HABIB KHAN, Jaipur V. DCIT, Jaipur

ITA 415/JPR/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99371 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 17-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAILASH MANGAL JCIT DR DHK
• Keywords: Opportunity of being heard; Corroborative evidences

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 415/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 SHRI HABIB KHAN P/O M/S. H.K. EXPORT CORPORATION, 2259, TAKIYA YAQEEN SHAH, CH. TOP KHANA HUZOORI, JAIPUR CUKE VS. THE DCIT CIRCLE- 2 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ABBPK 5855 P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL , CA JKTLO DH VKSJ LS@ REVENUE BY :SHRI KAILASH MANGAL, JCIT -DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 23/10/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 23 /10/2015 VKNS'K@ ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE LD. CIT(A)-I, JAIPUR DATED 7-02-2013 FOR THE ASSESSMENT YEAR 2008-09. 2.1 THE GROUND NOS. 1 TO 3.1 OF THE ASSESSEE RAISE FOLLOWING ISSUES. (I) REJECTION OF BOOKS OF ACCOUNT U/S 145(3) OF T HE ACT (II) ESTIMATION OF 25% PROFITS ON UNVERIFIABLE PUR CHASES AMOUNTING TO RS. 9,18,148/- FROM M/S. LOTUS IMPEX. ITA NO. 415/JP/2013 SHRI HABIB KHAN VS. DCIT CIRCLE- 2, JAIPUR . 2 3.1 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE HAS NOT PRESSED GROUND NO. 1 REGARDING REJECTION OF BOOKS O F ACCOUNT U/S SECTION 145(3) OF THE ACT . THE SAME IS DISMISSED BEING NOT PRESSED. 4.1 APROPOS GROUND NO. 2 OF THE ASSESSEE REGARDING UNVERIFIABLE PURCHASES, THE LD. AR OF THE ASSESSEE DURING THE CO URSE OF HEARING CONTENDS THAT THIS BENCH OF ITAT IN BUNCH OF APPEA LS BY CONSOLIDATED ORDER IN THE CASE OF ANUJ KUMAR VARSHNEY & OTHERS V S. ITO (ITA NO. 187/JP/2012 DATED 22-10-2014) HAS HELD THAT 15% OF UNVERIFIABLE PURCHASES SHALL BE HELD TO BE INCOME OF THE ASSESSE E FROM UNDISCLOSED SOURCES IN THE RELEVANT YEARS. THEREFORE, THE APPEA L MAY BE DECIDED IN VIEW OF THE ITAT ORDER. HOWEVER, AT THE SAME TIME, IT IS PLEADED TO SET ASIDE THE MATTER AS THAT BOTH REVENUE AND ASSESSEE HAVE GONE IN APPEAL BEFORE HON'BLE RAJASTHAN HIGH COURT AGAINST THIS B UNCH OF ORDERS. 4.2 THE LD. DR HAS ALSO CONFIRMED THAT REVENUE HAS GONE IN APPEAL BEFORE THE HON'BLE RAJASTHAN HIGH COURT. 4.3 AT THE END OF THE ARGUMENTS, BOTH THE PARTIES A GREED THAT THE ISSUE IN QUESTION MAY BE SET ASIDE TO THE FILE OF THE AO TO DECIDE THE SAME AFRESH AFTER THE JUDGEMENT RENDERED IN THE CASE OF ANUJ KUMAR VARSHNEY & OTHERS VS. ITO (SUPRA) BY HON'BLE RAJASTHAN HIGH COURT, AFTER GIVING ITA NO. 415/JP/2013 SHRI HABIB KHAN VS. DCIT CIRCLE- 2, JAIPUR . 3 THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEAR D IN ACCORDANCE WITH LAW. 4.4 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THERE IS MERIT IN THE PROPOSAL OF BOTH THE PARTIES. ACCORDINGLY, THE ISSUE RAISED IN ASSESSEE'S APPEAL IS SET ASIDE AND RESTORED BACK TO THE FILE OF THE AO TO DECIDE THE SAME AFRES H AFTER THE JUDGMENT OF HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF ANUJ K UMAR VARSHNEY & OTHERS (SUPRA) IS DELIVERED, AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THUS GROUND NO . 2 OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 5.1 THE GROUND NO. 4 OF THE ASSESSEE IS THAT LD. CI T(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OUT OF THE FOLLOWING EX PENSES. CONVEYANCE EXPENSES RS. 24,341/- FREIGHT & CARTAGE EXPENSES RS. 38,033/- TELEPHONE EXPENSES RS. 3,915/- TRAVELLING EXPENSES RS. 99,625/- 5.2 THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT SIMILAR TYPE OF DISALLOWANCES WERE RAISED BEFORE ITAT IN ASSESSMENT YEARS 2006-07 AND 2007-08 WHICH WERE RESTRICTED TO RS. 50,000/- BY IT AT. IN ASSESSMENT YEAR 2007-08, THE AMOUNT OF SUCH DISALLOWANCES WERE TO THE TUNE OF ITA NO. 415/JP/2013 SHRI HABIB KHAN VS. DCIT CIRCLE- 2, JAIPUR . 4 RS.1,78,510/- WHICH WAS RESTRICTED TO RS. 50,000/- BY ITAT VIDE ITS ORDER DATED 30-06-2011 BY FOLLOWING OBSERVATIONS. 4.7 WE HAVE HEARD BOTH THE PARTIES. THE LD. AR IN T HE PAPER BOOK HAS NOT FILED THE DETAILS OF TRAVELING E XPENSES. THE AO WAS JUSTIFIED IN ASKING THE ASSESSEE TO GIVE THE DE TAILS OF EXPENSES DEBITED FOR THE PURPOSE FOR WHICH TRAVELING WAS DON E. WE ARE NOT HAVING THE DETAILS OF THE EXPENSES DEBITED IN THE I MMEDIATELY PRECEDING YEAR. IT IS TRUE THAT THE TRAVELING EXPEN SES MAY CONTAIN THE EXPENSES IN RESPECT OF THE ASSESSEE AS WELL AS THE EMPLOYEES. THUS THE DISALLOWANCE MADE BY THE AO OUT OF THE TOT AL EXPENSES AT 10% IS EXCESSIVE. WE THEREFORE, FEEL THAT IT WILL B E FAIR AND REASONABLE TO RESTRICT THE DISALLOWANCE TO RS. 50,0 00/-. IT IS PLEADED THAT SAME COURSE OF ACTION MAY BE ADO PTED. 5.3 THE LD. DR ON THE OTHER HAND CONTENDS THAT THE AO MADE THE DISALLOWANCE ON SCIENTIFIC BASIS BY DISALLOWING 10% THEREOF AS THE ASSESSEE FAILED TO FURNISH THE SUPPORTING EVIDENCE AND RECORDS TO JUSTIFY THE DISALLOWANCES. THIS FINDING HAS NOT BEEN CHALLE NGED BY THE ASSESSEE. THUS THERE IS NO IMPROVEMENT IN COMPLIANCE OF THE D EFICIENCIES IN THE RECORDS AS POINTED OUT BY THE AO. THE ITAT WITHOUT APPRECIATING THIS ISSUE HAS MADE A LUMPSUM ADDITION OF RS. 50,000/- W ITHOUT ASSIGNING ANY ITA NO. 415/JP/2013 SHRI HABIB KHAN VS. DCIT CIRCLE- 2, JAIPUR . 5 REASON WHATSOEVER. IT IS CONTENDED THAT EVERY YEAR IS DISTINCT AND SEPARATE UNIT IN INCOME TAX PROCEEDINGS AND RES JUDICATA DO NOT APPLY. THEREFORE, ITAT JUDGEMENTS OF PRECEDING YEARS ON MATTER OF FAC TS AND NON- MAINTENANCE OF RELEVANT RECORDS CANNOT BE DEEMED AS BINDING PRECEDENT FOR THE ASSESSEE TO ENJOY THE NON-MAINTENANCE OF RE CORDS AND AT THE SAME TIME AVAIL TO NORMAL DISALLOWANCE. THIS EMBOLDENS T HE ASSESSEE TO BE RECALCITRANT. 5.4 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. I FIND MERIT IN THE ARGUMENTS OF THE LD. DR THAT THE ASSESSEE HAS NEITHER DENIED THE DEFICIENCY IN THE R ECORD IN QUESTION NOR HAS GIVEN ANY IMPROVEMENT IN COMPLIANCE OF THE RECO RD. IN VIEW OF ALL THESE DEFECTS, THERE IS NO MITIGATING CIRCUMSTANCE TO DISTURB THE ESTIMATE MADE BY THE AO. THE ASSESSEE HAS NOT GIVEN ANY REAS ON TO SUGGEST THAT THE ESTIMATE IS EITHER ARBITRARY OR UNJUSTIFIED. IN VIEW THEREOF, I SEE NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). THUS GROU ND NO. 4 OF THE ASSESSEE IS DISMISSED. ITA NO. 415/JP/2013 SHRI HABIB KHAN VS. DCIT CIRCLE- 2, JAIPUR . 6 6.0 IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED FOR STATISTICAL PURPOSES ORDER PRONOUNCED IN THE OPEN COURT ON 23 /10/201 5 SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 23 /10/ 2015 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI HABIB KUNAN, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE DCIT, CIRCLE- 2, JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 415/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR