Shree Shubham Exports, Kolkata V. ITO, Ward-36(2), Kolkata, Kolkata

ITA 2574/KOL/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 9977 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 09-02-2021
• Assessment Year: 2016-2017
• Appeal Filed On: 12-12-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC KOLKATA SHRI SANJAY GARG, JUDICIAL MEMBER . / ITA NO.2574/KOL/2019 ASSESSMENT YEAR:2016-17 SHREE SHUBHAM EXPORTS MANGALAM-A, 2 ND FLOOR, ROOM NO.204, 24, HEMANT BASU SARANI, KOLKATA-700001 [ PAN NO.AAPFS 2792 G] / V/S . INCOME TAX OFFICER WARD-36(2), 110, SHANTIPALLY, 8 TH FLOOR, KOLKATA-107 /APPELLANT .. /RESPONDENT HEARING THROUGH VIDEO CONFERENCING /BY APPELLANT NONE /BY RESPONDENT SHRI JAYANTA KHANRA, JCIT-SR-DR /DATE OF HEARING 09-02-2021 /DATE OF PRONOUNCEMENT 09-02-2021 /O R D E R THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 25.09.2019 OF THE COMMISSIONER OF INCOME-TAX (APPEA LS)-10, KOLKATA [HEREINAFTER REFERRED TO AS CIT(A)]. 2. NONE HAS PUT IN APPEARANCE ON BEHALF OF THE ASSE SSEE DESPITE NOTICE. IN VIEW OF THIS, I PROCEED TO DECIDE THE APPEAL ON MERITS AFTE R GOING THROUGH THE RECORD AND AFTER HEARING THE LD. DR. 3. THE ASSESSEE IN THIS APPEAL HAS CONTESTED THE AD DITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ESTIMATION OF PROFITS EARNED ON SALE OF IMPORT GOODS @ 15% AND THEREBY MAKING THE TOTAL ADDITION AT 10,66,945/-. THE ASSESSEE HAS TAKEN THE PLEA THAT IN FACT THE ASSESSEE DID NOT MAKE ANY SALES. THE GO ODS, THAT WERE IMPORTED WERE ITA NO.2574/KOL/2019 A.Y. 2016-17 SHREE SHUBHAM EXPORTS VS. ITO WD-36(2), KOL. PAGE 2 RETURNED BY THE ASSESSEE DUE TO INFERIOR QUALITY. I T HAS BEEN PLEADED THAT SINCE THE ASSESSEE DID NOT MAKE ANY SALES / PURCHASE, THE EST IMATION OF PROFIT ON SALE BY THE ASSESSING OFFICER WAS NOT JUSTIFIED. IN THE ALTERNA TIVE, IT HAS BEEN PLEADED THAT THE ESTIMATION OF PROFIT @ 15% WAS TOO HIGH, WHICH COUL D HAVE BEEN AT THE MOST ESTIMATED AT 2% OF TOTAL PURCHASE. IT HAS BEEN FURT HER PLEADED THAT EVEN OTHERWISE THE ASSESSEE IS ENTITLED TO SET OFF THE PROFITS AGAINST THE CARRIED FORWARD LOSSES OF THE EARLIER ASSESSMENT YEARS. 4. I HAVE HEARD THE LD. DR AND HAVE ALSO GONE THROU GH THE RECORD. LD. DR HAS SUBMITTED THAT THERE IS NO EVIDENCE ON THE FILE THA T THE ASSESSEE HAD NOT MADE SALES OF THE IMPORTED GOODS. THAT, IN FACT, THE IMPORT DUTY HAS BEEN PAID BY THE ASSESSEE OUT OF CUSTOMERS ACCOUNT. THEREFORE, IT IS NOT BELIEVABLE THAT ASSESSEE HAS NOT MADE THE SALE OF THE IMPORTED GOODS. HOWEVER, THE LD. DR HAS BEEN FAIR ENOUGH TO STATE THAT STRAIGHTWAY ASSESSMENT OF PROFITS @ 15% OF MADE BY THE ASSESSING OFFICER HAS NO BASIS. LD. DR HAS SUBMITTED THAT THE ESTIMATION OF PROFITS CAN BE MADE ON THE BASIS OF AVERAGE PROFITS SHOWN BY THE ASSESSEE IN PRECEDING AND SUBSEQUENT ASSESSMENT YEARS TO THE RELEVANT ASSESSMENT YEAR. I FIND MERITS IN T HE ABOVE SUBMISSIONS OF THE LD. DR. THE ESTIMATION OF PROFIT @ 15% IS SET ASIDE AND IT IS DIRECTED THAT NET PROFIT OF THE ASSESSEE BE ESTIMATED ON THE TOTAL PURCHASES TAKING INTO CONSIDERATION THE AVERAGE NET PROFIT OF PRECEDING THREE YEARS AND SUBSEQUENT TWO YEARS TO THE RELEVANT ASSESSMENT YEAR. TAKING THE AVERAGE OF FIVE ASSESSMENT YEARS, THE NET PROFIT OF THE ASSESSEE BE ESTIMATED. IT IS FURTHER DIRECTED THAT THE PROFITS SO ESTIMATED WILL BE SET OFF AGAINST THE CARRIED FORWARD LOSSES OF THE EARLIER ASSESSMENT YE ARS AS ADMISSIBLE AS PER LAW. WITH THE ABOVE OBSERVATION THE PRESENT APPEAL OF TH E ASSESSEE IS TREATED AS PARTLY ALLOWED . ORDER PRONOUNCED IN OPEN COURT AT THE CLOSE OF THE HEARING ON TUESDAY, 9 TH FEBRUARY, 2021 . SD/- (SANJAY GARG) JUDICIAL MEMBE R *DKP/SR.PS ' - 09/02/2021 ITA NO.2574/KOL/2019 A.Y. 2016-17 SHREE SHUBHAM EXPORTS VS. ITO WD-36(2), KOL. PAGE 3 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-SHREE SHUBHAM EXPORTS MANGALAM-A, 2 ND FLOOR, ROOM 204, 24, HEMANT BASU SARANI, KOLKATA-700001 2. /RESPONDENT-ITO WD-36(2), 110, SHANTIPALLY, 8 TH FLOOR, KOLKATA-107 3. % ' / CONCERNED CIT 4. ' - / CIT (A) 5. ( ++% , % / DR, ITAT, KOLKATA 6. - / GUARD FILE. BY ORDER/ , %,