Sh. Lalit Kumar Agarwal, Agra V. I.T.O.-4(2), Agra

ITA 244/AGR/2014

• Counselvise Citation: 24420314 RSA 2014
• Duration Of Justice: 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 30-09-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 08-09-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SU RENDRA KUMAR
• Assessee Lawyers: NAVEEN GARGH
• Keywords: Unexplained cash credit; Business income
• Section: 144

Judgement Text

I.T.A. NO.: 244/ AGRA/ 14 ASSESSMENT YEAR 2009-10 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AGRA SMC BENCH, AGRA [CORAM: PRAMOD KUMAR AM] I.T.A. NO.: 244/ AGRA/ 14 ASSESSMENT YEAR 2009-10 LALIT KUMAR AGARWAL .APPELLANT B 30, SHALIMAR ENCLAVE, KAMLA NAGAR AGRA [PAN: ADEPA6910A] VS. INCOME TAX OFFICER WARD 4(2), AGRA .RESPONDENT APPEARANCES BY: NAVEEN GARGH , FOR THE APPELLANT SURENDRA KUMAR , FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING: 30 TH SEPTEMBER, 2014 DATE OF PRONOUNCING THE ORDER: 30 TH SEPTEMBER, 2014 O R D E R 1. THIS IS AN APPEAL FILED AGAINST THE ORDER DATED 13 TH MARCH 2014 PASSED BY THE CIT (A) IN THE MATTER OF ASSESSMENT UNDER SECTI ON 144 R.W.S. 147 OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2009- 10. 2. GRIEVANCE RAISED BY THE ASSESSEE APPELLANT IS AS FOLLOWS: BECAUSE IN ANY VIEW, THE ADDITION MODIFIED/ CONFIRM ED BY THE LEARNED CIT(A) TO THE EXTENT OF RS 1,32,360 AS UNDI SCLOSED PROFIT FROM THE JOB WORK BUSINESS, BY APPLYING NET PROFIT @ 81.90% ON RS 3,27,400 AS GROSS RECEIPTS IS WRONG AND HIGHLY EXCE SSIVE. 3. TO ADJUDICATE ON THIS APPEAL, ONLY A FEW MATERIA L FACTS NEED TO BE TAKEN NOTE OF. THE ASSESSEE IS AN INDIVIDUAL AND THIS ASS ESSMENT WAS REOPENED AS A RESULT OF SOME AIR IN FORMATION. IT IS SUFFICIENT TO TAKE NOTE OF THE FACT THAT THERE WERE SOME UNEXPLAINED CASH DEPOSITS, AGGREGATING TO RS 3,27,400, MADE IN THE I.T.A. NO.: 244/ AGRA/ 14 ASSESSMENT YEAR 2009-10 PAGE 2 OF 3 ACCOUNT OF THE ASSESSEE WHICH HAVE BEEN BROUGHT TO TAX IN THE IMPUGNED ASSESSMENT. THE ASSESSING OFFICER BROUGHT TO TAX TH ESE DEPOSITS AS UNEXPLAINED CREDITS IN THE HANDS OF THE ASSESSEE, BUT, WHEN MAT TER TRAVELLED IN APPEAL BEFORE THE CIT(A), HE HAS TREATED THESE DEPOSITS AS GROSS PROFESSIONAL RECEIPTS OF THE ASSESSEE AND COMPUTED INCOME ON THE SAME BY TAKING PROFIT MARGIN AT 81.90%- AS IS WORKED OUT ON THE BASIS OF THE FIGURES GIVEN IN THE INCOME TAX RETURN WHICH SHOW NET INCOME OF RS 1,35,000 ON GROSS RECEI PTS OF RS 1,65,000. ACCORDINGLY, AS AGAINST THE INCOME OF RS 1,35,000, AS DISCLOSED BY THE ASSESSEE IN THE INCOME TAX RETURN, THE INCOME IS ASSESSED AS RS 2,68,159, BEING 81.90% OF RS 3,27,400. CONSEQUENTLY, AN ADDITION OF RS 1,32,2 60 IS MADE IN THE HANDS OF THE ASSESSEE. THE ASSESSE IS AGGRIEVED AND IS IN AP PEAL BEFORE ME. 4. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF T HE APPLICABLE LEGAL POSITION. 5. ON A PERUSAL OF DETAILS OF UNEXPLAINED DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE, I FIND THAT THERE ARE SMALL CASH DEPOSITS OF RS 15,000 (31.10.2008), RS 25,000 (5.11.2008), RS 10,000 (6.11.2008), RS 15,00 0 (14.2.2009) AND RS 11,000(17.2.2009). THE ASSESSEE BEING IN THE BUSINE SS AND THIS BANK ACCOUNT BEING USED BY THE ASSESSEE FOR HIS REGULAR TRANSACT IONS, JUST BECAUSE THERE IS A DEPOSIT IN THE ACCOUNT OF THE ASSESSES, THE SAME CA NNOT BE TREATED AS HIS INCOME OR SALES TURNOVER. THE ASSESSEES EXPLANATION THAT THESE DEPOSITS WERE MADE OUT OF THE CASH BALANCE CANNOT BE STRAIGHTAWAY REJECTED JUST BECAUSE THE ASSESSEE HAS NOT MAINTAINED HIS REGULAR BOOKS OF ACCOUNTS. T HE AMOUNTS ARE SMALL AND THIS MUCH AVAILABILITY OF CASH IN THE HANDS OF THE ASSESSEE CANNOT BE REJECTED. THAT LEAVES US WITH THE DEPOSITS OF RS 2,46,400, WH ICH ARE BY CLEARING CHEQUES, WHICH CAN INDEED BE TREATED AS UNDISCLOSED TURNOVER OF THE ASSESSEE. NO DOUBT THE ASSESSEE IS DOING THE JOB WORK, BUT, EVEN IN DO ING SO, A NET PROFIT OF 81.90%, WITHOUT ANY COMPARABLE CASE BEING BROUGHT ON RECORD , DOES INDEED SEEMS TO BE VERY HARSH. WE HAVE NOTED THAT THE CIT(A) HAS JUST IFIED THIS RATE OF PROFIT BY REFERRING TO THE FIGURES IN THE INCOME TAX RETURN B UT THEN ALL THIS IS IN THE REALM OF ESTIMATION. IN VIEW OF THESE DISCUSSIONS, AND BE ARING IN MIND ENTIRETY OF THE CASE, I AM OF THE CONSIDERED VIEW THAT A NET PROFIT RATE OF 75% WILL BE A FAIR AND I.T.A. NO.: 244/ AGRA/ 14 ASSESSMENT YEAR 2009-10 PAGE 3 OF 3 REASONABLE ESTIMATION. LEARNED COUNSEL FOR THE ASSE SSEE HAS ALSO AGREED TO ACCEPT THE SAME AND LET THE MATTER REST THERE. 6. ACCORDINGLY, I RECOMPUTE THE BUSINESS INCOME AT RS 1,85,000, BEING 75% OF 2,46,400 ROUNDED OFF TO THE NEAREST THOUSAND. AS THE ASSESSEE HAS ALREADY DISCLOSED THE INCOME OF RS 1,35,000, THE ADDITION I S RESTRICTED TO RS 50,000. THE BALANCE ADDITION STANDS DELETED. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 7. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED IN T HE TERMS INDICATED ABOVE. IT WAS SO PRONOUNCED IN THE OPEN COURT IMMEDIATELY UPO N CONCLUSION OF THIS HEARING. SD/- PRAMOD KUM AR (ACCOUNTANT MEMBER) AGRA. DATED 30 TH DAY OF SEPTEMBER, 2014. COPIES TO : (1) THE APPELLANT (2) THE RESPO NDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA