Girdhari Lal Sharma, Jamshepur V. ITO, Jamshepur

ITA 31/RAN/2013

• Counselvise Citation: 3125114 RSA 2013
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 13-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEEPAK RAUSHAN SR S C
• Keywords: Rejection of books of accounts; Question of law
• Section: 234B; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI CIRCUI T BENCH, RANCHI (BEFORE SHRI P.K.BANSAL, HONBLE A.M.& SHR I D,T. GARASIA, HONBLE J.M.) I.T.A. NO. 31/RAN/2013 : AS SESSMENT YEAR 2009-10 SHRI GIRDHARI LAL SHARMA, JAMSHEDPUR - VS- I.T.O., WARD-1(4), JSR (APPELLANT) PAN :BEWPS 5971K (RESPONDENT) APPELLANT BY : SHRI S.K.PODDAR WITH S HRI M.K.CHOUDHURY, ADVOCATE RESPONDENT BY : SHRI DEEPAK RAUSHAN, SR.S.C. DATE OF CONCLUDING THE HEARING : 30.04.2013 DATE OF PRONOUNCING THE ORDER : 07.05.2013 O R D E R PER BENCH : THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A), JAMSHEDPUR DATED 31.01.2013 FOR THE ASSESSMENT YEAR 2009-10. 2. THE ISSUE INVOLVED IN THIS APPEAL IN GROUND NOS. 1 TO 7 RELATES TO THE ADDITION OF RS.4,75,43,168/- UNDER THE HEAD CASH SA LES AND DEPOSITED IN THE BANK UNDER SECTION 68 OF THE INCOME TAX ACT. THE ASSESSI NG OFFICER NOTED THAT THE ASSESSEE HAS SHOWN TRADING IN IRON ORE AND COAL WIT H GROSS SALES OF RS.31,95,79,909/- ON WHICH THE GROSS PROFIT WAS SHO WN AT RS.15,96,207/- AND NET PROFIT DECLARED WAS RS.2,44,564/-. THE ASSESSING OF FICER REJECTED THE BOOKS OF ACCOUNTS DUE TO LOW G.P. , PARTY-WISE LEDGER NOT PR ODUCED, DATE-WISE LEDGER NOT PRODUCED AND ALSO THE FACT THAT THE ASSESSEE HAS NO T SUBSTANTIATED THE CASH SALES SHOWN AT RS.47,54,3168/-. ULTIMATELY, THE ASSESSING OFFICER MADE THE ADDITION OF RS.4,75,43,168/- TREATING IT TO BE THE CASH CREDIT UNDER SECTION 68 OF THE INCOME TAX ACT BY TAKING THE NET PROFIT, AS PER THE BOOKS OF ACCOUNT OF THE ASSESSEE AT 2 RS.2,44,564/-. THE ASSESSEE WENT IN APPEAL BEFORE T HE CIT(A). THE CIT(A) CONFIRMED THE ADDITION AT RS.4,75,43,168/-. 3. WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CON SIDERED THE SAME. WE NOTED THAT THE ASSESSING OFFICER, WHILE MAKING THE ASSESSMENT, HAS COMPUTED THE TOTAL INCOME OF THE ASSESSEE BY TAKING THE NET PROF IT AS PER THE PROFIT & LOSS A/C.. THEREBY, THE ASSESSING OFFICER HIMSELF, ON THE ONE HAND, HAD ACCEPTED THE SALES SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS EXCE PT THE NET PROFIT IS ALWAYS ARRIVED AT AFTER DEDUCTING FROM THE SALES AND CLOSI NG STOCK THE AMOUNT OF THE OPENING STOCK PURCHASED AND THE VARIOUS EXPENSES. I T IS NOT A CASE WHERE THE ASSESSING OFFICER, AFTER REJECTING THE BOOKS OF THE ACCOUNTS OF THE ASSESSEE, HAD DETERMINED THE INCOME OF THE ASSESSEE IN THE MANNER GIVEN U/S. 144 OF THE INCOME TAX ACT. THE ASSESSING OFFICER HAS ACCEPTED THE SA LES AS SHOWN BY THE ASSESSEE BY TAKING THE NET PROFIT AS PER P&L A/C. OF THE ASS ESSEE AND THE SALES INCLUDE CASH SALES WHICH HAD BEEN ADDED BY THE ASSESSING OFFICER UNDER SECTION 68 HAS NOT PROVED AND IN OUR OPINION, NEED NOT BE ADDED AGAIN. EVEN OTHERWISE, WHEN THE BOOKS OF ACCOUNTS ARE REJECTED, THE ASSESSMENT HAS TO BE MADE IN THE MANNER AS STIPULATED UNDER SECTION 144 AND ONCE THE ASSESSMEN T IS MADE IN THE MANNER AS STATED UNDER SECTION 144, THEN NO QUESTION OF MAKIN G ANY DISALLOWANCE OR ADDITION ON THE BASIS OF THE BOOKS OF ACCOUNTS CAN ARISE UNDER SECTION 144, THE INCOME HAS TO BE ESTIMATED ON THE BASIS OF THE MATE RIALS AVAILABLE ON RECORD. ONCE THE INCOME IS ESTIMATED BY INVOKING THE PROVISIONS OF SECTION 144, IN OUR OPINION, NO FURTHER ADDITION OR DISALLOWANCE CAN BE MADE BY THE ASSESSING OFFICER. OUR AFORESAID VIEW IS DULY SUPPORTED BY THE CIT-VS- BAN WARILAL BANSHIDHAR 229 ITR 229 (ALL). WE ACCORDINGLY DELETE THE ADDITION OF RS . 4,75,43,168/-. THUS, GROUND NOS.1 TO 7 ARE ALLOWED. 4. GROUND NO.8 IS RELATING TO THE CHARGING OF INTER EST UNDER THE 234B OF THE I.T. ACT. 3 5. AFTER HEARING THE RIVAL SUBMISSIONS, WE NOTED TH AT THIS ISSUE IS COVERED BY THE DECISION OF THE JURISDICTIONAL HIGH COURT, IN W HICH HONBLE JHARKHAND HIGH COURT IN T.A. NO.38 OF 2010 IN THE CASE OF AJAY PRA KASH VERMA VS- ITO VIDE ORDER DATED 25.07.2012 HELD AS UNDER: 24. LEARNED COUNSEL FOR THE REVENUE COULD NOT DIS PUTE THIS LEGAL POSITION. THEREFORE, SO FAR AS QUESTION OF LAW INVO LVED IN THIS APPEAL THAT WHETHER THE INTEREST COULD HAVE BEEN LEVIED AG AINST THE ASSESSED INCOME OF THE ASSESSEE UNDER SECTIONS 234 A AND 234 B IS CONCERNED, IN VIEW OF THE FULL BENCH JUDGMENT OF RA NCHI BENCH OF PATNA HIGH COURT DELIVERED IN THE CASE OF SMT. TEJ KUMARI, THE REVENUE CAN LEVY THE INTEREST ONLY ON THE TOTAL INC OME DECLARED IN THE RETURNS AND NOT ON THE INCOME ASSESSED AND DETERMIN ED BY THE A.O. TO THAT EXTENT. THE ORDERS PASSED BY THE AUTHORITIE S BELOW ARE ACCORDINGLY MODIFIED AND INTEREST SHALL BE CHARGEAB LE IN THE LIGHT OF THE FULL BENCH JUDGMENT, REFERRED ABOVE. 6. WE ACCORDINGLY FOLLOWING THE ABOVE DECISION, DIR ECT THE ASSESSING OFFICER TO RE-COMPUTE THE INTEREST UNDER SECTION 234B ON TH E BASIS OF THE TOTAL INCOME DECLARED BY THE ASSESSEE IN THE RETURN FILED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 7 TH MAY, 2013. SD/- SD/- [D.T.GARASIA] [P.K.BANSAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 7 TH MAY, 2013 COPY OF ORDER FORWARDED TO : 1. SHRI GIRDHARI LAL SHARMA, JAMSHEDPUR 2. I.T.O., WARD-1(4), JAMSHEDPUR 3. C.I.T.(A), 4. THE C.I.T., 5. THE D.R., I.T.A.T., TRUE COPY, BY ORDER, SR. PRIVATE SECRETARY, ITAT, RANCHI [MST, SR.PS]