M/s. Sidhi Cargo Carrier, Jajpur V. ACIT, Circle-1(2), Cuttack

ITA 211/CTK/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7202 (ITAT-CUTTACK)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 02-02-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 24-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: DAMODAR PATI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO. 211 /CTK/2016 ASSESSMENT YEAR : 2010 - 2011 M/S. SIDHI CARGO CARRIERS, SUKINDA BLOCK ROAD TRANSPORT, DIST: JAJPUR VS. ACIT, CIRCLE 1(2), CUTTACK PAN/GIR NO. AANFM 8220 B (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI DAMODAR PATI, AR REVENUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 02 /02 / 2017 DATE OF PRONOUNCEMENT : 02 /02 / 2017 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - CUTTACK, DATED 8.12.2015 , FOR THE ASSESSMENT YEAR 2010 - 2011 . 2. IN THIS APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER DETERMINING THE PROFIT OUT OF TRANSPORT ATION BUSINESS @ 5% AND DETERMINATION OF PROFIT @ 6% ON TRADING BUSINESS. 3. AT THE TIME OF HEARING, IT WAS SUBMITTED BY THE AR OF THE ASSESSEE THAT THE ASSESSING O FFICER DETERMINED THE PROFIT @ 8 % ON TRADING BUSINESS, WHICH WAS REDUCED BY THE CIT(A) TO 6%. HENCE, HE IS NOT PRESSING THIS GROUND OF APPEAL. ACCORDINGLY, SAME IS DISMISSED FOR WANT OF PROSECUTION. 2 ITA NO. 211/CTK/2016 ASSESSMENT YEAR :2010 - 2011 4. REGARDING DETERMINATION OF PROFIT AT 5% OUT OF TRANSPORT ATION BUSINESS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE WAS ASKED A S TO WHO HAS EXECUTED THE TRANSPORT CONTRACT DURING THE YEAR AND PRODUCE TO BOOKS OF ACCOUNT PARTICULARLY THE CASH BOOK. THE ASSESSEE ONLY FURNISHED THE LEDGER ACCOUNT COPY OF THE EXPENSES CLAIMED IN SUPPORT OF THE PROFIT AND LOSS ACCOUNT. ON VERIFICATI ON OF SUCH LEDGER ACCOUNT COPIES, THE ASSESSING OFFICER FOUND THAT ALL THE TRANSPORTATION CHARGES WERE PAID IN CASH. THE ASSESSING OFFICER VERIFIED THE BILLS AND VOUCHERS AND OBSERVED THAT IN SOME VOUCHERS THEY WERE NOT HAVING THE RECIPIENTS SIGNATURE AND OTHER DETAILS LIKE ADDRESSES ETC. SINCE THE CASH BOOK WAS NOT PRODUCED AND THE BILLS AND VOUCHERS WERE NOT REGULAR AND COULD NOT BE VERIFIED, THEREFORE, THE ASSESSING OFFICER HELD THAT THE CORRECTNESS AND COMPLETENESS OF THE ACCOUNTS CANNOT BE ACCEPTED A ND HENCE, REJECT THE BOOK S OF ACCOUNT U/S.145(3) OF THE ACT AND, THEREAFTER, ESTIMATED THE PROFIT FROM TRANSPORT ATION BUSINESS AT 5% OF THE GROSS RECEIPTS. 5. ON APPEAL, THE CIT(A) OBSERVED THAT THE ASSESSEE HAS RELIED ON THE DECISION OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF HARIHAR ROADWAYS FOR THE SUBMISSION THAT THE TRIBUNAL HAS DETERMINED THE PROFIT FOR TRANSPORTATION BUSINESS AT 1%. THE CIT(A) OBSERVED THAT THE TRIBUNAL IN THE CASE OF PHULCHAND AGARWAL HAS HELD THAT IN THE ABSENCE OF CASH BOOK, T HE ACCOUNTING RESULTS OF THE ASSESSEE CAN BE REJECTED AND ESTIMATION OF PROFIT CAN BE MADE. THE DECISION IN THE CASE OF HARIHAR ROAWAYS (SUPRA) RELIED ON BY THE ASSESSEE WAS IN THAT PARTICULAR CASE WHICH MAY NOT HAVE 3 ITA NO. 211/CTK/2016 ASSESSMENT YEAR :2010 - 2011 APPLICATION TO THE PRESENT CASE OF THE ASSESSEE. HENCE, HE CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 6. BEFORE ME, THE ONLY ARGUMENT OF THE A.R. OF THE ASSESSEE IS THAT THE DETERMINATION OF INCOME BY APPLYING RATE OF 5% TO THE TRANSPORTATION BUSINESS OF THE ASSESSEE WAS EXCESSIVE . HE SU BMITTED THAT THE ASSESSEE WAS NOT OWNING ANY VEHICLES AND IT WAS TAKING VEHICLES ON HIRE AND THEN GIVING TO OTHER S ON HIRE AND THEREBY MAKING A MEAGRE PROFIT. THEREFORE, IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, A REASONABLE ESTIMATION OF THE INCOME BY APPLYING THE LOWER RATE SHOULD BE MADE. 7. THE D.R. ON THE OTHER HAND SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 8. AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE CONSIDERED VIEW THAT IT WOULD MEET THE E NDS OF JUSTICE IF THE NET PROFIT FROM TRANSPORTATION BUSINESS OF THE ASSESSEE IS ESTIMATED BY APPLYING THE RATE OF 3% TO THE TURNOVER FROM TRANSPORTATION BUSINESS. I, ACCORDINGLY, MODIFY THE ORDER OF THE CIT(A) AND PARTLY ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOU NCED IN THE OPEN COURT ON 02 /02 /2017 IN THE PRESENCE OF PARTIES. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 02 /02 /2017 B.K.PARIDA, SPS 4 ITA NO. 211/CTK/2016 ASSESSMENT YEAR :2010 - 2011 COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : M/S. SIDHI CARGO CARRIERS, SUKINDA BLOCK ROAD TRANSPORT, DIST: JAJPUR 2. THE RESPONDENT. ACIT, CIRCLE 1(2), CUTTACK 3. THE CIT(A) - CUTTACK 4. PR.CIT , CUTTACK 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//