Sri.Mangat Aboobacker, Calicut V. The ITO, Calicut

ITA 263/COCH/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8496 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 21-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 11-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A DHANARAJ
• Assessee Lawyers: A V MURALEEDHARAN
• Keywords: Corroborative evidences
• Section: 6; 154

Judgement Text

ITA NO S 262 AND 263/C/2015 1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN (SMC) BEFORE SHRI B P JAIN , ACCOUNTANT MEMBER ITA NO S 262 AND 263/COCH/2015 (A SST YEA SS 2008 - 09 & 2009 - 10 ) MANGAT ABOOBACKER 1/195 PUBNE TRADERS M A ROAD CLICUT 673 001 VS THE INCOME TAX OFFIC ER WARD 1(3), KOZHIKODE ( APPELLANT) (RESPONDENT) PAN NO. AHOPA0799H ASSESSEE BY SH A V MURALEEDHARAN REVENUE BY SH A DHANARAJ, SR DR DATE OF HEARING 21 ST JUNE 2016 DATE OF PRONOUNCEMENT 22 ND JUNE 2016 ORDER PER B P JAIN, AM : THESE APPEA LS BY THE ASSESSEE ARISE FROM THE CONSOLIDATED ORDER DATED 31.3.2015 OF THE CIT(A), KOZHIKODE FOR THE ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 RESPECTIVELY. 2 FIRST, I SHALL TAKE UP FOR ADJUDICATION THE APPEAL IN ITA NO. 262/COCH/2015 AND THE ORDER HEREIN B ELOW SHALL BE IDENTICALLY APPLICABLE FOR THE OTHER APPEAL ALSO. ITA NO S 262 AND 263/C/2015 2 3 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A PRO P R I E TOR OF M IS P UNE T RAD ER S, C A LIC UT . THE MAIN B USINESS O F TH E AS S ESSEE I S TRANSP ORT S O F ON I O N FRO M P U NE AND RAHULI IN M A H A R ASHTR A AND DIST R I B U TES THE S A M E I N C AL I CUT KA N NUR AND MALAPPURAM DISTRICTS. A SURVEY A /S 133 A OF T HE I T ACT WA S CONDUCTED IN THE BUSINESS PREMI S ES OF MIS PUNE T RAD E R S, M A R OA D, CA LI CUT ON 07 . 01.2011. 3.1 DUR I NG THE COURSE OF S U R V EY U / S 1 3 3A OF T H E IT A C T , 1 9 6 1 THE LO O S E SH E E T S CO NTAINING ACT U AL T R A N S AC T IO N S A ND COMM I S SI ON R EC E I VED WE R E S E EN AND IMP OU N DED . A T TH E TIME OF S U R V EY TH E A S S E SSEE C O UL D NO T PR O DUCE THE BOOKS OF A CCOUNT S . I N T HE SWO R N STA T E MENT RE C O R DE D AT TH E TIME OF SURVEY ON 07.10.2011 A N SWER TO QUES TION N O. 3 THE A SS ESS EE STATED THAT HE IS NOT MAINTAINING DAY BOOK, LEDGER A ND S TOCK R EG IS T ER . IT I S STATED THAT ALL T HE TRANSACTIONS WERE ROUTED THROUGH T H E BAN K AC C OUNT MAINTAINED WITH THE AXL S BANK, YM C A ROA D , CAL I CU T . T HE T O TAL TURNO VER WAS WORK E D O U T O N THE B ASI S OF THE B AN K S TAT E ME N T S F O R AL L T HE TH RE E FINAN CIAL Y E A R S R E LEVA NT T O T H E A SS T . Y EA R S . IT WAS STATED THAT T HE A SS ESS E E K E EPS ONLY S LI P S F OR N O T IN G THE TRAN SA C T I O N S AND T H E SE ARE R EGU L AR LY D ES T ROY E D . I N T H ESE C I RC U M S TANC ES , TH E A SS ESSIN G O FF ICER HAS NOT ACC E P T ED THE BOO K S OF ACCOU N TS PRO DU CE D TR EA T I N G THE M AS FABRICATED AND NOT GENUINE. THEREFORE, T H E TURNOVER OF TH E BU SIN E S S W A S ARRIVED AT ON THE BASIS OF T R ANSACTION I N THE BANK STATEME NTS A ND IN C OME WAS ESTIMA T E D A T 3% OF T H E TURNOVER A S UND ER : FIN. YEAR TURNOVER COMMISSION @5% COMMISSION FORGONE @ 2% NET COMMISSION OWN BUSINESS TOTAL INCOME ASSESSED 2007 - 08 10922922 546146 218458 327688 - 327688 2008 - 09 69839569 3491978 1396791 2095187 - 2095187 2009 - 10 99745772 4987289 1994915 2992373 2827 40 3275113 ITA NO S 262 AND 263/C/2015 3 THE A SSESS EE PREFERRED APPEAL BEFORE T HE FIRST APPELLATE AUTHORITY. THE LD CIT(A) D I REC T ED THE AO T O D E L ETE T HE AD D ITION S MADE ON T HE FOLLOWING GROUNDS: A } THERE IS N O BASIS OF EX T RA P O L ATION OF T URNOVER TO T HE P A ST YEAR S WH EN NO INCRIMIN ATI NG DET A ILS W ER E REC O V E R E D RELA T I NG T O TH E PRE VIOUS Y E ARS DURI N G THE SU R V E Y . THE LD CLT(A ) H A S RELI ED O N TH E D ECISI O N IN THE CASE OF CLT VS D R MKE M E N O N 24 8 1TR 3 1 0 BY MUMBAI HI G H COU R T . B) THE AO ADOPTED A FLAT R ATE OF RS. 40/ - PE R K G F OR ALL TH E ASSES S M ENT YEARS WI THO U T CO NSIDERIN G T HE HU G E F L UC TU ATI O N IN T H E P R I C E OF ONIO N PR E VAI LING IN THE MARKE T . C ) THE FIGURES APP EARING IN T H E L O O S E S HE ETS IMP O UN D ED D U R ING T HE COURSE OF SURVEY DO NOT REPRESEN T SA L E OR EX P ENDITU RE AND IT C O UL D BE RELATED TO RECEIVI NG OR GIVING MONEY TO VAR I OUS PARTIES IN RE L A TI NG TO BUS I NESS TRANSACTIONS. D) NO CORROBORATIVE EVIDENCES HAVE BEEN OBTAINED BY THE A O TO S UBSTANTIATE THE EXTRAPOLATION BASED ON IMPO U NDED MATERIALS. 3.2 . IT I S SU BMITTED THAT THE F IND I NGS OF T HE LD C LT( A) CON T AINS T HE FOLLOWI NG M ISTAKE AP P AR E NT FROM RECORD S: A } T H E A O HA S RE LIED UPON THE B ANK AC C OUNTS M AI NT AINED B Y THE AS S E SSEE WITH THE A X IS BANK, YMCA RO A D , CA L I C U T FOR T HE BASIS OF IN COME ASS E SSED S INCE A L L THE TR A NS ACTIONS WE R E ROU T E D TH RO UGH THE B ANK . B) THE AO HAS N O T DI S CUSSED Q UANTITATI V E ASPEC TS OF SALE S A N YWHERE IN T HE ASSESSMENT O R D E R OR ESTIMATED THE PRIZ E OF ONION AS RS. 4 0 P ER KG IN A LL THE ASSESSMEN T Y E A R S . C) THE ASS ES S EE I N QUE STIO N N O. 3 H AD S T ATED TH AT HE H AS NO T MA I NTAINED ANY DAY B O OK, L EDGE R ' AND STOC K R E GISTER. HE HAS AL S O S TA T ED THAT SLIP S P RIOR TO JULY 2009 WERE DE S TRO YE D AND ALL TRANSAC T I O N S ARE ROUT ED T HROUGH B AN K. D) THE FINDING OF T HE LD CL T (A) THAT INCOME WAS ES T IMA T E D O N THE ITA NO S 262 AND 263/C/2015 4 BA S IS OF EXTRAPOLATION OF THE DATA AVAIL A BLE I N THE LOOS E S HEET S IMPOUNDED DURING THE COURSE OF SURVEY IS AGA I NST THE FACTS. 3.3 IT WAS SUBMITTED THAT P RIMA FACIE, SINCE CERTAIN MISTAKES POINTED O U T BY THE ASSESSING OFFICE R W AS FOU N D T O BE CORREC T, A L ET T E R WAS IS S U ED ALONG WIT H T H E M IS CE LLA NE O US PE T ITI O N O F THE A S SE SS ING OFFIC E R T O THE ASS E S S EE O N 3 0. 12 .20 14 P ROPOS ING T O R EC T I FY T H E MISTA K E . I N R ESP O NSE , THE ASS E SS EE FIL E D A LET T ER O N 04.03. 2 015 OBJ E CTING T O T HE PROP O S AL. 3.4 AGGRIEVED, THE ASSESSEE PREFERRED APPEAL TO THE FIRST APPELLATE AUTHORI TY. THE CIT(A) CONFIRMED THE ACTION OF THE AO. 4 THE ASSESSEE BEING AGGRIEVED IS IN APPEAL BEFORE THIS TRIBUNAL. 5 I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT WAS POINTED OUT BY THE LD COUNSEL FOR THE ASSESSEE THA T THE ASSESSEE HAS PRODUCED THE BOOKS OF ACCOUNT AND NO DEFECT HAS BEEN POINTED BY THE AO . EVEN BEFORE US, NO MATERIAL HAS BEEN PLACED ON RECORD REGARDING ANY DEFECT IN THE BOOKS OF ACCOUNT. I DO NOT FIND ANY MISTAKE, WHICH IS APPARENT FROM RECORD. THERE FORE, WHEN THERE IS NO MISTAKE APPARENT FROM RECORD, THE PROVISIONS OF SECTION 154 CANNOT COME INTO PLAY. THEREFORE, I AM OF THE OPINION THAT T HE LD CIT(A) IS NOT JUSTIFIED IN RECALLING THE ORDER AND REVIEW THE SAM E BY WRITING A DIFFERENT ORDER A CCORDING T O THE APPLICAT ION MADE BY THE AO. I N THE ITA NO S 262 AND 263/C/2015 5 FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER OF THE CIT(A) IS TO BE REVERSED AND THE ORIGINAL ORDER MADE BY THE CIT(A) , IS DIRECTED TO BE ACCEPTED. IT IS ORDERED ACCORDINGLY. 6 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ITA NO.263/COCH/2015 7 SINCE THE ISSUE IN THE OTHER APPEAL IS IDENTICAL, THEREFORE, MY ORDER IN ITA NO.262/COCH/2015 IS APPLICABLE IN TH IS APPEAL ALSO . THEREFORE, BOTH THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. 8 TO SUM - U P , BOTH THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND DAY OF JUNE 2016 SD/ - ( B P JAIN ) ACCOUNTANT MEMBER COCHIN: DAT ED 22 ND JUNE 2016 RAJ* ITA NO S 262 AND 263/C/2015 6 COPY TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT, 5 . DR 6 . GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN