Modi Collection, Angul V. ITO, Angul Ward, Angul

ITA 436/CTK/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7230 (ITAT-CUTTACK)
• Duration Of Justice: 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 22-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: D K SHETH
• Keywords: Business income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO.436 /CTK/2016 ASSESSMENT YEAR : 2010 - 2011 MODI COLLECTION, MAIN ROAD, ANGUL. VS. ITO, ANGUL WARD, PLOT NO.630/83, KULAD, ANGUL. PAN/GIR NO. AAKFM 2051 P ( ASSESSEE ) .. ( RESPONDENT ) ASSESSEE BY : SHRI D.K.SHETH, AR REVENUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 30 /01/ 2017 DATE OF PRONOUNCEMENT : 30 /01/ 2017 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 2, BHUBANESWAR, DATED 1.9 .2016 FOR THE ASSESSMENT YEAR 2010 - 11 . 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE CIT(A) ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER ESTIMATING NET PROFIT @ 3.29% OF THE TURNOVER AFTER REJE CTING BOOK RESULTS OF THE ASSESSEE THEREBY MAKING ADDITION OF RS.1,36,518/ - TO THE INCOME OF THE ASSESSEE. 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. BRIEF FACTS OF THE CASE ARE T HAT 2 ITA NO.436/CTK/2016 ASSESSMENT YEAR :2010 - 2011 THE ASSESSING OFFICER ASKED THE ASSESSEE TO SUBMIT THE BILLS AND VOUCHERS FOR VERIFICATION OF EXPENDITURE. THE ASSESSEE STATED THAT THE BILLS AND VOUCHERS ARE NOT AVAILABLE FOR PRO DUCTION. CONSIDERING THIS, THE ASSESSING O FFICER OBSERVED THAT IN ABSENC E OF BILLS AND VOUCHERS, CORRECTNESS AND GENUINENESS OF EXPENSES IS NOT VERIFIABLE. THEREFORE, H E REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE NET PROFIT OF THE ASSESSEE @ 3.29% OF GROSS BUSINESS RECEIPTS O F RS. 1,88,79,745/ - AT RS. 6,21,144/ - . 4. ON APPEAL BEFORE THE CIT(A), THE ASSESSEE STATED TH AT THE NET PROFIT SHOWN BY HIM WAS @ 2.63% AND THE ASSESSING O FFICER HAS ESTIMATED THE NET PROFIT EXCESSIVELY. IT WAS SUBMITTED THAT THE NET PROFIT SHOWN AND ACCEPTED BY THE DEPARTMENT WAS IN A.Y. 2007 - 08 , A. Y. 2008 - 09 AND A.Y. 2009 - 10 @ 2.18%, 2.17% AND 2.02% RESPECTIVELY. THE DETAILS ARE AS BELOW: SI. NO. ASST. YEAR TURNOVER NET PROFIT RESULT 1 2010 - 11 RS.1,88,79,745/ - RS.4,84,626/ - (2.63%) ASSESSED U/S. 143(3) 2. 2009 - 10 RS.1,73,60,328/ - RS. 3,51,181/ - (2.02%) ACCEPTED U/S. 143(1) 3. 2008 - 09 RS.1 ,22,90,000/ - RS.2,66,337/ - (2.17%) ACCEPTED U/S. 143(1) 4. 2007 - 08 RS.1 ,09,80,396/ - RS.2,39,771/ - (2.1S%) ACCEPTED U ; S. 143(1) 5. THE CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE HELD THAT THE ASSESSMENT MADE BY THE ASSESSING OFFICER BY APPLYING THE NET RATE OF 3 ITA NO.436/CTK/2016 ASSESSMENT YEAR :2010 - 2011 PROFIT @ 3.29% TO THE TURNOVER OF THE ASSESSEE FOR ESTIMATING THE INCOME WAS NOT EXCESSIVE. 6. BEFORE ME, LD A.R . OF THE ASSESSEE SUBMITTED THAT THE RATE OF ESTIMATION OF NET PROFIT @ 3.29% TO THE TURNOVER WAS EXCESSIVE AS COMPARED TO THE PAST ACCEPTED RESULTS OF THE ASSESSEE. 7. THE DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, SUPPORTED THE ORDER OF THE CIT(A). 8. I FIND THAT THE REJECTION OF BOOKS OF ACCOUNT OF THE ASSESSEE IS NOT UNDER CHALLENGE BEFORE ME. THE ONLY SUBMISSION OF THE LD A.R. OF THE ASSESSEE IS THAT THE NET PROFIT RATE APPLIED TO ESTIMATE THE INCOME IS EXCESSIVE. I T IS ALSO NOT IN DISPUTE THAT THE NET PROFIT RATE DECLARED AND ACCEPTED BY THE DEPARTMENT IN THE IMMEDIATELY PRECEDING ASSESSMENT YEARS I S IN A.Y. 2007 - 08 @ 2.18% , A.Y. 2008 - 09 @ 2.17% AND A.Y. 2009 - 10 @ 2.02% . IN MY CONSIDERED VIEW, AFTER REJECTING OF BOOK RES ULTS OF THE ASSESSEE , THE INCOME OF THE ASSESSEE HAS TO BE ESTIMATED BY THE ASSESSING OFFICER BUT WHILE DOING SO, HE CANNOT MAKE A WILD GUESS OF THE SAME. THE PAST ACCEPTED RESULTS ARE A GUIDE TO THE ESTIMATION OF THE INCOME OF THE ASSESSEE. CONSIDERING T HE PAST ACCEPTED RESULTS OF THE ASSESSEE, I AM OF THE CONSIDERED VIEW THAT ESTIMATION OF INCOME OF THE ASSESSEE BY APPLYING THE NET PROFIT RATE OF 3% WILL MEET THE ENDS OF 4 ITA NO.436/CTK/2016 ASSESSMENT YEAR :2010 - 2011 JUSTICE. I, THEREFORE, MODIFY THE ORDER OF THE CIT(A) ACCORDIN GLY AND PARTLY ALLOW THE GROUND OF THE APPEAL OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCE D IN THE OPEN COURT ON 30 / 01/2017 IN THE PRESENCE OF PARTIES. S D/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 30 /01 /2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE ASSESSEE : MODI COLLECTION, MAIN ROAD, ANGUL. 2. THE RESPONDENT: ITO, ANGUL WARD, PLOT NO.630/83, KULAD, ANGUL. 3. THE CIT(A) - 2, BHUBANESWAR. 4. PR.CIT 2, BHUBANESWAR. 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//