Pradipta Kumar Pradhan, Khurda V. ITO, Khurda Ward, Khurda

ITA 22/CTK/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3825 (ITAT-CUTTACK)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 16-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: SUNIL KUMAR MISHRA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO. 22/CTK/2017 ASSESSMENT YEAR : 2011 - 2012 PRADIPTA KUMAR PRADHAN, PROP. JAGANATH OIL, AT/PO: PITAPALI, KHURDA. VS. ITO, KHURDA WARD, KHURDA . PAN/GIR NO. AIWPP 8060 B (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI SUNIL KUMAR MISHRA, AR REVENUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 17 /05/ 2017 DATE OF PRONOUNCEMENT : 17 /05 / 2017 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 1, BHUBANESWAR, DATED 11.4.2016 , FOR THE ASSESSMENT YEAR 2011 - 12 . 2. THE SOLE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS THAT THE LD CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER ESTIMATING THE NET PROFIT @ 4% ON THE TURNOVER. 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE FACTS OF THE CASE ARE THAT THE ASSESSEE DERIVES INCOME FROM WHOLESALE TRADING IN 2 ITA NO. 22/CTK/2017 ASSESSMENT YEAR :2011 - 2012 LUBRICANTS, TYRES, TUBES & FILTERS. A SURVEY UNDER SECTION 131A OF THE ACT WAS CONDUCTED IN THE BUSINESS PREMISES OF THE ASSESSEE ON 23.9.2010. THE ASSESSEE FILED THE RETURN OF INCOME ON 25.11.2011 SH OWING INCOME OF RS.10,66,200/ - . THE ASSESSING OFFICER ASSESSED THE TOTAL INCOME AT RS.29,46,690/ - AFTER ESTIMATION OF PROFIT AND ADDITION OF INCOME FROM OTHER SOURCES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE SALE REGISTER, PURCHASE REGISTER AND STOCK REGISTER WITH ALL BILLS/VOUCHERS IN SUPPORT OF PURCHASES & SALE S AND ALSO THE CASH BOOK. THE ASSESSEE DI D NOT FURNISH THE SAME. THE ASSESSING OFFICER PROPOSED TO COMPLETE THE ASSESSMENT U/S.144 IN ABSE NCE O F BOOKS OF ACCOUNT. N O BOOKS OF ACCOUNT WERE PRODUCED. T HEREFORE, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S.144 INVOKING THE PROVISIONS OF SECTION 145(3) OF THE ACT AND ESTIMATED THE PROFIT @ 4 % OF THE TURNOVER. 4. THE ASSESSEE CHALLENGED SUCH ESTIMATION OF 4% OF THE GROSS TURNOVER BEFORE THE CIT(A). THE CIT(A) OBSERVED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FAILED TO PRODUCE THE CASH BOOK, LEDGER AND STOCK REGISTER FOR EXAMINATION EVEN THOU GH SPECIFICALLY ASKED FOR BY THE ASSESSING OFFICER . IN THE ABSENCE OF THESE VITAL BOOKS OF ACCOUNT, THE CORRECTNESS OF THE PROFIT DISCLOSED BY THE ASSESSEE AS PER BOOKS COULD NOT BE VERIFIED. HE FURTHER OBSERVED THAT T HE CORRECTNESS OF THE CLOSING STOCK W HICH HAS A DEFINITE BEARING ON THE TAXABLE PROFIT ALSO COULD NOT BE VERIFIED IN THE ABSENCE OF THE STOCK REGISTER. THE ASSESSING OFFICER RESORT ED TO SECTION 145(3) OF THE ACT AND ESTIMATE D THE PROFIT @4% OF THE TURNOVER. 3 ITA NO. 22/CTK/2017 ASSESSMENT YEAR :2011 - 2012 HE OBSERVED THAT I N THE CIRCUMSTA NCES OF THE ASSESSEE'S CASE, THE INVOK ING OF SECTION 145(3) BY THE ASSESSING OFFICER WA S PERFECTLY JUSTIFIED. HE OBSERVED THAT THE ONLY ISSUE WHICH REMAINS TO BE DECIDED IS WHETHER THE ESTIMATION OF PROFIT @4% OF THE TURNOVER WAS REASONABLE AND NOT EXCES SIVE. THE ASSESSEE HAS DISCLOSED A PROFIT OF 1.69% FOR THE YEAR UNDER APPEAL WHICH APPEARS TO BE TOO LOW IN THE LINE OF TRADE, THE ASSESSEE IS CARRYING ON. THE ES TIMATION OF PROFIT @4% BY THE ASSESSING OFFICER APPEARS TO BE QUITE REASONABLE. THE ASSESSEE D EALS IN LUBRICANTS, TYRES, TUBES ETC., THE PROFIT IN THE TRADING OF WHICH IS IN THE VICINITY OF 4 TO 5%. KEEPING IN VI EW ALL THESE RELEVANT FACTORS, THE CIT(A) HELD THAT THE ASSESSING OFFICER WA S JUSTIFIED IN ESTIMATING THE NET PROFIT AT 4% OF THE TURNOVE R IN THE ABSENCE OF PRODUCTION OF BOOKS OF ACCOUNT. 5. BEFORE ME, LD AUTHORISED REPRESENTATIVE ADMITTED THAT THE ASSESSEE FAILED TO PRODUCE BOOKS OF ACCOUNT AND OTHER RELEVANT REGISTERS FOR VERIFICATION BEFORE THE ASSESSING OFFICER AND CIT(A) . HE SUBMIT TED THAT THE ASSESSEE IS A WHOLESALE TRADER IN LUBRICANTS AND, THEREFORE, IN THIS LINE OF TRADE, GENERALLY NET PROFIT @ 1 TO 2% IS SHOWN AND HENCE, ESTIMATION OF NET PROFIT @ 4% WAS EXCESSIVE. 6. ON THE OTHER HAND, LD D.R. SUPPORTED THE ORDER OF THE CIT(A ) AND SUBMITTED THAT IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER OF THE CIT(A) WAS FULLY JUSTIFIED AND SHOULD BE UPHELD. 4 ITA NO. 22/CTK/2017 ASSESSMENT YEAR :2011 - 2012 7. I FIND THAT THE ASSESSEE HAS NOT CHALLENGED THE REJECTION OF BOOK RESULTS OF THE ASSESSEE BY THE ASSESSING OFFICER IN ABSENCE OF PRODUCTION OF BOOKS OF ACCOUNT AND OTHER RELEVANT REGISTERS AND BILLS AND VOUCHERS. THE GRIEVANCE OF THE ASSESSEE IS THAT THE ESTIMATION OF NET PROFIT @ 4% IS EXCESSIVE. I FIND THAT THE CIT(A) HAS OBSERVED THAT THE ASSESSEE HAS SHOWN NET PROFIT @ 1.69%. IN THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE CONSIDERED VIEW THAT IT WILL MEET THE ENDS OF JUSTICE, IF THE P ROFIT OF THE ASSESSEE IS ESTIMATED BY APPLYING THE RATE OF 3%. THEREFORE, I MODIFY THE ORDER OF THE CIT(A) ACCORDINGLY AND PARTLY ALLOW THE GROUND OF THE APPEAL OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL F ILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER P RONOUNCED IN THE OPEN COURT ON 17 /05/2017 IN THE PRESENCE OF PARTIES. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 17 /05/2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : PRADIPTA KUMAR PRADHAN, PROP. JAGANATH OIL, AT/PO: PITAPALI, KHURDA. 2. THE RESPONDENT. ITO, KHURDA WARD, KHURDA 3. THE CIT(A) - 1, BHUBANESWAR. 4. PR.CIT - 1, BHUBANESWAR, 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//