The ACIT, Circle-5, Baroda V. M/s. D.L. Roadlines, Baroda

ITA 2751/AHD/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1781 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2009
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2003-2004
• Appeal Filed On: 06-10-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M C PANDIT
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE S/SHRI N. S. SAINI, AM AND MAHAVIR SINGH, J M) ITA NO. 2751/AHD/2009 A. Y.: 2002-03 A. C. I. T., CENTRAL CIRCLE- 5, 5 TH FLOOR, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA 390 007 VS M/S. D. L. ROADLINES, 0-28, MAHALAXMI COMPLEX, KARELIBAUG, BARODA PA NO.AACFD 5118 N (APPELLANT) (RESPONDENT) APPELLANT BY SHRI M. C. PANDIT, DR RESPONDENT BY SHRI TUSHAR HEMANI, AR DATE OF ORDER RESERVED: 09/12/2009 O R D E R PER MAHAVIR SINGH: THIS APPEAL BY THE REVENUE IS ARISING OUT OF THE ORDER OF THE LEARNED CIT(A)-V, BARODA IN APPEAL NO. CAB/(A)-V/2006-07 DATED 07-07-2009. THE ASSESSMENT WAS FRAMED BY THE ACIT, CIRCLE-5, BARODA U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT.) FOR THE ASSESSMENT YEAR 2002-03. 2. THE TWO INTERCONNECTING ISSUES IN THIS APPEAL OF THE REVENUE IS AGAINST THE ORDER OF THE CIT(A) IN DELETING THE ADDITION BY ACCEPTING BOOK RESULTS, REJECTED BY THE AO AND ESTIMATING THE NET PROFIT AT 8% OF TH E RECEIPTS. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. AT THE OUTSET, THE LEARN ED DR ARGUED THAT IN EARLIER YEAR ALSO THE TRIBUNAL HAS UPHELD THE REJECTION OF BOOK RESULTS AND IN THIS YEAR ALSO THE ASSESSEES LORRY RECEIPTS FOR FREIGHT CHAR GES ARE KEPT BLANK AND NOTHING IS WRITTEN AND THIS FACT HAS BEEN NARRATED BY THE A O IN PARA 4.3 (II) OF THE ASSESSMENT ORDER WHICH READS UNDER: 4.3 (II) LORRY HIRE CHARGES ARE ALSO NOT SUPPORTED BY ANY PRIMARY EVIDENCE. IT WAS FOUND THA T THE COLUMN PROVIDED IN LORRY RECEIPT FOR FREIGHT CHARGES HAD BEEN KEPT BLA NK. THIS WAS AN UNUSUAL ITA NOS.2751/AHD/2009 M/S. D. L. ROADLINES 2 SITUATION WHEREIN GOING BY THE ENTRIES MADE IN THE LORRY RECEIPT (AS AMENDED BY THE ASSESSEE) ONE WOULD NOT KNOW THE EXACT AMOUNT O F THE FREIGHT CHARGES. IT ALSO BECAME APPARENT THAT BLANK COLUMN WERE OPEN FO R ABUSE AND MANIPULATION TO SUIT THE PURPOSE AND CONVENIENCE OF ASSESSEE. 4. IN VIEW OF THE ABOVE FACT, THE LEARNED COUNSEL F OR THE ASSESSEE FAIRLY STATED THAT HE HAS NO OBJECTION IF THE BOOK RESULTS ARE NOT ACCEPTED BUT A FAIR ESTIMATE SHOULD BE MADE. FOR THIS, THE LEARNED COUN SEL FOR THE ASSESSEE STATED THE FACT THAT THE ASSESSEE FIRM IS ENGAGED IN THE B USINESS OF TRANSPORTATION OF GOODS AND THE TOTAL RECEIPTS OF THE YEAR IS AT RS.2 ,71,69,649/- AND NET PROFIT OF THE ASSESSEE FIRM IS AT RS.9,49,741/-. ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE THE NET PROFIT RATE IN THIS YEAR IS AT 3.5 %. BUT HE STATED THAT IN THE EARLIER YEAR THE TRIBUNAL HAS MADE LUMP SUM ADDITIO N OF RS.2,00,000/- AND FOR THIS HE AGREED. WE FIND THAT THE FACTS ARE EXACTLY IDENTICAL IN THE PRESENT YEAR WHAT WAS IN 2001-02 WHICH WAS BEFORE THE TRIBUNAL A ND THE TRIBUNAL HAS ESTIMATED THE DISALLOWANCE AT RS.2,00,000/-. THE AS SESSEE HAS DECLARED NET PROFIT RATE AT 3.5% IN THIS YEAR AND WE FEEL THAT O NCE THE BOOK RESULTS ARE REJECTED THE NET PROFIT IS TO BE REJECTED, AS IN THE EARLIER YEAR THE ASSESSEE HAS DECLARED A FURTHER INCOME OF RS.2,00,000/- AND ACCEPTED THE SA ME. WE FEEL THAT THE PERCENTAGE IN TERMS OF NET PROFIT SHOULD HAVE BEEN ESTIMATED AT 4.5% INSTEAD OF DECLARED RATE OF 3.5%. ACCORDINGLY, WE DIRECT THE A O TO RE-COMPUTE THE INCOME AFTER TAKING THE NET PROFIT AT 4.5% WITHOUT REMUNER ATION AND INTEREST TO THE PARTNERS AND DEPRECIATION. ACCORDINGLY, THIS APPEAL OF THE REVENUE IS PARTLY ALLOWED. 5. IN THE RESULT, REVENUES APPEAL IS PARTLY ALLOWED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 18-1 2-09 SD/- SD/- (N. S. SAINI) ACCOUNTANT MEMBER (MAHAVIR SINGH) JUDICIAL MEMBER DATE : 18-12-09 LAKSHMIKANT/-*DKP ITA NOS.2751/AHD/2009 M/S. D. L. ROADLINES 3 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE /TRUE COPY/ BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD