The ACIT- 1(1), Bhopal V. Shri Harmindra Singh Bagga, Bhopal

ITA 190/IND/2013

• Counselvise Citation: 19022714 RSA 2013
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 04-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: ANIL KHAA
• Keywords: Business income; Opportunity of being heard
• Section: 44AD

Judgement Text

1 INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.190/IND/2013 A.Y. 2009-10 ACIT-1(1), BHOPAL :: APPELLANT VS HARMINDER SINGH BAGGA, BHOPAL PAN ADKPB 5574 D :: RESPONDENT REVENUE BY SHRI R.A. VERMA ASSESSEE BY SHRI ANIL KHABYA DATE OF HEARING 31.7.2013 DATE OF PRONOUNCEMENT 2 . 8 . 2013 O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 7 TH DECEMBER, 2012 OF THE LD. CIT(A)-I, BHOPAL. THE FI RST AND SECOND GROUND RAISED BY THE REVENUE IS THAT THE LEARNED FIRST APPELLATE AUTHORITY DID NOT FOLLOW THE 2 PROVISIONS OF SECTION 250(1) AND 250(2) OF THE INCO ME TAX ACT BY NOT GIVING A NOTICE AND OPPORTUNITY OF BEING H EARD, RESPECTIVELY, TO THE ASSESSING OFFICER. 2. THE CRUX OF ARGUMENTS ON BEHALF OF THE REVENUE, ADVANCED BY SHRI R.A. VERMA, LEARNED SENIOR DR, IS THAT THERE IS VIOLATION OF PROVISION OF SECTION 250(1) AND 250(2) OF THE INCOME TAX ACT, FIRSTLY AS NO NOTICE OF HEARIN G WAS PROVIDED TO THE ASSESSEE AND SECONDLY NO OPPORTUNITY OF BEING HEARD WAS EXTENDED TO THE LEARNED ASSESSING OFF ICER. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESS EE DEFENDED THE IMPUGNED ORDER BY SUBMITTING THAT IN TH E NORMAL COURSE THE NOTICES ARE ISSUED BUT THE ASSESSI NG OFFICER DID NOT APPEAR. IT WAS ALSO PLEADED THAT THE LEA RNED CIT(A) DECIDED THE APPEAL ON MERIT AND HAS CO-TERMINUS POWER WITH THAT OF THE ASSESSING OFFICER. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE 3 THAT THE ASSESSMENT ORDER DATED 19.12.2011 WAS CHALLENGED BEFORE THE LEARNED FIRST APPELLATE AUTHORITY AND THE APPEAL WAS INSTITUTED ON 18.1.2012. THE APPEAL WAS FIXED FOR HEARING AND WAS HEARD BY THE LEARNED FIRST APPELLATE AUTHORITY AND CONSEQUENT ORDER WAS PASSED ON 7 TH DECEMBER, 2012. ADMITTEDLY, IT IS NOT ON RECORD I N THE IMPUGNED ORDER THAT ANY NOTICE WAS SENT TO THE ASSESSI NG OFFICER. HOWEVER, THE ASSERTION OF THE LEARNED COUNS EL FOR THE ASSESSEE THAT IN NORMAL COURSE NOTICE IS ISSUED TO THE ASSESSING OFFICER, WAS NOT CONTROVERTED BY THE REVEN UE, THEREFORE, THE SUBMISSION OF THE LEARNED SENIOR DR I S NOT SUBSTANTIATED WITH ANY EVIDENCE. AT THE SAME TIME, THE LEARNED CIT(A) HAS CO-TERMINUS POWER WITH THAT OF THE ASSESSING OFFICER. OUR VIEW IS SUPPORTED BY THE DE CISION FROM HONBLE APEX COURT IN CIT VS. KANPUR COAL SYNDIC ATE (1964) 53 ITR 225 (SC), RATIO LAID DOWN IN CIT VS. K. S. DATTATREYA (2011) 197 TAXMAN 151 (KARN.), V. SUBRAMANIA 4 AYYAR VS. CIT; 113 ITR 685 (KER.), THEREFORE, KEEPIN G IN VIEW THE PRINCIPLE OF QUICK JUSTICE AND THE JUSTICE DELAYE D IS JUSTICE DENIED, WE FIND NO MERIT IN THESE GROUNDS. BOTH THESE GROUNDS ARE, THEREFORE, DISMISSED. 