Income Tax Officer , Basti V. Shri Umesh Chand Chaturvedi , Basti

ITA 218/LKW/2013

• Counselvise Citation: 21823714 RSA 2013
• Duration Of Justice: 1 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-04-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 05-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA
• Keywords: Principle of natural justice

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.218/LKW/2013 ASSESSMENT YEAR:2009 - 10 INCOME TAX OFFICER, BASTI. VS. SHRI UMESH CHAND CHATURVEDI, GANDHI NAGAR, BASTI. PAN:AFQPC1389B (APPELLANT) (RESPONDENT) APPELLANT BY SHRI ALOK MITRA, D.R. RESPONDENT BY NONE DATE OF HEARING 22/04/2014 DATE OF PRONOUNCEMENT 1 3 /05/2014 O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT (A) - II, LUCKNOW DATED 16/01/2013 FOR ASSESSMENT YEAR 2009 - 2010. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. HON'BLE CIT(A) HAS CONFIRMED THE INCOME OF THE ASSESSEE TO THE EXTENT OF RS.8,32,662/ - @3% OF THE TURNOVER OF RS.2,77,55,412/ - AS AGAINST RS.19,42,879/ - ESTIMATED AT 7% OF THE TURNOVER OF RS.2,77,55,412/ - . HON'BLE CIT(A) THUS GAVE RELIEF OF RS.11,10,217/ - TO THE ASSESSEE. 2. AO COMPLETED THE ASSESSMENT IN ACCORDA NCE WITH THE PROVISION OF SECTION 145(3) OF THE I.T.ACT, FOLLOWING ORDER OF HON'BLE ITAT, BENCH, LUCKNOW VIDE THEIR ORDER DATED 10.03.2006 IN ITA NO.574/LUC/05 IN THE CASE OF M/S GUPTA CONTRACTOR, GOTWA BAZAR, BASTI. FACTS AND CIRCUMSTANCES BEING THE SAME THE AO WAS RIGHT TO ESTIMATE PROFIT @7%. 2 3. THAT ON THE MERIT OF THE CASE THE ORDER OF CIT(A) IS LIABLE TO BE CANCELLED AND ORDER OF AO SHOULD BE UPHELD. 3. NONE APPEARED ON BEHALF OF ASSESSEE INSPITE OF SERVICE OF NOTICE AND HENCE, WE PROCEED TO DECID E THIS APPEAL OF THE REVENUE EX - PARTE QUA THE ASSESSEE. 4. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF LEARNED D.R. OF THE REVENUE AND GONE THROUGH THE ORDER OF LEARNED CIT(A). WE FIND THAT IT IS OBSERVED BY LEARNED CIT(A) IN PARA 4.2 OF HIS ORDER THAT THE TRIBUNAL ORDER RENDERED IN THE CASE OF GUPTA CONTRACTORS IN I.T.A. NO.574/LKW/05 DATED 10/03/2006 CITED BY THE ASSESSING OFFICER HAS NOT BEEN CONFRONTED TO THE ASSESSEE TO ADOPT THE RATE OF 7% FO R ESTIMATING THE INCOME. THEREAFTER , HE HAS OBSERVED THAT THE ASSESSEE WAS DENIED OPPORTUNITY WHICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. THEREAFTER IT IS HELD BY CIT(A) THAT IN HIS OPINION, THE ESTIMATION OF INCOME @3% IS REASONABLE AS AGAINST 7% ADOPTED BY THE ASSESSING OFFICER. WE ALSO FIND THAT THE DECISION OF CIT(A) IS ON THE BASIS THAT THE ASSESSEE HAS SHOWN GROSS PROFIT RATE OF 4% IN THE CURRENT YEAR AS WELL AS IN THE IMMEDIATELY PRECEDING YEAR BUT IT IS NOTED BY THE ASSESSING OFFICER ON PAGE 2 OF THE ASSESSMENT ORDER THAT THE ASSESSEE HAS DISCLOSED GROSS PROFIT RATE O F 9.21% IN THE PRECEDING ASSESSMENT YEAR 2008 - 09 AND NO REASON HAS BEEN GIVEN BY THE ASSESSEE FOR DECLINE IN THE GROSS PROFIT RATE IN THE PRESENT YEAR. THE ASSESSING OFFICER HAS ALSO NOTED THAT BOOKS OF ACCOUNT AND OTHER DOCUMENTS CALLED FOR VIDE ORDER SHEET ENTRY HAS NOT BEEN PRODUCED. HENCE, WE FIND THAT THE FINDING OF CIT(A) IS NOT CORRECT THAT THE GROSS PROFIT RATE FOR THE IMMEDIATELY PRECEDING YEAR WAS IN THE VICINITY OF 4% BECAUSE A CLEAR FINDING IS GIVEN BY THE ASSESSING OFFICER THAT THE GROSS PR OFIT RATE WAS 4.92% IN THE PRESENT YEAR, AS AGAINST 9 .2 1 % IN THE PRECEDING YEAR AND LEARNED CIT(A) ESTIMATED THE NET PROFIT @3% ON THIS BASIS THAT GP RATE IS SAME IN THE 3 PRESENT YEAR AND THE PRECEDING YEAR. IT MEANS THAT HE HAS ALLOWED DEDUCTION FOR EXPEN SES OF 1.93% AFTER GROSS PROFIT AND AGAINST THIS ORDER, THE ASSESSEE IS NOT IN APPEAL. HENCE, IF WE ALLOW THE SAME DEDUCTION AGAINST THE GROSS PROFIT OF THE PRECEDING YEAR OF 9.21%, THE NET PROFIT COMES AT 7.28%. AS AGAINST THIS, THE ASSESSING OFFICER HA D ESTIMATED THE NET PROFIT AT 7% WHICH IS ALSO IN LINE WITH THE TRIBUNAL DECISION IN CASE OF GUPTA CONTRACTORS (SUPRA). UNDER THESE FACTS, WE ARE OF THE CONSIDERED OPINION THAT THE ORDER OF CIT(A) IS NOT SUSTAINABLE. THEREFORE, WE SET ASIDE THE ORDER OF CIT(A) AND RESTORE THAT OF THE ASSESSING OFFICER. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 3 /05/2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR