WADHWA & WADHWA P LTD., Kota V. CIT, Kota

ITA 268/JPR/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62006 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-05-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 21-03-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D K MEENA; SUBHASH CHANDRA
• Assessee Lawyers: C M BIRLA
• Keywords: Business income
• Section: 143(3); 263; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI SANJAY ARORA ITA NOS. 153 & 268/JP/2012 ASSTT. YEAR : 2007-08 M/S WADHWA & WADHWA (P) LTD., VS THE ITO, WARD-1(1 ), B-20, SMALL SCALE IND.AREA, KOTA KOTA PAN NO. AAACWA1778Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI C.M. BIRLA RESPONDENT BY : S/SHRI SUBHASH CHANDRA & SHRI D .K. MEENA DATE OF HEARING : 02.05.2012 DATE OF PRONOUNCEMENT : 04.05.2012 ORDER PER BENCH THESE ARE TWO APPEALS BY THE ASSESSEE RELATING TO ASSESSMENT YEAR 2007-08. 2. APPEAL UNDER ITA NO. 153/JP/2012 IS AGAINST ORDE R PASSED U/S 143(3) ORIGINALLY AND APPEAL UNDER ITA NO. 268/JP/2012 IS AGAINST ORD ER PASSED U/S 263 OF THE ACT. 3. THE ASSESSEE DERIVES INCOME FROM BUSINESS TRADIN G AND GRINDING OF SALT AND INCOME FROM JOB WORK, HIRE CHARGES FROM MAHENDRA PI CKUPS. ASSESSMENT IN THIS CASE WAS COMPLETED U/S 144 ON A TOTAL INCOME OF RS. 12, 03,433/- AGAINST RETURNED INCOME OF RS. 3,48,400/-. THE ASSESSING OFFICER ASSESSED BUS INESS INCOME FROM MANUFACTURING 2 ACTIVITY AT RS. 3,60,000/-, INCOME FROM HIRE CHARGE S FROM THREE MAHENDRA PICKUPS AT RS. 6,09,433/- AND INCOME FROM JOB WORK AT RS. 2,34,000 /-. 4. THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE I N PART. BUSINESS INCOME WAS REDUCED BY RS. 1,60,000/- AGAINST RS. 3,60,000/- AD OPTED BY THE ASSESSING OFFICER. IN FACT, THE ASSESSING OFFICER ESTIMATED SALE TURN OV ER AT RS. 18,00,000/- BY APPLYING NP RATE OF 20%, INCOME WAS TAKEN AT RS. 3,60,000/-. T HE CIT(A) REDUCED ESTIMATION OF TURN OVER TO RS. 10,00,000/- AND DIRECTED TO APPLY NP RATE OF 20%. IN THE ABOVE FINDINGS OF THE CIT(A), WE FIND NO UNREASONABLENESS AS ESTIMATI ON MADE BY THE CIT(A) IS ON THE BASIS OF EARLIER YEARS TURN OVER. SINCE BOOKS OF A CCOUNT WERE NOT PRODUCED, THEREFORE, ESTIMATION IN OUR VIEW IS CORRECT. 5. HIRE CHARGES INCOME WAS ALSO REDUCED IN VIEW OF PROVISIONS OF RULE 44 AE OF THE ACT BY WHICH AN ADDITION OF RS. 4,96,033/- WAS DELE TED. IN RESPECT OF THIS HEAD ALSO, WE SEE NO UNREASONABLENESS IN THE ORDER OF CIT(A) WHO HAS COMPUTED THE INCOME OF THE ASSESSEE U/S 44AE. ACCORDINGLY, THE ORDER OF CIT(A ) ON THIS ASPECT IS ALSO CONFIRMED. 6. THE REMAINING ISSUE IS IN RESPECT OF INCOME FROM JOB CHARGES. THE ASSESSING OFFICER ADOPTED AN ESTIMATED TURN OVER OF RS. 5,24, 000/- AGAINST RS. 2,90,000/- SHOWN BY THE ASSESSEE. HOWEVER, WHILE COMPUTING THE INCOME, ASSESSING OFFICER CREPT A MISTAKE THAT WHILE ESTIMATING JOB RECEIPTS AT RS. 5,24,000/ - HE REDUCED RECEIPTS SHOWN BY ASSESSEE AT RS. 2,90,000/- AND ESTIMATED INCOME WAS ASSESSED IN THE HANDS OF THE ASSESSEE. THE CIT(A) RECTIFIED THIS MISTAKE AND ADOPTED THE FIGUR E OF RS. 5,24,000/- ON ACCOUNT OF JOB 3 RECEIPTS AND DIRECTED THE ASSESSING OFFICER TO COMP UTE THE INCOME @ 30% ON THESE RECEIPTS. HOWEVER, THE COUNSEL OF THE ASSESSEE STR ONGLY ARGUED THAT THERE IS NO BASIS FOR ADOPTING FOR SUCH A FIGURE AT RS. 5,24,000/- AGAINS T RECEIPT SHOWN BY THE ASSESSEE AT RS. 2,90,000/- AND CIT(A) WAS ALSO NO JUSTIFIED IN ESTI MATING THE PROFIT @ 30%. 7. AFTER CONSIDERING THE SUBMISSIONS OF LD. AR AS W ELL AS LD. DR WHO HAS PLACED RELIANCE ON THE ORDER OF CIT(A), WE ARE OF THE VIEW , THAT THE JOB RECEIPTS OF THE ASSESSEE IF TAKEN AT RS. 3,50,000/- AGAINST RS. 5,24,000/ - ADOPTED BY LOWER AUTHORITIES, THAT WILL MEET THE END OF JUSTICE. HOWEVER, WITH REGARD TO PROFIT @ 30%, WE SEE NO UNREASONABLENESS AT THE END OF CIT(A), THEREFORE, A PPLICATION OF 30% IS UPHELD. THE ASSESSING OFFICER IS DIRECTED TO RECOMPUTE THE INCO ME BY TAKING JOB RECEIPTS AT RS. 3,50,000/- AND THEN APPLY A NP RATE OF 30% ON THESE RECEIPTS. 8. IN THE SECOND APPEAL I.E. AGAINST ORDER U/S 263 OF THE ACT, WE FOUND THAT LD. CIT(A) HAS RECTIFIED THE MISTAKE OF ASSESSING OFFIC ER BY DIRECTING HIM TO ADOPT THE FIGURE OF RS. 5,24,000/- WITHOUT REDUCING THE AMOUNT OF R S. 2,90,000/- SHOWN BY THE ASSESSEE. THIS MISTAKE HAS ALREADY BEEN RECTIFIED BY LD. CIT( A) WHILE DECIDING THE APPEAL OF THE ASSESSEE ON MERIT. THEREFORE, THESE DIRECTIONS ARE NOW IMMATERIAL AS THE SAME WILL NOT EFFECT THE TAXABILITY BECAUSE WE HAVE ALREADY ADJUD ICATED THIS ISSUE WHILE DISPOSING OF THE APPEAL ON MERIT AGAINST THE ORDER OF CIT(A) AS ABOV E. 9. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE TRE AT THIS ORDER OF CIT AS INFRUCTUOUS IN NATURE. 4 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE AGAI NST THE ORDER U/S 143(3) IS ALLOWED IN PART AND SECOND APPEAL HAS BECOME INFRUCTUOUS IN N ATURE. 11. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 04 .05.2012. SD/- SD/- ( SANJAY ARORA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 04 TH MAY, 2012 RKK COPY TO/- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR