I.T.O Wd - 1,Haldia., Purba Medinipur V. Shri Gour Hari Debdas., Purba Medinipur

ITA 180/KOL/2013

• Counselvise Citation: 18023514 RSA 2013
• Duration Of Justice: 2 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 24-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Validity of assessment
• Section: 147; 145; 148; 144

Judgement Text

I.T.A. NO. 180/KOL./2013 ASSESSMENT YEAR: 2006-2007 & C.O. NO. 31/KOL/2013 (IN ITA NO. 180/KOL/2013) ASSESSMENT YEAR: 2006-2007 PAGE 1 OF 9 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 180/KOL/ 2013 ASSESSMENT YEAR : 2006-2007 INCOME TAX OFFICER,................................ ............................APPELLANT WARD-1, HALDIA, BASUDEVPUR, KHANCANCHAK, HALDIA, PURBA MEDINIPUR-721 602 -VS.- SHRI GOUR HARI DEBDAS,............................. .......................RESPONDENT S-17 & 18, HALDIA INDUSTRIAL ESTATE, DURGACHAK, HALDIA, PURBA MEDINIPUR-721 602 [PAN : AGPPD 4285 R] & C.O. NO. 31/KOL/2013 (ARSING OUT OF I.T.A. NO. 180/KOL/ 2013) ASSESSMENT YEAR : 2006-2007 SHRI GOUR HARI DEBDAS,............................. .......................CROSS OBJECTOR S-17 & 18, HALDIA INDUSTRIAL ESTATE, DURGACHAK, HALDIA, PURBA MEDINIPUR-721 602 [PAN : AGPPD 4285 R] -VS.- INCOME TAX OFFICER,................................ ............................RESPONDENT WARD-1, HALDIA, BASUDEVPUR, KHANCANCHAK, HALDIA, PURBA MEDINIPUR-721 602 APPEARANCES BY: N O N E, FOR THE DEPARTMENT SHRI SOUMITRA CHOUDHURY, ADVOCATE , FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : DECEMBER 09, 2015 DATE OF PRONOUNCING THE ORDER : DECEMBER 16, 2015 O R D E R PER SHRI P.M. JAGTAP :- THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXXIII, KOLKAT A DATED 29.11.2012 I.T.A. NO. 180/KOL./2013 ASSESSMENT YEAR: 2006-2007 & C.O. NO. 31/KOL/2013 (IN ITA NO. 180/KOL/2013) ASSESSMENT YEAR: 2006-2007 PAGE 2 OF 9 FOR THE ASSESSMENT YEAR 2006-07 AND THE SAME IS BEI NG DISPOSED OF ALONG WITH CROSS OBJECTION FILED BY THE ASSESSEE BEING C. O. NO. 31/KOL/2013. 2. THE SOLITARY ISSUE RAISED IN THE APPEAL OF THE R EVENUE RELATES TO THE RELIEF ALLOWED BY THE LD. CIT(APPEALS) TO THE ASSES SEE BY REDUCING THE ESTIMATED INCOME OF RS.15,05,421/- MADE BY THE ASSE SSING OFFICER TO RS.3,94,232/-. 3. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND SUPPLYING OF BITU MEN DRUM LIDS METAL TO INDIAN OIL CORPORATION, HALDIA REFINERY. THE RET URN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS ORIGINALLY FILED BY HI M ON 30.03.2007 DECLARING TOTAL INCOME OF RS.1,40,540/-. THE SAID R ETURN WAS INITIALLY PROCESSED BY THE ASSESSING OFFICER UNDER SECTION 14 3(1). SUBSEQUENTLY, THE ASSESSING OFFICER FOUND ON THE BASIS OF INFORMA TION RECEIVED FROM WBSEB, DURGACHAK THAT THE CONSUMPTION OF ELECTRICIT Y WAS SUPPRESSED BY THE ASSESSEE. HE, THEREFORE, REOPENED THE ASSESSMEN T AND ISSUED A NOTICE UNDER SECTION 148 ON 30.04.2008 AFTER RECORDING THE REASONS. IN RESPONSE TO THE SAID NOTICE, THE RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 21.06.2008 DECLARING TOTAL INCOME OF RS.1,68,960/-. FROM THE PERUSAL OF THE PROFIT AND LOSS ACCOUNT FILED BY THE ASSESSEE A LONG WITH THE SAID RETURN, IT WAS NOTICED BY THE ASSESSING OFFICER THA T THE SALES AND JOB WORK RECEIPTS HAVE BEEN SHOWN BY THE ASSESSEE AT RS.39,4 2,325/- AS AGAINST RS.14,92,745/- AS SHOWN IN THE PROFIT & LOSS ACCOUN T FILED ALONG WITH THE ORIGINAL RETURN OF INCOME. HE ALSO FOUND THAT EVEN SOME OF THE OTHER FIGURES APPEARING IN THE PROFIT & LOSS ACCOUNT WERE CHANGED AND THE NET PROFIT WAS SHOWN AT RS.1,85,365/- AS AGAINST RS.1,5 6,947/- SHOWN IN THE ORIGINAL RETURN OF INCOME. HE, THEREFORE, REQUIRED THE ASSESSEE TO EXPLAIN THIS DIFFERENCE BY PRODUCING THE BOOKS OF ACCOUNT A LONG WITH THE BILLS AND VOUCHERS FOR VERIFICATION. THE ASSEESSEE, HOWEVER, FAILED TO COMPLY WITH THIS REQUIREMENT. SOME OF THE FINANCIAL DETAILS FUR NISHED BY THE ASSESSEE I.T.A. NO. 180/KOL./2013 ASSESSMENT YEAR: 2006-2007 & C.O. NO. 31/KOL/2013 (IN ITA NO. 180/KOL/2013) ASSESSMENT YEAR: 2006-2007 PAGE 3 OF 9 DURING THE COURSE OF ASSESSMENT PROCEEDINGS WERE AL SO FOUND TO BE DIFFERENT BY THE ASSESSING OFFICER FROM THE FIGURES APPEARING IN EARLIER TWO PROFIT & LOSS ACCOUNTS FILED BY THE ASSESSEE. H E, THEREFORE, REJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE AND PROCEEDED TO ESTIMATE THE INCOME OF THE ASSESSEE TO THE BEST OF HIS JUDGMENT. IN THIS REGARD, HE FOUND THAT THE CONSUMPTION OF RAW MATERIAL IN THE P ROFIT & LOSS ACCOUNT FILED ALONG WITH THE ORIGINAL RETURN WAS SHOWN BY T HE ASSESSEE AT RS.4,55,137/- FOR SALES OF RS.14,92,745/-. BY APPLY ING THIS RATIO TO THE CONSUMPTION OF RAW MATERIAL SHOWN BY THE ASSESSEE I N THE PROFIT & LOSS ACCOUNT FILED ALONG WITH THE RETURN OF INCOME IN RE SPONSE TO NOTICE UNDER SECTION 148 AT RS.17,12,020/-, THE ASSESSING OFFICE R ESTIMATED THE TOTAL SALES OF THE ASSESSEE AT RS.56,15,033/- AND ON THE BASIS OF THE SAID FIGURE OF SALES, THE GROSS PROFIT OF THE ASSESSEE WAS WORK ED OUT BY HIM AT RS.18,94,983/- AS AGAINST RS.5,46,510/- SHOWN BY TH E ASSESSEE. THIS DIFFERENCE OF RS.13,48,473/- WAS ADDED BY THE ASSES SING OFFICER TO THE NET PROFIT OF RS.1,56,948/- SHOWN BY THE ASSESSEE AND A CCORDINGLY THE INCOME OF THE ASSESSEE FROM BUSINESS WAS ESTIMATED BY THE ASSESSING OFFICER AT RS.15,05,421/- IN THE ASSESSMENT COMPLETED UNDER SE CTION 144/147 VIDE AN ORDER DATED 31.12.2009. 4. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 144 READ WITH SECTION 147, AN APPEAL WAS PREFERRED BY T HE ASSESSEE BEFORE THE LD. CIT(APPEALS) CHALLENGING THE VALIDITY OF THE SA ID ASSESSMENT AS WELL AS DISPUTING THE TRADING ADDITION MADE THEREIN. AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE AS WELL AS THE REL EVANT MATERIAL AVAILABLE ON RECORD, THE LD. CIT(APPEALS) DID NOT F IND MERIT IN THE PRELIMINARY ISSUE RAISED BY THE ASSESSEE CHALLENGIN G THE VALIDITY OF ASSESSMENT MADE BY THE ASSESSING OFFICER UNDER SECT ION 144 READ WITH SECTION 147 AND DISMISSING THE SAME, HE UPHELD THE VALIDITY OF THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 144 R EAD WITH SECTION 147 OF THE ACT. I.T.A. NO. 180/KOL./2013 ASSESSMENT YEAR: 2006-2007 & C.O. NO. 31/KOL/2013 (IN ITA NO. 180/KOL/2013) ASSESSMENT YEAR: 2006-2007 PAGE 4 OF 9 5. THE LD. CIT(APPEALS) ALSO UPHELD THE ACTION OF T HE ASSESSING OFFICER IN REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE B UT REDUCED THE ESTIMATE OF BUSINESS INCOME OF THE ASSESSEE MADE BY THE ASSE SSING OFFICER AT RS.15,05,421/- TO RS.3,94,232/- FOR THE FOLLOWING R EASONS GIVEN IN PARAGRAPHS NO. 5.2 TO 5.5 OF HIS IMPUGNED ORDER:- 5.2. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE. AS MENTIONED ABOVE, THE APPELLANT HAD FILED THREE DIFF ERENT PROFIT AND LOSS ACCOUNTS BEFORE THE ASSESSING OFFICER. THE FIRST ACCOUNT WAS FILED ALONGWITH THE ORIGINAL RETURN OF INCOME I N WHICH NET PROFIT HAD BEEN WORKED OUT AT RS. 1,56,947/-. THEN, ALONGWITH THE RETURN FILED IN RESPONSE TO NOTICE UNDER SECTIO N 148, ANOTHER PROFIT AND LOSS ACCOUNT WAS FILED SHOWING N ET PROFIT AT RS. 1,85,365/-. THERE WAS VAST DIFFERENCE IN FIGURE S OF MANY ITEMS IN THE TWO ACCOUNTS. FOR EXAMPLE, SALE WAS SH OWN AT RS.14,92,745/- IN THE FIRST ACCOUNT AND AT RS.39,42 ,325/- IN THE SECOND ONE. PURCHASE OF RAW MATERIAL AND ELECTRICIT Y EXPENSES WERE SHOWN AT RS.6,93,158/- AND RS.24,288/- RESPECT IVELY IN THE FIRST ACCOUNT WHEREAS THE CORRESPONDING FIGURES IN THE SECOND ACCOUNT WERE OF RS.19,50,041/- AND RS. 2,87,766/- R ESPECTIVELY. WHEN THESE DISCREPANCIES WERE DISCUSSED WITH THE AS SESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS, YET ANOTHER P ROFIT AND LOSS ACCOUNT WAS FILED. NET PROFIT SHOWN IN THIS AC COUNT MATCHED WITH THE SAME IN THE SECOND ACCOUNT. HOWEVE R, CERTAIN OTHER FIGURES, INCLUDING SALES, WERE CHANGED. NOT O NLY THAT, SOME OF THE FIGURES WERE PRESENTED IN AN UNUSUAL MA NNER. GROSS VALUE OF SALE AND JOB WORK WERE SHOWN AT RS.36,22,4 25/-, FROM WHICH RAW MATERIAL, POWER AND LABOUR AMOUNTING TO RS.13,13,398/-, RS.2,63,478/- AND RS.5,52,8041- RES PECTIVELY WERE DEDUCTED IN ORDER TO ARRIVE AT NET FIGURE OF R S.14,92,745/- WHICH MATCHED WITH THE SALES SHOWN IN THE FIRST ACC OUNT. THE DIFFERENCE BETWEEN THE AMOUNT DEBITED TOWARDS RAW M ATERIAL, LABOUR AND POWER IN THE SECOND ACCOUNT AND THE AMOU NT DEDUCTED FROM GROSS SALES WERE DEBITED SEPARATELY. THE REASON FOR THE UNUSUAL ACCOUNTING HAS BEEN ATTRIBUTED TO T HE FACT THAT ACCOUNTS WERE PREPARED FOR TWO PERIODS. IN THE FIRS T PERIOD I.E. 01.04.2004 TO 25.07.2005 THE BUSINESS WAS BEING LOO KED AFTER BY THE MANAGER AND THEREAFTER BY THE APPELLANT HIMS ELF. HOWEVER THIS EXPLANATION DOES NOT FULLY CLARIFY THE MATTER. IT IS NOT UNDERSTOOD, AS TO WHY A PART OF RAW MATERIAL CO ST, POWER AND LABOUR EXPENSES WERE REDUCED FROM GROSS SALES A ND THE REMAINING PART DEBITED SEPARATELY TO THE PROFIT AND LOSS ACCOUNT. ALSO, THE FIGURE OF GROSS VALUE OF SALES A ND INCOME FROM JOB WORK IS NOT SAME IN THE SECOND AND THE THI RD ACCOUNTS. IN THE SECOND ACCOUNT, IT WAS MENTIONED AT RS.39,42 ,325/- WHICH HAS BEEN REDUCED TO RS.36,22,425/- IN THE THI RD ACCOUNT. I.T.A. NO. 180/KOL./2013 ASSESSMENT YEAR: 2006-2007 & C.O. NO. 31/KOL/2013 (IN ITA NO. 180/KOL/2013) ASSESSMENT YEAR: 2006-2007 PAGE 5 OF 9 SUCH UNEXPLAINED DISCREPANCIES DO NOT INSPIRE ANY C ONFIDENCE IN ACCURACY OF ANY OF THE PROFIT AND LOSS ACCOUNTS PREPARED BY THE APPELLANT. IT HAS ALSO BEEN MENTIONED BY THE AS SESSING OFFICER IN HIS ORDER THAT THE APPELLANT DID NOT PRO DUCE ALL THE DETAILS CALLED FOR DURING THE ASSESSMENT PROCEEDING S. CONSIDERING THESE FACTORS, THE ASSESSING OFFICER WA S QUITE JUSTIFIED IN NOT ACCEPTING THE ACCOUNTS OF THE APPE LLANT. HERE IT MAY BE MENTIONED THAT THE APPELLANT HAS OBJECTED TO THE ESTIMATION MADE BY THE ASSESSING OFFICER, INTER ALI A, ON THE GROUND THAT THE ASSESSING OFFICER HAD NOT APPLIED S ECTION 145 OF INCOME TAX ACT, 1961. I DO NOT AGREE WITH THE APPEL LANT ON THIS POINT. AS A MATTER OF FACT, THE ASSESSING OFFICER H AS SPECIFICALLY MENTIONED IN THE PARAGRAPH BEFORE COMPUTATION OF AS SESSED INCOME, THAT - 'AS THE ASSESSEE CANNOT JUSTIFY HIS ACCOUNTS THE SAME IS REJECTED UNDER SECTION 145(3) OF INCOME TAX ACT, 1961 AND ASSESSMENT IS COMPLETED EX PARTE ON THE BASIS O F MATERIAL AVAILABLE ON RECORD.' THUS THE APPELLANT IS NOT COR RECT IN STATING THAT THE ASSESSING OFFICER HAS NOT APPLIED SECTION 145. THE FACT IS THAT, THE ASSESSING OFFICER NOTICED SER IOUS DISCREPANCIES IN THE ACCOUNTS, ISSUED SHOW CAUSE NO TICE AND THEREAFTER INVOKED PROVISIONS OF SECTION 145(3) OF INCOME TAX ACT, 1961. CONSIDERING THE FOREGOING DISCUSSION, I UPHOLD THE ACTION OF THE ASSESSING OFFICER IN REJECTING ACCOUN TS OF THE APPELLANT AND INVOKING PROVISION OF SECTION 145(3) OF INCOME TAX ACT, 1961. 5.3. HOWEVER, IT IS WELL SETTLED THAT EVEN IN A CAS E WHERE ACCOUNTS ARE REJECTED AND INCOME IS ASSESSED BY RES OLVING TO ESTIMATE, THE ASSESSMENT HAS TO BE MADE ON A REASON ABLE BASIS. IN THE APPELLANT'S CASE, THE ASSESSING OFFICER HAS COMPUTED GROSS' PROFIT BY RECASTING THE TRADING ACCOUNT. SUC H RECASTING IS BASED ON ESTIMATION OF SALES. IN FACT IN THE BODY O F ASSESSMENT ORDER, BASIS OF SUCH ESTIMATION HAS NOT BEEN MENTIO NED AND ONLY A REFERENCE TO WORKING IN A SHOWCASE LETTER DA TED 21.12.2009 HAS BEEN MADE. ON GOING THROUGH THE SAID SHOW CAUSE LETTER, IT IS SEEN THAT THE ASSESSING OFFICER FIRST WORKED OUT THE RAW MATERIAL CONSUMED AS PER THE ACCOUNTS S UBMITTED IN THE RETURN FILED UNDER SECTION 139(1) AND SAME A S PER THE ACCOUNTS SUBMITTED WITH THE RETURN FILED IN RESPONS E TO THE NOTICE U/S 148. THE TWO FIGURES CAME OUT TO RS.4,55 ,137/- AND RS.17,12,020/- RESPECTIVELY. AS THE SALES SHOWN IN THE FIRST ACCOUNTS WERE OF RS.14,92,745/-, HE ESTIMATED THAT SALES ACHIEVED FROM CONSUMPTION OF RAW MATERIAL OF RS.17, 12,020/-, AS DECLARED IN THE SECOND SET OF ACCOUNTS, MUST BE OF RS.56,15,033/- ON A PROPORTIONATE BASIS. BASED ON T HIS FIGURE OF SALES, HE RE-CASTED THE TRADING ACCOUNT AND ARRIVED AT GROSS PROFIT OF RS.18,94,983/-. I.T.A. NO. 180/KOL./2013 ASSESSMENT YEAR: 2006-2007 & C.O. NO. 31/KOL/2013 (IN ITA NO. 180/KOL/2013) ASSESSMENT YEAR: 2006-2007 PAGE 6 OF 9 5.4. THE ABOVE METHOD OF ESTIMATING SALES SUFFERS F ROM SERIOUS DEFECTS. THE ASSESSING OFFICER HAS COMPARED TWO FIG URES FOR CONSUMPTION OF RAW MATERIAL WHICH WERE, IN REALITY, NOT COMPARABLE. AS PER THE EXPLANATION GIVEN BY THE APP ELLANT, THE FIGURE OF RS.19,50,041/- DEBITED TOWARDS PURCHASE O F RAW MATERIAL IN THE SECOND ACCOUNT CONSISTED OF TWO PAR TS. OUT OF TOTAL RAW MATERIAL COST, AMOUNT OF RS.13,13,398/- H AD BEEN DIRECTLY REDUCED FROM GROSS SALE TO ARRIVE AT SALES OF RS.14,92,745/- AND BALANCE OF RS.6,93,158/- WAS