Mohd. Yusuf, Ghaziabad V. ITO, Ward- 2(2), Noida

ITA 3946/DEL/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 9010 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 24-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR ANJULA JAIN
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES SMC : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA.NO.3946/DEL./2018 ASSESSMENT YEAR 2013-2014 MOHD. YUSUF, MS-1, 2 ND FLOOR, SECTOR-12, PRATAP VIHAR, GHAZIABAD 201 009. PAN AAPPY8546A VS. THE INCOME TAX OFFICER, WARD-2(2), NOIDA. (APPELLANT) (RESPONDENT) FOR ASSESSEE : - NONE - FOR REVENUE : DR. ANJULA JAIN, SR. D.R. DATE OF HEARING : 16 . 1 0.2018 DATE OF PRONOUNCEMENT : 16 . 10 .2018 ORDER PER BHAVNESH SAINI, J.M. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-1, NOIDA, DATED 27.02.2018, FOR THE A.Y. 2013-2014. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT ASSESSEE IS A PROPRIETOR OF M/S.EUTECH METAL DEVELOPMENT, GHAZIABAD AND ENGAGED IN THE BUSINESS OF EXPORT OF SCAFFOLDING ITEMS AND 2 ITA.NO.3946/DEL./2018 MOHD. YUSUF, GHAZIABAD. DERIVED INCOME FROM BUSINESS OR PROFESSION. THE ASSESSEE FURNISHED VARIOUS DETAILS IN RESPECT OF COMPUTATION OF INCOME AND OTHER RELEVANT DOCUMENTS AS CALLED FOR BY THE A.O. WHICH WERE VERIFIED BY THE A.O. THE A.O. NOTED THAT THE ASSESSEE HAS SHOWN ONLY 1.34% NET PROFIT IN ASSESSMENT YEAR UNDER APPEAL AS COMPARED TO 3.39% IN THE IMMEDIATELY PREVIOUS YEAR, THUS THERE IS A DECLINE OF 2.05% IN THE NET PROFIT SHARING RATIO. THE A.O. ALSO NOTED THAT THOUGH THE GROSS RECEIPTS/TURNOVER OF THE ASSESSEE HAS INCREASED BY 3.87 TIMES OF THE PREVIOUS YEAR I.E. RS, 2,63,17,531/- TO RS, 10,20,05,638/- AND ALSO THERE IS AN EXPENSES INCREASE OF 1.65%, THEREFORE, ASSESSEE WAS ISSUED SHOW CAUSE NOTICE AS TO WHY THE ASSESSMENT ORDER SHOULD NOT BE PASSED AFTER INCREASING THE NET PROFIT SHARING RATIO BY 2.05% OF THE GROSS RECEIPTS/TURNOVER. THE A.O. WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. THE A.O. HOWEVER, INCREASED THE PROFIT BY 1% AND MADE THE ADDITION OF RS.10.20,056/-. THE LD. CIT(A) REDUCED THE ADDITION BY 50% AND RESTRICTED THE ADDITION TO RS.5,10,028/-. 3 ITA.NO.3946/DEL./2018 MOHD. YUSUF, GHAZIABAD. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE NOTIFYING THE DATE OF HEARING THROUGH REGISTERED POST. 4. AFTER HEARING THE LD. D.R, I AM OF THE VIEW THAT ADDITION IS WHOLLY UNJUSTIFIED. THE A.O. RECORDED THAT ASSESSEE FILED REQUIRED DOCUMENTS AND RESPONDED TO THE QUERIES RAISED BY THE A.O. THE A.O. HAS NOT POINTED OUT ANY DEFECT IN THE DOCUMENTS SUBMITTED BY THE ASSESSEE IN RESPECT OF INCOME DECLARED IN THE RETURN OF INCOME. THE BOOKS OF ACCOUNT OF THE ASSESSEE HAVE NOT BEEN REJECTED BY THE A.O. NO SPECIFIC DEFECTS HAVE BEEN POINTED-OUT IN MAINTENANCE OF THE BOOKS OF ACCOUNT BY THE ASSESSEE. FURTHER, MERE FALL IN THE NET PROFIT RATE BY ITSELF IS NO GROUND TO INCREASE THE NET PROFIT RATE AS COMPARED TO THE PRECEDING ASSESSMENT YEAR. THE PROFIT CANNOT BE STATIC EACH YEAR. THEREFORE, THERE WAS NO JUSTIFICATION FOR THE AUTHORITIES BELOW TO INCREASE THE PROFIT RATE FOR THE PURPOSE OF MAKING THE ADDITION AGAINST THE ASSESSEE. IN VIEW OF THE ABOVE, I SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ENTIRE ADDITION. 4 ITA.NO.3946/DEL./2018 MOHD. YUSUF, GHAZIABAD. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED 16 TH OCTOBER, 2018 VBP/- COPY TO 1. THE APP ELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT SMC BENCH, DELHI 6. GUARD FILE. // BY ORDER // ASSISTANT REGISTRAR : ITAT DELHI BENCHES : DELHI.