DCIT, Chandigarh V. M/s Kapoor Brothers & Agencies, Chandigarh

ITA 213/CHANDI/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2411 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 29-01-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 26-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR
• Keywords: Principle of natural justice
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.213 /CHD/2013 (ASSESSMENT YEAR : 2008-09) THE D.C.I.T., VS. M/S KAPOOR BROTHERS & AGENCI ES, CIRCLE 2(1), SCO 194-195, ROOM NO.414, 4 TH FLOOR, SECTOR 17-C, AAYAKAR BHAWAN, SECTOR 17E, CHANDIGARH. CHANDIGARH. PAN: AAAFK8993J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI J.S.NAGAR, DR RESPONDENT BY : SHRI VINEET KRISHAN DATE OF HEARING : 12.06.2013 DATE OF PRONOUNCEMENT : 21.06.2013 O R D E R PER SUSHMA CHOWLA, J.M. : THE APPEAL FILED BY THE REVENUE IS AGAINST THE ORDE R OF THE COMMISSIONER OF INCOME-TAX (APPEALS), CHANDIGARH DA TED 04.12.2012 RELATING TO ASSESSMENT YEAR 2008-09 AGAINST THE ORD ER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE GROUND OF APPEAL RAISED BY THE REVENUE READ AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(APPEALS) IN A PPEAL NO. 393/10-11, HAS ERRED IN DELETING ON THE FOLLOWING GROUNDS OF APPEAL :- 1. 'WHETHER ON FACTS AND CIRCUMSTANCES THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.9,76,287/- MADE BY THE ASSESSING OFFICER BY APPLYING NP OF 3%FORNON-PRODUCTION OF CO MPLETE BOOKS OF ACCOUNTS. 2. THE APPELLANT CRAVES TO ADD OR AMEND ANY GROUND/GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD OR DISPOSED OFF. 2 3. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE CANCELLED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED . 3. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT T HE ASSESSEE HAD FILED RETURN OF INCOME DECLARING NIL INCOME FOR THE YEAR UNDER CONSIDERATION. THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY. THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF RESALE OF PAPER AND TONER OF XERO INDIA LTD. FOR WHICH THE ASSESSEE HAD AN AGENCY FOR CHANDIGARH. THE ASSESSEE HAD ALSO OBTAINED THE DEA LERSHIP WITH SONY INDIA PVT. LTD. FOR THE SALE OF LCD TVS, LAPTO PS, MUSIC SYSTEM AND CAMERAS, ETC. THE ASSESSING OFFICER VID E PARA 3 OBSERVED AS UNDER: 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO PRODUCE BOOKS OF ACCOUNT AND VOUCHERS FOR EXPENSES. IN RESPONSE THERETO, THE ASSESSEES COUNSEL PRODUCED ONLY THE CASH BOOK. HOWEVER, NO LEDGER ACCOUNT, VOUCHERS FOR EXPENSES AND STOCK REGISTER WERE PRODUCED. IN THE ABSENCE OF LEDGER ACCOUNT, STOCK REGISTER AND VOUCHERS FOR EXPENSES, THE TRADE RESULTS ARE NOT VERIFIABLE. IN CASE OF TRADERS HAVING TURNOVER OF RS.40 LACS, INCOME IS ESTIMATED AT 5% OF THE TOTAL TURNOVER. I N THE PRESENT CASE, THE ASSESSEE IS HAVING TURNOVER O F RS.3,25,42,908/-. ACCORDINGLY, THE NET PROFIT OF T HE ASSESSEE IS ESTIMATED AT 3% OF THE GROSS SALES. TH E ASSESSEE HAS SHOWN GROSS SALES OF RS.3,25,42,908/-, 3% OF WHICH COMES TO RS.9,76,287/-. THEREFORE, AN ADDITION OF RS.9,76,287/- IS MADE TO THE RETURNED INCOME OF THE COMPANY. PENALTY PROCEEDINGS U/S 271(1)(C) ARE BEING INITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 4. THUS THE ASSESSMENT WAS COMPLETED AT RS.9,76,287 /-. 5. THE CIT (APPEALS) VIDE PARA 3.3 DELETED THE ADDI TION MADE IN THE HANDS OF THE ASSESSEE OBSERVING AS UNDER: 3.3 I HAVE CONSIDERED THE SUBMISSION OF THE LD. COUNSEL AND HAVE ALSO GONE THROUGH ASSESSMENT RECOR DS OF THE CASE. THE ASSESSING OFFICER HAS ESTIMATED TH E GP RATE OF 3% ON THE GROUND THAT LEDGER ACCOUNT, VOUCH ERS FOR EXPENSES AND STOCK REGISTER WERE NOT PRODUCED, BUT A PERUSAL OF PARA 25 OF REPLY DATED 18.10.2010 REVE ALS 3 THAT CASH BOOK LEDGER, SALE/PURCHASE VOUCHERS AND STOCK REGISTER WERE PRODUCED. FROM THE ORDER SHEET , IT APPEARS THAT THE ASSESSING OFFICER HAD NOT ASKED FO R ANY FURTHER DETAILS. THE ASSESSING OFFICER HAS NOT POINTED OUT ANY DISCREPANCY IN THE BOOKS OF ACCOUNT, WARRANTING ESTIMATION OF GP RATE. IN FACT, THE VERY BASIS OF MAKING ADDITION IN THIS CASE IS THAT COMPLETE BOOKS OF ACCOUNTS WERE NOT PRO DUCED, WHICH IN FACT, IS NOT CORRECT. HENCE, THE ADDITION MADE ON ACC OUNT OF ESTIMATION OF GP RATE IS DELETED. GROUNDS OF APPEAL NOS. 2 AND RE DISMISSED. 6. SHRI J.S. NAGAR HAS PUT IN APPEARANCE ON BEHALF OF THE REVENUE AND SHRI VINEET KRISHAN APPEARED FOR THE AS SESSEE AND PUT- FORWARD THEIR CONTENTIONS. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST T HE ORDER OF CIT (APPEALS) IN CANCELING THE ADDITION MADE BY THE ASS ESSING OFFICER BY REJECTING THE TRADING RESULTS SHOWN BY THE ASSES SEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AS PER THE ASSESS ING OFFICER THE ASSESSEE HAD FAILED TO PRODUCE THE BOOKS OF ACCOUNT , VOUCHERS FOR EXPENSES AND THE STOCK REGISTER. ONLY CASH BOOK WA S PRODUCED DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER IN VIEW THEREOF HAD ESTIMATED THE INCOME IN THE HANDS OF TH E ASSESSEE BY APPLYING THE NET PROFIT RATE OF 3% TO THE GROSS SAL ES OF RS.3.25 CRORES, RESULTING IN ADDITION OF RS.9,76,287/-. ON THE OTHER HAND, THE CIT (APPEALS) HAS DELETED THE SAID ADDITION IN VIEW OF THE REPLY FILED BY THE ASSESSEE THAT IT HAD PRODUCED THE CASH BOOK, LEDGER, SALE & PURCHASE VOUCHERS AND STOCK REGISTER. HOWEV ER, THE SAID BOOKS OF ACCOUNT WERE NOT PRODUCED BEFORE THE CIT ( APPEALS). THE CLAIM OF THE ASSESSING OFFICER IS THAT THE SAME WER E ALSO NOT PRODUCED BEFORE HIM DURING THE ASSESSMENT PROCEEDIN GS, ON THE OTHER HAND, THE LEARNED A.R. FOR THE ASSESSEE CLAIM ED THAT THE 4 COMPLETE BOOKS OF ACCOUNT HAVE BEEN MAINTAINED AND ARE AVAILABLE WITH THE ASSESSEE AND THE SAME CAN BE PRODUCED FOR VERIFICATION. 8. IN THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES A ND FOLLOWING THE PRINCIPLE OF NATURAL JUSTICE WE DEEM IT FIT TO RESTORE THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER TO REDECI DE THE SAME DE- NOVO AFTER VERIFYING THE BOOKS OF ACCOUNT OF THE AS SESSEE. THE ASSESSEE IS DIRECTED TO PRODUCE THE COMPLETE BOOKS OF ACCOUNT ALONGWITH VOUCHERS AND STOCK REGISTER BEFORE THE AS SESSING OFFICER TO ESTABLISH ITS CLAIM IN RESPECT OF THE BALANCE SH EET AND PROFIT & LOSS ACCOUNT FILED FOR THE YEAR UNDER CONSIDERATION . WE REMIT THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE SAME DE-NOVO IN ACCORDANCE WITH LAW AFTER AFFORDING REAS ONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DAY OF JUNE, 2013. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 21 ST JUNE, 2013 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH