Chitta Ranjan Satapathy, Cuttack V. ITO, Ward-2, Dhenkanal

ITA 20/CTK/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7183 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-03-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 18-01-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D.K.PRADHAN
• Keywords: Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO. 20 /CTK/2016 ASSESSMENT YEAR : 2011 - 12 SRI CHITTA RANJAN SATPATHY, PROP. M/S. HINGULA HARDWARE & PAINTS,ITI CHAK, TALCHER, ANGU L . VS. ITO, WARD - 2, DHENKANAL PAN/GIR NO. AMWPS 8401 M (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI S.N.SAHU, AR REVENUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 07 /03 / 2017 DATE OF PRONOUNCEMENT : 07/03 / 2017 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 2, BHUBANESWAR , DATED 2.11.2015 , FOR THE ASSESSMENT YEAR 2011 - 12 . 2. AT THE TIME OF HEARING, LD A.R. OF THE ASSESSEE SUBMITTED THAT THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE LD CIT(A) WAS NOT JUSTIFIED IN C ONFIRMING THE ACTION OF THE ASSESSING OFFICER IN ESTIMATING THE INCOME BY APPLYING THE RATE OF 8% ON THE TURNOVER OF RS.55,49,636/ - . 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND DERIVES INCOME FROM BUSINESS O F SALES OF PAINTS WITH REPAIRING AND PAINTING 2 ITA NO. 20/CTK/2016 ASSESSMENT YEAR :2011 - 12 OF VEHICLES. DURING THE YEAR, THE ASSESSEE HAD SHOWN TURNOVE R OF RS. 45,22,772/ - AND ESTIMATED THE INCOME FROM THE ABOVE BUSINESS AT RS . 3,61,821/ - BY APPLYING NET PROFIT RATE AT 8% TO THE TURNOVER. HOWEVE R, THE ASSESSING OFFICER FOUND THAT THE TOTAL DEPOSITS OF THE YEAR IN A/C N O. 077301500043 OF THE ASSESSEE WITH ICICI BANK, TALCHER WAS RS. 58,84,900/ - . REGARDING THE SOURCE OF DEPOSIT, THE ASSESSEE SUBMITTED THAT IT WAS OUT OF SALE PROCEEDS OF THE YEAR AND THAT THE PAYMENTS WERE MADE TO SUPPLIERS FROM THE ABOVE ACCOUNT THROUGH DEMAND DRAFT AND THAT CASH DEPOSITS WERE MADE TO AVOID EXCESS DEMAND DRAFT CHARGES. THE ASSESSING OFFICER ESTIMATED THE TURNOVER OF THE ASSESSEE AT RS. 55,49,636/ - AFTER CONSIDER ING DEPOSIT OF RS. 3,35,264/ - AS MATURITY VALUE OF LIC AND CREDITED TO THE ACCOUNT ON 10.04.2010 AND THEN APPLIED THE NET PROFIT RATE AT 8% AND ESTIMATED THE INCOME FROM THE BUSINESS AT RS. 4,43,971/ - . 4. ON APPEAL BEFORE THE CIT(A), THE ASSESSEE SUBMITTE D THAT THE ASSESSING OFFICER SHOULD HAVE CONSIDERED THE DEPOSIT OF RS.3,48,522/ - ON 5.3.2011 IN THE ABOVE ACCOUNT, WHICH WAS THE MATURITY VALUE RECEIVED FROM LIC. 5. THE CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE OBSERVED THAT THE TURNOVER OF RS.45,22,772/ - SHOWN BY THE ASSESSEE WAS NOT VERIFIABLE FROM SALE BILLS. THE ASSESSEE HAS SHOWN INCOME FROM THE BUSINESS AT RS. 3,61,821/ - BY APPLYING RATE AT 8% OF THE TURNOVER. IN REPLY TO SOURCE OF DEPOSITS IN THE BANK ACCOUNT, THE ASSESSEE HAS STATED THE SAME WAS NOT TURNOVER OF THE ASSESSEE. THE ASSESSEE HAS ACCEPTED THE ACTION OF 3 ITA NO. 20/CTK/2016 ASSESSMENT YEAR :2011 - 12 THE ASSESSING OFFICER IN TREATING THE TURNOVER OF RS. 55 , 49 , 636/ - I.E, TOTAL DEPOSIT IN THE BANK ACCOUNT LESS LIC CREDITED TO THE ACCOUNT. THE ASSESSING OFFICER WAS LIBERAL ENOUGH TO APPLY NET PROFIT RATE AT 8% TO THE UNDERSTATED TURNOVER OF RS. 10,26,864/ - AND MADE ADDITION OF RS. 82,15 0/ - ONLY, THAT TOO WHEN THE ASSESSEE HAS HIMSELF APPLIED NET PROFIT RATE AT 8% TO THE TURNOVER DISCLOSED BY HIM. THEREFORE, IN THE GIVEN FA CTS AND CIRCUMSTANCES OF THE CASE, THE STATEMENT OF THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE TO APPLY 5% TO THE TURNOVER ESTIMATED BY THE ASSESSING OFFICER ON THE BASIS OF PRESUMPTIVE RATE OF TAXATION PRESCRIBED U/S.44AF OF THE ACT WAS GROSSLY MISPL ACED AND HENCE, DISMISSED THE GROUND OF THE ASSESSEE. 6. BEFORE ME, LD AUTHORISED REPRESENTATIVE OF THE ASSESSEE FILED BANK STATEMENT AND DEMONSTRATED THEREFROM THAT RS.3,48,522/ - WAS THE MATURITY PROCEED OF FIXED DEPOSIT NO.077314000181 CREDITED ON 5.3.2011. FURTHER, FROM THE BANK STATEMENT OF ICICI BANK, HE POINTED OUT THAT ON 8.2.2011, THERE WAS CREDIT OF RS.1,90,000/ - ON ACCOUNT OF UTI MATURITY VALUE. IT WAS, THEREFORE, HIS PRAYER THAT THE PROFIT OF THE ASSESSEE SHOULD BE ESTIMAT ED BY APPLYING T HE RATE OF 8% TO RS.50,11,114/ - AS TURNOVER OF THE ASSESSEE AFTER ALLOWING CREDIT OF RS.3,48,522/ - AND RS.1,90,000/ - FROM THE TURNOVER ESTIMATED BY THE ASSESSING OFFICER AT RS.55,49,636/ - . 7. ON THE OTHER HAND, LD DEPARTMENTAL REPRESENTATIVE COULD NOT CONT ROVERT THE ABOVE SUBMISSION MADE BY THE LD AUTHORISED REPRESENTATIVE OF THE ASSESSEE. 4 ITA NO. 20/CTK/2016 ASSESSMENT YEAR :2011 - 12 8. AFTER HEARING THE RIVAL SUBMISSIONS AND PERUSING THE MATERIALS AVAILABLE ON RECORD, I FIND THAT THE TURNOVER OF RS.55,49,636/ - ESTIMATED BY THE ASSESSI NG OFFICER ON TH E BASIS OF DEPOSIT S IN ICICI BANK IS INCLUSIV E OF MATURITY PROCEEDS OF DEPOSITS OF RS.3,48,522/ - CREDITED ON 5.3.2011 AND THE MATURITY PROCEEDS OF UTI OF RS.1,90,000/ - CREDITED ON 8.2.2011. THUS SUBMISSION OF THE LD AUTHORISED REPRESENTATIVE OF THE ASS ESSEE HAS NOT BEEN CONTROVERTED BY THE LD DEPARTMENTAL REPRESENTATIVE DURING THE COURSE OF HEARING. I, THEREFORE, SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND DIRECT THE ASSESSING OFFICER TO TAKE THE TURNOVER OF THE ASSESSEE AT RS.50,11,114/ - AND DETERMIN E THE NET INCOME OF THE ASSESSEE BY APPLYING THE RATE OF 8% TO THE SAID TURNOVER. THUS GROUND OF THE ASSESSEE IS PARTLY ALLOWED. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRO NOUNCED IN THE OPEN COURT ON 07/03 /2017 IN THE PR ESENCE OF PARTIES. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 07/03 /2017 B.K.PARIDA, SPS 5 ITA NO. 20/CTK/2016 ASSESSMENT YEAR :2011 - 12 COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : SRI CHITTA RANJAN SATPATHY, PROP. M/S. HINGULA HARDWARE & PAINTS,ITI CHAK, TALCHER, ANGU L 2. THE RESPONDENT. ITO, WARD - 2, DHENKANAL 3. THE CIT(A) - 2, BHUBANESWAR. 4. PR.CIT - 2, BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//