M/s Devlok Distributors, Lucknow V. Dy. Commissioner of Income Tax, Lucknow

ITA 350/LKW/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0554 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 28-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: ASHOK SETH
• Keywords: Principle of natural justice
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 350/LKW/2015 ASSESSMENT YEAR: 2011 - 12 M/S DEVLOK DISTRIBUTORS C - 187, NIRALA NAGAR L UCKNOW V. DY. CIT RANGE IV LUCKNOW T AN /PAN : AABFD2357C (APP ELL ANT) (RESPONDENT) APPELLANT BY: SHRI ASHOK SETH, C.A. RESPONDENT BY: SHRI ALKA SINGH, D.R. DATE OF HEARING: 06 12 201 7 DATE OF PRONOUNCEMENT: 07 12 201 7 O R D E R PER P ARTHA SARATHI CHAUDHURY, J.M : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LD. CIT(A), LUCKNOW - 2 DATED 30/1/2015. 2 . THE SOLE GRIEVANCE OF THE ASSESSEE IN THE ENTIRE GROUNDS OF APPEAL RELATES TO THE REJECTION OF THE BOOKS OF ACCOUNT BY THE ASSESSIN G OF FICER ON THE GROUND OF LOW G.P., LOW N.P. AND ESTIMATION OF NET PROFIT RATE @ 4% , RESULTING INTO ADDITION OF RS.80,33,649/ - . 3 . THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS PRIMARILY DEALING IN TRADING OF COMPUTERS, INFORMATION TECHNOLOGY AND OFFICE AUTOMA TION PRODUCTS MAINLY IN WHOLESALE TO RETAIL DEALERS, GOVERNMENT DEPARTMENTS AND INSTITUTIONS. THE ASSESSEE - FIRM HAD FILED ITS RETURN OF INCOME ON 29/9/2011 DECLARING TOTAL INCOME OF RS.15,14,141/ - . THE ASSESSMENT WAS FINALLY COMPLETED UNDER SECTION 143(3 ) OF THE ACT BY MAKING VARIOUS [ ITA NO.350/LKW/2015 ] 2 DISALLOWANCES/ADDITIONS BY THE ASSESSING OFFICER AND FOR THE REASONS AS MENTIONED IN THE ASSESSING OFFICERS ORDER, AND ASSESSING THE TOTAL INCOME AT RS.1,11,82,820/ - . 4 . WITH REGARD TO THE ESTIMATION OF NET PROFIT RATE @ 4% AND THE CONSEQUENT ADDITION, A DETAILED SUBMISSION WAS MADE BY THE ASSESSEE BEFORE THE LD. CIT(A) AND THE LD. CIT(A) HAS ALSO CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER. THEREAFTER, THE LD. CIT(A) HAS PASSED A DETAILED ORDER ENSHRINING THEREIN VARIO US REASONS , WHICH ARE PART OF THE RECORD AND NEED NOT TO BE REITERATED HEREIN AGAIN , AND HAS HELD THAT SINCE ASSESSEE WAS UNABLE TO OFFER SATISFACTORY EXPLANATION AND TH ERE ARE VARIOUS DISCREPANCIES WHICH WAS NOT RECONCILED BY THE ASSESSEE AND, THEREFORE, HE CONFIRMED THE ADDITION OF RS.80,33,649/ - ON ESTIMATION OF PROFIT @ 4%. 5 . BEING FURTHER AGGRIEVED, ASSESSEE HAS PREFERRED THIS APPEAL BEFORE US. THE LD. A.R. OF THE ASSESSEE VEHEMENTLY ARGUED BY PLACING A COMPARATIVE CHART BEFORE US WHEREIN IT HAS BEEN ST ATED THAT FOR ASSESSMENT YEAR 2012 - 13 , WHICH IS THE IMMEDIATE NEXT ASSESSMENT YEAR , THE N.P. RATE OF 0.33% WAS ACCEPTED BY THE ASSESSING OFFICER ON THE SAME FACTS AND CIRCUMSTANCES. THE LD. A.R. OF THE ASSESSEE FURTHER POINTED OUT THAT ALL THE DOCUMENTS A ND DETAILS WERE SUBMITTED BEFORE THE ASSESSING OFFICER AND THESE DETAILS WERE ALSO PLACED BEFORE US IN VOLUMINOUS PAPER BOOK FILED BEFORE THE TRIBUNAL . THE LD. A.R. OF THE ASSESSEE ALSO SUBMITTED THAT NO PROPER OPPORTUNITY WAS PROVIDED TO THE ASSESSEE AND THE ASSESSMENT ORDER WAS PASSED BY THE ASSESSING OFFICER IN A HURRIED MANNER WHICH IN TURN AFFECTS THE PRINCIPLES OF NATURAL JUSTICE. 6 . THE LD. D.R., ON THE OTHER HAND, RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. [ ITA NO.350/LKW/2015 ] 3 7 . WE HAVE PERUSED THE CASE RECORDS, HEARD T HE RIVAL CONTENTIONS AND WE FIND THAT FOR ASSESSMENT YEAR 2012 - 13 THE NET PROFIT RATE ARRIVED AT 0.33% WAS ACCEPTED BY THE DEPARTMENT AND ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) AND ON THE SIMILAR FACTS AND CIRCUMSTANCES THIS HAS TAKEN PLACE , WHICH I S ALSO NOT DISPUTED BY THE LD. D.R. AT THE SAME TIME, AS PER THE FINDINGS OF THE LD. CIT(A) THERE ARE SEVERAL DEFECTS IN THE STOCK REGISTER AND THE VALUATION OF STOCK OF SEVERAL ITEMS WERE NOT PROPER. THE LD. A.R. OF THE ASSESSEE , AT THE TIME OF HEARING , HAS STATED BEFORE US THAT ITEM - WISE DETAILS OF STOCK WAS MADE BEFORE THE ASSESSING OFFICER AND UNDER THESE CIRCUMSTANCES RESORTING TO REJECTION OF THE BOOKS OF ACCOUNT WAS NOT CORRECT. WE HOLD, IN OUR CONSIDERED VIEW, THAT A DETAILED ENQUIRY FOR VERIFICA TION OF ALL THE FACTS IS REQUIRED IN THIS CASE OF THE ASSESSEE AND FURTHER MORE THERE IS AN ELEMENT OF NATURAL JUSTICE WHICH IS ALSO TO BE TAKEN CARE OF AS ALLEGED BY THE LD. A.R. OF THE ASSESSEE. CONSIDERING THE BALANCE OF CONVENIENCE IN THE PARAMETERS O F JUSTICE, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR PROPER VERIFICATION OF THE ENTIRE FACTS AND DETAILS AND THEREAFTER ADDRESS THE ISSUE AFRESH AFTER A FF ORDING REASONABLE OPPORTUNITY OF HEARIN G TO THE ASSESSEE. 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 7/12/ 201 7 . SD/ - SD/ - [ T.S. KAPOOR ] [PARTHA SARATHI CHAUDHURY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 7 TH DECEMBER , 2017 JJ: 0612 [ ITA NO.350/LKW/2015 ] 4 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR