ITO-Ward--1-(3), Asansol, Asansol V. Naresh Kumar Chaparia, Burdwan

ITA 319/KOL/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6377 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 16-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S M S TAUHEED CITSRDR
• Assessee Lawyers: T P ROY
• Keywords: Presumptive income
• Section: 44AD; 145

Judgement Text

, D , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH D KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 319 / KOL / 20 17 ASSESSMENT YEAR :2006-07 INCOME TAX OFFICER WARD-1(3), SAHANA APARTMENT, LOWER CHELIDANGA, ASANSOL- 713 304 V/S . NARESH KUMAR CHAPARIA PROP. M/S CALCUTTA DELHI TRANSPORT, NEAMATPUR, SITARAMPUR,BURDWAN-713359 [ PAN NO.AESPC 9803 M ] /APPELLANT .. / RESPONDENT /BY APPELLANT S.M.S TAUHEED, ADDL. CIT-SR-DR /BY RESPONDENT SHRI T.P. ROY, AR /DATE OF HEARING 05-06-2018 /DATE OF PRONOUNCEMENT 08-06-2018 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2006-07 I S DIRECTED AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS), ASNSOL DA TED 16.12.2016. PASSED IN CASE NO.128/CIT(A)/ASL/WARD-1(3)/ASL/14-15, INVO LVING PROCEEDINGS U/S 143(3)/254/145 OF THE INCOME TAX ACT, 1961; IN SHOR T THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE REVENUES SOLE SUBSTANTIVE GROUND IN THE INS TANT APPEAL PLEADS THAT CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DIRECTING THE ASSESSING OFFICER TO COMPUTE ASSESSEES NET PROFIT @ 8% OF TH E TURNOVER ON ACCOUNT OF HIS FAILURE IN SUBSTANTIATING TRUCK HIRING CHARGES CLAIMED AS EXPENDITURE. THE CIT(A)S DETAILED DISCUSSION ON THE INSTANT SOLE IS SUE READS AS UNDER:- 3. DECISION:- ITA NO.319/KOL/2017 A.Y. 2006-0 7 ITO WD-1(3), ASL. VS. NARESH KR. C HAPARIA PAGE 2 THE ASSESSEE IS IN THE LINE OF TRANSPORTATION BUSIN ESS ACTING AS AN AGENT. THE RETURN OF INCOME DURING THE PREVIOUS YEA R WAS FILED DECLARING TOTAL INCOME OF RS.1,810,070/-. THE CASE WAS SELECT ED FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED ON 31/12/2008 WHEREIN THE TOTAL INCOME WAS ASSESSED AT RS.1,02,94,590/-. DURING THE COURSE OF FIRST APPELLATE PROCEEDINGS THE LD. CIT(A) REJECTED THE BOOKS OF AC COUNT OF ASSESSEE UNDER SECTION 145 AND ESTIMATED THE TOTAL INCOME OF THE ASSESSEE AT THE RATE OF 10% OF THE TURNOVER I.E. RS.10,45,928/-. TH EREAFTER BEING AGGRIEVED WITH THE ENHANCEMENT ORDER OF THE CIT(A) THE ASSESSEE WENT IN APPEAL BEFORE THE TRIBUNAL. THE HON'BLE TRIBUNAL VIDE THEIR ORDER DATED 3 RD MAY 2012 HAVE SET-ASIDE THE ISSUE BACK TO THE ASSE SSING OFFICER WITH THE FOLLOWING DIRECTIONS:- FURTHER, LD. COUNSEL FOR THE ASSESSEE STATED THAT SINCE THE ASSESSEE WAS UNABLE TO PRODUCE BOOKS OF ACCOUNTS, C IT(A) ENHANCED THE ASSESSMENT BY APPLYING NET PROFIT RATE @ 10% AS AGAINST THE DECLARED PROFIT OF 2%. LD. COUNSEL FOR THE ASSESSEE IN ALL FAIRNESS STATED THAT HE IS READY TO PRODUCE COM PLETED BOOKS OF ACCOUNT AS WELL AS HE IS READY TO EXPLAIN THE ISSUE OF TRUCK HIRE CHARGES BEING INDIVIDUAL TRUCK AND NOT ON CONTRACT BASIS. ON THESE FACTS, LD. CIT, DR SHRI L.K.S. DAHIYA ALSO CO NCEDED THAT LET THE ISSUE BE EXAMINED AFRESH BY ASSESSING OFFICER B UT HE REQUESTED THE BENCH TO DIRECT THE ASSESSEE TO APPEA R BEFORE ASSESSING OFFICER AS AND WHEN CALLED FOR. IN THE LI GHT OF THE ABOVE FACTS AND CIRCUMSTANCES, WE FEEL THAT LET THESE TWO ISSUES BE EXAMINED AFRESH BY ASSESSING OFFICER. HENCE, WE SET ASIDE THE ISSUES TO THE FILE OF ASSESSING OFFICER AND ALLOW T HE APPEAL OF ASSESSEE FOR STATISTICAL PURPOSES. IN THE CONSEQUENTIAL ASSESSMENT ORDER PASSED IN PUR SUANCE TO THE DIRECTIONS OF ITAT THE ASSESSING OFFICER ON 28 TH MARCH 2014 HAS COMPUTED THE TOTAL INCOME AT RS.62,14,640/-. IN THE SAID ASSESSMENT THE TRUCK HIRE CHARGES CLAIMED TO HAVE BEEN PAID BY THE ASSESSEE OF RS.54,03,848/- HAS BEEN DISALLOWED BY THE ASSESSING OFFICER. FURTHER THE ASSESSING OFFICER OBSERVED THAT CERTAIN PAYMENT S HAD BEEN MADE WITHOUT DEDUCTION OF TDS AND ACCORDINGLY DISALLOWAN CE UNDER SECTION 40(IA) OF RS.6,31,550/- WAS ALSO MADE. THE ASSESSEE IN HIS SUBMISSIONS HAS HIGHLIGHTED THA T THE ASSESSING OFFICER HAS DISALLOWED EXCESSIVE TRUCK HIRE CHARGES THE GROSS RECEIPTS DECLARED BY THE ASSESSEE IS RS.1,04,59,286/- OUT OF WHICH THE DISALLOWANCE MADE BY THE AO RS.54,03,848/P-. THE DI SALLOWANCE OF TRUCK HIRE CHARGES HAVE BEEN MADE FOR WANT OF VERIF ICATION AS FOLLOWS:- DISALLOWANCE OF HIRE CHARGES REASONS (A) 3,92,202/- 1.38,413/- ON THE GROUND OF WRONG VEHICLE NUMBER ITA NO.319/KOL/2017 A.Y. 2006-0 7 ITO WD-1(3), ASL. VS. NARESH KR. C HAPARIA PAGE 3 46,415/- (NON-TRANSPORT VEHICLE)[BOGUS OR INFLATED EXPENDITURE (B) 47,41,001/- NO RECORD FOUND WITH RTO/TRUCK NUMBER NOT REGISTERED WITH RTO ASANSOL (C) 39,402/- 46,415/- AS INFLATED EXPENDITURE TOTAL RS.54,03,848/- ON GOING THROUGH THE ASSESSMENT ORDER AND THE FINDI NGS OF THE ASSESSING OFFICER RECORDING THE DEFECTS POINTED OUT IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE I AM OF THE OPINION THAT T HE BILLS AND VOUCHERS PRODUCED BY THE ASSESSEE ARE NOT AUTHENTIC AND NOT RELIABLE. NUMEROUS MISTAKES HAVE BEEN POINTED OUT BY THE AO IN THE BIL LS PREPARED FOR PAYMENT OF HIGHER CHARGES. ACCORDINGLY THE BOOKS OF ACCOUNTS OF THE ASSESSEE ARE HEREBY REJECTED U/S. 145(3) OF THE ACT . IT IS CONTENTION OF THE A/R THAT THE AO HAS MADE RE PEATED DISALLOWANCE ON THE SAME GROUND. THE TURNOVER OF THE ASSESSEE AN D THE WORK DONE AS TRANSPORTATION AGENT HAS NOT BEEN DISPUTED BY TH E AO. HOWEVER, THE AO AFTER REJECTION OF BOOKS HAS TO MAKE A REASONABL E ESTIMATE OF THE INCOME OF THE ASSESSEE. THE ASSESSMENT CANNOT BE BA SED WITHOUT MATERIAL FACTS. I PROPOSE TO GO BY THE PROVISION IN THE ACT GIVEN IN SECTION 44AD WHERE THE INCOME HAS TO BE ASSESSED AT 8% OF THE GROSS TURNOVER EVEN IF THE ASSESSEE DOES NOT MAINTAIN ANY BOOKS OF ACCOUNTS. THEREFORE ON REJECTION OF THE BOOKS OF ACCOUNTS THE NET PROFIT IN THE CASE OF THE AS IS TAKEN AT 8% OF THE GROSS RECEIPTS IN LINE WITH THE PROVISIONS OF SECTION 44AD REGARDING PRESUMPTIVE TAXATION. THE GROSS RECEIPTS OF THE AS IS RS.1,04,59,286/-. THE AO IS DIRECTED TO C OMPUTE THE NET PROFIT AT 8% OF THE TURNOVER. THE APPEAL OF THE ASSESSEE I ON THIS ISSUE IS PARTLY ALLOWED. 3. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL SUBMISSIONS. THERE IS NO DISPUTE THAT THIS ASSESSEE IS A TRANSPORT COM MISSION AGENT. THE RELEVANT RECEIPTS FROM THE CONCERNED CUSTOMERS ASSIGNING HIM THE CORRESPONDING TRANSPORTATION WORKS ARE NOT IN DISPUTE AS THE ISSU E BEFORE US IS THAT OF SUBSTANTIATION OF TRUCK HIRE CHARGES AMOUNTING TO 54,03,848/-. HE HAS FAILED TO TALLY THE RELEVANT TRUCKS NUMBERS VIS--VIS THE INFORMATION OBTAINED FROM RTO DEPARTMENT. HE HAS ALSO BEEN FOUND TO HAVE INFL ATED SOME EXPENSES (SUPRA). THE SAME INVITED THE IMPUGNED DISALLOWANCE IN COURSE OF FIRST ASSESSMENT. THE CIT(A) HAS APPLIED NET PROFIT @ 10% AGAINST THE DECLARED ITA NO.319/KOL/2017 A.Y. 2006-0 7 ITO WD-1(3), ASL. VS. NARESH KR. C HAPARIA PAGE 4 PROFIT @ 2% IN FIRST ROUND. WE SOUGHT TO KNOW FROM THE LEARNED DEPARTMENTAL REPRESENTATIVE AS TO WHETHER THE ASSESSEES EXPEND ITURE OF TRUCK HIRE CHARGES IS IN ANY WAY ABNORMAL OR EXCESSIVE VIS--VIS THE C ORRESPONDING FIGURES IN ANY PRECEDING OR SUCCEEDING ASSESSMENT YEAR. THERE IS N O SUCH MATERIAL IN CASE SUGGESTING SUCH AN INFLATION. WE OBSERVE IN THIS PE CULIAR FACTUAL BACKDROP THAT THE CIT(A) HAS RIGHTLY APPLIED OF 8% OF THE ENTIRE TURNOVER OF 104,59,286/- AS INCOME AFTER BEING BROADLY GUIDED BY THE ABOVE PRES UMPTIVE RATE OF TAX U/S 44AD. WE CONCLUDE IN THESE PECULIAR FACTS THAT CIT( A) HAS NOT COMMITTED ANY ERROR IN DIRECTING THE ASSESSING OFFICER TO COMPUTE ASSESSEES NET PROFIT @ 8%. WE ALSO MAKE IT CLEAR THAT SAME SHALL NOT BE TR EATED AS A PRECEDENT IN ANY PROCEEDING OR SUCCEEDING ASSESSMENT YEAR. THE R EVENUE FAILS IN ITS SOLE SUBSTANTIVE GROUND. 4. THIS REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 08/06/2018 SD/- SD/- ( %) (' %) (DR. A.L. SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S (- 08 / 06 /201 8 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-ITO WARD-1(3),SAHANAAPARTMENT,LOWER CHE LIDANGA, ASANSOL-713304 2. /RESPONDENT-NARESH KUMAR CHAPARIA, PROP. M/S CALCUT TA DELHI TRANSPORT, NEAMATPUR, SIT ARAMPUR, BURDWAN-713359 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5. 7 ''3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO 3,