The ITO, Ward-(2)(4), PORBANDAR V. M/s. Virgin Logistics, PORBANDAR

ITA 384/RJT/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7797 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 04-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARVIND N SONTAKKE
• Assessee Lawyers: D S SODHA A R
• Keywords: Rejection of books of accounts
• Section: 44AD; 133(6); 145

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT LOZJH LOZJH LOZJH LOZJH OLHE OLHE OLHE OLHE VGEN VGEN VGEN VGEN] YS[KK LNL; , ] YS[KK LNL; , ] YS[KK LNL; , ] YS[KK LNL; ,OA OAOA OA EGKOHJ EGKOHJ EGKOHJ EGKOHJ IZLKN IZLKN IZLKN IZLKN] U; ] U;] U; ] U;KF KFKF KF;D LNL; DS LE{KA ;D LNL; DS LE{KA ;D LNL; DS LE{KA ;D LNL; DS LE{KA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO.384/RJT/2015 ( / ASSESSMENT YEAR : 2012-13) THE INCOME TAX OFFICER, WARD 2(4), JR, PORBANDAR / VS. M/S. VIRGIN LOGISTICS, 19, GIDC, DHARAMPUR, PORBANDAR-360 575 ./ ./ PAN/GIR NO. : AAIFV 7528 G ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI ARVIND N. SONTAKKE, SR.D.R. ! / RESPONDENT BY : SHRI D. S. SODHA, A.R. ' #$ % ! & / DATE OF HEARING 08/06/2018 '( ! & / DATE OF PRONOUNCEMENT 20/06/2018 )* / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEAL) -JAMNAGAR [CIT(A) IN SHORT] VIDE APPEAL NO. CIT(A)-JAM/280/14 -15 DATED 25.06.2015 ARISING IN THE ASSESSMENT ORDER PASSED UNDER S.143(3) OF TH E INCOME TAX ACT, 1961 (HERE IN AFTER REFERRED TO AS 'THE ACT') DATED 25.03.2015 RELEVANT TO ASSESSMENT YEAR (AY) 2012-13 . ITA NOS.384/RJT/2015 ITO VS. M/S. VIRGIN LOGISTICS ASST.YEAR 2012 -13 - 2 - 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS UNDER:- 1. WHETHER, ON FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT AO WAS UNJUSTI FIED IN REJECTING BOOKS OF ACCOUNT OF THE ASSESSEE. 2. WHETHER, ON FACTS AND THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE BY AO ON ACCOUNT OF ESTIMATION OF INCOME. 3. ON THE BASIS OF THE FACTS AND CIRCUMSTANCES OF T HE CASE, THE LEARNED CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF TH E ASSESSING OFFICER. THAT THE REVENUE CRAVES LEAVES TO ADD, AMEND, ALTER OR WITHDRAW ANY GROUND OF APPEAL. IT IS THEREFORE PRAYED THAT THE ORDER OF THE CIT(A) , JAMNAGAR MAY KINDLY BE SET ASIDE AND THAT OF ASSESSING OFFIC ER BE RESTORED. 3. THE SOLITARY ISSUE RAISED BY THE REVENUE IN THIS APPEAL IS THAT LEARNED CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE AO ON ESTIMATED BASIS AFTER REJECTING THE BOOK OF ACCOUNT S. 4. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM AND ENGAGED IN THE TRANSPORTATION BUSINESS. THE ASSESSE E DURING THE YEAR HAS CARRIED OUT TRANSPORTATION WORK FOR ULTRATECH CEMEN T LTD. THE ASSESSEE USED TO PROVIDE TRANSPORT FACILITY FOR TRANSPORTING THE GOODS FROM THE SITE OF THE SUPPLIER TO THE PLANT OF ULTRATECH CEMENT LT D. THE ASSESSEE FOR THIS PURPOSE USED TO HIRE THE TRUCK FROM THE LOCAL MARKE T. THE ASSESSEE USED TO ISSUE A CHALLAN TO THE TRUCK OWNERS/ DRIVERS ONCE I T IS LOADED WITH THE GOODS FOR TRANSPORTING THE SAME TO THE PLANT OF ULT RATECH CEMENT LTD. THE ITA NOS.384/RJT/2015 ITO VS. M/S. VIRGIN LOGISTICS ASST.YEAR 2012 -13 - 3 - TRUCK OWNERS/ DRIVERS AFTER MAKING THE DELIVERY OF THE GOODS AT THE DESTINATION USED TO GET THE COPY OF CONFIRMATION FR OM ULTRATECH CEMENT LTD. WHICH WAS SUBMITTED TO THE ASSESSEE BY THEM FO R THEIR PAYMENT. THERE WAS NO WRITTEN AGREEMENT BETWEEN THE ASSESSEE AND THE TRUCK OWNERS/ DRIVERS. BOTH THE ASSESSEE AND THE TRUCK OW NERS/ DRIVERS WERE WORKING BY VERBAL UNDERSTANDING. ULTRATECH CEMENT LIMITED PERIODICALLY USED TO SUBMI T THE STATEMENTS TO THE ASSESSEE SHOWING THE DETAILS OF TRANSPORTATION OF GOODS FOR THE SPECIFIED PERIOD. SUCH DETAILS WERE CONTAINING THE DETAILS OF TRUCK NUMBERS AND WEIGHT OF GOODS TRANSPORTED FROM THE LO CATION OF THE SUPPLIERS. SUBSEQUENTLY AND ACCORDINGLY THE ASSESSE E USED TO RAISE THE BILLS TO ULTRATECH CEMENT LTD. THE ASSESSEE DURING THE YEAR HAS SHOWN TRANSPORTATI ON EXPENSES OF RS. 11,38,26,937/- AGAINST THE GROSS RECEIPTS OF TRANSP ORT CHARGES FROM ULTRATECH CEMENT LTD FOR RS.11,53,39,074/- IN ITS T RADING AND PROFIT & LOSS ACCOUNT. THE AO DURING THE ASSESSMENT PROCEEDINGS TO VERIFY THE VERACITY OF TRANSPORTATION EXPENSES ISSUED TO NOTICES U/S 133(6 ) TO SOME TRUCK DRIVERS RANGING BETWEEN 60 TO 70 IN NUMBERS. HOWEVER, MOST OF THE TRUCK OWNERS/ DRIVERS FAILED TO RESPOND TO THE NOTICES IS SUED TO THEM. SOME OF ITA NOS.384/RJT/2015 ITO VS. M/S. VIRGIN LOGISTICS ASST.YEAR 2012 -13 - 4 - THE TRUCK DRIVERS DENIED TO HAD ANY TRANSACTION WIT H THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. BESIDES THE ABOVE, THE AO ALSO OBSERVED THAT ASSESS EE HAD DECLARED ITS NET PROFIT FOR THE YEAR UNDER CONSIDERATION @1.02% OF THE TURNOVER WHICH IN HIS OPINION WAS QUITE LOW AS PER THE PREVAILING MARKET RATE. IN VIEW OF ABOVE, THE AO ISSUED SHOW-CAUSE NOTICE V IDE DATED 19.03.2015 FOR REJECTING THE BOOKS OF ACCOUNTS U/S 145(3) OF THE ACT AND ESTIMATE THE NET PROFIT/INCOME @ 8% OF THE GROSS RE CEIPTS. IN COMPLIANCE WITH IT, THE ASSESSEE FURNISHED THE D ETAILS OF THE CHALLAN CONTAINING THE NAME OF THE DRIVERS, TRUCK NUMBER, W EIGHT, AND DESTINATION, ETC ON A SAMPLE BASIS. THE ASSESSEE HA S ALSO FILED THE COPIES OF THE STATEMENT ISSUED BY THE ULTRATECH CEMENT LTD . TO IT CONTAINING THE DETAILS OF THE GOODS, TRUCK NUMBERS, WEIGHT, ETC TO JUSTIFY THE TRANSPORTATION CHARGES. THE ASSESSEE ALSO SUBMITTED THAT THE OPPORTUNITY OF CROSS VERIFICATION FROM THE PARTIES WHO DENIED TO HAVE A TRANSACTION W ITH THE ASSESSEE WAS NOT PROVIDED TO IT. THEREFORE, THE SAME CANNOT BE R ELIED UPON FOR REJECTING THE BOOKS OF ACCOUNTS. THE ASSESSEE ALSO SUBMITTED THAT THE DETAILS WERE SUBMITTED TO THE AO VIDE LETTER DATED 12/12/2014 AN D ENOUGH TIME WAS AVAILABLE WITH THE AO FOR PROVIDING THE OPPORTUNITY OF CROSS VERIFICATION. ITA NOS.384/RJT/2015 ITO VS. M/S. VIRGIN LOGISTICS ASST.YEAR 2012 -13 - 5 - THE ASSESSEE ALSO SUBMITTED THAT ALL THE EXPENSES I NCURRED BY IT ARE GENUINE AND INCURRED IN CONNECTION WITH ITS BUSINES S. THEREFORE, THE ALLEGATION THAT ASSESSEE HAS SHOWN LESS PROFIT, I.E . @1.02% OF THE TURNOVER IS NOT TENABLE. HOWEVER, THE AO DISREGARDED THE CONTENTION OF THE A SSESSEE BY OBSERVING THAT THE DETAILS OF THE TRUCK OWNERS WERE NOT FURNI SHED. SIMILARLY, IN MOST OF THE CASES, THERE WAS NO RESPONSE OF THE NOTICE I SSUED U/S 133(6) OF THE ACT TO THE TRUCK DRIVERS/ DRIVERS. THE AO ALSO OBSE RVED THAT THE OPPORTUNITY OF CROSS-EXAMINATION TO THE ASSESSEE WI TH THE TRUCK DRIVERS/ OWNERS WILL BE NO SIGNIFICANCE AND WILL ONLY LEAD T O THE WASTAGE OF TIME AS THERE ARE LARGE NUMBERS OF TRUCK DRIVERS INVOLVE D. ACCORDINGLY, THE AO REJECTED THE BOOKS OF ACCOUNTS AND ESTIMATED THE PROFIT OF THE GROSS RECEIPTS @8%. THUS, THE TOTAL INCOME WAS DETERMINED BY THE AT RS.92,27,130/- ONLY. 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL TO LEARN ED CIT(A). THE ASSESSEE BEFORE THE LEARNED CIT(A) SUBMITTED THAT I T HAS PRODUCED ALL THE BOOKS OF ACCOUNTS INCLUDING BILLS, VOUCHERS AND SUP PORTING EVIDENCE BY WHICH FINANCIAL STATEMENTS WERE DRAWN. THE BOOKS OF ACCOUNTS WERE DULY AUDITED U/S 44AB OF THE ACT, AND NO DEFECT WAS POIN TED OUT THEREIN. THE REPLY FURNISHED DURING THE PROCEEDINGS TO THE A O WAS NOT CONTROVERTED SUCH AS THE LIST OF CHALLANS ISSUED TO THE TRUCK OWNERS AS WELL AS STATEMENT FURNISHED BY THE ULTRATECH CEMENT LTD. ITA NOS.384/RJT/2015 ITO VS. M/S. VIRGIN LOGISTICS ASST.YEAR 2012 -13 - 6 - THERE WAS NO CROSS-EXAMINATION OPPORTUNITY PROVIDED TO THE ASSESSEE WITH THE TRUCK DRIVERS/ OWNERS TO WHOM NOTICES U/S 133(6) WERE ISSUED. THE LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE DELETED THE ADDITION MADE BY THE AO BY OBSERVING AS UNDER: DECISION: 6. I HAVE DULY CONSIDERED THE SUBMISSION OF THE APP ELLANT AND ALSO GONE THROUGH THE ASSESSMENT ORDER. 6.1 SO FAR AS ADDITION FOR RS.92,27,130/- BY REJECT ING BOOKS OF ACCOUNTS AND ESTIMATING TOTAL INCOME @8% OF TOTAL T URNOVER, I AM INCLINED TO AGREE WITH THE CONTENTION OF THE APPELL ANT THAT THE GROUNDS TAKEN BY THE AO FOR REJECTION OF BOOKS OF ACCOUNT A RE NOT JUSTIFIABLE. COMPARISON OF PROFIT RATIO OF THE APPELLANT FIRM WI TH THE OTHER FIRM IN THE SAME LINE OF BUSINESS IS NOT A GROUND FOR REJEC TION OF BOOKS OF ACCOUNTS. ALSO THE AO FAILED TO POINT OUT ANY DEFEC T ON METHOD OF ACCOUNTING OR ANY INHERENT DEFECTS IN BOOKS OF ACCO UNTS. FURTHER THE AO HAS PASSED THE ORDER WITHOUT GIVING THE APPELLANT O PPORTUNITY TO CROSS EXAMINE THE PARTIES FROM WHOM INFORMATION OBTAINED U/S. 133(6) OF THE ACT, IT IS AGAINST THE PRINCIPAL OF NATURE JUSTICE AND CONSEQUENTIAL ADDITION IS NOT TENABLE. HENCE THE ADDITION MADE ON THIS ACCOUNT IS DELETED. BEING AGGRIEVED BY ORDER OF LEARNED CIT(A) REVENUE IS IN THE SECOND APPEAL BEFORE US. THE LEARNED DR BEFORE US VEHEMENTLY SUPPORTED THE O RDER OF AO. ON THE OTHER HAND, THE LEARNED AR BEFORE US SUBMITTED THAT THE OPPORTUNITY OF CROSS-EXAMINATION WAS NOT GIVEN TO THE ASSESSEE WIT H THE TRUCK DRIVERS TO WHOM NOTICES WERE ISSUED U/S 133(6) OF THE ACT. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT BOOKS OF ACCOUNTS WERE DULY AUDITED AND ITA NOS.384/RJT/2015 ITO VS. M/S. VIRGIN LOGISTICS ASST.YEAR 2012 -13 - 7 - NO DEFECT OF WHATSOEVER WAS POINTED OUT BY THE AO A ND THUS, THE BOOKS OF ACCOUNTS WERE REJECTED ON BASELESS GROUNDS. THE PAN OF THE TRUCK OWNERS WERE FURNISHED DURING A SSESSMENT PROCEEDINGS, BUT THE AO DID NOT VERIFY THE SAME FRO M THE AOS HAVING TO JURISDICTION OVER THE TRUCK OWNERS/ DRIVERS. THE LE ARNED AR VEHEMENTLY SUPPORTED THE ORDER OF LEARNED CIT(A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE PRESENT CASE, THE AO RE JECTED THE BOOKS OF ACCOUNTS AND ESTIMATED THE PROFIT @8% OF THE TOTAL GROSS RECEIPTS. THE AO REJECTED THE BOOKS BECAUSE THE TRUCK OWNERS TO W HOM NOTICES WERE ISSUED U/S 133(6) DID NOT RESPOND. SIMILARLY, THE AO ALSO OBSERVED THAT THE ASSESSEE H AD SHOWN LESS AMOUNT OF PROFIT IN COMPARISON TO THE PREVAILING MARKET RA TE. IN THE PRECEDING DISCUSSION, WE NOTE THAT THE BOOKS OF ACCOUNTS WERE DULY AUDITED AND SUPPORTED WITH THE DOCUMENTARY EVIDENCE AS DISCUSSED ABOVE. THE AO HAS NOT POINTED OUT ANY DEFECT IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE EXCEPT ROUTINE/MINOR OBS ERVATIONS. IN SUCH CIRCUMSTANCES, COURTS HAVE HELD THAT BOOKS OF ACCOU NTS CANNOT BE REJECTED. IN THIS REGARD, WE REFER TO THE ORDER OF THIS TRIBUNAL IN THE CASE OF ITO VS. GIRISH M. MEHTA REPORTED IN 105 ITD 585, WH ERE THE HEAD NOTE READS AS UNDER: ITA NOS.384/RJT/2015 ITO VS. M/S. VIRGIN LOGISTICS ASST.YEAR 2012 -13 - 8 - SECTION 145 OF THE INCOME-TAX ACT, 1961 - METHOD O F ACCOUNTING - REJECTION OF ACCOUNTS - ASSESSMENT YEAR 1998-99 - W HETHER BEFORE REJECTING BOOKS OF ACCOUNT, DEPARTMENT HAS TO PROVE THAT ACCOUNTS ARE UNRELIABLE, INCORRECT OR INCOMPLETE; ACCOUNTS REGUL ARLY MAINTAINED IN COURSE OF BUSINESS, DULY AUDITED UNDER PROVISIONS O F ACT AND FREE FROM ANY QUALIFICATION BY AUDITORS, SHOULD BE TAKEN AS C ORRECT UNLESS THERE ARE STRONG AND SUFFICIENT REASONS TO INDICATE THAT THEY ARE UNRELIABLE - HELD, YES - WHETHER IF REVENUE DOUBTS CORRECTNESS O F GROSS PROFIT DECLARED BY ASSESSEE, IT FIRST OF ALL SHOULD REJECT ASSESSEES BOOKS OF ACCOUNT AFTER SATISFYING MANDATORY REQUIREMENT OF S ECTION 145, WHICH CAN BE DONE ONLY AFTER POINTING OUT A SPECIFIC DEFE CT IN BOOKS OF ACCOUNT - HELD, YES - WHETHER ONUS TO MAKE OUT A CASE FOR R EJECTION OF BOOKS OF ACCOUNT IS ON REVENUE AND, SO, ASSESSEE CANNOT BE B URDENED WITH RESPONSIBILITY OF PROVING A NEGATIVE ASPECT OF MATT ER AND CANNOT BE HELD RESPONSIBLE FOR NOT HAVING EARNED PROFIT AT A PARTI CULAR RATE - HELD, YES - WHETHER NON-SUPPLY OF FULL NAME AND ADDRESS OF BU YERS IN CASE OF CASH SALES CANNOT BE A REASON FOR REJECTING BOOKS OF ACC OUNT WHERE ASSESSING OFFICER HAS NO CORROBORATIVE MATERIAL ON RECORD TO REACH TO CONCLUSION THAT SALE PRICE OF THOSE CASH BILLS WERE LOWER THAN SALE PRICE OF CREDIT SALES BILLS, IN RESPECT OF WHICH FULL NAMES AND ADD RESSES OF BUYERS WERE WRITTEN - HELD, YES WE ALSO RELY ON THE JUDGMENT OF DELHI HIGH COURT IN THE CASE OF SMT. POONAM RANI REPORTED IN 326 ITR 223, WHEREIN, IT WA S HELD AS UNDER: THE ASSESSING OFFICER HAD NOT POINTED OUT ANY PARTI CULAR DEFECT OR DISCREPANCY IN THE ACCOUNT BOOKS MAINTAINED BY THE ASSESSEE. DURING THE COURSE OF HEARING BEFORE THE COMMISSIONER (APPE ALS), IT WAS POINTED OUT BY THE ASSESSEE THAT HER ACCOUNT BOOKS WERE DULY AUDITED UNDER SECTION 44AB OF THE CENTRAL EXCISE ACT AND TH E QUANTITATIVE DETAILS AS REQUIRED BY CLAUSE 28( B ) OF FORM NO. 3CD REGARDING RAW MATERIAL AND FINISHED PRODUCTS ( I.E., OPENING STOCK OF RAW MATERIAL, RAW MATERIAL ISSUED TO PRODUCTION DEPARTMENT, RAW MATER IAL CONSUMED AND CLOSING STOCK OF RAW MATERIAL, OPENING STOCK OF FIN ISHED GOODS, FINISHED GOODS PRODUCED DURING THE YEAR, FINISHED GOODS SOLD AND CLOSING STOCK OF FINISHED GOODS) WERE PREPARED AND AUDITED BY CER TIFIED ACCOUNTANT AND WERE ENCLOSED WITH FORM NO. 3CD WHICH HAD BEEN PLACED ON RECORD, BUT THE ASSESSING OFFICER HAD IGNORED THE F ACTUAL FIGURES, BOTH IN QUALITATIVE AND QUANTITATIVE TERMS, ENCLOSED WIT H THE RETURN AND FILED ITA NOS.384/RJT/2015 ITO VS. M/S. VIRGIN LOGISTICS ASST.YEAR 2012 -13 - 9 - DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IT WAS FOR THAT REASON THAT THE COMMISSIONER (APPEALS) WAS SATISFIED THAT THE A SSESSEE HAD FURNISHED COMPLETE DETAILS, INCLUDING QUANTITATIVE DETAILS IN RESPECT OF PURCHASE OF RAW MATERIAL, MANUFACTURE OF COPPER WIR E AND SALE OF THE FINISHED PRODUCTS. IN THOSE CIRCUMSTANCES, THE ACCO UNTS MAINTAINED BY THE ASSESSEE COULD NOT HAVE BEEN SAID TO BE INCOMPL ETE OR INACCURATE. IN FACT, THE ASSESSING OFFICER HAD NO MATERIAL BEFORE HIM TO TREAT THE ACCOUNTS OF THE ASSESSEE AS DEFECTIVE OR INCOMPLETE . IN VIEW OF ABOVE, WE HOLD THAT THE AO ERRED IN REJE CTING THE BOOKS OF ACCOUNTS UNDER THE PROVISIONS OF SECTION 145(3) OF THE ACT. THEREFORE THERE WAS NO REASON FOR THE AO TO ESTIMATE THE PROF IT AFTER REJECTING THE BOOKS OF ACCOUNTS. EVEN FOR THE SAKE OF ARGUMENTS IF IT IS ASSUMED THA T THE BOOKS OF ACCOUNTS WERE CORRECTLY REJECTED UNDER SECTION 145(3) OF THE ACT THEN ALSO THE PROFIT CANNOT BE ESTIMATED @ 8 % OF THE GROSS RECEI PTS IN THE GIVEN FACTS & CIRCUMSTANCES. IN THIS REGARD, WE NOTE THAT THE A O HAS ESTIMATED THE PROFIT @8% WITHOUT BRINGING ON RECORD ANY COMPARABL E CASES TO THE BUSINESS OF THE ASSESSEE. THE AO HAS JUST MENTIONED IN HIS ORDER THAT THE ASSESSEE HAS DECLARED VERY LOW PROFIT AS PER THE PR EVAILING MARKET RATE. IN OUR VIEW, THE AO BEFORE ESTIMATING THE PROFIT @ 8 % SHOULD HAVE BROUGHT ON RECORD THE COMPARABLE CASES WHEREIN THE PROFIT @ 8% OF THE GROSS RECEIPTS HAS BEEN DECLARED. WE ALSO NOTE THAT ONCE BOOKS OF ACCOUNTS HAVE BEEN REJECTED, THEN THE PROFIT DECLARED BY THE ASSESSEE IN THE EARLIER YEAR S BECOMES THE GUIDING FACTOR FOR DETERMINING THE PROFIT ON AN ESTIMATED B ASIS. IN THE CASE ON HAND, THE AO HAS NOT CONSIDERED THE RATE OF PROFIT DECLARED BY THE ASSESSEE IN THE EARLIER YEARS. ITA NOS.384/RJT/2015 ITO VS. M/S. VIRGIN LOGISTICS ASST.YEAR 2012 -13 - 10 - WE ALSO NOTE THAT THE AO HAS TAKEN THE GUIDANCE FRO M THE PROVISIONS OF SECTION 44AD IN ADOPTING THE RATE @ 8% FOR DETERMIN ING THE PROFIT OF THE ASSESSEE WHICH IS NOT CORRECT AS IT APPLIES TO THE SMALL ASSESSEE HAVING TURNOVER UP TO RS. 1 CRORE. IN VIEW OF ABOVE, WE DO NOT FIND ANY REASON TO INTE RFERE IN THE ORDER OF LEARNED CIT(A). HENCE THE GROUND OF APPEAL FILED B Y THE REVENUE IS DISMISSED. 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 20/06/2018 SD/- SD/- EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN OLHE VGEN OLHE VGEN OLHE VGEN OLHE VGEN U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LN L; L; L; L; (MAHAVIR PRASAD) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 20/06/2018 PRITI YADAV, SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. + & ' ,& / CONCERNED CIT 4. ' ,& ( ) / THE CIT(A)-JAMNAGAR. 5. -$. / 0&0# , , /DR,ITAT, RAJKOT 6. / 12 3 % / GUARD FILE. / BY ORDER, -& 0& //TRUE COPY// / ! '#$ ( DY./ASSTT.REGISTRAR) ! $%! & , / ITAT, RAJKOT