Sh. Paramjeet Singh, Agra V. I.T.O., Agra

ITA 237/AGR/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0423 (ITAT-AGRA)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-09-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 09-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH : AGRA BEFORE SHRI R.K. GUPTA, J. M. AND SHRI P.K. BANSAL, A.M. PAN NO. AKYPS5099P I.T.A.NO . 237/AGR/2010 A. Y. 2005-06 SHRI PARAMJEET SINGH, INCOME-TAX OFFICER, 3/9A, M.G.ROAD, VS. 1(3), AGRA AGRA APPELLANT RESPONDENT APPELLANT BY : SHRI RAJENDRA SHARMA, ADV. RESPONDENT BY : SHRI VINOD KUMAR, JR.DR O R D E R PER R.K.GUPTA, J.M. THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORD ER OF LD. CIT (A)-I, AGRA, RELATING TO ASSESSMENT YEAR 2005-06. 2. THE ASSESSEE IS OBJECTING SUSTAINING THE ADDITION O F RS. 1,27,808/- BY ESTIMATING THE NET PROFIT RATE AT 9 % AGAINST THE NET PROFIT RATE SHOWN BY THE ASSESSEE AT 7.79 % 3. THE BUSINESS OF THE ASSESSEE IS HOTEL BAR AND RESTA URANT IN THE NAME OF HOTEL EAST LIGHT. THE NET PROFIT RATE SHOWN BY THE ASSESSEE WAS AT 7.79 % AGAINST 11.8 % SHOWN IN LAST YEAR. COMPLE TE BOOKS OF ACCOUNT ARE MAINTAINED BY THE ASSESSEE FOR HIS BUSINESS PUR POSE. IN VIEW OF THE - 2 - 2 ASSESSING OFFICER, THE ASSESSEE COULD NOT EXPLAIN T HE DECLINE IN NET PROFIT RATE. ACCORDINGLY, HE APPLIED A NET PROFIT RATE OF 10 % AGAINST 7.79 % SHOWN BY THE ASSESSEE. THE ASSESSEE PREFERRED APPEA L BEFORE THE LD. CIT(A). THE REASON FOR DECLINE IN PROFIT RATE WAS E XPLAINED THAT ELECTRICITY EXPENSES WERE INCREASED FROM RS. 4.41 LAKHS TO RS. 6.67 LAKHS AND ALSO THERE WAS INCREASE IN ICE EXPENSES I.E. RS. 13,000/ - TO RS. 1,16,000/-. IT WAS ALSO EXPLAINED THAT THERE IS EXTRA EXPENSES ON ACCOUNT OF REPAIR AND MAINTENANCE OF THE HOTEL BUILDING. THEREFORE, FOR T HESE REASONS, THERE WAS A SLIGHT DECLINE IN NET PROFIT RATE. IT WAS FURTHER SUBMITTED THAT COMPLETE BOOKS OF ACCOUNT ARE MAINTAINED AND NO DEFECT HAS B EEN POINTED OUT BY THE ASSESSING OFFICER, NEITHER THE BOOKS OF ACCOUNT ARE REJECTED BY THE ASSESSING OFFICER. AFTER CONSIDERING THE SUBMISSION S, THE LD. CIT(A) WAS OF THE VIEW THAT NET PROFIT RATE APPLIED BY THE ASS ESSING OFFICER IS ON HIGHER SIDE. THEREFORE, HE REDUCED THE NET PROFIT R ATE TO 9 %. NOW THE ASSESSEE IS IN APPEAL HERE BEFORE THE TRIBUNAL. 4. LD. AUTHORIZED REPRESENTATIVE REITERATED THE CONTEN TION RAISED BEFORE THE LD. CIT(A). ON THE OTHER HAND, THE LD. D R PLACED RELIANCE ON THE ORDER OF THE LD. CIT(A). 5. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE OTHER MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE DESER VES TO SUCCEED IN HIS APPEAL. IT IS NOTED THAT THE ASSESSEE IS MAINTAININ G REGULAR BOOKS OF ACCOUNT AND NO DEFECT WHATSOEVER WAS POINTED OUT BY THE ASSESSING - 3 - 3 OFFICER IN MAINTAINING THE BOOKS OF ACCOUNT. MERELY DECLINE IN NET PROFIT RATE, THE TRADING RESULT CANNOT BE DISTURBED. THERE FORE, IN OUR CONSIDERED VIEW, WITHOUT BRINGING ANY MATERIAL AND WITHOUT CON SIDERING THE SUBMISSIONS OF THE ASSESSEE THAT SLIGHTLY DECLINE I N NET PROFIT RATE IS BECAUSE OF INCREASE IN VARIOUS EXPENSES AS MENTIONE D ABOVE, WE FEEL THAT THE DISTURBING THE NET PROFIT RATE BY THE ASSESSING OFFICER WAS NOT JUSTIFIED. THE LD. CIT(A) WAS ALSO NOT JUSTIFIED IN SUSTAINING THE NET PROFIT RATE OF 9 % AGAINST 7.79 % DECLINED BY THE ASSESSEE WITHOUT ASSIGNING ANY COGENT REASONING. IN VIEW OF THESE FACTS AND CIRCUM STANCES, WE DIRECT THE ASSESSING OFFICER TO ACCEPT THE TRADING RESULT SHOW N BY THE ASSESSEE. THE ADDITION SUSTAINED BY THE LD. CIT(A) IS, THEREFORE, DELETED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. . THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 17 TH SEPTEMBER, 2010. SD/- SD/- ( P.K. BANSAL ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AGRA DATED : 17 TH SEPTEMBER,2010. CPU* 1516 - 4 - 4 COPY FORWARDED TO :- THE APPELLANT THE RESPONDENT THE CIT THE CIT(A) CONCERNED. THE D.R, ITAT AGRA. GUARD FILE BY ORDER, AR, I.T.A.T., AGRA.