Kaushik Ghosh, Kolkata V. ACIT, Circle-44, Kolkata, Kolkata

ITA 2372/KOL/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4531 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 19-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA B BENCH, KOLKATA (BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER & SRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER) ITA NO. 2372/KOL/2016 ASSESSMENT YEAR: 2012-13 KAUSHIK GHOSH..................................APPELLANT 15, RAJA SEW BOX BAGLA LANE KOLKATA 700 004 [PAN : ADLPG 5836 A] ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-44, KOLKATA............................RESPONDENT APPEARANCES BY: SHRI SUBASH AGARWAL, AR, APPEARED ON BEHALF OF THE ASSESSEE. SHRI S. DASGUPTA, ADDL. CIT, D/R. APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : JULY 17 TH , 2018 DATE OF PRONOUNCING THE ORDER : AUGUST 3 RD , 2018 ORDER PER J. SUDHAKAR REDDY, AM :- THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-13, KOLKATA (HEREINAFTER THE LD. CIT(A)), DT. 31/08/2016, PASSED U/S 250 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT), RELATING TO ASSESSMENT YEAR 2012-13. 2. THOUGH THE ASSESSEE HAS RAISED FOUR GROUNDS OF APPEAL, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT, TO GIVE QUIETUS TO THE ISSUE, HE IS ONLY ARGUING GROUND NO.3, WHICH READS AS FOLLOWS:- 3. (A) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN MAKING AN ENHANCEMENT OF INCOME OF THE ASSESSEE BY ESTIMATING THE NET PROFIT @8% AS AGAINST THE A.O.S ESTIMATION OF 5.63% OF RECEIPTS. (B) FOR THAT, WITHOUT PREJUDICE TO GROUND NO. 1, THE LD. CIT(A) OUGHT TO HAVE MADE A REASONABLE ESTIMATE OF THE ASSESSEES INCOME. 3. THE ASSESSEE IS AN INDIVIDUAL AND IS RUNNING AN ADVERTISING CONCERN. THE ASSESSING OFFICER PASSED ORDER U/S 144 OF THE ACT, ESTIMATING THE INCOME OF THE ASSESSEE AT 5.63% OF THE GROSS RECEIPTS OF RS.1,01,77,065/-. THIS PERCENTAGE OF 5.63% WAS ARRIVED AT BY THE ASSESSING OFFICER BY TAKING THE AVERAGE OF THE NET 2 ITA NO. 2372/KOL/2016 ASSESSMENT YEAR: 2012-13 KAUSHIK GHOSH PROFITS DECLARED BY THE ASSESSEE FOR THE ASSESSMENT YEARS 2010-11, 2011-12 & 2012-13. 3.1. ON APPEAL, WHILE GIVING RELIEF ON OTHER ISSUES, THE LD. CIT(A) DIRECTED THAT THE INCOME BE ESTIMATED AS @ 8% OF THE TOTAL TURNOVER, FOR THE REASON THAT THE ASSESSEE HAD SHOWN 7.31% OF THE TURNOVER AS THE PERCENTAGE OF PROFIT FOR THE EARLIER ASSESSMENT YEAR. 4. FURTHER AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD RIVAL CONTENTIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE LAW CITED, WE HOLD AS FOLLOWS:- 5.1. THIS IS A CASE OF ESTIMATION. THE ASSESSING OFFICER HAS HIMSELF ESTIMATED THE PROFIT AT 5.63%. THE LD. CIT(A) ON THE GROUND THAT THE ASSESSEE HAD EARNED A PERCENTAGE OF PROFIT AT THE RATE OF 7.31% OF THE TURNOVER, DIRECTED THE ASSESSING OFFICER TO ADOPT 8% OF THE TURNOVER AS PROFIT FOR THIS YEAR. THE ASSESSEE, SUBMITTED BEFORE THE ASSESSING OFFICER THAT, THERE IS A REDUCTION IN THE GROSS TURNOVER OF THE ASSESSEE FROM ABOUT RS.16 CRORES IN THE EARLIER ASSESSMENT YEARS TO RS.10 CRORES IN THE IMPUGNED ASSESSMENT YEARS AND THAT DUE TO DOWNTURN IN THE BUSINESS, THE PERCENTAGE OF PROFIT ESTIMATED BY THE LD. CIT(A) IS EXCESSIVE AND UNREASONABLE. 5.2. THE LD. D/R, SUBMITS THAT, THE NET PROFIT EARNED FOR THE ASSESSMENT YEAR 2012- 13 I.E. 3.22% SHOULD NOT HAVE BEEN CONSIDERED BY THE ASSESSING OFFICER, AS THE BOOKS OF ACCOUNTS ITSELF WERE REJECTED. HE PLEADED THAT THIS ESTIMATE BY THE LD. CIT(A) IN FAIR AND REASONABLE AND HENCE REQUIRES NO INTERFERENCE. 6. ON A CONSPECTUS OF THE MATTER, WE ARE OF THE CONSIDERED OPINION THAT ENDS OF JUSTICE WOULD BE MET IF THE PROFIT IS ESTIMATED AT 6% OF THE GROSS RECEIPTS OF THIS YEAR, 3 ITA NO. 2372/KOL/2016 ASSESSMENT YEAR: 2012-13 KAUSHIK GHOSH IN VIEW OF THE FACT THAT THERE IS A FALL IN TURNOVER OF THE ASSESSEE AND THE ASSESSEE HAD MADE OUT A CASE THAT THERE IS A DECLINE IN THE NET PROFITS DURING THE YEAR. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO ESTIMATE THE TURNOVER AT THE RATE OF 6% OF THE TURNOVER IN THE PLACE OF 7.31% ESTIMATED BY THE LD. CIT(A). 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. KOLKATA, THE 3 RD DAY OF AUGUST, 2018. SD/- SD/- [ S.S. VISWANETHRA RAVI ] [ J. SUDHAKAR REDDY ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 03.08.2018 {SC SPS} COPY OF THE ORDER FORWARDED TO: 1. KAUSHIK GHOSH 15, RAJA SEW BOX BAGLA LANE KOLKATA 700 004 2. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-44, KOLKATA 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY HEAD OF OFFICE/ D.D.O. ITAT, KOLKATA BENCHES