DEB ITED SEPARATELY, WHICH MATCHED WITH THE FIGURE IN THE FI RST ACCOUNT. IF THIS FACTOR IS CONSIDERED, RAW MATERIAL CONSUMPT ION WOULD NOT BE DIFFERENT IN THE TWO ACCOUNTS. WHILE THE EXP LANATION CANNOT BE ACCEPTED IN TOTO IN LIGHT OF SEVERAL DISC REPANCIES MENTIONED EARLIER, NOR THE SAME CAN BE ALTOGETHER D ISCARDED IN A SUMMARY MANNER AS DONE BY THE ASSESSING OFFICER. IT IS TO BE NOTED HERE THAT BOTH THE ACCOUNTS WERE PROVIDED BY THE ASSESSEE HIMSELF. IT IS NOT A CASE AS IF THE ASSESS ING OFFICER DETECTED A DIFFERENT FIGURE OF RAW MATERIAL CONSUMP TION FROM SOME INDEPENDENT SOURCE SUCH AS PHYSICAL VERIFICATI ON OR THIRD PARTY INQUIRY ETC. THUS, IT IS NOT A CASE WHERE RAW MATERIAL CONSUMPTION WAS PARTLY RECORDED IN THE BOOKS AND SO ME UNACCOUNTED RAW MATERIAL CONSUMPTION WAS DETECTED. IT IS TRUE THAT THERE IS SOME DEFECT IN THE ACCOUNTING MADE BY THE APPELLANT BUT NO EVIDENCE HAS BEEN GATHERED REGARDI NG UNACCOUNTED CONSUMPTION, PRODUCTION OR SALES. IT IS ALSO IMPORTANT TO NOTE THAT THE ENTIRE SALES MADE BY THE APPELLANT ARE TO INDIAN OIL CORPORATION WHICH IS A PUBLIC SEC TOR UNDERTAKING AND THEREFORE POSSIBILITY OF UNACCOUNTE D SALES IS PRACTICALLY NIL. IT IS ALSO TO BE NOTED THAT THE RA W MATERIAL CONSUMPTION OF RS.17,12,020/- HAS ALSO BEEN TAKEN B Y THE ASSESSING OFFICER FROM ONE OF THE PROFIT AND LOSS A CCOUNTS PREPARED BY THE APPELLANT FROM HIS REGULAR BOOKS ON LY AND HENCE THERE CANNOT BE PRESUMPTION THAT A PART OF TH E SAME WAS UTILIZED FOR UNACCOUNTED PRODUCTION AND SALES. AS A MATTER OF FACT, THERE IS NO EVIDENCE WHATSOEVER REGARDING THE RE BEING ANY UNACCOUNTED PRODUCTION OR SALES AND THE ESTIMATION OF UNACCOUNTED SALE IS BASED ON CONJECTURES AND SURMIS ES. THEREFORE THE ADDITION MADE BY AN UNSUBSTANTIATED PRESUMPTION OF UNACCOUNTED SALES CANNOT BE SUSTAINE D. 5.5 HOWEVER, THAT ALSO DOES NOT MEAN THAT THE INCOM E SHOWN BY THE APPELLANT CAN BE ACCEPTED AS CORRECT. AS MENTIO NED EARLIER, THE ACCOUNTS OF THE APPELLANT SUFFER FROM SERIOUS D ISCREPANCIES AND INCONSISTENCIES AND WERE RIGHTLY REJECTED UNDER SECTION 145(3) OF INCOME TAX ACT, 1961. ONCE THE ACCOUNTS A RE REJECTED, REASONABLE PROFIT IS REQUIRED TO BE ESTIMATED. AS P ER THE PROFIT AND LOSS ACCOUNT FILED WITH RETURN SUBMITTED IN RES PONSE TO NOTICE UNDER SECTION 148, THE SALES AND INCOME FROM JOB WORK WERE OF RS.39,42,325/-, IT IS SEEN THAT IN THE IMME DIATELY I.T.A. NO. 180/KOL./2013 ASSESSMENT YEAR: 2006-2007 & C.O. NO. 31/KOL/2013 (IN ITA NO. 180/KOL/2013) ASSESSMENT YEAR: 2006-2007 PAGE 7 OF 9 PRECEDING