Tanuja Sajoo, Cuttack V. ITO, Ward-1(2), Bhubaneswar

ITA 430/CTK/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7190 (ITAT-CUTTACK)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 07-03-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 13-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: AMBIKA PRASAD MOHANTY

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO. 430 /CTK/2016 ASSESSMENT YEAR : 2011 - 12 TANUJA SAHOO, L/H LATE ATISH KUMAR SAHOO, AT: SHOP NO.1 & 2, KASTURI ESTATE, ASHOK NAGAR, BHUBANESWAR. VS. ITO, WARD 1(2), BHUBANESWAR. PAN/GIR NO. ARRPS 1842 C (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI AMBIKA PRASAD MOHANTY, AR REVENUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 07 /03 / 2017 DATE OF PRONOUNCEMENT : 07/03 / 2017 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) 2, BHUBANESWAR , DATED 17.9.2016 , FOR THE ASSESSMENT YEAR 2011 - 12 . 2. THE ASSESSE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. FOR THAT THE LEARNED CIT (APPEAL) HAS ERRED BOTH IN LAW & FACT IN ESTIMATING THE INCOME AT 0.80% OF GROSS RECEIPT IN THE BANK ACCOUNT WITHOUT HAVING ANY COGENT REASONING. 2. FOR THAT THE LEARNED CIT (APPEAL) HAS ERRED BOTH IN LAW & FACT BY HOLDING THA T RS . 1,30,46,300/ - , AS GROSS RECEIPT OF THE ASSESSEE, WHICH IS THE GROSS RECEIPT OF ANOTHER BUSINESS AND THAT IS ALREADY INCLUDED IN THE GROSS RECEIPT OF BANAMALI SAHOO 2 ITA NO. 430/CTK/2016 ASSESSMENT YEAR :2011 - 12 WHOSE ACCOUNTS ARC ALSO AUDITED AND THERE IS NO REASON OR REBUTTAL BY THE AO ) IN THE ASSESSMENT ORDER FOR DISBELIEF. 3. FOR THAT THE LEARNED CIT (APPEAL) HAS ERRED BOTH IN LAW & FACT BY HOLDING THE REJECTION OF BOOKS JUSTIFIED, AS ALL THE RELEVANT DOCUMENTS AND FACTS WERE PLACED BEFORE THE AO ) AND CALCULATION OF EXACT SALES FROM CASH BO OK AND STOCK REGISTER IS NOT A VALID REASON ON THE PART OF AO TO REJECT THE BOOKS. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS DISCLOSED NET PROFIT @ 0.47% OF SALE OF RS.12,23,42,450/ - . THE ASSESSING OFFICER ESTIMATED THE NET PROFIT @ 1% O N NET TOTAL DEPOSIT OF RS.17,93,38,223/ - ON THE GROUND THAT THE ASSESSEE FAILED TO PRODUCE BOOKS OF ACCOUNT BEFORE HIM FOR VERIFICATION. 4. ON APPEAL BEFORE THE CIT(A), THE ASSESSEE CONTENDED THAT IN EARLIER TWO ASSESSMENT YEARS I.E. 2009 - 2010 AND 2011 - 12 , THE NET PROFIT SHOWN WAS 0.62% AND 0.45%, RESPECTIVELY AND THE SAME WAS ACCEPTED BY THE DEPARTMENT U/S.143(1) OF THE ACT. THE CIT(A), HOWEVER, WAS OF THE VIEW THAT ESTIMATION OF PROFIT BY APPLYING 1% WAS EXCESSIVE AND, THEREFORE, HE DIRECTED THE ASSESSI NG OFFICER TO ESTIMATE THE NET PROFIT @ 0.8% OF NET TOTAL DEPOSITS IN BANK OF RS.17,93,38,223/ - . 