Prakash Chandra Baral, Khurda V. ITO, Khurda Ward, Khurda

ITA 181/CTK/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7575 (ITAT-CUTTACK)
• Duration Of Justice: 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 10-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: S K JENA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO. 181/CTK/2016 ASSESSMENT YEAR : 2012 - 2013 PRAKASH CHANDRA BARAL, AT: KANPUR, PO: MALIPADA, KHURDA. VS. ITO, KHURDA WARD, KHURDA. PAN/GIR NO. ANMPB 5066 E (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI S.K.JENA, AR REVENUE BY : SHRI D.K.PRADHAN , DR DATE OF HEARING : 8 /11 / 2016 DATE OF PRONOUNCEMENT : 8 /11 / 2016 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 1, BHUBANESWAR , DATED 18.2.2016 , FOR THE ASSESSMENT YEAR 2012 - 2013. 2. AT THE OUTSET, LD A.R. OF THE ASSESSEE SUBMITTED THAT THE ONLY EFFECTIVE GROUND WHICH HE WANTED TO PRESS IN THE PRESENT APPEAL WAS GROUND NO.2, WHICH READS A S UNDER: THAT THE LD AO HAS ERRED IN LAW AND IN FACT BY MAKING THE ASSESSMENT BASED ON ESTIMATE IN WHICH HE HAS ESTIMATED THE TOTAL INCOME AT RS.41,60,410/ - WHICH IS @ 8% OF TURNOVER AND REJECTING THE BOOKS OF ACCOUNT AND THEREBY CREATING TAX DEMAND, WHIC H IS CONTRARY TO THE EVIDENCE ON RECORD AND RULES, HENCE THE SAME IS LIABLE TO BE DELETED. 2 ITA NO. 181/CTK/2016 ASSESSMENT YEAR :2012 - 2013 3. HE SUBMITTED THAT THE ASSESSEE DERIVES INCOME FROM RETAIL BUSINESS OF IMFL. THE ASSESSING OFFICER REJECTED THE BOOK RESULTS OF THE ASSESSEE AND ESTIMATED THE I NCOME AT 8% OF THE GROSS BUSI NESS RECEIPTS OF THE ASSESSEE OF RS.5,20,05,141 AND ASSESSED THE INCOME OF THE ASSESSEE AT RS.41,60,411/ - . HE SUBMITTED THAT THE ESTIMATION OF INCOME OF THE ASSESSEE AT 8% I S MUCH HIGHER AS COMPARED TO THE ACCEPTED PAST RATE OF NET PROFIT BY THE DEPARTMENT IN THE CASE OF THE ASSESSEE ITSELF. HE FILED A CHART SHOWING THAT THE NET PROFIT RATE OF 2.13% WAS ACCEPTED IN ASSESSMENT YEAR 2009 - 2010, NET PROFIT RATE OF 1.79% WAS ACCEPTED IN A.Y. 2010 - 2011 AND NET PROFIT RATE OF 1.22% WAS ACCEPTED IN ASSESSMENT YEAR 2011 - 2012. HE SUBMITTED THAT IN THE YEAR UNDER APPEAL, THE NET PROFIT RATE IS AT 1.28%. IT WAS, THEREFORE, HIS PRAYER THAT THE INCOME OF THE ASSESSEE IN THE PRESENT YEAR SHOULD BE ESTIMATED AT 1.5%. HE ALSO RELIED ON THE DECISION OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF BABUNI KUMAR PRUSTY VS ITO (ITA NO .338/CTK/2014: AY: 2010 - 2011) ORDER DATED 16.10.2014 AND SUBMITTED IN RETAIL TRADING OF IMFL , THE TRIBUNAL HAS ESTIMATED THE NET PROFIT RATE AT 1% OF THE GROSS RECEIPTS AND HELD IT TO BE FAIR AND REASONABLE. 4. ON THE OTHER HAND, LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 5. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASS ESSING OFFICER REJECTED THE BOOK 3 ITA NO. 181/CTK/2016 ASSESSMENT YEAR :2012 - 2013 RESULTS OF THE ASSESSEE AND ESTIMATED THE NET PROFIT RATE AT 8% OF GROSS SALE RECEIPTS FROM IMFL OF RS.5,20,05,141/ - AND ESTIMATED THE INCOME OF THE ASSESSEE AT RS.41,60,411/ - IN PLACE OF RS.6,66,400/ - SHOWN BY THE ASSESSEE. 6. ON APPEAL, LD CIT (A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 7. THE REJECTION OF BOOK RESULTS BY THE ASSESSING OFFICE R IS NOT CHALLENGED BY THE ASSESSEE BEFORE THE TRIBUNAL. THE ONLY GRIEVANCE OF THE ASSESSEE IS THAT ESTIMATION OF NET PROFIT @ 8% IS MUCH HIGHER AS COMPARED TO PAST ACCEPTED RESULTS OF THE ASSESSEE, WHICH RANGES FROM 2.13% TO 1.22% FROM ASSESSMENT YEARS 2 009 - 2010 TO 2011 - 12. FURTHER, IT IS ALSO THE CONTENTION OF LD A.R. OF THE ASSESSEE THAT THIS BENCH OF THE TRIBUNAL IN THE CASE OF BABUNI KUMAR PRUSTY(SUPRA), HAS HELD THAT NET PROFIT RATE OF 1% IS FAIR AND REASONABLE IN RETAIL TRADE OF IMFL. 8. AFTER CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE OF THE ASSESSEE, I FIND THAT THE NET PROFIT RATE OF 2.13% SHOWN BY THE ASSESSEE ITSE LF HAD BEEN ACCEPTED U/S.143(1) OF THE ACT IN A.Y. 2009 - 2010, NET PROFIT RATE @ 1.79% HAD BEEN ACCEPTED U/S.143(1 ) OF THE ACT FOR A.Y. 2010 - 2011 AND NET PROFIT RATE @ 1.22% HAS ALSO BEEN ACCEPTED U/S. 143(1) IN A.Y. 2011 - 2012 IN THE CASE OF THE ASSESSEE. THEREFORE, I AM OF THE CONSIDERED VIEW THAT IT WOULD BE JUST AND FAIR TO ESTIMATE THE NET PROFIT OF THE ASSESSEE FOR THE YEAR UNDER APPEAL @ 2% OF THE GROSS SALE PROCEEDS FROM RETAIL TRADE 4 ITA NO. 181/CTK/2016 ASSESSMENT YEAR :2012 - 2013 OF IMFL. I, THEREFORE, MODIFY THE ORDERS OF LOWER AUTHORITIES AND ORDER ACCORDINGLY. THUS, GROUND OF APPEAL IS PARTLY ALLOWED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCE D IN THE OPEN COURT ON 8 /11 /2016 IN THE PRESENCE OF PARTIES. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 8 /11 /2016 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, ASST.REGISTRAR, ITAT, CUTTACK 1. THE APPELLANT : PRAKASH CHANDRA BARAL, AT: KANPUR, PO: MALIPADA, KHURDA 2. THE RESPONDENT: ITO, KHURDA WARD, KHURDA. 3. THE CIT(A) - 1, BHUBANESWAR 4. CIT , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//