Shri Mahesh Kumar Kumawat, Dewas V. The ITO, Dewas

ITA 300/IND/2012

• Counselvise Citation: 30022714 RSA 2012
• Duration Of Justice: 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 17-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Keywords: Rejection of books of accounts
• Section: 145; 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH - SMC BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.300/IND/2012 A.Y.2005-06 MAHESH KUMAR KUMAWAT DEWAS PAN AKEPK0808Q :: APPELLANT VS INCOME TAX OFFICER DEWAS :: RESPONDENT APPELLANT BY NONE RESPONDENT BY SHRI R.A. VERMA DATE OF HEARING 24.09.2012 DATE OF PRONOUNCEMENT 28.09.2012 O R D E R THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 21.2.2012 FOR THE A.Y. 2005-06 . 2 2. THE ONLY GRIEVANCES OF THE ASSESSEE RELATES TO T HE CIT(A)S ACTION IN ESTIMATING THE SALES AT RS. 60 LACS IN PL ACE OF ACTUAL SALES OF RS. 38.12 LACS SHOWN IN THE PROFIT AND LOS S ACCOUNT AND APPLICATION OF NET PROFIT RATE OF 5% ON ESTIMATES S ALES OF RS. 60 LACS. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE IN SPITE OF GIVING THE OPPORTUNITY. ACCORDINGLY, THE LEARNED SENIOR D R WAS HEARD AND THE MATERIAL PLACED ON RECORD IS PERUSED AND TH E APPEAL IS DECIDED AS UNDER. 3. FROM RECORD WE FIND THAT DURING THE YEAR, UNDER CONSIDERATION, THE ASSESSEE WAS ENGAGED IN TRADING OF GRAINS, PULSES, ETC. WHILE FRAMING THE ASSESSMENT THE ASSES SING OFFICER REJECTED THE BOOKS OF ACCOUNTS AND PASSED ORDER U/S 144 OF THE ACT. IN PLACE OF SALES OF RS. 38.12 LACS SHOWN BY THE ASSESSEE, THE ASSESSING OFFICER ESTIMATED THE SAME AT RS. 80 LACS AND APPLIED NET PROFIT RATE OF 5% THEREON. THE WITHDRAW ALS SHOWN OUT OF THE CAPITAL ACCOUNT WERE TREATED BY THE ASSE SSING OFFICER AS UTILISED FOR UNDERTAKING TURNOVER OUTSIDE THE BO OKS OF ACCOUNTS. THE LEARNED CIT(A) CALLED FOR THE REMAND REPORT WITH 3 REGARD TO EXAMINATION OF BOOKS OF ACCOUNTS BY THE A SSESSING OFFICER VIS-A-VIS ANY SALE AND PURCHASE OUTSIDE THE BOOKS OF ACCOUNTS WHEREIN IT WAS FOUND THAT THE ASSESSEE HAS NOT UNDERTAKEN ANY SALES OUTSIDE THE BOOKS OF ACCOUNTS. AFTER CONSIDERING THE REMAND REPORT, THE CIT(A) OBSERVED THAT THE ASSESSEE HAS FURNISHED THE DETAILS OF SALES AND DUR ING THE YEAR THE ASSESSEE HAS SOLD OPENING STOCK. IN THE REMA ND REPORT, THE ASSESSING OFFICER STATED THAT HE HAS VERIFIED T HE EVIDENCE FURNISHED BY THE ASSESSEE DURING THE APPELLATE PROC EEDINGS AND OBSERVED THAT THERE WAS NO BASIS FOR INVOCATION OF PROVISIONS OF SECTION 145 OF THE ACT. IT WAS ALSO OBSERVED BY THE ASSESSING OFFICER AFTER VERIFICATION OF SALES ACCOUNT THAT NO SALES WERE EFFECTED FROM SEPTEMBER, 2004 TO FEBRUARY, 2005. S OME DIFFERENCE WAS FOUND IN THE OPENING STOCK OF CHANA, GOTA WHICH, AS PER THE RETURN WAS 250 QUINTALS WHILE AS PER THE BOOKS OF ACCOUNTS IT WAS 201.80 QUINTALS. THE CIT( A) ALSO OBSERVED THAT THE ASSESSEE HAS ATTENDED THE ASSESSM ENT PROCEEDINGS FROM TIME TO TIME AND 12 HEARINGS WERE RECORDED BY THE ASSESSING OFFICER IN THE ASSESSMENT AND THAT THE ASSESSEE HAS PRODUCED BOOKS OF ACCOUNTS FOR VERIFIC ATION BEFORE 4 THE ASSESSING OFFICER AND ALSO FURNISHED SALES BILL S FOR VERIFICATION. ACCORDINGLY, THE LEARNED CIT(A) HELD THAT THERE WAS NO JUSTIFICATION FOR INVOKING THE PROVISIONS OF SECTION 144 OF THE ACT. HOWEVER, THE CIT(A) ESTIMATED THE SALE S AT RS. 60 LACS IN PLACE OF RS. 80 LACS ESTIMATED BY THE ASSES SING OFFICER. AGAINST THE ORDER OF THE CIT(A), THE REVENUE IS NOT IN APPEAL BEFORE US, HOWEVER, THE ASSESSEE IS IN FURTHER APPE AL BEFORE ME. . 4. WE HAVE CONSIDERED THE SUBMISSIONS ADVANCED BY T HE LEARNED SENIOR DR, GONE THROUGH THE ORDERS OF THE A UTHORITIES BELOW AND FIND THAT THERE IS NO REASON TO ASSUME TH AT THE FUNDS WITHDRAWN FROM CAPITAL ACCOUNT WERE UTILISED FOR MA KING THE TRANSACTION OUTSIDE THE BOOKS OF ACCOUNTS UNLESS TH ERE IS ANY COGENT EVIDENCE IN THE HANDS OF THE ASSESSING OFFIC ER. AFTER CONSIDERING THE REMAND REPORT, WE DO NOT FIND ANY J USTIFICATION FOR ESTIMATING THE SALES AT RS. 60 LACS BY THE CIT( A). KEEPING IN VIEW THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE DIRECT THE ASSESSING OFFICER TO TAKE THE SALES AT R S. 40 LACS IN 5 PLACE OF RS. 38.12 LACS SHOWN BY THE ASSESSEE AND T O APPLY 5% NET PROFIT RATE THEREON. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 28 TH SEPTEMBER, 2012. SD/- (R.C.SHARMA) ACCOUNTANT MEMBER DATED: 28 TH SEPTEMBER, 2012 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE DN/-1414 6