Shri Nimeshkumar R. Gole, Patan V. The Income tax Officer, Ward-2, Patan

ITA 2982/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1766 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 25-04-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 23-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: HARSHAD J THAKKAR
• Keywords: Assessment record; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA K. YADAV, JUDICIAL MEMBER ./ ITA NOS. 2981 & 2982/AHD/2015 / ASSESSMENT YEAR: 2007-08 & 2008-09 NIMESHKUMAR R. GOLE, C/O. M/S. NOBLE MITRA DAILY, VISHWAS COMPLEX, RAJMAHAL ROAD, PATAN-384265 (NG) .. APPELLANT PAN : ANYPG 7426 K VS INCOME TAX OFFICER, WARD-2, PATAN .. RESPONDENT ASSESSEE(S) BY : SHRI HARSHAD J. THAKKAR, AR REVENUE BY : SHRI MUKESH SHARMA, SR. DR. / DATE OF HEARING 25/04/2016 /DATE OF PRONOUNCEMENT 29/04/2016 / O R D E R THESE TWO APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST THE SEPARATE ORDERS OF THE COMMISSIONER OF INCOME-T AX (APPEALS), GANDHINAGAR OF EVEN DATED 27.07.2015 FOR ASSESSMENT YEARS 2007-08 AND 2008-09 RESPECTIVELY. SINCE BOTH THESE APPEALS INVOLVE SIMILAR ISSUE, THESE ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR SAKE OF CONVEN IENCE. ITA NO. 2981/AHD/2015 : AY 2007-08 2. IN THIS APPEAL, THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS:- 1. THE CIT(A) HAS ERRED IN LAW AS WELL AS ON FAC TS BY CONFIRMING THE ADDITIONS MADE BY ASSESSING OFFICER WHICH WAS ON ESTIMATED FIGURES DERIVED FROM INCORRECT INFORMATION. (SMC) ITA NOS. 2981 & 2982/AHD/2015 NIMESHKUMAR R. GOLE VS. ITO AY 2007-08 & 2008-09 2 2. THE CIT(A) HAS ERRED IN LAW AS WELL AS ON FACT S BY CONFIRMING THE ESTIMATED RECEIPT OF SELL PRICE OF T HE NEWS PAPER AT PRINTED PRICE ON NEWSPAPER. 3. THE CIT(A) HAS ERRED IN LAW AS WELL AS ON FACT S BY CONFIRMING THE NET RECEIPT WORKED OUT BY THE ASSESS ING OFFICER AT PRINTED PRICE WITHOUT TAKING INTO CONSID ERATION THE SALES COMMISSION (TRADE DISCOUNT) AND ACTUALLY AMOUNT COLLECTED FROM THE CLIENT. 4. THE CIT(A) HAS ERRED IN LAW AS WELL AS ON FACT S BY CONFIRMING THE RETAIL SALES PRICE OF A SINGLE COPY TO THE CLIENT IN MARKET AS ADOPTED IN ASSESSMENT ORDER. 5. THE CIT(A) HAS ERRED IN LAW AS WELL AS ON FACT S BY CONFIRMING THE NON-CONSIDERATION MADE BY ASSESSING OFFICER OF MARKET PROCEDURE FOR SELLING A NEWS PAPE R WITH TRADE DISCOUNTS AND AGENTS AND VENDORS COMMISSION A T THE RATE OF 40% OF SELL PRICE. 6. THE CIT(A) HAS ERRED IN LAW AS WELL AS ON FACT S BY CONFIRMING THE DISALLOWANCES OF ALL DISCOUNTS AND COMMISSION TO THE PERSONS SUPPLYING THE NEWS PAPER FROM PUBLISHERS TO CLIENT. 7. THE APPELLANT PRAYS TO GRANT LEAVE FOR ADDITIO NS, ALTERATIONS, AMENDMENTS, OR WITHDRAWAL OF ANY GROUN D OF APPEAL DURING THE COURSE OF HEARING OF APPELLATE PROCEEDINGS. 8. THE APPELLANT PRAYS TO GRANT RELIEF BY DELETIN G THE ADDITIONS MADE BY THE ASSESSING OFFICER AND CONFIRM ED BY THE CIT (A) INTO THE TOTAL INCOME AMOUNTING TO RS. 1,86,113/- FULLY AND TO GRANT THE JUSTICE. 3. THE BRIEF FACTS OF THE CASE, AS CULLED OUT FROM THE ASSESSMENT RECORDS, ARE THAT THE ASSESSEE HAD FILED RETURN OF INCOME ON 31.03.2008 DECLARING TOTAL INCOME AT RS.9 5,340/- WHICH WAS PROCESSED U/S 143(1) OF THE ACT. THEREAF TER, THE CASE OF THE ASSESSEE WAS REOPENED U/S 147 OF THE AC T AS THE ASSESSING OFFICER HAD REASONS TO BELIEVE THAT PROFI T TO THE EXTENT (SMC) ITA NOS. 2981 & 2982/AHD/2015 NIMESHKUMAR R. GOLE VS. ITO AY 2007-08 & 2008-09 3 OF RS.1,86,113/- HAD ESCAPED ASSESSMENT. ACCORDINGL Y, NOTICE U/S 148 OF THE ACT WAS ISSUED AND THE ASSESSMENT WA S REOPENED; AND THEREAFTER, THE ASSESSING OFFICER FRA MED ASSESSMENT U/S 143(3) R.W.S. 147 OF THE ACT BY MAKI NG ADDITION OF RS.1,86,113/- ON ACCOUNT OF UNDISCLOSED INCOME. 3.1 MATTER WAS CARRIED BEFORE THE FIRST APPELLATE A UTHORITY, WHEREIN VARIOUS CONTENTIONS WERE MADE ON BEHALF OF THE ASSESSEE AND, THE CIT(A), AFTER CONSIDERING THE SUB MISSIONS OF THE ASSESSEE, DISMISSED THE APPEAL OF THE ASSESSEE AND THE SAME HAS BEEN OPPOSED BEFORE US, INTER ALIA, SUBMITTING THAT THE CIT(A) ERRED IN CONFIRMING THE ESTIMATED RECEIP T OF SELL PRICE OF THE NEWSPAPER AT PRINTED PRICE ON NEWSPAPER. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTIC ED THAT THE ASSESSEE HAD SHOWN GROSS INCOME OF ADVERTISEMENT OF RS.3,55,048/-, LAVJAM OF RS.1,59,842/-, PAPER SELLI NG INCOME OF RS.22,97,688/- - TOTALING TO RS.28,12,578/- AND DISCLOSED NET INCOME OF RS.95,337/-. THE ASSESSING OFFICER F URTHER NOTICED THAT THE ASSESSEE HAD DECLARED THAT IT HAD PRINTED DAILY AVERAGE OF 27177 COPIES OF NEWSPAPERS AND ON AVERAG E SOLD 25790 OF DAILY NEWSPAPER @ OF RE.1 PER COPY. AS A RESULT, THE TURNOVER WAS WORKED OUT TO RS.77,88,580/-; HOWEVER, IN THE RETURN, ASSESSEE HAD DISCLOSED TOTAL TURNOVER OF RS .22,97,688/- ONLY ON ACCOUNT OF SELLING OF NEWSPAPERS. SO, THE ASSESSING OFFICER WORKED OUT UNDISCLOSED TURNOVER ON PRO-RATA BASIS AT RS.1,86,113/-. FURTHER, THE ASSESSING OFFICER REJEC TED FRESH (SMC) ITA NOS. 2981 & 2982/AHD/2015 NIMESHKUMAR R. GOLE VS. ITO AY 2007-08 & 2008-09 4 DECLARATION FILED AND SIGNED BEFORE THE ADDL. DISTR ICT COLLECTOR, PATAN WHEREIN THE ASSESSEE HAD DECLARED THAT HE WAS CHARGING RS.150/- AS ANNUAL SUBSCRIPTION. THE ASSESSING OFFI CER HAS CONTENDED THAT THE ASSESSEE HIMSELF DECLARED BEFORE THE INFORMATION DEPARTMENT OF STATE AND IT IS ALSO CERT IFIED BY THE CHARTERED ACCOUNTANT THAT ANNUAL SUBSCRIPTION WAS C HARGED AT RS.300/- PER ANNUM. THE ASSESSING OFFICER ALSO CON TENDED THAT ASSESSEE COULD HAVE REVISED HIS RETURN SHOWING ANNUAL SUBSCRIPTION CHARGES FROM RS.300/- TO RS.150/- BEFO RE THE REASSESSMENT PROCEEDINGS STARTED BUT NOT AFTER 8 YE ARS. THE ASSESSING OFFICER ALLOWED THE EXPENDITURE CLAIMED B Y THE ASSESSEE AND WORKED OUT THE PROFIT ON SELLING OF NE WSPAPERS AT RS.1,86,113/- AND MADE THE ADDITION TO THE TOTAL IN COME, WHICH WAS CONFIRMED BY CIT(A). THE STAND OF THE ASSESSEE HAS BEEN THAT ANNUAL SUBSCRIPTION OF NEWSPAPER IS RS.150/- P .A., WHICH IS COLLECTED BY AGENTS OR VENDORS APPOINTED BY THE ASSESSEE. THE ASSESSEE FURTHER THAT HE SOLD THE NEWSPAPERS AT 26 PAISE PER COPY TO THE VENDORS AND IN SUCH FACTS THE INCOME DE CLARED OF RS.22,97,688/- IS CORRECT. IT WAS ALSO ARGUED THAT THE ASSESSING OFFICER HAS TAKEN THE SALE PRICE OF A SINGLE COPY A T CLIENT PRICE I.E. RE.L/- AND MADE THE ADDITION. HOWEVER, IT WAS CONTENDED THAT VENDORS WHO ARE GETTING PRINTED COPIES ON BULK AT 40% DISCOUNT AND THERE WAS VAST VARIATION OF SELLING PR ICE TO THE VENDORS. THESE FACTS HAVE NOT BEEN PROPERLY VERIF IED BY THE LOWER AUTHORITIES. APART FROM ABOVE, ASSESSEES BU SINESS IS A PECULIAR ONE IN WHICH THE AGENTS/VENDORS ARE GIVEN COMMISSION (TRADE DISCOUNT). CONSIDERING THE FACTS AND CIRCUM STANCES OF THE CASE AS WELL AS THE PECULIARNESS IN THE ASSESSE ES BUSINESS (SMC) ITA NOS. 2981 & 2982/AHD/2015 NIMESHKUMAR R. GOLE VS. ITO AY 2007-08 & 2008-09 5 MODEL, IN THE INTEREST OF JUSTICE, THE MATTER IS SE T ASIDE TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO DECIDE THE SAME AS PER FACTS AND LOW, AFTER PROVIDING DUE OPPO RTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSING OFFICER IS A T THE LIBERTY TO RECORD THE STATEMENT OF VENDORS/AGENTS TO VERIFY THE FACTS AS NARRATED BY ASSESSEE IN HIS CONTENTIONS. SINCE I AM RESTORING THE MATTER BACK TO THE FILE OF ASSESSING OFFICER ON PRELIMINARY ISSUE FOR THE REASONS DISCUSSED ABOVE, I AM REFRAIN ING TO COMMENT ON MERIT OF THE ISSUE AT HAND. 5. AS A RESULT, THIS APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. ITA NO. 2982/AHD/2015 : AY 2008-09 6. SIMILAR ISSUE AROSE IN THIS APPEAL ALSO FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2008-09. FACTS BEIN G SIMILAR, SO FOLLOWING THE SAME REASONING AS DISCUSSED ABOVE IN THE CASE OF ITA NO.2981/AHD/2015 FOR ASSESSMENT YEAR 2007-08 (SUPRA), I RESTORE THIS ISSUE ALSO TO THE FILE OF THE ASSESS ING OFFICER FOR FRESH ADJUDICATION WITH THE SAME DIRECTION. THUS, THIS APPEAL OF THE ASSESSEE IS ALSO ALLOWED FOR STATISTICAL PUR POSES. 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 29 TH , APRIL, 2016 AT AHMEDABAD. SD/- ( SHAILENDRA K. YADAV ) JUDICIAL MEMBER AHMEDABAD; DATED 29/04/2016 BIJU T., PS (SMC) ITA NOS. 2981 & 2982/AHD/2015 NIMESHKUMAR R. GOLE VS. ITO AY 2007-08 & 2008-09 6 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! ' ' # / CONCERNED CIT 4. ' ' # ( ) / THE CIT(A) 5. &'( ! , ' ! , / DR, ITAT, AHMEDABAD 6. (- . / GUARD FILE. / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) !', / ITAT, AHMEDABAD