Appeal Details
Counselvise Citation
[2018] 125 COUNSELVISE.COM (IT) 3624 (ITAT-AMRITSAR)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 1 month(s) 19 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
16-08-2018
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
DB
Next Hearing Date
08-08-2018
Assessment Year
2012-2013
Appeal Filed On
27-06-2017
Judgement Text
IN THE INCOME TAX APPELLATE T RIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.427(ASR)/2017 ASSESSMENT YEAR: 2012-13 INCOME TAX OFFICER, WARD-3(1), SRINAGAR VS. SH. HILAL AHMAD KHAN, PROP. M/S KING KHAN ENTERPRISES, MANDIR BAGH, HABBA KADAL, SRINAGAR PAN:BJAPK 2932F (APPELLANT) (RESPONDENT) APPELLANT BY: SH. GAUTAM DEB (LD. DR) RESPONDENT BY: SH. BASHIR AHMAD LONE (LD. CA ) DATE OF HEARING: 08.08.2018 DATE OF PRONOUNCEMENT: 16.08.2018 ORDER PER N.K.CHOUDHRY, JM: THE INSTANT APPEAL HAS BEEN PREFERRED BY THE REVENU E DEPARTMENT, ON FEELING AGGRIEVED AGAINST THE ORDER D ATED 15.03.2017 PASSED BY THE LD. CIT(A), J&K, JAMMU U/S. 143(3) OF T HE I.T. ACT, 1961 (HEREINAFTER CALLED AS THE ACT). 2 . THE FOLLOWING GROUNDS OF APPEAL RAISED BY THE REV ENUE DEPARTMENT. 1. WHETHER THE LD. CIT(A) WAS RIGHT IN LAW AND FA CT IN APPLYING VERY LOW NET PROFIT RATE OF 0.05% INSTEAD OF NET PROFIT RATE OF 8% APPLIED BY THE ASSESSING OFFICER WITHOUT APPRECIATING THE FACT THA T THE ASSESSEE HAS SHOWN UTTER NON-COOPERATION AND NO BOOKS OF ACCOUNT S OR OTHER DETAILS AS CALLED BY THE AO WERE FILED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. 2. WHETHER THE LD. CIT(A) WAS RIGHT IN LAW AND F ACT IN ALLOWING THE APPEAL OF THE ASSESSEE BY RELYING ON THE EXPLANATIO NS OF THE ASSESSEE SUBMITTED DURING THE APPELLATE PROCEEDINGS THOUGH N O EVIDENCE FOR CORRECTNESS OF THE CLAIM OF UNSECURED LOANS AND CRE DITORS WERE FILED BY THE ITA NO.427(ASR)/2017 (A.Y: 2012-13) ITO V. SH. HIL AL AHMAD KHAN, SRINAGAR 2 ASSESSEE DURING THE ASSESSMENT PROCEEDINGS DESPITE OPPORTUNITIES BEING PROVIDED BY THE AO. 3. IN THE INSTANT CASE, DURING THE ASSESSMENT PROCEEDINGS, ASSESSEE HAD FAILED TO PRODUCE THE BOOKS OF ACCOUNT AND OTH ER DETAILS BECAUSE THE SAME HAVE BEEN DESTROYED IN FLOOD OF SEPTEM BER, 2014 IN KASHMIR, HOWEVER, THE ASSESSING OFFICER WHILE RELYING UPO N THE MATERIAL AVAILABLE ON RECORD TO THE BEST OF HIS JUDGME NT MADE AN ASSESSMENT U/S 144 OF THE ACT BY APPLYING 8% AS NET PROFIT RATE AND ALSO MADE AN ADDITION WHILE DISALLOWING @ 25% OF THE TOTAL SUNDRY AND OTHER CREDITORS, I.E., ON AD HOC BASIS. THE ASSESSMENT ORDER WAS CHALLENGED BEFORE THE LD. CIT(A) AND THE LIST OF DETAILS OF 02 COMPARABLE CASES DEALING WITH THE IDENTICAL AND SIMILAR TRADE AND CBDT CIRCULAR, WHICH WAS ISSUED QUA FL OOD OF SEP,2014 IN KASHMIR, HAVE BEEN SUBMITTED BEFORE THE L D. CIT(A). IT WAS ALSO SUBMITTED BEFORE THE LD. CIT(A) THAT ALTHOUGH THE ASSESSEE COULD NOT PRODUCE THE BOOKS OF ACCOUNT AND OTHER DETAILS AS THE SAME WERE DESTROYED IN THE FLOOD OF SEP., 2014 IN KASHMIR, HOWEVER, IT IS A FACT THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE HAVE DULY BE EN AUDITED BY THE CHARTERED ACCOUNTANT. THE LD. CIT(A) WHILE TAK ING INTO CONSIDERATION OF TWO COMPARABLE CASES DEALING WITH THE SIM ILAR AND IDENTICAL BUSINESS/TRADE AS WELL AS OTHER CIRCUMSTANCES APPLI ED THE NET PROFIT RATE TO THE TUNE OF 0.5% IN THE CASE OF THE A SSESSEE. THE ORDER OF THE LD. CIT(A) IS UNDER CHALLENGE BEF ORE US AND IN SUPPORT OF ITS CASE, THE LD. DR SUBMITTED THAT THE LD. C IT(A) HAS COMMITTED ERROR IN NOT APPRECIATING THE FACT THAT THE ASSESSEE HAS SHOWN UTTER NON-COOPERATION AND NO BOOKS OF ACCOUNT OR OTHER DOCUMENTS AS CALLED BY THE AO WERE FILED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. FURTHER IT WAS ALSO SUBMITTED THAT THE LD. CIT(A) HAS COMMITTED ERROR IN RELYING UPON THE EXPLAN ATIONS OF THE ITA NO.427(ASR)/2017 (A.Y: 2012-13) ITO V. SH. HIL AL AHMAD KHAN, SRINAGAR 3 ASSESSEE WHEREAS NO EVIDENCE ON CORRECTNESS OF CLAIM OF UNSECURE D LOANS AND CREDITS WERE FILED BY THE ASSESSEE DURING THE ASSE SSMENT PROCEEDINGS DESPITE AMPLE OPPORTUNITIES BEING PROVIDED BY THE AO. 4. ON THE OTHER HAND, THE LD. AR RELIED UPON THE ORDER PASSED BY THE LD. CIT(A) AND SUBMITTED THAT THE ASSESSING OFFICER W HILE APPLYING NPA @ 8% AS WELL AS MAKING DISALLOWANCE @ 25% HAS NOT AP PLIED ITS MIND, THEREFORE, THE LD. CIT(A) HAS CORRECTLY ANALYZE D THE FACTUAL POSITION AS WELL AS THE DOCUMENTS ON RECORD AND WHILE COM PARING TWO IDENTICAL ISSUES DEALING WITH THE SAME TRADE APPLIED TH E APPROPRIATE NET PROFIT RATE @ (0.5%) , HENCE, DOES NOT REQUIRE AN Y INTERFERENCE BY THIS HONBLE COURT. 5. WE HAVE INDEPENDENTLY APPLIED OUR MIND TO THE O RDER PASSED BY THE AUTHORITIES BELOW, AS IN THE INSTANT CASE THE BOOKS O F ACCOUNT AND OTHER RELEVANT MATERIAL HAVE BEEN DESTROYED IN THE F LOOD OF SEPT. 2014 IN KASHMIR, HOWEVER, IT IS A FACT THAT BOOKS OF ACCOUNT O F THE ASSESSEE WERE DULY AUDITED BY THE CHARTERED ACCOUNTANT AND EXE MPTION WAS GRANTED BY THE CBDT THROUGH ITS CIRCULAR ISSUED IN 201 4, FROM PRODUCING THE BOOKS OF ACCOUNT, IF THE SAME HAVE BEEN DE STROYED IN FLOOD IN SEP., 2014 AND FURTHER IT WAS DIRECTED THAT THE PENDING ASSESSMENT MAY BE COMPLETED ON THE BASIS OF MATERIAL/INFOR MATION AVAILABLE ON RECORD, HOWEVER, THE ASSESSING OFFICER NEITH ER COMPARED ANY COMPARABLE CASES NOR CONSIDERED THE OTHER FACTUAL POSIT ION WHILE MAKING AN ADDITION AND APPLIED THE NET PROFIT RATE @ 8% IN CASE OF THE ASSESSEE. FURTHER, WITH REGARD TO THE SUNDRY AND OTHER CREDITOR S, THE LD. CIT(A) CONCLUDED THAT ONCE A PROFIT IS ESTIMATED, THEN N O FURTHER ADDITION CAN BE MADE AS HELD BY VARIOUS COURTS. THAT IS, WITHOUT RECORDING A FINDING OF A PARTICULAR LIABILITY IS BEING NOT GENUINE OR ITA NO.427(ASR)/2017 (A.Y: 2012-13) ITO V. SH. HIL AL AHMAD KHAN, SRINAGAR 4 BOGUS. FROM THE AFORESAID REASONS AND ANALYZATIONS , WE ARE OF THE CONSIDERED OPINION THAT THE LD. CIT(A) HAS PASSED VERY LOGICAL AND REASONED ORDER WHICH DOES NOT SUFFER FROM ANY PERVERSITY , ILLEGALITY AND IMPROPRIETY AND HENCE, STANDS AFFIRMED. 6 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE DEP ARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 .08.2018. SD/- SD/- (SANJAY ARORA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JU DICIAL MEMBER DATED:16.08.2018 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) SH. HILAL AHMAD KHAN, PROP. M/S KING KHAN ENT ERPRISES, MANDIR BAGH, HABBA KADAL, SRINAGAR (2) THE ITO, WARD 3(1), SRINAGAR (3) THE CIT(A), J&K, JAMMU (4) THE CIT CONCERNED (5) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER
