M/s Jamadar Travels, Bharuch V. The Dy.CIT.,Bharuch Circle, Bharuch

ITA 2328/AHD/2009

• Counselvise Citation: 232820514 RSA 2009
• Duration Of Justice: 2 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 21-09-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 31-07-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: MEHUL K PATEL
• Keywords: Rejection of books of accounts
• Section: 143(3); 145

Judgement Text

, , . .. . . .. . , , , , . .. .!' !' !' !' !' !' !' !' , # # # # $ $ $ $ IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABAD BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HONBLE SHR I A.MOHAN ALANKAMONY, A.M.) . ITA NO. 2328/AHD./2009 : ' %&- 2004-2005 M/S. JAMADAR TRAVELS, BHARUCH VS- DCIT, BHARUCH CIRCLE, BHARUCH (PAN : AABFJ 9426G) ()* /APPELLANT) ( +,)* /RESPONDENT ) )* - . / APPELLANT BY : SHRI MEHUL K. PATEL +,)* - . / RESPONDENT BY : SHRI SAMIR TEKRIWAL, SR.D.R. /'0 - 1# / DATE OF HEARING : 22/09/2011 2!% - 1# / DATE OF PRONOUNCEMENT : 23/09/2011 / ORDER PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER DATED 21-01-2009 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-IV, AHM EDABAD FOR THE ASSESSMENT YEAR 2004-2005. 2. GROUND NOS.1 TO 3 RAISED BY THE ASSESSEE IN THI S APPEAL ARE AGAINST CONFIRMING THE ACTION OF THE AO IN REJECTING THE BOOKS OF ACCO UNTS UNDER SECTION 145 OF THE I.T. ACT AND CONFIRMING THE ADDITION OF RS.6,64,699/- MA DE BY THE AO ON ACCOUNT OF ESTIMATED PROFIT ONLY. 3. THE FACTS IN BRIEF RELATING TO THE CONTROVERSY I NVOLVED IN THE ABOVE GROUNDS OF APPEAL ARE THAT THE ASSESSEE IS A FIRM ENGAGED IN T HE BUSINESS OF SUPPLY OF PASSENGER BUSES TO VARIOUS COMPANIES VIZ. SWIL, LUPIN, PEPSIC O, WELSPUN ETC. ON HIRE. DURING THE YEAR, IN ADDITION TO ASSESSEES OWN VEHICLES, T HE ASSESSEE HAS ALSO HIRED VEHICLES FROM ASSOCIATED PERSONS AND OUTSIDERS TO FULFILL FU RTHER REQUIREMENTS. FOR THE ITA NO. 2328-AHD-09 2 ASSESSMENT YEAR UNDER APPEAL, IT FILED THE RETURN O F INCOME DECLARING TOTAL INCOME AT RS.3,49,110/-. T HE AO FRAMED THE ASSESSMENT UNDER SECTION 143(3) ON 28.12.2006, WHEREIN HE REJECTED THE BOOKS OF ACCOUNTS BY INVOKI NG THE PROVISIONS OF SECTION 145 AND MADE ADDITION OF RS. 6,64,699/-. THE REASON GIVEN BY THE AO FOR MAKING THIS ADDITION IS THAT THE ASSESSEE HAS SHOWN CONSOLIDATED RECEIPT S OF RS.2,76,73,483/- IN RESPECT OF OWNED AS WELL AS HIRED VEHICLES AND BOOK PROFIT OF RS.7,18,975/- AND NET PROFIT OF RS.1,52,448/-. IN THE PROFIT & LOSS A/C., THE ASSES SEE HAS SHOWN THIRD PARTY (ASSOCIATED PERSONS AND OUTSIDERS) CONTRACT RECEIPTS OF RS.1,02 ,97,016/- AND CLAIMED EXPENSES AT RS.99,37,108/- ON BEHALF OF THIRD PARTIES THEREBY T HE ASSESSEE HAS SHOWN NET PROFIT OF RS.3,59,908/- @ 3.49% FROM THE HIRED VEHICLES WHERE AS IN RESPECT OF OWNED VEHICLES, THE ASSESSEE HAS SHOWN RECEIPTS OF RS.1,73,76,467/- AND NET PROFIT OF RS.3,59,067/- @2.06% BEFORE CONSIDERING THE INTEREST AND REMUNERA TION TO PARTNERS. 3.1 THE AO STATED THAT THE ASSESSEE HAS SHOWN NET P ROFIT AT 3.5% ON HIRED VEHICLES AND 2.06% ON OWNED VEHICLES. HOWEVER, THE ASSESSEE IS NOT IN A POSITION TO JUSTIFY THE SAME AS NO VEHICLE-WISE INCOME AND EXPENDITURE ACCO UNT IS DRAWN. HE ACCORDINGLY REJECTED THE BOOKS OF ACCOUNTS AND MADE THE ADDITIO N OF RS.6,64,699/- BY COMPUTING BOOK PROFIT @5% ON TOTAL RECEIPTS OF RS.2,76,73,483 /-. 4. ON APPEAL, IN THE IMPUGNED ORDER, THE LD. CIT(A) UPHELD THE ACTION OF THE AO REJECTING THE BOOKS OF ACCOUNTS AND CONFIRMED THE A DDITION OF RS. 6,64,699/- MADE BY THE AO. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF T HE ASSESSEE, SHRI MEHUL K. PATEL APPEARED AND CONTENDED THAT THERE IS NO JUSTIFICATI ON FOR REJECTION OF BOOKS OF ACCOUNTS BY INVOKING THE PROVISIONS CONTAINED IN SECTION 145 OF THE I.T. ACT. ALTERNATIVELY, HE PLEADED THAT FLAT RATE OF 5% APPLIED BY THE AO IS O N THE HIGHER SIDE. 6. ON THE OTHER HAND, SHRI SAMIR TEKRIWAL, SR.D.R., APPEARING ON BEHALF OF THE REVENUE, VEHEMENTLY SUPPORTED THE ORDER OF THE LD. CIT(A). ITA NO. 2328-AHD-09 3 7. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. LOOKING TO THE VARIOUS DEFECTS, POINTED OUT BY THE AO IN THE ASSESSMENT ORDER, REJECTION OF THE BOOKS OF ACCOUNT S IS UPHELD. HOWEVER, IN OUR OPINION, IT WILL MEET THE ENDS OF JUSTICE, IF THE R ATE OF 4% IS APPLIED. ON THIS BASIS, THE ADDITION WORKS OUT TO RS.3,87,964/- AS UNDER: 4% OF RS.2,76,73,483/- : RS.11,06,939/- LESS: INCOME DECLARED BY THE ASSESSEE : RS. 7,18,975 /- BALANCE TO BE TAKEN AS ADDITION : RS. 3,87,964/- WE ACCORDINGLY RESTRICT THE ADDITION OF RS. 6,64,69 9/- TO RS.3,87,964/-. 8. THE ONLY OTHER GROUND OF APPEAL IS AGAINST DISAL LOWING RS.1,72,260/- OUT OF INTEREST AS ALLEGED DIVERSION OF INTEREST BEARING F UNDS FOR NON-BUSINESS PURPOSE. 9. WE HAVE HEARD BOTH THE SIDES. THIS GROUND OF APP EAL IS NOT ARISING OUT OF THE IMPUGNED ORDER OF THE LD. CIT(A) AND ON THIS GROUND ALONE, THIS GROUND OF APPEAL IS REJECTED. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. 3 - 2!% 4' & 23 / 09 /2011 ! 5 - 60 7 THIS ORDER PRONOUNCED IN COURT ON 23/09/2011. SD/- SD/- (A.MOHAN ALANKAMONY) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 23/09/2011 - -- - +18 +18 +18 +18 98%1& 98%1& 98%1& 98%1&- -- - 1. )* 2. +,)* 3. 1 /= 4. /=- - 5. 8@6 +1' , , 7 6. 6B C3 , D/ F , 7 TALUKDAR/ SR. P.S. ITA NO. 2328-AHD-09 4