K Madhan Rao, Ganjam V. ACIT, Berhampur

ITA 200/CTK/2012

• Counselvise Citation: 20022114 RSA 2012
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 08-08-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 21-03-2012
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: D K SETH

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , HONBLE SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER / I.T.A.NO. 200/CTK/2012 ( / ASSESSMENT YEAR 2007 - 08) K.MADHAB RAO, VENKASTESWARA STREET,KABISURYANAGAR (GANJAM) PAN: AFHPR 8257 C - - - VERSUS - ASST.COMMISSIONER OF INCOME - TAX , BERHAMPUR CIRCLE, BERHAMPUR. ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI D.K.SETH, AR / FOR THE RESPONDENT: / SHRI . S.C.MOHANTY, DR / DATE OF HEARING: 08.08.20 12 / DATE OF PRONOUNCEMENT: 14.08.2012 / ORDER . . , , SHRI K.K.GUPTA, ACCOUNTANT MEMBER . IN THE PRESENT APPEAL, THE ASSESSEE AGITATES ESTIMATION OF NET PROFIT @5% IN THE ASSESSMENT MADE U/S.143(3)/147 OF THE I.T.ACT AND CONFIRMED BY THE LEARNED CIT(A). 2. THE BRIEF FACTS ARE THAT THE ASSESSEE IS A DEALER IN INDIAN MADE FOREIGN LIQUOR (IMFL) FILED ITS RETURN OF INCOME DECLARING INCOME OF 4,78,835 WHICH WAS SUBJECTED TO SCRUTINY U/S.143(3)/147. THE ASSESSING OFFICER I NVOKED THE PROVISIONS OF SECTION 145(3) IN ORDER TO SUBSTANTIATE THAT THE ASSESSEE HAS NOT MAINTAINED BOOKS OF ACCOUNT FOR CLAIMING THE EXPENSES WITHOUT UNRELIABLE EVIDENCE. HE ESTIMATED THE NET PROFIT OF GROSS TURNOVER OF 1.66 CRORES AT 5% WHICH WAS APPE ALED AGAINST BEFORE THE FIRST APPELLATE AUTHORITY. THE LEARNED CIT(A) DECLINED TO ENTERTAIN THE ASSESSEES CONTENTION FOR VALIDITY OF PROCEEDINGS FOR RE - ASSESSMENT U/S.147 BUT CONSIDERED THAT THE I.T.A.NO. 200/CTK/2012 2 BOOKS OF ACCOUNT WERE NOT PRODUCED AND NEVER WERE PRODUCED D URING THE APPELLATE PROCEEDINGS. THE ASSESSEE RELIED UPON A CASE PASSED BY THE ITAT,CUTTACK BENCH WHEN AGAINST 1.4% DISCLOSED BY THE ASSESSEE THE PROFIT INITIALLY WAS ESTIMATED BY THE ASSESSING AUTHORITIES AT 5% WAS REDUCED TO 3.5% BY THE TRIBUNAL. THE ASS ESSEE SUBMITTED BEFORE THE LEARNED CIT(A) THAT THE ASSESSEE DISCLOSED 3.4% THEREFORE SHOULD BE ACCEPTED INSTEAD OF ENHANCING THE SAME TO 5%. THE LEARNED CIT(A) NOT CONSIDERING THE OVERALL FACTS HELD THE ORDER OF THE ASSESSING OFFICER REQUIRE D NO INTERFEREN CE. HOWEVER, HE DIRECTED THE ASSESSING OFFICER TO ALLOW THE DEDUCTION CLAIMED U/S.80C AS PER THE PROVISIONS OF THE I.T.ACT. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THE FACTS BROUGHT ON RECORD BY THE AUTHORITIES BELOW AND FURTHER IN SUPPORT HE P RODUCED THE TRIBUNALS ORDER WHICH WAS PLACED BEFORE THE LEARNED CIT(A) AS WELL. 4. THE LEARNED DR SUPPORTED THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW AND THE MATERIAL AVAILABLE ON RECORD. THE REJECTION OF BOOKS OF ACCOUNT WAS ON THE BASIS AS , WE ARE INCLINED TO HOLD THAT THE COST OF SALES FOR THE IMPUGNED ASSESSMENT YEAR HA D INCREASED WHICH RESULTED IN THE ASSESSING OFFICER RESORTING TO ESTIMATE WHEN THE VO UCHERS WERE NOT PRODUCED BEFORE IT ON ISSUE OF NOTICE U/S.142(1). THE CLAIM THAT THE ASSESSEE HAD DECLARED 3.34% NET PROFIT THEREFORE WAS INCREASED TO 5% WITHOUT ANY BASIS INSOFAR AS NO SPECIFIC DEFECT WAS POINTED OUT BY THE ASSESSING OFFICER TO ESTIMATE T HE SAME AT 5%. THE LEARNED CIT(A) HAS ALSO NOT GIVEN ANY REASON FOR CONFIRMING THE SAME INSPITE OF A SIMILAR PLACED DEALER IN IMFL, THE TRIBUNAL HA D HELD 3 .5% AS REASONABLE. THE ASSESSMENT YEAR IN THAT CASE I.T.A.NO. 200/CTK/2012 3 WAS 1997 - 98 WHEN THE IMPUGNED ASSESSMENT YEAR IS 2007 - 08 WHEN THE COST OF SALE HAS DEFINITELY INCREASED. THE COST OF SALES LEADS TO A HIGHER TURNOVER ON WHICH THE NP IS COMPUTED THEREFORE TO MEET THE ENDS OF JUSTICE, WE DIRECT THE ASSESSING OFFICER TO ADOPT 4% OF THE TURNOVER AS DECLARED BY THE ASSESSEE AS AGAINST 3.34% DECLARED BY THE ASSESSEE. WE DIRECT ACCORDINGLY. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. S D/ - S D/ - ( . . . ) , (K.S.S.PRASAD RAO), JUDICIAL MEMBER ( . . ) , , (K.K.GUPTA), ACCOUNTANT MEMBER. ( ) DATE: 14.08.2012 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : K.MADHAB RAO, VENKASTESWARA STREET,KABISURYANAGAR (GANJAM) 2 / THE RESPONDENT: ASST.COMMISSIONER OF INCOME - TAX, BERHAMPUR CIRCLE, BERHAMPUR. 3 . / THE CIT, 4 . ( )/ THE CIT(A), 5 . / DR, CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY, / BY ORDER, APPENDIX XVII SEAL TO BE AFFIXED ON THE ORDER SHEET BY THE SR. P.S./P.S. AFTER DICTATION IS GIVEN 1. DATE OF DICTATION 10 .8.2012 . 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 13.08.,2012 OTHER MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.... 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S . 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER ................ 9. DATE OF DESPATCH OF THE ORDER .. ( ), (H.K.PADHEE), SENIOR.PRIVATE SECRETARY.