M/s Mahasagar Travels Ltd., JUNAGADH V. The Dy. Commr. of Income Tax, Junagadh Cir.-1, JUNAGADH

ITA 275/RJT/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0051 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-11-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 11-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C S ANJARIA
• Keywords: Business income; Income from undisclosed sources
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT [CONDUCTED THROUGH E-COURT AT AHMEDABAD] BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER ./ ITA NO. 275/RJT/2015 ASSESSMENT YEAR : 2010-11 M/S. MAHASAGAR TRAVELS LTD, KALWA CHOWK, JUNAGADH PAN : AABCM 4403 H VS DCIT, CIRCLE-1, JUNAGADH / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI SAMIR JANI, AR REVENUE BY : SHRI C.S. ANJARIA, DR / DATE OF HEARING : 22/11/2016 / DATE OF PRONOUNCEMENT: 20/12/2016 / O R D E R PER S.S. GODARA, JUDICIAL MEMBER :- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2010-11 ARISES FROM ORDER OF CIT(A)-3,RAJKOT DATED 13.03.2015, PASSED I N CASE APPEAL NO. CIT(A)-3/RJT/0527/13-14, IN PROCEEDINGS U/S 143(3) OF THE INCOME-TAX ACT, 1961, IN SHORT THE ACT. 2. WE NOTICE AT THE OUTSET THAT THE INSTANT APPEAL SUFFERS FROM DELAY OF 9 DAYS IN FILING. LEARNED COUNSEL REPRESENTING ASSESSEE HAS FILED HIS PERSONAL AFFIDAVIT SEEKING CONDONATION THEREOF ON T HE GROUND THAT HE WAS ON AN INTERNATIONAL TOUR IN CONNECTION WITH ALL GUJARAT FEDERATION OF TAX CONSULTANTS. LEARNED DEPARTMENTAL REPRESENT ATIVE IS FAIR ENOUGH IN NOT DISPUTING THE SAID SOLEMN AVERMENTS. WE THUS CONDONE THE IMPUGNED DELAY OF 9 DAYS IN FILING OF THE INSTA NT APPEAL. THE SAME IS NOW TAKEN UP FOR ADJUDICATION ON MERITS. ITA NO. 275/RJT/2015 MAHASAGAR TRAVELS LTD VS. DCIT AYS 2010-11 2 3. THE ASSESSEES SOLE SUBSTANTIVE GROUND CHALLENGE S UNACCOUNTED BUSINESS RECEIPTS ADDITION OF RS.12,97,496/- AS MAD E BY BOTH THE LOWER AUTHORITIES. WE FIND THAT THE LD. CIT(A) ELABORATE LY DISCUSSES ASSESSING OFFICERS CONCLUSIONS AND ASSESSEES SUBM ISSIONS AS UNDER:- 9.0 GROUND NO.6 IS REGARDING A.O.S ACTION OF M AKING ADDITION OF RS.12,97,496/- TOWARDS UNACCOUNTED BUSINESS RECEIPT S BASED ON FEEDBACK FROM SERVICE TAX DEPARTMENT. 9.1 IT WAS SEEN BY THE AO THAT AS PER THE CENTRAL E XCISE DEPARTMENT, THE APPELLANT HAD NOT SHOWN BUSINESS RE CEIPTS OF RS.12,97,496/-. THE ADDITION WAS MADE BY THE AO AS PER THE FOLLOWING OBSERVATIONS:- '7.2 THE ASSESSEE'S COM EN I ION IS NOT ACCEPTABLE BECAUSE DURING THE COURSE OF SURVEY/SEARCH CARRIED OUT BY CENTRAL EXCISE DEPARTMENT FOR SERVICE-TAX PURPOSE AT THE BUSINESS PREMISES OF THE COMPANY, THE CENTRAL EXCISE DEPARTMENT HAS IMPO UNDED ACCOUNTING MATERIALS RELATING TO THE ASSESSEE'S BUS INESS AND AFTER VERIFICATION OF EACH AND EVERY TRANSACTION, THEY HA VE SEGREGATED THE TRANSACTIONS WHICH WERE FOUND AS NOT RECORDED I N THE BOOKS OF ACCOUNTS AS PER ANNEXURE B1 & ANNEXURE D. THIS OFFI CE HAS DEPUTED INSPECTORS TO COLLECT THE INFORMATION FROM CENTRAL EXCISE DEPARTMENT AND NECESSARY VERIFICATION OF THE DETAIL S RECEIVED THERE FROM IS MADE. FURTHER, THE CENTRAL EXCISE DEP ARTMENT HAS INTIMATED THE ASSESSEE REGARDING THIS FACT VIDE ITS SHOW CAUSE NOTICE DT. 19.10.2011. THE ASSESSEE'S REQUEST FOR C ROSS VERIFICATION OF WITNESS IS NOT ACCEPTABLE BECAUSE THE WITNESS (C ENTRAL EXCISE DEPARTMENT) HAS ALREADY GIVEN THE OPPORTUNITY TO TH E ASSESSEE VIDE SHOW CAUSE NOTICE DT. 19.10.2011 TO REPRESENT ITS CASE REGARDING NON-ACCOUNTING OF INCOME RELATING TO RENT -A-CAB SERVICE AND MINI BUS RENT AS MENTIONED IN ANNEXURES B1 & D WHICH IS A PART OF SAID SHOW CAUSE NOTICE. LOOKING TO THE FACTS NARRATED SUPRA, THE ASSESSEE'S OBJECTION IS NOT TEN ABLE AND I THEREFORE, MAKE ADDITION OF RS.12,97,496/- TO THE R ETURNED INCOME OF THE ASSESSEE...... ' 9.2 DURING THE COURSE OF APPELLATE PROCEEDINGS, IT WAS CONTENDED BY THE APPELLANT THAT THE ADDITION HAS BEEN MADE ON THE BA SIS OF INFORMATION BORROWED FROM THE SERVICE TAX DEPARTMENT IN SPITE O F THE FACT THAT THE ITA NO. 275/RJT/2015 MAHASAGAR TRAVELS LTD VS. DCIT AYS 2010-11 3 ALLEGED RECEIPTS HAVE BEEN ACCOUNTED FOR AND DETAIL S HAVE BEEN FILED DURING THE COURSE OF APPELLATE PROCEEDINGS. IT IS A LSO CONTENDED THAT COPIES OF THE DOCUMENTS USED AGAINST THE APPELLANT HAVE NOT BEEN MADE AVAILABLE IN SPITE OF SPECIFIC REQUEST. ALSO, THE C ROSS-EXAMINATION OF WITNESSES WAS NOT GRANTED. IT WAS THEREFORE REQUEST ED THAT THE ADDITION BE DELETED. 9.3 I HAVE CAREFULLY CONSIDERED THE CONTENTION OF T HE APPELLANT AND THE ASSESSMENT ORDER. THE TRANSACTIONS NOT RECORDED IN THE BOOKS OF ACCOUNTS HAVE BEEN SPECIFICALLY MENTIONED IN ANNEXU RE-B1 AND ANNEXURE-D BY THE EXCISE DEPARTMENT ON THE BASIS OF INFORMATION COLLECTED DURING THE COURSE OF SURVEY. I AGREE WITH THE A.O. THAT CENTRAL EXCISE DEPARTMENT HAD ALREADY GIVEN AN OPPO RTUNITY TO THE APPELLANT VIDE ITS LETTER DT. 19/10/2011 TO SHOW CA USE AS TO WHY THE NON-ACCOUNTING OF INCOME WAS WRONG. A SPECIFIC OPPO RTUNITY HAS ALREADY BEEN PROVIDED BY THE EXCISE DEPARTMENT. IT IS THEREFORE NOT AT ALL NECESSARY TO OFFER ANY FURTHER OPPORTUNITY OF C ROSS-EXAMINATION TO THE APPELLANT. THE ADDITION MADE BY THE A.O. IS BAS ED ON THE FINDING DISCOVERED BY ANOTHER GOVERNMENT DEPARTMENT COLLECT ED DURING THE COURSE OF SURVEY. THE VERACITY OF THE SAME IS NOT D OUBTED. THE APPELLANT HAS ALSO NOT GIVEN ANY ORDER OF THE HIGHER AUTHORIT Y OF THE EXCISE DEPARTMENT WHEREIN THIS ADDITION IS DELETED. I AM N OT ABLE TO AGREE WITH THE APPELLANT'S CONTENTION AND FIND NO MERIT I N THE SAME. THE ADDITION IS CONFIRMED. THIS GROUND OF APPEAL IS DIS MISSED. 4. WE HAVE HEARD BOTH THE PARTIES REITERATING THEIR RESPECTIVE STANDS AGAINST AND IN SUPPORT OF THE IMPUGNED UNACC OUNTED BUSINESS RECEIPT ADDITION. BOTH THE AUTHORITIES BELOW HAVE ADMITTEDLY ADDED THE ENTIRE AMOUNT IN QUESTION. AFTER STRONGLY ARGU ING IN ASSESSEES FAVOUR FOR DELETING THE IMPUGNED ADDITION IN ENTIRE TY, LEARNED COUNSEL RAISES AN ALTERNATIVE PLEA THAT HE ONLY WISHES TO C ONFINE THE ABOVE SUBSTANTIVE GROUND TO THE EXTENT OF ESTIMATION OF G P COMPONENT IN THE ABOVE UNACCOUNTED INCOME. HE THUS SEEKS TO GET TH E GROSS PROFIT COMPONENT ESTIMATED IN THE UNACCOUNTED INCOME FOR B EING SUBJECT MATTER OF ADJUDICATION IN THE INSTANT APPEAL. LEAR NED DEPARTMENTAL ITA NO. 275/RJT/2015 MAHASAGAR TRAVELS LTD VS. DCIT AYS 2010-11 4 REPRESENTATIVE FAILS TO DISPUTE ASSESSEES ARGUMENT THAT ENTIRE UNACCOUNTED BUSINESS RECEIPTS COULD NOT BE ADDED IN SUCH CIRCUMSTANCE. WE OBSERVE IN THIS FACTUAL BACKGROUN D THAT BOTH THE LOWER AUTHORITIES HAVE ERRED IN NOT CONFINING THE I MPUGNED ADDITION TO THE GP COMPONENT THEREIN ONLY. WE THUS DIRECT T HE ASSESSING OFFICER TO PROCEED AFRESH TO FINALIZE CONSEQUENTIAL ASSESSMENT BY RESTRICTING THE IMPUGNED UNACCOUNTED BUSINESS RECEI PTS AMOUNT TO THE EXTENT OF GROSS PROFIT ELEMENT AS PER LAW. 5. THIS ASSESSEES APPEAL IS PARTLY ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 20 TH DECEMBER, 2016 AT AHMEDABAD. SD/- SD/- (N.K. BILLAIYA) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER AHMEDABAD; DATED 20/12/2016 *BT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! / CONCERNED CIT 4. ! ( ) / THE CIT(A) 5. , / DR, ITAT, RAJKOT 6. & / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) ' #, / ITAT, RAJKOT