YEAR, I.E. F.Y.2004-05, NET PROFIT RATE S HOWN BY THE APPELLANT HIMSELF WAS ABOUT 10%. THOUGH CERTAIN ADD ITION HAD BEEN MADE BY THE ASSESSING OFFICER IN SCRUTINY ASSE SSMENT IN THAT YEAR, THE SAME WAS DELETED BY ITAT AND THUS FI NALLY ASSESSED INCOME WAS ALSO ABOUT 10% OF TURNOVER. CON SIDERING ALL THE FACTS IN ENTIRETY, I AM OF THE VIEW THAT PR OFIT FOR THE YEAR UNDER APPEAL CAN BE REASONABLY ESTIMATED IN THE APP ELLANT'S CASE BY APPLYING NET PROFIT RATE OF 10% ON THE TURN OVER OF RS.39,42,325/- WHICH COMES TO RS.3,94,232/-. THE AS SESSING OFFICER IS DIRECTED TO REDUCE INCOME ACCORDINGLY. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 6. AT THE TIME OF HEARING BEFORE US, NONE HAS APPEA RED ON BEHALF OF THE REVENUE. THE LD. CIT (D.R.), WHO IS PRESENT IN THE COURT HAS SUBMITTED THAT THIS CASE IS TO BE ARGUED BY THE LD. SR. D.R., WHO IS NEITHER PRESENT IN THE COURT NOR HAS GIVEN ANY INTIMATION OF HIS ABSEN CE OR ANY INSTRUCTION TO SEEK ADJOURNMENT. WE, THEREFORE, PROCEED TO DISP OSE OF THIS APPEAL FILED BY THE REVENUE EX PARTE AFTER HEARING THE ARG UMENTS OF THE LD. COUNSEL FOR THE ASSESSEE AND PERUSING THE RELEVANT MATERIAL AVAILABLE ON RECORD. 7. IT IS OBSERVED THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE WERE REJECTED BY THE ASSESSING OFFICER FOR THE REASONS T HAT THREE PROFIT & LOSS ACCOUNTS GIVING DIFFERENT FIGURES WERE FILED BY THE ASSESSEE AT THREE DIFFERENT STAGES AND THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNT AS WELL AS SUPPORTING BILLS/VOUCHERS FOR VERIFICATION AND KEEPING IN VIEW ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ACTION OF THE ASSESSING OFFICER IN REJECT ING THE BOOKS OF ACCOUNT WAS UPHELD BY THE LD. CIT(APPEALS). HE, HOWEVER, HE LD THAT ONCE THE BOOKS OF ACCOUNT ARE REJECTED, THE INCOME OF THE ASSEESSE E FROM BUSINESS IS REQUIRED TO BE ESTIMATED ON SOME REASONABLE BASIS. IN THIS REGARD, HE FOUND THAT NET PROFIT OF 10% WAS DECLARED BY THE AS SESSEE IN THE I.T.A. NO. 180/KOL./2013 ASSESSMENT YEAR: 2006-2007 & C.O. NO. 31/KOL/2013 (IN ITA NO. 180/KOL/2013) ASSESSMENT YEAR: 2006-2007 PAGE 8 OF 9 IMMEDIATELY PRECEDING YEAR, I.E. A.Y. 2005-06 AND A LTHOUGH CERTAIN ADDITIONS HAD BEEN MADE BY THE ASSESSING OFFICER TO THE NET PROFIT, THE SAME WERE DELETED BY THE TRIBUNAL THEREBY ACCEPTING FINALLY THE NET PROFIT RATE OF 10% DECLARED BY THE ASSESSEE. THE LD. CIT(A PPEALS), THEREFORE, APPLIED THE NET PROFIT RATE OF 10% TO THE HIGHER TU RNOVER OF RS.39,42,325/- DECLARED BY THE ASSESSEE IN THE PROF IT & LOSS ACCOUNT FILED ALONG