Anoop Kumar Garg, Agra V. I.T.O.-3(1), Mathura

ITA 171/AGR/2012

• Counselvise Citation: 17120314 RSA 2012
• Duration Of Justice: 3 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-06-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 30-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BELU SINHA
• Assessee Lawyers: MAHESH CHAND AGARWAL

Judgement Text

I.T.A. NO.171/AGRA/2012 ASSESSMENT YEAR:2008-09 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE: SHRI G.C. GUPTA, VICE-PRESIDENT AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO.171/AGRA/2012 ASSESSMENT YEAR:2008-09 ANOOP KUMAR GARG, VS. INCOME-TAX OFFICER, 120/23A,CHOBEY JI KA PHATAK, 3(1), MATHURA. KINARI BAZAR, AGRA. [PAN: ABOPG 8410 H] APPELLANT BY : SHRI MAHESH CHAND AGARWAL, C.A. RESPONDENT BY : SMT. BELU SINHA, SR. D.R. DATE OF HEARING : 20.07.2015 DATE OF PRONOUNCEMENT : 24.07.2015 O R D E R THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YE AR 2008-09 IS DIRECTED AGAINST THE ORDER OF THE CIT(A). GROUND OF APPEAL NO. 1 OF THE ASSESSEE IS AS UNDER : 1. THAT THE LD. LOWER AUTHORITIES HAVE GROSSLY ERRED I N SELF ASSUMING THE APPELLANT AS A RETAIL TRADER (AS PRESC RIBED U/S. 44AF OF THE INCOME TAX ACT) AND APPLYING THE PROFIT MARG IN @ 5% ON SELF IMAGINED ALLEGED TURNOVER OF RS.1,51,22,259/- ON PU RELY HYPOTHETICAL AND IMAGINARY ASSUMPTIONS, IGNORING THE MATERIAL FA CTS ON RECORD THAT RESPONDENT WAS DOING THE BUSINESS OF COMMISSIO N AGENT. THUS THE ADDITION MADE BY LD. AUTHORITIES IS TOTALLY INC ORRECT AND BASELESS. 2. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT NET PROFIT RATE OF 5% WAS APPLIED BY THE AO ON THE SELF IMAGINED TURNO VER OF RS.1.51 CRORES ON PURELY HYPOTHETICAL AND IMAGINARY ASSUMPTIONS. IT W AS SUBMITTED THAT ASSESSEE WAS MERELY A COMMISSION AGENT AND WAS EARN ING COMMISSION ON THE TRANSACTIONS. THIS FACT WAS ACCEPTED BY THE DEP ARTMENT THROUGHOUT IN EARLIER YEARS AND THE ASSESSMENT HAS BEEN FRAMED IN SUMMARY MANNER. IT WAS SUBMITTED THAT THE ASSESSEE WAS A SMALL ASSESSE E WITH RETURN OF INCOME I.T.A. NO.171/AGRA/2012 ASSESSMENT YEAR:2008-09 PAGE 2 OF 4 OF RS.1.63 LACS AND WAS ASSESSED AT A VERY HIGH FIG URE AT 1.51 CRORES. THE ASSESSEE EARNED INCOME BY WAY OF COMMISSION ON SUPP LY OF COAL AND THERE WAS NO JUSTIFICATION FOR THE ASSESSMENT OF ALL THE CREDIT ENTRIES IN THE BANK ACCOUNT OF THE ASSESSEE. HE SUBMITTED THAT WITH REG ARD TO CASH DEPOSITS AND WITHDRAWALS FROM THE BANK ACCOUNT OF THE ASSESSEE, IT WAS EXPLAINED THAT THESE CASH DEPOSITS WERE MADE AFTER RECEIVING THE A MOUNTS FROM BRICK KILN OWNERS AND FOR MAKING FURTHER PAYMENTS TO THE PUBLI C OF TRIBAL AREA OF NORTH EAST REGION WHO SUPPLIED COAL TO BRICK KILN OWNERS, CASH WITHDRAWALS WERE MADE. THE ASSESSEE WAS JUST A MEDIATOR BETWEEN THE PARTIES, FOR WHICH HE RECEIVED COMMISSION. THE LEARNED COUNSEL REFERRED T O THE COPY OF ACKNOWLEDGEMENT OF INCOME-TAX RETURN FILED FOR THE ASSESSMENT YEAR 2007-08 WHEREIN IN THE COLUMN NATURE OF BUSINESS, THE ASS ESSEE HAS SPECIFICALLY MENTIONED THE SAME AS COMMISSION AGENTS (GENERAL C OMMISSION AGENTS). THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO PA GES 1 TO 50 OF THE PAPER BOOK NO. 2 FILED BY THE ASSESSEE WHEREIN THE ASSESS EE HAS FILED PHOTOCOPIES OF SOME OF THE BILLS RAISED BY THE ASSESSEE DURING THE RELEVANT PERIOD TO SHOW THAT THE ASSESSEE HAS CHARGED COMMISSION ON PER TON BASIS. THE LEARNED DR HAS RELIED ON THE ORDERS OF THE AO AND CIT(A). 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE ORDERS OF THE AO AND CIT(A) AND THE COPIES OF DOCUMENTS PLACED IN THE COMPILATION FILED BY THE ASSESSEE. WE FIND THAT THE ASSESSEE HAS CLAIMED THAT IT WAS MERELY A COMMISSION AGENT AND USED TO CHARGE COMMISSION ON T HE TRANSACTION OF SUPPLY OF COAL TO VARIOUS BRICK KILN OWNERS. WE FIN D THAT IN EARLIER ASSESSMENT YEARS ALSO THE ASSESSEE HAS SHOWN ONLY COMMISSION I NCOME AND THE ASSESSMENTS WERE FRAMED ON THAT BASIS BY THE DEPART MENT FOR PAST MANY YEARS. IN THE RETURN OF INCOME FILED, THE ASSESSEE HAS SHOWN HIS NATURE OF BUSINESS AS THAT OF COMMISSION AGENTS. WE FIND FR OM THE PHOTOCOPIES OF SOME OF THE BILLS RAISED BY THE ASSESSEE DURING THE RELEVANT PERIOD FILED IN THE COMPILATION NO. 2 BEFORE THE TRIBUNAL WHEREIN THE A MOUNT CHARGED AS COMMISSION ON PER TON BASIS HAS SPECIFICALLY BEEN M ENTIONED. WE FIND THAT THE DEPARTMENT COULD NOT BRING ANY MATERIAL ON RECO RD TO CONTROVERT THE I.T.A. NO.171/AGRA/2012 ASSESSMENT YEAR:2008-09 PAGE 3 OF 4 SUBMISSIONS OF THE ASSESSEE. THE CORRESPONDING WITH DRAWAL ENTRIES WERE THERE IN THE BANK ACCOUNT OF THE ASSESSEE, WHEREIN THE CREDIT ENTRIES OF CASH WERE FOUND AND THE AO CONVENIENTLY HAS APPLIED NET RATE OF 5% ON THE TOTAL OF THE CREDIT SIDE OF THE BANK ACCOUNT AND HAS IGNORED THE DEBIT ENTRIES THEREIN. IN THESE FACTS OF THE CASE, WE HOLD THAT NO CASE FO R APPLYING NET PROFIT RATE AT 5% ON ENTIRE CREDIT ENTRIES IN THE BANK ACCOUNT OF THE ASSESSEE COULD BE MADE OUT BY THE DEPARTMENT AND ACCORDINGLY, THE ADD ITION MADE BY THE AO IS DELETED AND GROUND NO. 1 OF THE APPEAL IS ALLOWED. 4. GROUND NO. 2 OF APPEAL OF THE ASSESSEE IS AS UND ER : 1. THAT THE LD. AUTHORITIES HAVE ERRED IN CONFIRMIN G THE ADDITION OF RS.18,842/- ON ACCOUNT OF INTEREST BY SELF ASSUMING THAT RATE OF INTEREST FOR ALL LOANS TAKEN AND ALL LOANS GIVEN MU ST BE EQUAL. THUS THE ADDITION OF RS.18,842/- IS TOTALLY HYPOTHETICAL , IMAGINARY AND WITHOUT BRINGING ANY MATERIAL ON RECORD IN SUPPORT OF THE SAME. 5. WE HAVE HEARD THE PARTIES. WE FIND THAT THE BASI S OF THE ADDITION THAT THE ASSESSEE HAS CHARGED LESS RATE OF INTEREST THAN THE RATE OF INTEREST PAID BY HIM AND THEREFORE, EXCESS AMOUNT OF RS.18,842/- WAS NOT FROM BUSINESS OF THE ASSESSEE, IS UNSUSTAINABLE. THERE IS NO FINDING BY THE REVENUE AUTHORITIES THAT THE INTEREST WAS NOT PAID BY THE A SSESSEE AS CLAIMED BY IT OR IT WAS PAID TO SOME OF HIS RELATIVES OR ASSOCIATES. NO PURPOSE OTHER THAN BUSINESS FOR PAYMENT OF INTEREST COULD BE ESTABLISH ED BY THE DEPARTMENT. IN THIS VIEW OF THE MATTER, THE ISSUE IS DECIDED IN FA VOUR OF THE ASSESSEE. GROUND NO. 2 OF APPEAL IS, ACCORDINGLY, ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH JULY, 2015. SD/- SD/- INTURI RAMA RAO G.C. GUPTA (ACCOUNTANT MEMBER) (VICE- PRESIDEN T) DATED: AGRA: 24 TH JULY, 2015 I.T.A. NO.171/AGRA/2012 ASSESSMENT YEAR:2008-09 PAGE 4 OF 4 *AKS/- COPIES TO: (1) THE APPELLANT (2) THE RESPONDE NT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA