S A Rangaraj, Coimbatore V. ITO, Coimbatore

ITA 186/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64189 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 23-08-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 30-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K RAJAGOPAL
• Section: 143(3); 133A

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL B BENCH, CHENNAI. BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER & SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER I.T.A. NO. 186/MDS/2012 ASSESSMENT YEAR : 2008-09 SHRI S.A. RANGARAJ, PROP: R S AGENCIES, VINAYAGAR KOIL ST., KOPPANURPUDUR, KAPPALANGARAI POST, POLLACHI TALUK, COIMBATORE 642 120. [PAN: AEYPR7166A] VS. THE INCOME TAX OFFICER, WARD I(2), # 112, ALAGAPPA LAYOUT, POLLACHI, COIMBATORE 642 001. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANANDD BABUNATH, C.A. RESPONDENT BY : SHRI K. RAJAGOPAL, JCIT DATE OF HEARING : 23.08.2012 DATE OF PRONOUNCEMENT : 23.08.2012 ORDER PER CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) II, COIMBATORE DATED 28.11.2011 IN ITA NO. 683/09-10 FOR THE ASSESSMENT YEAR 2008-09. SHRI ANANDD BABUNATH, C.A. REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI K.RAJAGOPAL, JCIT REPRESENTED ON BEHALF OF THE REVENUE. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.186 186186 186/M/ /M/ /M/ /M/12 1212 12 2 2. THE ONLY GRIEVANCE IN THE GROUNDS OF APPEAL OF THE ASSESSEE IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN D IRECTING THE ASSESSING OFFICER IN ESTIMATING THE PROFITS AT THE RATE OF 2. 5% OF THE TURNOVER. 3. FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN I NDIVIDUAL AND ENGAGED IN THE BUSINESS OF TRADING IN COCONUT COPRA FILED H IS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-09 ON 30.09.2008 ADMITTING TOT AL INCOME OF ` .2,42,340/-. LATER A SURVEY UNDER SECTION 133A WAS CONDUCTED ON 25.03.2009 AND THE CASE WAS TAKEN UP FOR SCRUTINY A ND ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) ON 24.09.2009 DETERM INING THE INCOME OF THE ASSESSEE AT ` .23,78,792/-. WHILE COMPLETING THE ASSESSMENT, THE ASSESSING OFFICER MADE AN ADDITION OF ` .21,36,452/- BY ESTIMATING THE NET PROFIT OF THE ASSESSEE AT 3% OF THE TURNOVER. 4. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPE ALS) ESTIMATED THE NET PROFIT AT 2.5% OF THE TURNOVER INSTEAD OF 3% AD OPTED BY THE ASSESSING OFFICER. 5. THE COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS SUPPLYING ITS COCONUT ONLY TO MARICO LTD. AND IT HA D TO FULFILL THE REQUIREMENT OF QUALITY AND SUPPLY AS PER THE AGREED TERMS WITH CUSTOMER AND THIS LEAVES THE ASSESSEE A THIN MARGIN OF PROFIT. THE ASSESSEE HAD RETURNED NET PROFIT AT 1.8% DURING THIS ASSESSMENT YEAR 2008-09 WHICH IS R EASONABLE IN THE TYPE I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.186 186186 186/M/ /M/ /M/ /M/12 1212 12 3 OF BUSINESS THE ASSESSEE IS DOING. THE COUNSEL SUBM ITS THAT THE ASSESSING OFFICER COMPARED ASSESSEES BUSINESS WITH THAT OF O THER TWO DEALERS OF SIMILAR PRODUCTS WITHOUT ANY PROPER ANALYTICAL BASI S FOR SUCH COMPARISON. THE ASSESSEE ALSO SUBMITS THAT THE TURNOVER OF THE ASSESSEE IS VERY MUCH HIGHER THAN THE OTHER TWO DEALERS COMPARED BY THE A SSESSING OFFICER AND ALSO THE QUALITY OF THE COMMODITY DEALT WITH BY THE ASSESSEE WHEN COMPARED TO OTHER TWO DEALERS. THEREFORE, THE COUNSEL SUBMIT S THAT IT IS NOT A FAIR COMPARISON MADE BY THE ASSESSING OFFICER. 6. THE COUNSEL FOR THE REVENUE SUPPORTED THE ORDER S OF LOWER AUTHORITIES. 7. WE HAVE HEARD BOTH SIDES, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS PLACED BEFORE US. THE ASSESSING OFFICER A DOPTED 3% AS NET PROFIT OF THE ASSESSEE MAINLY ON THE GROUND THAT ON VERIFI CATION OF THE BILLS AND VOUCHERS, IT SHOWED THAT THEY DID NOT CONTAIN ANY I DENTIFIABLE AND COMPLETE ADDRESS OF PERSONS TO WHOM PAYMENTS WERE MADE ON AC COUNT OF PURCHASE AND ALSO ON ACCOUNT OF CERTAIN EXPENSES DEBITED TO THE PROFIT AND LOSS ACCOUNT. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DIRECT THE ASSESSING OFFICER TO ADOPT NET PROFIT AT THE RATE OF 1.75% OF THE TURNOVER INSTEAD OF 3% ADOPTED BY THE ASSESSING OFF ICER AS INCOME OF THE ASSESSEE. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.186 186186 186/M/ /M/ /M/ /M/12 1212 12 4 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON THURSDAY, THE 23 RD AUGUST, 2012 AT CHENNAI. SD/- SD/- (ABRAHAM P. GEORGE) ACCOUNTANT MEMBER (CHALLA NAGENDRA PRASAD) JUDICIAL MEMBER CHENNAI, DATED, THE 23.08.2012 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.