5. BEING AGGRIEVED BY THIS ORDER, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. LD AUTHORISED REPRESENTATIVE OF THE ASSESSEE REITERATED THE SUBMISSIONS M ADE BEFORE THE LOWER AUTHORITIES. WHEN THE BENCH ASKED HIM 3 ITA NO. 430/CTK/2016 ASSESSMENT YEAR :2011 - 12 TO PRODUCE THE COPY OF AUDITED ACCOUNTS TOGETHER WITH TAX AUDIT REPORT, HE FILED COPY OF BALANCE SHEET, PROFIT AND LOSS ACCOUNT AND ANNEXURES APPENDED THERETO WITHOUT THE AUDITORS REPORT WHICH WE R E NOT SINGED BY THE CHARTERED ACCOUNTANT OR THE PROPRIETOR OF THE FIRM OR BY THE LD AUTHORISED REPRESENTATIVE (AR) OF THE ASSESSEE APPEARING BEFORE THE TRIBUNAL. THEREFORE, THE UNSIGNED STATEMENT OF ACCOUNTS WITHOUT AUDITORS REPORT WAS NOT ACCEPTED BY THE BENCH . FURTHER, LD A.R. WAS REQUIRED TO FILE COPY OF TAX AUDIT REPORT BUT HE EXPRESSED HIS INABILITY TO DO SO. 7. LD DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDERS OF LOWER AUTHORITIES. 8. AFTER C ONSIDERING THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE IN MY CONSIDERED VIEW AS THE ASSESSEE FAILED TO PRODUCE THE AUDITED BOOKS OF ACCOUNT BEFORE THE ASSESSING OFFICER FOR HIS VERIFICATION AND KEEPING IN VIEW THE FACT THAT THE ASSESSEE FAILED TO DO SO EVEN BEFORE THE CIT(A) AND BEFORE THE TRIBUNAL, I FI ND NO GOOD AND JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER OF THE CIT(A), WHICH IS HEREBY CONFIRMED AND THE GROUND NO.1 OF APPEAL OF THE ASSESSEE IS DISMISSED. 9.` THE OTHER ISSUE INVOLVED IN THIS APPEAL IS THAT THE CIT(A) ERRED IN HOLDING THAT RS.1,30 ,46,300/ - AS GROSS RECEIPTS OF THE ASSESSEE. 4 ITA NO. 430/CTK/2016 ASSESSMENT YEAR :2011 - 12 10. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER NOTED THAT TOTAL DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE WAS RS.18,28,83,223/ - AND A SUBSTANTIAL PORTION OF THESE DEPOSITS CONSTITUTE CASH DEP OSIT. THE AS SESSING OFFICER ATTEMPTED TO RECONCILE THE DEPOSITS IN THE BANK ACCOUNT WITH TOTAL SALE CONSIDERATION SHOWN BY THE ASSESSEE IN THE PROFIT AND LOSS ACCOUNT. HE ARRIVED AT THE FIGURE OF RS.1,29,08,594/ - BY WHICH DEPOSITS IN BANK EXCEEDS SALE CO NSIDERATION SHOWN BY THE ASSESSEE. THE ASSESSING OFFICER ASKED THE A SSESSEE TO EXPLAIN THE DIFFERENCE , WHO REPLIED THAT SOME DEPOSITS IN THE BANK ACCOUNT PERTAIN TO THE BUSINESS OF ONE SHRI BANAMALI SAHU, PROPRIETOR OF WINE BARRAGE, JAGATPUR AND THAT HIS BANK ACCOUNT WAS USED FOR MAKING DEMAND DRAFTS OF THE BUSINESS OF SHRI BANAMALI SAHU. THE ASSESSEE SUBMITTED THE DETAILS OF DRAFTS ISSUED IN FAVOUR OF THE ORISSA STA TE BEVERAGE CORPORATION. HOWEVER, THE ASSESSEE COULD NOT PRODUCE BANK ACCOUNT INCLUDING C ASH BOOK TO VERIFY THE SOURCE OF CASH DEPOSITED IN THE BANK ACCOUNT . THE ASSESSING OFFICER FURTHER FOUND THAT THE ACCOUNT PAYEE CHEQUES IN THE NAME OF SHRI KUNJA ROADWAYS, M/S. GOBAL AGROCOM AND M/S. BARODA PRIONEER WERE FOUND CREDITED TO THE BANK ACCOUN T. THE ASSESSEE SUBMITTED THAT HE WAS VENTURING INTO NEW BUSINESS ACTIVITIES AND THE CHEQUES IN THE NAME OF THESE THREE BUSINESS CONCERNS WERE RECEIVED FOR THOSE ACTIVITIES. THE ASSESSING OFFICER DECIDED TO TAKE THIS EXPLANATION FOR RECONCILING THE DEPOS ITS IN THE BANK WITH SALE CONSIDERATION IN THE PROFIT AND LOSS ACCOUNT. HOWEVER, ACCORDING TO THE ASSESSING OFFICER, THE AMOUNT OF RS.80,08,594/ - STILL REMAINED TO BE RECONCILED. 