WITH THE RETURN OF INCOME IN RESPONSE TO NOTI CE UNDER SECTION 148 AND ESTIMATED THE INCOME OF THE ASSESSEE AT RS.3,94 ,232/- AS AGAINST RS.15,05,421/- ESTIMATED BY THE ASSESSING OFFICER. HAVING CONSIDERED ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE ESTIMATE SO MADE BY THE LD. CIT(APPEALS) IS QUITE F AIR AND REASONABLE AS THE SAME IS BASED ON THE RESULTS DECLARED BY THE AS SESSEE IN THE IMMEDIATELY PRECEDING YEAR, WHICH HAVE BEEN FINALLY ACCEPTED BY THE TRIBUNAL. ON THE OTHER HAND, THE ESTIMATE OF BUSINE SS INCOME OF THE ASSESSEE MADE BY THE ASSESSING OFFICER BY APPLYING THE RAW MATERIAL CONSUMPTION RATIO SHOWN IN THE FIRST PROFIT & LOSS ACCOUNT TO RAW MATERIAL CONSUMPTION SHOWN IN THE SECOND PROFIT & L OSS ACCOUNT TO WORK OUT THE SALES AT HIGHER SIDE THAN DECLARED BY THE A SSESSEE IN THE SECOND PROFIT & LOSS ACCOUNT, IN OUR OPINION, IS NOT WELL FOUNDED ESPECIALLY WHEN THE ASSESSEE IS DEALING WITH A PUBLIC SECTOR UNDERT AKING WHERE THERE IS HARDLY ANY CHANCE OF HAVING ANY UNDISCLOSED TURNOVE R. WE, THEREFORE, UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) E STIMATING THE INCOME OF RS.3,94,232/- AND DISMISS THIS APPEAL OF THE REV ENUE. 8. IN HIS CROSS OBJECTION, THE ASSESSEE HAS MERELY SUPPORTED THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) ESTIMATING H IS BUSINESS INCOME BY APPLYING THE NET PROFIT RATE OF 10% ON THE HIGHER T URNOVER AS DECLARED IN THE PROFIT & LOSS ACCOUNT FILED ALONG WITH THE RETU RN IN RESPONSE TO NOTICE UNDER SECTION 148. SINCE THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) GIVING RELIEF TO THE ASSESSEE ON THIS ISSUE HAS ALR EADY BEEN UPHELD BY US WHILE DISPOSING OF THE APPEAL OF THE REVENUE, THE C ROSS OBJECTION FILED BY I.T.A. NO. 180/KOL./2013 ASSESSMENT YEAR: 2006-2007 & C.O. NO. 31/KOL/2013 (IN ITA NO. 180/KOL/2013) ASSESSMENT YEAR: 2006-2007 PAGE 9 OF 9 THE ASSESSEE HAS BECOME INFRUCTUOUS AND THE SAME IS ACCORDINGLY DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE AS WELL AS THE CROSS OBJECTION OF THE ASSESSEE BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON DECEMBER 16, 2015. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER KOLKATA, THE 16 TH DAY OF DECEMBER, 2015 COPIES TO : (1) INCOME TAX OFFICER, WARD-1, HALDIA, BASUDEVPUR, KHANCANCHAK, HALDIA, PURBA MEDINIPUR-721 602 (2) SHRI GOUR HARI DEBDAS, S-17 & 18, HALDIA INDUSTRIAL ESTATE, DURGACHAK, HALDIA, PURBA MEDINIPUR-721 602 (3) COMMISSIONER OF INCOME-TAX (APPEALS)-XXXIII, K OLKATA (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.