4. THE NEXT GROUND RAISED BY THE REVENUE PERTAINS TO DELETING THE ADDITION OF RS. 2,28,500/- MADE BY THE L EARNED ASSESSING OFFICER AFTER REJECTING THE BOOK RESULTS. THE CRUX OF ARGUMENTS ON BEHALF OF THE REVENUE IS IN SUPPORT T O THE ADDITION/ASSESSMENT ORDER WHEREAS THE LEARNED COUNSEL FOR THE ASSESSEE DEFENDED THE IMPUGNED ORDER. 4.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT TH E IMPUGNED ADDITION WAS MADE BY THE LEARNED ASSESSING OFFICER ON THE PRESUMPTION THAT THE ASSESSEE SHOWED CONTRACT RECEIPTS OF RS. 121 LACS AND NO BOOKS OF ACC OUNTS ARE MAINTAINED, THUS NET PROFIT RATE OF 15% WAS APPLIED TO ESTIMATE THE BUSINESS PROFIT BY FOLLOWING THE ORDER OF THE 5 EARLIER NET PROFIT RATE. THUS, THE DIFFERENCE IN PRO FIT AT RS. 2,28,500/- WAS ADDED. BEFORE THE LEARNED CIT(A) IT WAS EXPLAINED BY THE ASSESSEE THAT THE TOTAL RECEIPTS INCLU DE THE RECEIPT OF RS.78 LACS WHICH HAVE BEEN RECEIVED BY CHE QUE FROM SMT. ARCHNA MISHRA AGAINST SALE OF SPACE IN RESIDENTIAL CUM COMMERCIAL COMPLEX AND RS. 5 LACS AGAINST STAMP DUTY EXPENSES, RS. 26 LACS FOR FINISHING WORK AN D RS.47 LACS AGAINST REGISTRY OF STRUCTURE. THUS, THES E ARE GROSS BUSINESS RECEIPTS ON WHICH ESTIMATED PROFIT WAS DISCLOSED. THE BOOK PROFIT SHOWN BY THE ASSESSEE WAS ABOUT 13% AGAINST WHICH THE LEARNED ASSESSING OFFICER APPLIED 15%. WE FURTHER FIND THAT BEFORE THE LEARNED CIT(A) FOLLOWING CASES WERE RELIED UPON :- (I) SUNIL SIDDHARTH BHAI VS CIT 156 ITR 509 (SC) (II) DHUN DABABHOY KAPADIA VS. CIT; 63 ITR 651 (SC) (III) PARIMISETTI SEETHERAMAMMA VS. CIT; 57 ITR 532 (SC ) (IV) CIT VS. K.Y. PILUAH & SONS; 63 ITR 411 (SC) (V) MAN MOHAN SADANI VS. CIT; 304 ITR 52 (MP) 6 (VI) SURESH CHAND TALERA VS. UOI; 282 ITR 341(MP) (VII) MAN MOHAN SADANI VS. CIT; 304 ITR 52 (MP) (VIII)CIT VS.GURUBACHHAN SINGH J. JUNEZA; 302 ITR 63( GUJ) THE LEARNED CIT(A) CONSIDERED THE SUBMISSIONS AND THE DECISIONS RELIED UPON BY THE ASSESSEE AND ALSO THE PROVISIONS OF SECTION 44AD OF THE ACT. CONSIDERING THE FACTS, THE LEARNED CIT(A) AFFIRMED THE NET PROFIT RATE OF 13% WHICH IS UNDER CHALLENGE BEFORE THE TRIBUNAL. 4.2 WE FIND THAT THE HONBLE JURISDICTIONAL HIGH COU RT IN THE CASE OF MAN MOHAN SADANI (SUPRA) HELD THAT THE ENTIRE SALE PROCEEDS CANNOT BE REGARDED AS PROFIT OR TR EATED AS UNDISCLOSED INCOME OF THE ASSESSEE. ON THE CONTRAR Y, IT IS THE NET PROFIT RATE WHICH HAS TO BE ADOPTED IN SUCH CASES. WHILE COMING TO THIS CONCLUSION, THE HONBLE HIGH COURT CONSIDERED THE DECISION PRONOUNCED IN CIT VS. BALCHAND AJITKUMAR (2003) 263 ITR 610 (MP) AND CIT VS. PRESIDENT INDUSTRIES (2002) 258 ITR 654 (GUJ.) (PARA 4). 7 RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT, WE AFFIRM THE CONCLUSION D RAWN IN THE IMPUGNED ORDER ON THE ISSUE IN HAND. THIS GRO UND OF THE REVENUE IS, THEREFORE, HAVING NO MERIT, CONSEQUEN TLY, DISMISSED. 5. THE LAST GROUND PERTAINS TO DELETING THE ADDITION O F RS.28 LACS MADE ON ACCOUNT OF ALLEGED UNACCOUNTED RECEIPTS ON THE SALE OF PROPERTY. THE CRUX OF ARGUME NTS ON BEHALF OF THE REVENUE IS IN SUPPORT TO THE ASSESSMENT ORDER/ADDITION WHEREAS THE LEARNED COUNSEL FOR THE ASSESSEE DEFENDED THE IMPUGNED ORDER. 5.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE THAT PURSUANT TO SEARCH PROCEEDINGS IN THE CASE OF SHRI PUSHPENDRA MISHRA IT WAS NOTICED THAT HE PURCHASED A STRUCTURED HOUSE FROM THE ASSESSEE THUS SUMMONS WERE ISSUED TO THE ASSESSEE WHEREIN IT WAS EXPLAINED THAT HE 8 SOLD A HOUSE TO SMT. ARCHNA MISHRA WIFE OF SHRI PUSHPENDRA MISHRA IN THE YEAR 2008 FOR RS. 75 LACS. A S PER THE EXPLANATION OF THE ASSESSEE, THE REGISTRY WAS GOT D ONE ON THE AMOUNT OF RS. 47 LACS TO SAVE THE STAMP DUTY BUT THE AGREEMENT WAS DONE FOR RS. 75 LACS, THUS THE DIFFE RENCE OF RS. 28 LACS WAS ADDED TO THE INCOME OF THE ASSESSE E AS SHORT RECEIPT. THE CLAIM OF THE ASSESSEE BEFORE THE L EARNED CIT(A) WAS THAT THE AMOUNT OF RS. 121 LACS INCLUDES RS. 78 LACS WHICH WAS RECEIVED BY CHEQUE FROM SMT. ARCHNA MISHRA AGAINST THE SALE OF THE CONSTRUCTION WHICH INCLU DES RS. 5 LACS AGAINST STAMP DUTY EXPENSES, ETC. THE ASSES SING OFFICER HAS NOT DOUBTED THE VERSION OF THE ASSESSEE T HAT GROSS RECEIPTS WERE TO THE TUNE OF RS. 121 LACS WHI CH INCLUDES RS. 78 LACS RECEIVED FROM SMT. ARCHANA MISHR A WIFE OF SHRI PURHPENDRA MISHRA. THE ASSERTION OF THE ASSESSEE WAS NOT CONTROVERTED BY THE REVENUE. SINCE THE AMOUNT OF RS. 78 LACS WAS RECEIVED THROUGH BANKING 9 CHANNEL, THEREFORE, THE ADDITION MADE ON THIS COUNT M ADE BY THE ASSESSING OFFICER IS BASED ON PRESUMPTION ON LY. IN VIEW OF THESE FACTS, WE FIND NO INFIRMITY IN THE CON CLUSION DRAWN IN THE IMPUGNED ORDER. NO DOUBLE ADDITION IS PERMITTED OF THE SAME AMOUNT. THIS GROUND OF THE REV ENUE IS ALSO HAVING NO MERIT. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LEARNED REPRESENTATIVES OF BOTH THE SIDES ON 31.7.2013. SD SD (R.C.SHARMA) (JOGINDER S INGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 02. 8.2013 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE DN/-3131.7 & 1&2.8