5 ITA NO. 430/CTK/2016 ASSESSMENT YEAR :2011 - 12 11. IN THIS REGARD, THE ASSESSEES EXPLANATION WAS CALLED FOR WHO REPLIED T HAT THE DEMAND DRAFTS IN FAVOUR OF ODISHA STATE BEVERAGE CORPORATION WERE OF RS. 1,30,46,500/ - WHEREAS THE ORIGINAL UNRECONCILED AMOUNT WAS OF RS. 1,29,08,594/ - AND , THEREFORE, ONLY THE SMALL AMOUNT OF RS. 1,37,90 6/ - REMAINED UNRECONCILED. THE ASSESSING O F FICER CONCLUDED THAT THE ASSESSEE IS NOT DEPOSITING ENTIRE SALE PROCEEDS AND COLLECTIONS FROM DEBTORS IN THE BANK ACCOUNT AND THAT IN THE ABSENCE OF CASH BOOK, STOCK REGISTER AND OTHER REGULAR BOOKS OF ACCOUNT, THE BOOK RESULT S SHOWN BY THE ASSESSEE CANNOT BE RELIED UPON. HENCE, HE REJECTED THE ASSESSEES BOOKS OF ACCOUNT A ND ESTIMATED PROFIT OF THE ASSESSEE @ 1% ON NET TOTAL DEPOSITS IN BANK ACCOUNTS OF RS.17,93,38,223/ - AMOUNTING TO RS.17,93,382/ - . SINCE THE ASSESSEE HAD ALREADY SHOWN NET PROFIT OF RS.9,10,229/ - , THE ASSESSING OFFICER MADE AN ADDITION OF RS.8,83,153/ - . 12. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 13. LD AUTHORISED REPRESENTATIVE OF THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORIT IES. 14. ON THE OTHER HAND, LD DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDERS OF LOWER AUTHORITIES. 15. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE ORDERS OF LOWER AUTHORITIES, I FIND THAT NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE 6 ITA NO. 430/CTK/2016 ASSESSMENT YEAR :2011 - 12 AUTH ORISED REPRESENTATIVE OF THE ASSESSEE TO SHOW THAT CASH DEPOSIT OF RS.1,29,08,594/ - IN THE BANK ACCOUNT WAS OF WINE BARRAGE, JAGATPUR , WHOSE PROPRIETOR WAS SHRI BANAMALI SAHU . THE ASSESSING OFFICER FOUND THAT THE EXPLANATION OF THE ASSESSEE WAS THAT DEMA ND DRAFTS IN FAVOUR OF ORISSA STATE BEVERAGE CORPORATION WAS RS.1,30,46,500/ - AND, THEREFORE, THERE WAS DIFFERENCE OF RS.1,37,906/ - , WHICH WAS UNRECONCILED. THE ASSESSING OFFICER OPINED THAT IN ABSENCE OF BOOKS OF ACCOUNT PRODUCED BY THE ASSESSEE AND THE RELEVANT DETAILS, THE DIFFERENCE CANNOT BE RECONCILED AND HENCE, HE REJECTED THE BOOK RESULTS OF THE ASSESSEE AND ESTIMATED THE INCOME BY APPLYING THE PROFIT RATE @ 1% TO THE NET DEPOSIT IN THE BANK OF RS.17,93,38,223/ - , WHICH WAS CONF IRMED IN APPEAL BY TH E CIT(A) ON THE GROUND THAT THE ASSESSEE HAS NOT PRODUCED CASH BOOK TO SHOW AVAILABILITY OF CASH FOR DEPOSIT IN BANK. HENCE, I FIND NO GOOD REASON TO INTERFERE WITH THE ORDER OF THE CIT(A), WHICH IS HEREBY CONFIRMED AND THE GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 16. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRO NOUNCED IN THE OPEN COURT ON 07/03 /2017 IN THE PRESENCE OF PARTIES. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 07/03 /2017 B.K.PARIDA, SPS 7 ITA NO. 430/CTK/2016 ASSESSMENT YEAR :2011 - 12 COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : TANUJA SAHOO, L/H LATE ATISH KUMAR SAHOO, AT: SHOP NO.1 & 2, KASTURI ESTATE, ASHOK NAGAR, BHUBANESWAR 2. THE RESPONDENT. ITO, WARD 1(2), BHUBANESWAR 3. THE CIT(A) - 2, BHUBANESWAR 4. PR.CIT , - 2, BHUBANESWAR. 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//