M/s. Geetarani Mohanty, Barbil V. ACIT, Circle- 2(1), Cuttack

ITA 435/CTK/2019

AI Insights

The case involves appeals filed by M/s. Geetarani Mohanty against the orders of the ld CIT(A), Cuttack, for the assessment years 2008-09, 2010-11, and 2013-14. The primary contention was regarding the estimation of income by the CIT(A), which the assessee argued was not properly adjudicated and was based on an incorrect application of profit rates. The assessee disclosed varying net profit rates for the years in question, which were significantly lower than the rates adopted by the CIT(A). The Tribunal found that the CIT(A) had not adequately addressed the legal issues or the discrepancies in profit rate applications, leading to the decision to remand the matter back for a thorough re-examination.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 300249 (ITAT-CUTTACK)
• Duration Of Justice: 3 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 27-02-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 18-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE AND ARUN KHODPIA, ACCOUNTANT MEMBER Assessment Year M/s. Geetarani Mohanty, Station Road, Barbil, Keonjhar PAN/GIR No. (Appellant Per Bench These are of the ld CIT(A) No.0215/2017, 0216.2016 2008-09, 2010 2. Shri P.C.Sethi, ld AR appeared for the assessee and Shri M.K.Gautam, ld CIT DR appeared for the revenue. IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI GEORGE MATHAN, JUDICIAL AND ARUN KHODPIA, ACCOUNTANT MEMBER ITA Nos.297,287 & 435/CTK/20 Assessment Years :2008-09, 2010-11 & 2013 M/s. Geetarani Mohanty, Station Road, Barbil, Vs. ACIT, Circle Cuttack PAN/GIR No.AADFG 1692 D (Appellant) .. ( Respondent Assessee by : Shri P.C.Sethi, AR Revenue by : Shri M.K.Gautam, CIT Date of Hearing : 28/0 Date of Pronouncement : 28/0 O R D E R These are appeals filed by the assessee against the of the ld CIT(A), Cuttack dated 5,8.2019, 31.7.2019 & 30.9.2019 0215/2017, 0216.2016-17 & 0218/2016-17 for the assessment year 09, 2010-11 and 2013-14, respectively. Shri P.C.Sethi, ld AR appeared for the assessee and Shri M.K.Gautam, ld CIT DR appeared for the revenue. Page1 | 5 IN THE INCOME TAX APPELLATE TRIBUNAL, JUDICIAL MEMBER AND ARUN KHODPIA, ACCOUNTANT MEMBER CTK/2019 11 & 2013-14 ACIT, Circle-2(1), Respondent) P.C.Sethi, AR , CIT DR 02/2023 /02/2023 filed by the assessee against the separate orders , Cuttack dated 5,8.2019, 31.7.2019 & 30.9.2019 in Appeal for the assessment years Shri P.C.Sethi, ld AR appeared for the assessee and Shri ITA Nos.297, 287 & 435/CTK/2019 Assessment Years :2008-09, 2010-11 & 2013-14 Page2 | 5 3. It was the submission by ld AR that the assessee is in the business of mining iron ore. It was the submission that the returns filed by the assessee came to be processed and assessments came to be passed on best judgment, when the income of the assessee had been estimated at 58%. It was the submission that before the ld CIT(A) for all the three assessment years, legal issues had been raised as also grounds on merits. It was the submission that for the assessment year 2008-09, the assessee had disclosed net profit of 13.78%, for the assessment year 2010-2011, the net profit of 16.27% and for the assessment year, it was a loss, whereas the gross profit disclosed was at 7.98%. It was the submission that for the assessment years 2008-09 and 2010-2011, the ld CIT(A) has not given any proper adjudication to the legal issues and had passed a very cryptic order. For the assessment year 2013-14, the ld CIT(A) has not considered the legal issues raised at all. It was the further submission that for all the three assessment years, the ld CIT(A) admittedly has verified the net profit rate from 2001-02 to 2012-13 and found that highest G.P. disclosed for the assessment year 2011-12 at 23.87% and consequently, adopted the net profit rate of 24% for all the three assessment years. It was the very specific submission by ld AR that for the assessment year 2013-14, the G.P. disclosed itself was only 7.98% and the net profit could never have crossed above gross profit rate. It was the submission that the average of the net profit from assessment year 2001-02 to 2011-12 was coming to 11.97%. It ITA Nos.297, 287 & 435/CTK/2019 Assessment Years :2008-09, 2010-11 & 2013-14 Page3 | 5 was the submission that the order passed by the ld CIT(A) was perverse and that the net profit rate was liable to be adopted at 11.97% or net profit disclosed whichever was higher for the assessment year 2008-09 and 2010- 2011 and for the assessment year 2013-14, the worst case scenario was the net profit rate being at the gross profit rate. It was the submission that from assessment year 2013-14, the assessee has been incurring substantial loss. It was the prayer that the orders of the ld CIT(A) may be modified accordingly. 4. In reply, ld CIT DR submitted that the estimation of the profit as done by the ld CIT(A) is correct and that the ld CIT(A) has followed judicially accepted principles when he has estimated the net profit. It was the further submission that in respect of revenue’s appeals against reduction of the net profit as done by the ld CIT(A) from 58% to 24%, the appeals of the revenue have already been sent back to the ld CIT(A) for re- adjudication. It was the submission that the issues in these appeals should be restored to the file of the ld CIT(A) for re-adjudication especially when ld AR has specifically submitted that the legal issues have not been considered. 5. We have considered the rival submissions. As it is noticed that the ld CIT(A) has not adjudicated the legal issues raised by the assessee and has passed a very cryptic order in respect of the legal issues raised, we are of ITA Nos.297, 287 & 435/CTK/2019 Assessment Years :2008-09, 2010-11 & 2013-14 Page4 | 5 the view that interest of justice would be served if the issues are restored to the file of the ld CIT(A) for readjudication. 6. Coming to the issue of estimation of the income of the assessee on merits, it is noticed that the ld CIT(A) has not considered the fact that the gross profit for the assessment year 2013-14 itself was only 7.98%. This being so and as it is noticed that the ld CIT(A) has adopted the principles of taking highest net profit disclosed in a block of years as against the average, we are of the view that the issues need to be readjudicated by the Ld CIT(A) and on this reason, the issues in these appeals are restored to the file of the ld CIT(A) for re-adjudication after granting the assessee adequate opportunity of hearing. 7. In the result, appeals of the assessee stand partly allowed for statistical purposes. Order dictated and pronounced in the open court on 28/02/2023. Sd/- sd/- (Arun Khodpia) (George Mathan) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack; Dated 28/02/2023 B.K.Parida, SPS (OS) ITA Nos.297, 287 & 435/CTK/2019 Assessment Years :2008-09, 2010-11 & 2013-14 Page5 | 5 Copy of the Order forwarded to : By order Sr.Pvt.secretary ITAT, Cuttack 1. The Appellant : M/s. Geetarani Mohanty, Station Road, Barbil, Keonjhar 2. The Respondent: ACIT, Circle-2(1), Cuttack 3. The CIT(A)-, Cuttack 4. Pr.CIT-, Cuttack 5. DR, ITAT, Cuttack 6. Guard file. //True Copy//