBUTORS VS ITO, WD.2(2) XXV/1287, PAZHAYANADAKKAVU TRICHUR TRICHUR PAN : AAAFL8456G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S SIVARAMAKRISHNAN RESPONDENT BY : SMT. SUSAN GEORGE VARGHESE DATE OF HEARING : 19-12-2012 DATE OF PRONOUNCEMENT : 11-01-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE TAXPAYER IS DIRECTED AGAINST TH E ORDER OF THE C.I.T.(A)-V, KOCHI DATED 30-11-2011. 2. SHRI S SIVARAMAKRISHNAN, THE LD.REPRESENTATIVE F OR THE TAXPAYER SUBMITTED THAT THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 144 OF THE ACT EVEN THOUGH THE TAXPAYER APPEARED BEFORE TH E ASSESSING OFFICER AND 2 ITA NO.17 /COCH/2012 FILED ALL THE DOCUMENTS INCLUDING THE ACCOUNTS, ETC . REFERRING TO THE LETTER WRITTEN BY THE REPRESENTATIVE TO THE ASSESSING OFFI CER ON 06-12-2010, THE LD.REPRESENTATIVE SUBMITTED THAT THE TAXPAYER FILED COPIES OF DAY BOOK AND LEDGER IN A CD FORM WHICH WAS NOT CONSIDERED BY THE ASSESSING OFFICER. ACCORDING TO THE LD.REPRESENTATIVE, THE ASSESSING O FFICER MAY BE DIRECTED TO CONSIDER ALL THE MATERIALS FILED BY THE TAXPAYER. REFERRING TO THE ORDER OF THE COMMISSIONER OF INCOME-TAX(A) THE LD.REPRESENTA TIVE SUBMITTED THAT THE COMMISSIONER OF INCOME-TAX(A) HAS ALSO NOT TAKE N INTO CONSIDERATION THE LEDGER AND DAY BOOK FILED BY THE TAXPAYER. ACC ORDING TO THE LD.REPRESENTATIVE, WHEN THE TAXPAYER WAS MAINTAININ G BOOKS OF ACCOUNT AND THE BOOKS OF ACCOUNT WERE NOT REJECTED, THE BOOK RESULT HAS TO BE ACCEPTED. THEREFORE, ESTIMATION OF PROFIT DOES NOT ARISE FOR CONSIDERATION. 3. ON THE CONTRARY, SMT. SUSAN GEORGE VARGHESE, THE LD.DR SUBMITTED THAT THE TAXPAYER HAS NOT FILED DAY BOOK AND LEDGER FOR VERIFICATION. THEREFORE, THE ASSESSING OFFICER WAS FORCED TO COMP LETE THE ASSESSMENT U/S 144 OF THE ACT. WHEN THE ATTENTION OF THE LD.DR WA S DRAWN TO THE LETTER SAID TO BE WRITTEN BY THE LD.REPRESENTATIVE FOR THE TAXPAYER ON 06-12-2010 WHEREIN IT WAS CLEARLY STATED THAT SOFT COPY OF THE DAY BOOK AND LEDGER WAS 3 ITA NO.17 /COCH/2012 FURNISHED TO THE ASSESSING OFFICER, THE LD.DR VERY FAIRLY SUBMITTED THAT IN THAT CASE, THE ASSESSING OFFICER MAY BE DIRECTED TO RECONSIDER THE MATTER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTED LY, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 144 OF THE ACT. FROM THE MATERIALS AVAILABLE ON RECORD IT APPEARS THAT THE TAXPAYER HAS FILED TH E SOFT COPY OF THE DAY BOOK AND LEDGER AND OTHER DOCUMENTS REQUIRED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER WITHOUT EXAMINING THOSE DOCUM ENTS FOUND THAT THE TAXPAYER HAS NOT PRODUCED EITHER BOOKS OF ACCOUNT O R SUPPORTING VOUCHERS. THE LETTER OF THE LD.REPRESENTATIVE FOR THE TAXPAYE R CLEARLY SHOWS THAT DOCUMENTS AND OTHER MATERIALS WERE PRODUCED BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER WITHOUT REJECTING THE BOOKS OF ACCOUNT ESTIMATED THE PROFIT AT 5% OF THE SALES. THE QUESTION OF ESTIMAT ION OF PROFIT ARISES FOR CONSIDERATION ONLY WHEN THE TAXPAYER DOES NOT MAINT AIN THE BOOKS OF ACCOUNT OR THE BOOKS OF ACCOUNT WERE NOT PROPERLY M AINTAINED. IN THIS CASE, THE TAXPAYER CLAIMS THAT THE BOOKS OF ACCOUNT WERE MAINTAINED AND THE DAY BOOK AND LEDGER WAS FILED IN A SOFT COPY BE FORE THE ASSESSING OFFICER. THEREFORE, THE ASSESSING OFFICER IS SUPPO SED TO EXAMINE THE SAME. IF THE ASSESSING OFFICER FOUND THAT THE BOOKS OF AC COUNT DO NOT REFLECT THE 4 ITA NO.17 /COCH/2012 TRANSACTION CORRECTLY AND THE CORRECT PROFIT CANNOT BE DEDUCED FROM THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSING OFFICE R, THEN ONLY THE PROFIT HAS TO BE ESTIMATED. THEREFORE, THIS TRIBUNAL IS O F THE CONSIDERED OPINION THAT THE ASSESSING OFFICER HAS TO EXAMINE THE BOOKS OF ACCOUNT AT THE FIRST INSTANCE. ACCORDINGLY, THE ORDERS OF THE LOWER AUT HORITY ARE SET ASIDE AND THE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSES SING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE THE ISSUE AFTER EXAMINING THE BOOKS OF ACCOUNT AND THEREAFTER RECOMPUTE THE INCOME IN ACCORDANCE WITH LAW AFTER GIVING OPPORTUNITY OF HEARING TO THE TAXPAYER. 5. IN THE RESULT, APPEAL OF THE TAXPAYER IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 11 TH JANUARY, 2013. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 11 TH JANUARY, 2012 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH