ACIT PALGHAR CIR, PALGHAR V. DR. ABHAY G. PAGDHARE, THANE

ITA 34/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49162 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 04-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P C MOURYA
• Keywords: Tax effect
• Section: 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A : MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI R.K.PANDA, ACCOUNTANT MEMBER ITA. NO. 34/MUM/2010 ASSESSMENT YEAR 2005-2006 ACIT, PALGHAR CIRCLE PALGHAR VS. DR. ABHAY G. PAGDHARE PROP. OF PHILIA HOSPITAL & M/S. AGASTYA DEVELOPERS, PALGHAR DIST.THANE PAN AFJPP7458R (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI P.C. MOURYA FOR RESPONDENT : -NONE- ORDER PER D. MANMOHAN, V.P. 1. THIS APPEAL IS FILED AT THE INSTANCE OF THE REV ENUE AND IT PERTAINS TO THE ASSESSMENT YEAR 2005-2006. THOUGH N OTICE WAS ISSUED TO THE ASSESSEE BY REGISTERED POST (ACKNOWLEDGMENT CARD ON RECORD) NONE APPEARED ON BEHALF OF THE ASSESSEE. WE, THEREF ORE, PROCEED TO DISPOSE OF THE APPEAL EX-PARTE, QUA THE ASSESSEE. 2. ADMITTED FACTS ARE THAT THE ASSESSEE WAS CARRYI NG ON MEDICAL PRACTICE APART FROM BUILDING CONSTRUCTION A CTIVITY UNDER THE NAME AND STYLE OF M/S. AGASTYA DEVELOPERS. FOR THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2005-2006 ASSESSEE HAVING NOT DECLARED ANY INCOME, THE ASSESSING OFFICER ISSUED A NOTICE UNDER SECTION 148 OF THE ACT AND FINALLY COMPLETED THE AS SESSMENT UNDER SECTION 144 READ WITH SECTION 147 OF THE ACT ON A T OTAL INCOME OF RS.24,37,760/-. WE ARE CONCERNED HEREIN WITH THE IN COME ESTIMATED FROM PHILIA HOSPITAL. ASSESSING OFFICER ESTIMATED P ROFESSIONAL RECEIPTS AT RS.60 LAKHS ON WHICH NET INCOME IS ESTIMATED AT 20% OF THE TOTAL RECEIPTS WHICH WORKS OUT TO RS. 12 LAKHS. 2 3. ON AN APPEAL FILED BY THE ASSESSEE, LEARNED CIT (A) SUBSTITUTED THE ESTIMATE TO 10% OF THE GROSS RECEIP TS AND THUS AFFIRMED THE ADDITION OF RS. 6 LAKHS. IN THIS REGAR D, HE OBSERVED AS UNDER : 2.4. THE OTHER ISSUE CONTESTED BY THE APPELLANT IS REGA RDING THE APPLICABILITY OF NET PROFIT RATE OF 20% ON THE ESTIMATED GROSS INCOME OF RS.60,00,000/-. IT IS WEL L SETTLED PRINCIPLE ENUNCIATED BY VARIOUS COURTS THAT THE ASSESSING OFFICER WHILE MAKING THE BEST JUDGMENT ASSESSMENT SHOULD BE GUIDED BY EQUITY AND JUSTICE A ND AN INTELLIGENT AND WELL GROUNDED ESTIMATE OF NET IN COME. IN VIEW OF THE ABOVE PRINCIPLE LAID DOWN BY THE JUDGMENTS OF VARIOUS COURTS, IN MY OPINION, THE APPLICATION OF THE ESTIMATED PROFIT RATE OF 20% ON THE ESTIMATED GROSS PROFITS APPEARS TO BE ON THE HIGHER SIDE. THE APPELLANT HAS EXPLAINED THE CIRCUMSTANCES OF HI GH FIXED EXPENDITURE ON SALARY AND HEAVY INTEREST PAYM ENT ETC., DURING THE YEAR UNDER CONSIDERATION WHICH LED TO DECREASE IN THE NET PROFITS DURING THE YEAR UNDER CONSIDERATION. THE CONTENTION OF THE APPELLANT APPE ARS TO BE REASONABLE. IN VIEW OF THE SAME, IT WOULD BE FAIR IF THE PROFIT OF THE APPELLANT IS ESTIMATED @ 10% OF T HE GROSS RECEIPTS IN VIEW OF THE DETAILED SUBMISSIONS MADE BY THE APPELLANT ALONG WITH THE LETTER DATED 23-01- 2009. THEREFORE BY APPLYING THE PROFIT RATE OF 10% ON THE ESTIMATED GROSS PROFITS AS DETERMINED BY A.O. THE ADDITION OF RS. 6,00,000/- IS DELETED AND BALANCE ADDITION OF RS.6,00,000/- IS CONFIRMED OUT OF THE T OTAL ADDITION MADE ON ACCOUNT OF ESTIMATION OF THE PROFI T AT RS.12,00,000/-. 4. AGGRIEVED, REVENUE PREFERRED AN APPEAL BEFORE U S. NO MATERIAL WAS BROUGHT ON RECORD TO INDICATE THAT THE ASSESSEE HAS ALSO PREFERRED APPEAL. LEARNED D.R. COULD NOT PLACE ANY MATERIAL ON RECORD 3 TO INDICATE THAT THE INCOME FROM PROFESSION ESTIMAT ED BY THE ASSESSING OFFICER IS REASONABLE. 5. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE ORDER PASSED BY THE LEARNED CIT(A ) ON THIS ISSUE DOES NOT CALL FOR ANY INTERFERENCE. AT ANY RATE, TH E TAX EFFECT ON RS. 6 LAKHS WORKS OUT TO LESS THAN RS. 3 LAKHS IN WHICH E VENT, REVENUE SHOULD NOT HAVE PREFERRED AN APPEAL UNDER THE NORMA L CIRCUMSTANCES. IN OTHERWORDS, APPEAL IS NOT MAINTAINABLE FOR LOW T AX EFFECT. FOR THE REASONS GIVEN ABOVE, AS DECLARED IN THE OPEN COURT, APPEAL FILED BY THE REVENUE IS DISMISSED. SD/- SD/- (R.K.PANDA) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATE 21 ST JUNE, 2011 VBP/- COPY TO 1. ACIT, PALGHAR CIRCLE, PALGHAR 2. DR. ABHAY G. PAGDHARE, PROP. OF PHILIA HOSPITAL & M/S. AGASTYA DEVELOPERS, TEMBHODE ROAD, PALGHAR DIST. THANE PAN AFJPP7458R 3. CIT(A)-II, VARDHAN, 9 TH FLOOR, MIDC, WAGLE INDL. ESTATE, THANE. 4. CIT-III, MUMBAI. 5. DR A BENCH 6. GUARD FILE (TRUE COPY) BY ORDER ASST. REGISTRAR, ITAT, MUMBAI BENCHES MUMBAI.