Satyaban Pattnayak, Berhampur V. DCIT, Berhampur

ITA 405/CTK/2011

• Counselvise Citation: 40522114 RSA 2011
• Duration Of Justice: 1 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 19-09-2011
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: K C DASAR

Judgement Text

IN THE INC O ME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM , AND SHRI K.S.S.PRASAD RAO, JM ITA NO. 405 AND 406/CTK/2011 (ASSESSMENT YEAR S 2004 - 05 AND 2005 - 06) SRI SATYABAN PATNAIK, HILL PANTA,NEARP.W.D. OFFICE, BERHAMPUR (GM) PAN: ADIPP 9877 B VERSUS DCIT, BERHAMPUR CIRCLE, BERHAMPUR. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI K.C.DAS,AR FOR THE RESPONDENT SHRI S.C.MOHANTY, DR DATE OF HEARING : 21.10.2011 DATE OF PRONOUNCEMENT : 09.11.2011 ORDER SHRI K.S.S.PRASAD RAO, JM : THESE TWO APPEALS BY THE ASSESSEE ARE AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME - TAX (APPEALS) OF EVEN DATED 5 TH JULY, 2011 FOR THE ASSESSMENT YEARS 2004 - 05 AND 2005 - 06. 2. THE ONLY ISSUES RAISED BY THE ASSESSEE, WHICH IS COMMO N IN BOTH THE AYS UNDER CONSIDERATION, ARE AGAINST REJECTION OF BOOKS OF ACCOUNT AND ESTIMATION OF INCOME ADOPTING PROFIT RATE @8% BY THE ASSESSING OFFICER, REDUCED BY THE LEARNED CIT(A) TO 6.5%. 3. BOTH THE PARTIES WERE HEARD REGARDING THE ISSUES RAISED I N THE RESPECTIVE APPEALS AND THEIR LEGAL IMPLICATIONS. 4. ON CAREFUL CONSIDERATION OF THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL AND ANALYZING THE SAME IN THE LIGHT OF THE SUBMISSIONS OF BOTH THE PARTIES, THE UNDISPUTED FACTS RELATING TO THE ISSUES ARE TH AT THE ASSESSEE IS A HANDLING AND TRANSPORT CONTRACTOR FOR IFFCO,NLFD AND C & F AGENT FOR AMBUJA CEMENT EASTERN LTD. THE ASSESSING OFFICER HAS REJECTED THE BOOKS OF ACCOUNT ON THE GROUND THAT THE ASSESSEE FAILED TO PRODUCE VOUCHERS IN SUPPORT OF THE EXPEN SES. THEREFORE, THE ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNT AND RESORTED TO ESTIMATION OF INCOME BY ADOPTING PROFIT RATE OF 8% ON THE GROSS 2 BILLS RECEIVED. IN APPEAL, THE LEARNED CIT(A) UPHELD THE REJECTION OF BOOKS OF ACCOUNT BUT REDUCED THE RATE OF PROFIT TO 6.5%. 5. THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS MAINTAINED BOOKS OF ACCOUNTS WHICH ARE DULY AUDITED U/S.44AB OF THE ACT AND ON THIS BASIS HE CONTENDED THAT THE REJECTION OF BOOKS OF ACCOUNT ON TECHNICAL GROUNDS FOR NON - OBSERVATION OF FORMALITIES IS ARBITRARY. HE FURTHER CONTENDED THAT THE DEPARTMENTAL AUTHORITIES HAVE NOT INDICATED ANY INSTANCE TO JUSTIFY ESTIMATION OF NET PROFIT FROM TRANSPORT BUSINESS AT 8% BY THE ASSESSING OFFICER AND AT 6.5% BY THE LEARNED CIT(A). TH E LEARNED DR, ON THE OTHER HAND, SUPPORTED THE IMPUGNED ORDER OF THE LEARNED CIT(A). 6. ON CAREFUL CONSIDERATION OF THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL IN THE LIGHT OF RIVAL SUBMISSIONS OF BOTH THE PARTIES AS WELL AS THE IMPUGNED ORDERS PASSED BY THE DEPARTMENTAL AUTHORITIES, IT IS FOUND THAT THE ASSESSING OFFICER HAS OBSERVED THAT EXCEPT PRODUCING THE EXPENDITURE LEDGER, THE ASSESSEE WAS UNABLE TO PRODUCE THE REGISTER OF BILLS RAISED AND BILLS RECEIVED. EVEN THE ASSESSEE FAILED TO PRODUCE THE COPI ES OF BILLS RAISED BY HIM WITH BASIS OF RAISING THE BILL BEFORE HIS CONTRACTEE. IN ADDITION, THE LEARNED CIT(A) OBSERVED IN HIS ORDER THAT THE ASSESSEE FAILED TO PRODUCE THE SALARY REGISTER AND OTHER BOOKS LIKE BILLS RAISED AND RECEIPT REGISTER. THEREFORE, CONSIDERING THIS ASPECT OF THE CASE, WHICH COULD NOT BE CONTROVERTED BY THE LEARNED AR OF THE ASSESSEE BEFORE US, WE ARE OF THE CONSIDERED VIEW THAT THE DEPARTMENTAL AUTHORITIES ARE PERFECTLY JUSTIFIED IN NOT ACCEPTING THE BOOK RESULT AND RESORTING TO EST IMATION OF INCOME. HOWEVER, WE FIND THAT THE DEPARTMENTAL AUTHORITIES HAVE ADOPTED THE RESPECTIVE RATE OF PROFIT @ 8% BY THE ASSESSING OFFICER AND 6.5% BY THE LEARNED CIT(A) ARE WITHOUT ANY BASIS. TRUE IT IS THAT ONCE THE BOOKS OF ACCOUNT ARE REJECTED THE ASSESSING AUTHORITIES ARE TO DETERMINE THE INCOME ON ESTIMATION, BUT AS PER SETTLED LAW THAT ESTIMATION 3 SHOULD HAVE SOME RATIONAL NEXUS. HONBLE APEX COURT HAS ALSO HELD IN THE CASE OF BRIJ BHUSHAN LAL PARDUMAN KUMAR, ETC., V. ACIT (115 ITR 524) THAT EVEN IN CASE OF BEST JUDGMENT ASSESSMENT, THE SAME HAS TO BE DONE ON A REASONABLE BASIS AND NOT DISHONEST OR VINDICTIVELY. HONBLE KOLKATA HIGH COURT IN THE CASE OF CIT V. RANICHERRA TEA CO. LIMITED [207 ITR 979) HELD THAT ALTHOUGH THE ASSESSING OFFICER IS NOT BOUND BY STRICT JUDICIAL PRINCIPLES IN MAKING BEST JUDGEMENT ASSESSMENT, HE DOES NOT POSSESS ABSOLUTE AUTHORITY TO ASSESSEE ANY FIGURE AS HE LIKES. IN OUR CONSIDERED VIEW THE PAST RECORDS OF THE ASSESSEE CAN BE MADE AS BASIS FOR ESTIMATING THE INCOME. THER EFORE, WE SET ASIDE THE IMPUGNED ORDER OF THE LEARNED CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO REASONABLY ESTIMATE THE INCOME KEEPING IN VIEW THE PAST RECORDS OF THE ASSESSEE. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. S D/ - S D/ - (K.K.GUPTA) ACCOUNTANT MEMBER ( K.S.S.PRASAD RAO) JUDICIAL MEMBER DATE: 9 TH NOVEMBER, 2011 H.K.PADHEE, SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWAR DED TO : 1. THE APPELLANT: SRI SATYABAN PATNAIK, HILL PANTA,NEARP.W.D. OFFICE, BERHAMPUR (GM) 2. THE RESPONDENT: DCIT, BERHAMPUR CIRCLE, BERHAMPUR. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.