ITO, Faridabad V. Sh. Satender Kumar Garg, Faridabad

ITA 3552/DEL/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9717 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 16-09-2009
• Assessment Year: 2004-2005
• Appeal Filed On: 02-12-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRATIMA KAUSHIK
• Section: 143(3); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G DELHI BEFORE SHRI K.G. BANSAL AND SHRI GEORGE MATHAN I.T.A. NO. 3552(DEL)/2008 ASSESSMENT YEAR: 2004-05 INCOME-TAX OFFICER, SHRI SATENDER KUMAR GARG, WARD 1(2), FARIDABAD. VS. PROP . M/S GARG CARIERS, 1355, SECTOR-18, FARIDABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : MS. PRATIMA KAUSHIK , SR. DR RESPONDENT BY : NONE ORDER PER K.G. BANSAL : AM THIS APPEAL EMANATES FROM THE ORDER OF THE CI T(APPEALS), FARIDABAD, PASSED ON 25.09.2008 IN APPEAL NO . 268/06-07 AND IT PERTAINS TO ASSESSMENT YEAR 2004-05. THE ONLY SUBSTANTIVE GROUND TAKEN BY THE REVENUE IS THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEALS) ERRED IN DELETING THE ADDITION OF RS. 7,25,806/- MADE BY THE AO BY ESTIMATING NET INCOME AT 10% OF THE TRANSPORT RECEIPT. 2. WHILE NONE ATTENDED BEFORE US ON BEHALF OF T HE ASSESSEE, THE LEARNED DR RELIED ON THE ORDER OF THE AO. ITA NO. 3552(DEL)/2008 2 3. WE HAVE CONSIDERED THE FACTS OF THE CASE AN D SUBMISSIONS MADE BEFORE US. THE FINDINGS OF THE LEARNED CIT(APPE ALS) ARE CONTAINED IN PARAGRAPH 9 OF HIS ORDER, WHICH IS REPRODUCED BE LOW:- 9. GIVEN THE FACTS AND CIRCUMSTANCES AS ABOVE , THE QUESTION REMAINS WHETHER THE N.P. RATE OF 10% WAS JUS TIFIED IN THE INSTANT CASE. THIS CAN BE DETERMINED EITHE R FROM THE APPELLANTS OWN CASE RECORDS OR FROM THE COMPA RABLE CASES. AS REMAINS THE FACT, THIS IS THE APPELLA NTS FIRST YEAR, GIVING A NET PROFIT RATE OF 3.19%, AS REFL ECTED FROM THE AUDIT REPORT DATED 20.09.2004. THE LD. A.R. HAS GIVEN THE FOLLOWING COMPARATIVE CHART OF THE GROSS RECEIPTS, THE N.P. AND THE PERCENTAGE I N RESPECT OF THE FOLLOWING COMPARABLE APPELLANTS: NAME & ADDRESS OF THE A.YR. GROSS RTS. NP %AGE AFTER ADDITION ASSSSEE BY AO NARENDER KUMAR GAR 2004-05 6813604 109902 1.61% 1653+ WARD-5,DELHI ALWAR 21270 ROAD, SOHNA. 1.95% KAMLA DEVI, PROP. 2005-06 9777553 245 600 2.5% 2427 + RADHIKA CARRIER, 37105 FARIDABAD. 2.9% PRADEEP KR. & 2005-06 10712713 30 8318 2.88% 15000 SONS,TRANSPORTER 3.18% FARIDABAD. ITA NO. 3552(DEL)/2008 3 FROM THE ABOVE COMPARATIVE RESULTS IN THE SAM E LINE OF BUSINESS, IT IS FOUND THAT THE ABOVE N.P. RATE S HAVE BEEN ACCEPTED BY THE AO IN THE SCRUTINY ASSESSMENTS U/ S 143(3) OF THE INCOME-TAX ACT, 1961. THE AOS ESTIMATE @ 1 0% NP IN THIS CASE IS THUS CLEARLY AD-HOC OR ARBITRARY WITHOUT ANY BASIS OR YARDSTICKS EVER MENTIONED BY HIM IN THE ASSESSMENT U/S 144. HE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO JUSTIFY HIS ESTIMATE OF INCOME U/S 144. WITHOU T POINTING ANY DEFECT OR DEFICIENCY IN THE BOOKS OF ACCOUNT/VOU CHERS AND ACCEPTING THE GROSS RECEIPTS DECLARED AT RS. 72,58,069/- HE HAS PROCEEDED U/S 144 WITHOUT RESORTING TO THE PROVISIONS OF SECTION 145OF THE INCOME-TAX ACT. THE ONLY CONSID ERATION THEN REMAINS IS REGARDING THE ALLOWABILITY OF EXP ENSES I.E., THE NET RATE TO BE APPLIED, AND THE AO HAS ALLOWED A NP RATE OF 10% FOR THAT PURPOSE WITHOUT ANY BASIS, NOT EVEN CONSIDERING THAT THE RATE U/S 44AE IS EVEN LE SS THAN 5% IN A NO-ACCOUNTS CASE. THEREFORE, THE ESTIMATE MADE BY THE AO BEING ARBITRARY HAS NO LEGS TO STAND UPON O R HAS ANY GROUND, ESPECIALLY WHEN IN THE APPELLANTS OWN C ASE ON SIMILAR GROUNDS, THE AO HAS ACCEPTED THE NET P ROFIT @ 2.65% ONLY, U/S 143(3) OF THE INCOME-TAX ACT, 19 61, FOR THE ASSESSMENT YEAR 2005-06. THE AO IN HIS REPORT HAS OBJECTED TO THE CONSIDERATION OF CASES OF SHRI NARENDER K UMAR GARG AND SMT. KAMLA DEVI AND SHRI PRADEEP KUMAR & SONS WHEREIN THE NP WAS ASSESSED AT 1.95%, 2.9% AND 3.18% BECAUSE THEY WERE ASSESSED U/S 143(3) AFTER EXAMINATION OF BOOKS OF ACCOUNT AND VOUCHERS. HOWEVER, IT IS FOUND THAT BY FOLLOWING THE SAME LOGIC HE HAS RAISED N O EYEBROWS OR JUSTIFICATION FOR ACCEPTING THE RESULTS OF T HE APPELLANT FOR THE ASSESSMENT YEAR 2005-06 AS ABOVE WHICH WAS ALSO ASSESSED U/S 143(3) OF THE INCOME-TAX ACT, 1961. MOREOVER, THE APPELLANT HAS PRODUCED THE RELEVANT DOCUMENT S NOT ONLY UNDER RULE 46A BUT ALSO IN THE ENQUIRY UNDER S ECTION 250(4) HELD BY THE AO FOR THE YEAR UNDER CONTEXT. THE REFORE, IN VIEW OF THE ABOVE DISCUSSIONS, THE ADDITION OF RS. 7 ,25,806/- BEING MERITLESS STANDS DELETED. ITA NO. 3552(DEL)/2008 4 ON PERUSAL THEREOF, IT WILL BE SEEN THAT THE ESTIMATE OF THE AO WAS NOT BASED ON ANY FACT ON RECORD, WHILE THE LD. CIT(APPEALS) TOOK INTO ACCOUNT THE PAST HISTORY OF THIS CASE A ND SIMILARLY SITUATED ASSESSES FOR THE PURPOSE OF DETERMINING THE RATE OF NET PROFIT. THE LEARNED DR HAS NOT BEEN ABLE TO DISPLACE IN ANY MANNER THE FINDIN G OF THE LD. CIT(APPEALS). THEREFORE, WE DO NOT FIND ANY ERROR IN HIS ORDER WHICH REQUIRES CORRECTION FROM US. 4. IN THE RESULT, THE APPEAL IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 1 6.09.2009 SOON AFTER THE COMPLETION OF THE HEARING. SD/- SD/- (GEORGE MATHAN) (K.G. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE OF ORDER: 16.09.2009. SP SATIA COPY OF THE ORDER FORWARDED TO:- SHRI SATENDER KUMAR GARG, PROP. M/S GARG CARIERS, FARIDABAD. ITO, WARD 1(2), FARIDABAD. CIT CIT(A) THE DR, ITAT, NEW DELHI. ASSISTANT REGIST RAR.