Siddappa Shivappa Sulibhavi., Belgaum V. Income Tax Officer, Ward-1, Gokak., Gokak

ITA 393/PAN/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1012 (ITAT-PANAJI)
• Duration Of Justice: 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 01-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 05-11-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K M MAHESH
• Assessee Lawyers: G S DODAMANI
• Keywords: Gross profit estimation

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI GEORGE MATHAN , HONBLE JUDICIAL MEMBER ITA NO. 393 /PNJ/2014 (ASST. YEAR : 200 8 - 0 9 ) SIDDAPPA SHIVAPPA SULIBHAVI, PROP : M/S. S.S. SULIBHAVI & S ONS, NARAYANPETH, RAMDURG, DISTRICT BELGAUM. VS. ITO , WARD - 1 , GOKAK . PAN NO. APKPS 4418 P (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.S. DODAMANI - AR DEPARTMENT BY : SHRI K.M. MAHESH DR DATE OF HEARING : 01 / 0 6 /2015 . DATE OF PRONOUNCEMENT : 0 2 / 0 6 /201 5 . O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT (A), BELGAUM IN APPEAL NO. 649 /BGM/ 2010 - 11 DATED 0 8 /0 8 /201 4 FOR THE A.Y. 200 8 - 0 9 . 2. SHRI G.S. DODAMANI REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI K.M. MAHESH , LD. DR REPRESENTED ON BEHALF OF THE REVENUE. 3 . LEARNED AR ON BEHALF OF THE ASSESSEE HAS FILED THE COPY OF THE AUDIT REPORT ALONG WITH THE BALANCE SHEET . AT THE OUTSET , IT WAS 2 SUBMITTED BY THE LEARNED AR THAT THE LD. CIT(A) DISMISSED THE ASSESSEES APPEAL FOR NON - PROSECUTION A S ALSO ON MERITS. IT WAS THE SUBMISSION THAT THE ASSESSEE WAS NOT WELL AND WAS SUFFERING FROM SEVERE CHI K UNGUNYA AND ASTHMA . HE HAD BEEN ADVISED TO TAKE COMPLETE BED REST , CONSEQUENTLY HE H A D NOT APPEARED BEFORE THE L D. CIT(A) . A S THE L D. CIT(A) HAS ALSO DECIDED THE ASSESSEES APPEAL ON MERITS , L EARNED AR WAS REQUESTED TO SUBMIT HIS CASE ON MERITS . 4. IT WAS THE SUBMISSIONS OF THE LEARNED AR THAT THERE WERE THREE ADDITIONS , ONE ON ACCOUNT OF UNSECURED LOANS AND DEPOSITS FROM THE RELATIVES TO THE EXTENT OF RS. 1,41,000/ - , THE SECOND ADDITION WAS OF RS. 50,000/ - ON ACCOUNT OF LOW GROSS PROFIT AND THE THIRD ADDITION WAS OF RS. 32,000/ - REPRESENTING DISALLOWANCE OF SUPERVISION CHARGES . 5. IT WAS THE SUBMISSION THAT THE ASSESSEE IS IN THE BUSINESS OF MANUFACTURING OF HANDLOOM AND SAREES . IT WAS THE SUBMISSION THAT THE ASSESSEE HAD TAKEN DEPOSITS FROM FIVE OF HIS FAMILY MEMBERS DURING THE RELEVANT ASSESSMENT YEAR TO THE EXTENT OF RS. 1,41,000/ - . IT WAS THE SUBMISSION THAT THESE DEPOSITS WERE BASICALLY BOOK ENTRIES REPRESENTING THE SUPERVISION CHARGES PAID TO THE FIVE FAMILY MEMBERS WHICH HAD BEEN SHOWN AS DEPOSITS WITH THE ASSESSEE. IT WAS THE SUBMISSION THAT EVEN THOUGH THE CONFIRMA TION LETTERS HAD BEEN PRODUCED BEFORE THE 3 ASSESSING OFFICER, THE SAME HAD NOT BEEN CONSIDERED. IT WAS THE SUBMISSION THAT HE HAD NO OBJECTION IF THE ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR RE - VERIFICATION. TO THAT SUBMISSION, LEARNED DR DID NOT RAISE ANY SERIOUS OBJECTION. 6 . CONSEQUENTLY, CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE LEARNED DR , THIS ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION AS TO WHETHER THE SAID DEPOSITS ARE IN FACT T HE ADJUSTMENTS OF THE SUPERVISION CHARGES PAID TO THE SAID FIVE PERSONS AS SHOWN IN THE BALANCE SHEET . IF IT IS FOUND THAT THE SAID DEPOSITS REPRESENT THE SUPERVISION CHARGES PAID TO THE SAID FIVE PERSONS WHICH ARE TAKEN AS DEPOSITS IN THE ASSESSEES ACCOUNT, THEN THE ADDITION MADE IS LIABLE TO THE DELETED. 7 . IN THE RESULT, THE ISSUE IN REGARD TO ADDITION OF RS. 1,41,000/ - STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 8 . IN REGARD TO ADDITION OF RS. 50,000/ - REPRESENTING THE ADDITION OF LOW GROSS PROFIT, IT WAS THE SUBMISSION THAT THE ASSESSEES BOOKS OF ACCOUNTS HAVE NOT BEEN REJECTED AND CONSEQUENTLY NO ADDITION IS CALLED FOR. IN REPLY, LEARNED DR VEHEMENTLY SUPPORTED THE ORDERS OF THE ASSESSING OFFICER AND THE L D. CIT(A). 4 9 . I HAVE CONSIDERED THE RIVAL SUBMISSIONS . 10 . AS IT WAS NOTICED THAT THE ASSESSEES BOOKS OF ACCOUNTS HAVE NOT BEEN REJECTED, NO ADDITION ON ACCOUNT OF LOW GROSS PROFIT CAN BE MADE. CONSEQUENTLY, THE SAID ADDITION OF RS. 50,000/ - STANDS DELETED. 11 . IN REGARD TO ADDITION OF RS. 32,000/ - REPRESENTING THE DISALLOWANCE OUT OF THE SUPERVISION CHARGES PAID OF RS. 72,000/ - , IT WAS SUBMITTED THAT THOUGH THE ASSESSING OFFICER HAS MENTIONED THAT THE SUPERVISION CHARGES APPEARS TO BE VERY HIGH AND NO COMPARATIVE CASE HAS BEEN CONSIDERED. IT WAS SUBMITTED THAT CONSEQUENTLY THE ADDITION WAS LIABLE TO BE DELETED. 1 2 . IN REPLY, LEARNED DR VEHEMENTLY SUPPORTED THE ORDERS OF THE ASSESSING OFFICER AND THE L D. CIT(A). 1 3 . I HAVE CONSIDERED THE RIVAL SUBMISSIONS. 1 4 . AS IT IS NOTICED THAT THE ASSESSING OFFICER HAS NOT GIVEN ANY COMPARATIVE CASE NOR GIVEN ANY JUSTIFICATION FOR HOLDING THAT THE SUPERVISION CHARGES ARE VERY HIGH , T HE ADDITION MADE BY THE ASSESSING OFFICER BY DISALLOWANCE OF RS. 32,000/ - STANDS DELETED. 5 1 5 . IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATIS TI CAL PURPOSES. ( ORDER PRONOUNCED IN THE OPEN COURT ON 0 2 N D JUNE , 201 5 ). S D / - ( GEORGE MATHAN ) JUDICIAL MEMBER DATED : 0 2 N D J UNE , 201 5 . VR/ - COPY TO: 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE LD. CIT 4 . THE CIT(A) 5 . THE D.R 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI 6 DATE INITIAL ORIGINAL DICTATION PAD IS ENCLOSED AT THE END OF FILE 1. DRAFT DICTATED ON 01 . 06 .2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 01.06. 2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER N/A JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER N/A JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 01/06/2015 SR.PS 6. DATE OF PRONOUNCEMENT 0 2 /0 6 /2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 02/06 /2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER