ITO 17(3)(3), MUMBAI V. SIDDHARAM D. KAMBLE, MUMBAI

ITA 2045/MUM/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1780 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 22-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHI RAMA KARTHIKEY S
• Keywords: Additional evidence; TDS
• Section: 44AD; 147; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI G BENCH, MUMBAI BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI PAWAN SINGH, JUDICIAL MEMBER ./ I.T.A. NO. 2045/MUM/2017 ( / ASSESSMENT YEAR : 2011-12) ITO 17(3)(3), AAYAKAR BHAVAN, R.NO. 123 1 ST FLOOR, M.K. ROAD, MUMBAI 400020 / VS. SIDDHARAM D. KAMBLE M/43, SHIV SHAKTI NAGAR, GEN. J. B. MARG, NARIMAN POINT, MUMBAI 400021 ./ ./ PAN/GIR NO. : AICPK7155J ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI ABHI RAMA KARTHIKEY S., SR.D.R. / RESPONDENT BY : NONE / DATE OF HEARING 04/06/2019 !'# / DATE OF PRONOUNCEMENT 06/06/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF IN COME TAX (APPEALS)-28, MUMBAI, (CIT(A) IN SHORT), DATED 02 .12.2016 ARISING IN THE ASSESSMENT ORDER DATED 27.03.2015 PASSED BY THE ASSESSING OFFICER (AO) UNDER S. 144 R.W.S. 147 OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING AY 2011-12. ITA NO. 2045/MUM/17 [ITO VS. SIDDHARAM D. KAMBLE] A.Y. 2011-12 - 2 - 2. THE GROUNDS OF APPEAL RAISED BY REVENUE READ AS UNDER: 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DIRECTING TO DELETE THE ADDITIO N OF RS.1,10,91,114/- U/S.68 OF THE ACT AND IN FURTHER D IRECTING THE AO TO APPLY 10% NP (NET) TO THE SAID RECEIPTS AFTER REJEC TION OF BOOKS SINCE NONE PRODUCED, WITHOUT APPRECIATING THE FACTS THAT (I) DUE TO THE NON-COOPERATIVE AND RECALCITRANT AT TITUDE OF THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS, IN THAT , THE ASSESSEE NEITHER FILED HIS RETURN OF INCOME, NOR CO MPLIED WITH THE STATUTORY NOTICES; THE ASSESSMENT ORDER WA S PASSED U/S.144 OF THE ACT. (II) THE ASSESSEE HAS FAILED TO DISCHARGE THE PRIMA RY ONUS CASE UPON HIM TO PROVE THE SOURCE OF RECEIPTS OF RS.1,10 ,91,114/-. (III) THE ASSESSEES GROSS RECEIPTS DURING THE YEAR EXCEEDED THE LIMITS PRESCRIBED U/S.44AB OF THE ACT, AND ACCORDIN GLY, NOT ONLY WAS THE ASSESSEE REQUIRED TO MAINTAIN HIS BOOK S OF ACCOUNT, BUT ALSO FURNISH AN AUDIT REPORT THEREOF, WHICH THE ASSESSEE HAS FAILED TO DO SO. (IV) THE LD.CIT(A) HAS ERRED IN ADJUDICATING THE IS SUE IN FAVOUR OF THE ASSESSEE BY MERELY RELYING UPON THE SUBMISSI ONS AND EVIDENCES FURNISHED BY THE ASSESSEE, WITHOUT CARRYI NG OUT FURTHER INVESTIGATIONS DURING THE APPELLATE PROCEED INGS. (V) THE LD.CIT(A) OUGHT TO HAVE REMANDED BACK THE M ATTER TO THE FILE OF THE AO FOR CONSIDERING THE ASSESSEES S UBMISSIONS AND EVIDENCES, AND TO CARRY OUT FURTHER INVESTIGATI ONS TO VERIFY THE AUTHENTICITY OF THE ASSESSEES CLAIMS. (VI) THE ADMISSION OF THE ADDITIONAL EVIDENCES BY T HE LD. CIT(A), WITHOUT AFFORDING THE AO AN OPPORTUNITY TO VERIFY T HE SAME IS IN VIOLATION OF RULE 46A OF THE I.T. RULES, 1962. 3. WHEN THE MATTER WAS CALLED FOR HEARING, NONE A PPEARED ON BEHALF OF THE ASSESSEE. ACCORDINGLY, THE MATTER IS PROCEE DED EX PARTE IN THE ABSENCE OF ASSESSEE. 4. LEARNED DR FOR THE REVENUE RELIED UPON THE ORDER OF THE AO. 5. