Rajendra Madhavrao Barhate, Ahmednagar V. Income-tax Officer, Ward - 2, Ahmednagar

ITA 221/PUN/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0815 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 08-02-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NISHTHA TIWARI; PRATHAMESH J.LAWAND
• Section: 201; 22; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE VIRTUAL COURT BEFORE SHRI R.S. SYAL, VICE PRESIDENT . . , . / ITA NO. 22 1 /PUN/201 9 / ASSESSMENT YEAR : 20 1 5 - 1 6 RAJENDRA MADHAVRAO BAR HATE AT POST GHODEGAON, TAL. NEWASA, AHMEDNAGAR 414601 PAN : A MOPB3443J VS. ITO, WARD - 2 , AHMEDNAGAR (APPELLANT) (RESPONDENT) / ORDER PER R.S.SYAL, VP : TH IS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER PASSED BY THE CIT(A) , PUNE - 2 ON 15 - 10 - 201 8 IN RELATION TO THE ASSESSMENT YEAR 20 1 5 - 1 6 . 2. THIS APPEAL IS TIME BARRED BY 56 DAYS. AN AFFIDAVIT HAS BEEN FILED BY THE ASSE SSEE STATING THE REASONS WHICH LED TO THE LATE FILING OF THE APPEAL. I AM SATISFIED WITH SUCH REASONS. THE DELAY IS CONDONED AND THE APPEAL IS ADMITTED FOR HEARING ON MERITS. APPELLANT BY SHRI PRASAD BHANDARI RESPONDENT BY MS. NISHTHA TIWARI & SHRI PRATHAMESH J.LAWAND DATE OF HEA RING 1 1 - 0 6 - 20 20 DATE OF PRONOUNCEMENT 11 - 0 6 - 20 20 ITA NO . 22 1 /P UN/201 9 RAJENDRA M. BARHATE 2 3 . THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST CONFIRMATION OF ADDITION OF RS.18,22,754/ - MADE BY THE AO ON ACCOUNT OF ESTIMATED AMOUNT OF PROFIT FROM BUSINESS OPERATIONS. 4 . BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE CARRIED ON THE ONION BUSINESS AS COMMISSION AGENT. RETURN OF INCOME WAS FILED DECLARING TOTAL INCOME AT RS.7,01,880/ - . THE AO FOUND CERTAIN DISCREPANCIES IN BOOKS OF ACCOUNT. INVOKING THE PROVISIONS OF SECTION 145A OF THE ACT, HE REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE ASSESSED INCOME AT 1% OF TOTAL DEPOSITS IN VARIOUS BANK ACCOUNTS AMOUN TING TO RS.26,75,08,543/ - . THIS RESULTED INTO AN ADDITION OF RS.18,22,754/ - , BEING SUCH 1% NET PROFIT AS REDUCED BY THE AMOUNT OF PROFIT SHOWN BY THE ASSESSEE AT RS.8,53,051/ - . THE LD. CIT(A) DISMISSED THE APPEAL. 5 . I HAVE HEARD BOTH THE SIDES THROUGH VI RTUAL COURT AND HAVE GONE THROUGH THE RELEVANT MATERIAL ON RECORD. THE ASSESSEE IS ADMITTEDLY, ENGAGED IN THE BUSINESS OF ONION S AS COMMISSION AGENT. THE TOTAL GROSS RECEIPTS OF ASSESSEE FROM SAID BUSINESS STAND AT RS.59,52,372/ - . THE AO CORRECTLY FOUND CERTAIN DISCREPANCIES IN THE BOOKS OF ACCOUNTS AND RIGHTLY REJECTED THE SAME. AFTER REJECTING THE ITA NO . 22 1 /P UN/201 9 RAJENDRA M. BARHATE 3 BOOKS OF ACCOUNT, IT BECOMES OBLIGATORY ON THE PART OF AO TO DETERMINE THE INCOME IN A FAIR AND REASONABLE MANNER AND NOT ON AD HOC BASIS. IT IS NOT UNDERS TANDABLE AS TO HOW THE AO PROCEEDED TO APPLY 1% OF NET PROFIT ON THE DEPOSITS IN VARIOUS BANK ACCOUNTS AMOUNTING TO RS.26.75 CRORE WITHOUT CONSIDERING THAT HE WAS DEALING WITH A CASE OF AN ASSESSEE WHO WAS IN THE BUSINESS AS COMMISSION AGENT. ANY PERCENTA GE OF PROFIT OUGHT TO HAVE BEEN APPLIED ON THE GROSS RECEIPTS FROM BUSINESS OPERATIONS AND NOT ON AMOUNT OF BANK DEPOSITS. A CHART HAS BEEN PLACED ON RECORD SHOWING PROFIT RATES OF PRECEDING T WO YEARS. FOR THE A.Y. 2013 - 14, THE ASSESSEE DECLARED NET PROF IT OF RS.4.73 LAKHS. THE AO MADE AN ADDITION OF RS.1,50,000/ - AND AFTER ADDING SUCH AMOUNT OF ADDITION, THE ASSES SEES NET PROFIT PERCENTAGE COMES TO 16.01%. FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEAR, NET PROFIT PERCENTAGE WAS 15.10% OF GROSS RECEIPT S. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS SHOWN NET PROFIT AT 14.33% OF GROSS RECEIPTS. AS NET PROFIT PERCENTAGE SHOWN BY THE ASSESSEE IN THE CURRENT YEAR IS LESS THAN THAT OF PRECEDING TWO YEARS AND THE BOOKS OF ACCOUNT ARE HELD TO BE RIGHTL Y REJECTED , I DEEM IT FIT TO APPLY NET PROFIT PERCENTAGE OF ITA NO . 22 1 /P UN/201 9 RAJENDRA M. BARHATE 4 16 .01 % TO GROSS RECEIPTS OF RS.59,52,372/ - , WHICH IS HIGHER BETWEEN THE PROFIT RATE S OF IMMEDIATELY PRECEDING TWO YEARS . 6 . IN THE RESULT, THE APPEAL IS PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH JUNE , 20 20 . SD/ - ( R.S.SYAL ) / VICE PRESIDENT PUNE ; DATED : 11 TH JUNE , 20 20 GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT (APPEAL S) , PUNE - 2 4. THE PR. CIT - 1 , PUNE 5. , , SMC / DR SMC , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER, // TRUE C OPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE ITA NO . 22 1 /P UN/201 9 RAJENDRA M. BARHATE 5 DATE 1. DRAFT DICTATED ON 1 1 - 0 6 - 20 20 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 1 1 - 0 6 - 20 20 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER J M 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8 . FILE SENT TO THE BENCH CLERK SR.PS 9 . DATE ON WHICH FILE GOES TO THE HEAD CLE RK 10 . DATE ON WHICH FILE GOES TO THE A.R. 1 1 . DATE OF DISPATCH OF ORDER. *