ISHWAR LAL SAINI, Jaipur V. ITO, BEHROR

ITA 252/JPR/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54098 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 22-03-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K MEENA
• Assessee Lawyers: S L PODDAR

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR (BEFORE SHRI R.K.GUPTA AND SHRI N.L.KALRA) ITA NO.252 & 253/ JP/2010 ASSESSMENT YEAR 2005-06 & 2006-07 PAN: AKZPS 1177 M SHRI ISHWAR LAL SAINI VS. THE ITO PROP SAINI ROADWAYS WARD- BEHROR DHANI GORAWALI, SHAHPURA ALWAR (APPELLANT ) (RESPONDENT) ASSESSEE BY : SHRI S.L. PODDAR DEPARTMENT BY : SHRI D.K. MEENA ORDER PER N.L. KALRA, AM:- THE ASSESSEE HAS FILED THE APPEALS AGAINST TWO D IFFERENT ORDERS OF THE LD. CIT(A), ALWAR DATED 11-01-2010 FOR THE ASSESS MENT YEARS 2005-06 AND 2006-07. 2. FIRST OF ALL, WE TAKE UP THE APPEAL OF THE ASSES SEE FOR A.Y. 2005-06. 2.1 THE FIRST GROUND OF APPEAL OF THE ASSESSEE IS T HAT THE LD. CIT(A) HAS ERRED IN ESTIMATING THE INCOME AT RS. 11,36,584/- A GAINST DECLARED INCOME OF RS. 3,12,259/- BY APPLYING THE NET PROFIT RATE @ 5% AGAINST THE DECLARED NET PROFIT OF 1.37%. 2.2 THE ASSESSEE DERIVES INCOME FROM TRANSPORTATION BUSINESS AS WELL AS FROM CONTRACT RECEIPTS. THE AO NOTICED THAT THE ASS ESSEE HAS SHOWN GROSS NET 2 PROFIT RATE OF 1.37% DURING THE YEAR AS COMPARED T O NET PROFIT RATE OF 1.37% AND 1.03% OF THE IMMEDIATELY PRECEDING TWO YEAR. T HE TURNOVER DURING THE YEAR IS RS. 2.27 CRORES AS AGAINST TURNOVER OF RS. 42.48 LACS OF THE LAST YEAR. THE AO RECORDED THE STATEMENT OF THE ASSESSEE DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS. FROM THE STATEMENT, THE AO CONCLUDED THAT (1) ASSESSEE IS NOT HAVING EVIDENCE IN RESPECT OF THE AMOUNT OF FREIGHT PAID. (2) ASSESSEE IS NOT HAVING EVIDENCE FOR THE EXPENS ES DEBITED UNDER THE HEAD CONVEYANCE AND TRAVELING. (3) ASSESSEE HAS NOT BEEN ABLE TO GIVE EVIDENCE IN RESPECT OF FOLLOWING EXPENSES DEBITED. (A) .MISCELLANEOUS (B) ACCOUNTING CHARGES (C) TELEPHONE EXPENSES (D) STAFF WELFARE EXPENSES (E) OFFICE EXPENSES (4) THE AO FURTHER NOTICED THAT ALL THE EXPENSES HA VE BEEN INCURRED IN CASH. THE AO ACCORDINGLY REJECTED THE B OOKS OF ACCOUNTS AND APPLIED THE NET PROFIT RATE OF 7% ON T HE RECEIPTS SHOWN BY THE ASSESSEE. 2.3 THE LD. CIT(A) HELD THAT THE NET PROFIT RATE OF 7% APPLIED BY THE AO IS EXCESSIVE AND UNREASONABLE. THE NET PROFIT RATE WAS REDUCED TO 5%. 2.4 WE HAVE HEARD BOTH THE PARTIES. IN THE CASE OF HEERA LAL KATHARIA VS. ITO BEARING ITA NO.220/JP/2006 FOR THE ASSESSMENT Y EAR 2002-03, THE TRIBUNAL VIDE ORDER DATED 21-05-2007 RESTRICTED THE DISALLOWANCE TO RS. 2.00 3 LACS AS AGAINST NET PROFIT RATE OF 5% UPHELD BY THE LD. CIT(A) ON TURNOVER OF RS. 2,40,56,730/-. IN THAT CASE, THE ASSESSEE DISCL OSED NET PROFIT RATE OF 1.64%. THE LD. CIT(A)-II, JAIPUR IN THE CASE OF SAN JAY KUMAR RESTRICTED THE NET PROFIT RATE OF 3.25% AS AGAINST 5% APPLIED BY T HE AO. IN THE WRITTEN SUBMISSION BEFORE US, THE LD. AR HAS SUBMITTED THAT THE DECISION OF THE TRIBUNAL IN THE CASE OF HEERA LAL KATHARIA (SUPRA) IS FULLY APPLICABLE IN THIS CASE BECAUSE THE TRANSPORTATION RECEIPTS IN THIS CA SE ARE OF THE SAME LEVEL. FURTHER IT WAS SUBMITTED THAT THE TRANSPORTATION RE CEIPTS ALSO INCLUDED THE TRANSPORTATION RECEIPTS FROM FOUR OWN TRUCKS AND IF THAT INCOME IS CONSIDERED THEN NET PROFIT RATE WILL BE AT 2.11%. HOWEVER, THE RE IS NO EVIDENCE TO SUGGEST THAT TRANSPORTATION RECEIPTS INCLUDED THE T RANSPORTATION RECEIPTS FROM OWN TRUCKS. IN CASE THE ASSESSEE IS SHOWING INCOME OF FOUR TRUCKS U/S 44AE SEPARATELY THEN NATURALLY THE RECEIPTS OF SUCH TRUC KS ARE NOT INCLUDED IN THE TOTAL TRANSPORTATION RECEIPTS. HENCE, CONSIDERING T HE ORDER OF THE TRIBUNAL IN THE CASE OF HEERA LAL KAHARIA (SUPRA), WE FEEL THAT IT WILL BE FAIR AND REASONABLE TO RESTRICT THE ADDITION TO RS. 1.50 LAC S AS THE INCOME FROM OWN TRUCKS IS ALSO INCLUDED IN THE INCOME TO THE EXTENT OF RS. 1.68 LACS 3.1 THE SECOND GROUND OF APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ESTIMATION OF HOUSE HOLD EX PENSES AT RS. 1.20 LACS. 4 3.2 WE HAVE HEARD BOTH THE PARTIES. THE LD. CIT(A) HAS NOT UPHELD SEPARATE ADDITION OF RS. 40,000/- FOR HOUSE HOLD EX PENSES BECAUSE PART OF THE TRADING ADDITION HAS BEEN CONFIRMED. THE AO HAS ALS O NOT ADDED SEPARATELY THE ADDITION ON ACCOUNT OF INADEQUATE WITHDRAWALS. HENCE THE ADDITION ON ACCOUNT OF INADEQUATE WITHDRAWALS STANDS COVERED BY THE TRADING ADDITION CONFIRMED AND HENCE NO SEPARATE ADDITION OF RS. 40, 000/- IS REQUIRED TO BE MADE. 4.0 NOW WE WILL TAKE UP THE APPEAL OF THE ASSESSEE FOR A.Y.2006-07. 4.1 THE FIRST GROUND OF APPEAL OF THE ASSESSEE IS T HAT THE LD. CIT(A) HAS ERRED IN ESTIMATING THE INCOME AT RS. 4,75,366/- AG AINST DECLARED INCOME OF RS. 1,56,802/- BY APPLYING THE NET PROFIT RATE @ 5% AGAINST THE DECLARED NET PROFIT OF 1.64%. 4.2 THE ASSESSEE HAS SHOWN THE RECEIPT OF RS. 95,07 ,339/-. THE AO APPLIED THE NET PROFIT RATE OF 7% WHICH WAS REDUCED TO 5% BY THE LD. CIT(A). THE ASSESSEE IS AGGRIEVED AGAINST APPLICATION OF NE T PROFIT RATE OF 5% AS AGAINST DECLARED NET PROFIT RATE OF 1.64%. 4.3 CONSIDERING OUR FINDINGS FOR THE ASSESSMENT YEA R 2005-06, WE FEEL THAT IT WILL BE FAIR AND REASONABLE TO RESTRICT THE TRADING ADDITION TO RS. 75,000/- BECAUSE THE TURNOVER DURING THE YEAR IS A ROUND RS. 95.00 LACS AS AGAINST RS. 2.27 CRORES OF THE IMMEDIATELY PRECEDI NG YEAR. 5 5.1 THE SECOND GROUND OF THE ASSESSEE IS AGAINST AD DITION ON ACCOUNT OF INADEQUATE WITHDRAWALS. NO SEPARATE ADDITION HAS BE EN MADE ON ACCOUNT OF INADEQUATE WITHDRAWALS. THE INADEQUATE WITHDRAWALS HAVE BEEN CONSIDERED AT RS. 26,938/- BECAUSE THE AO ESTIMATED HOUSE HOLD EXPENSES AT RS. 1.44 LACS AGAINST WITHDRAWALS OF RS. 1,17,062/. NO SEPAR ATE ADDITION HAS BEEN MADE EITHER BY AO OR BY THE LD. CIT(A). SINCE WE HA D ALREADY CONFIRMED THE PART OF THE TRADING ADDITION, THEREFORE, NO SEPARAT E ADDITION IS REQUIRED TO BE MADE. 6. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE P ARTLY ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 05-08 -2011. SD/- SD/- (R.K. GUPTA) (N.L. KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR DATED; 05/08/2011 *MISHRA COPY FORWARDED TO :- 1. SHRI ISHWAR LAL SAINI, JAIPUR 2. THE ITO WARD- 4 (1), JAIPUR 3 THE LD. CIT BY ORDER 4. THE LD. CIT(A) 5 THE LD.DR 6 THE GUARD FILE (ITA NO.252/JP /10) A.R, ITAT, JAIPUR 6