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MAD E ON BEHALF OF THE REVENUE AS WELL AS THE ASSESSMENT ORDER PASSED BY THE AO AND THE APPELLATE ORDER PASSED BY THE CIT(A). IT IS TRUE T HAT ASSESSEE HAS NOT ITA NO. 2045/MUM/17 [ITO VS. SIDDHARAM D. KAMBLE] A.Y. 2011-12 - 3 - PROVIDED THE REQUISITE DETAILS BEFORE THE AO WHICH LED TO CERTAIN ADDITIONS UNDER S.68 OF THE ACT FOR AN AMOUNT OF RS .1,10,91,110/-. HOWEVER, BEFORE THE CIT(A), THE ASSESSEE HAS MADE S UBMISSIONS THAT HE IS A CIVIL CONTRACTOR AND THE RECEIPTS WERE IN T HE COURSE OF EXECUTION OF BUSINESS. THE CLAIM OF ASSESSEE BEING CIVIL CONTRACTOR IS SUPPORTED BY THE TDS DEDUCTION ETC. AS NOTED BY THE CIT(A). HAVING REGARD TO CONSPECTUS OF FACTS, THE CIT(A) ESTIMATED 10% NET PROFIT RATE ON THE GROSS RECEIPT AS ASSESSED INCOME TO MEET THE ENDS OF JUSTICE. WHILE DOING SO, THE CIT(A) OBSERVED AND RIGHTLY SO THAT EX PARTE ASSESSMENT CANNOT BE BASED ON WILD GUESSES OR SURMI SES, SUSPICION AND CONJUNCTURES. THE KEY ISSUE INVOLVED IS WHETHER TH E CIT(A) OUGHT TO HAVE RESORTED TO SOME REASONABLE ESTIMATIONS ON THE GROSS RECEIPT OR OUGHT TO HAVE CONFIRMED THE ACTION OF THE AO TOWARD S TAXABILITY OF FULL AMOUNT OF GROSS RECEIPT. WE ARE OF THE CLEAR VIEW THAT SOME ESTIMATIONS OUGHT TO BE MADE ALBEIT AFTER OBTAINING CONSULTATIONS BY WAY OF REMAND REPORT FROM THE AO. AT THE SAME TIME , WE ARE ALIVE TO THE MANDATE OF LAW THAT THE CIT(A) IS A SUPERIOR AU THORITY VESTED WITH POWER OF BOTH ADJUDICATION AS WELL AS APPELLATE FUN CTIONS. THE CIT(A) HAS ADJUDICATED 10% OF RECEIPT HAVING REGARD TO THE LEGISLATIVE ESTIMATIONS OF 8% BENCHMARKED FOR THE PURPOSES OF S ECTION 44AD OF THE ACT. SECTION 44AD OF THE ACT PROVIDES FOR COMP UTING PROFITS AND GAINS OF BUSINESS @ 8% OF THE GROSS RECEIPT OF PRES UMPTIVE BASIS. SUCH PRESUMPTIVE RATES ARE NATURALLY DERIVED AFTER ANALYZING EMPIRICAL DATAS AVAILABLE IN THE FIELD AND AFTER ELABORATE MA KING STATISTICAL ANALYSIS. THUS, THE PRESUMPTIVE RATE OF 8% ADOPTED BY THE LEGISLATURE CANNOT SAID TO BE DEVOID OF ANY SCIENTIFIC BASIS. THE CIT(A), ON THE OTHER HAND, HAS ESTIMATED THE INCOME AT 10% I.E. 2% HIGHER THAN THE RATE ADOPTED BY THE LEGISLATURE. THE CIT(A) IN OUR VIEW HAS ADOPTED RATIONAL APPROACH TO BRING THE END TO THE DISPUTE. THUS, IN DEPARTURE WITH GENERAL PRACTICE OF REMITTING THE MATTER TO TH E AO, WE DO NOT CONSIDER IT NECESSARY TO REMIT THE MATTER IN THE IN STANT CASE BACK TO THE ITA NO. 2045/MUM/17 [ITO VS. SIDDHARAM D. KAMBLE] A.Y. 2011-12 - 4 - FILE OF THE AO [OR TO THE CIT(A)] FOR PURPORTED VIO LATION OF RULE 46A HAVING REGARD TO THE PECULIAR FACTS OF THE CASE IN HAND. WE ENDORSE THE ACTION OF THE CIT(A) BEING FAIR AND REASONABLE AND RESONATE WITH THE CIRCUMSTANCES OF THE CASE. THUS, WE DECLINE TO INTERFERE WITH THE ORDER OF THE CIT(A). 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. SD/- SD/- (PAWAN SINGH) (PRADIP KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: DATED 06/06/2019 TRUE COPY S. K. SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. )*+ , / CONCERNED CIT 4. ,- / CIT (A) 5. 012 33*+, *+#, ) / DR, ITAT, MUMBAI 6. 278 9 / GUARD FILE. BY ORDER / , / , *+#, ) THIS ORDER PRONOUNCED IN OPEN COURT ON 06/06/20 19