Duryodhan Patra, Astaranga V. ITO, Puri Ward, Puri

ITA 438/CTK/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0176 (ITAT-CUTTACK)
• Duration Of Justice: 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 20-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIM KUMAR CHAKRABORTY
• Assessee Lawyers: S K JENA
• Keywords: Business income
• Section: 201

Judgement Text

P A G E 1 | 5 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK SMC BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG , JUDICIAL MEMBER ITA NO . 438 /CTK/20 19 ASSESSMENT YEAR : 201 6 - 17 DURYODHAN PATRA, AT: RAMACHANDRAPUR, ASTARANGA, DIST: PURI VS. ITO, PURI WARD, PURI PAN/GIR NO. BFKPP 4732 A (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI S.K.JENA , AR REVENUE BY : SHRI ASHIM KUMAR CHAKRABORTY , DR DATE OF HEARING : 24 / 0 6 / 20 20 DATE OF PRONOUNCEMENT : 24 / 0 6 /20 20 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - 2 , BHUBANESWAR DATED 28.6.2019 FOR THE ASSESSMENT YEAR 2016 - 17. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: A. FOR THAT THE LD AO ERRED IN DETERMINING TH E TURNOVER OF THE APPELLANT AT RS.1,73,40,197.00 MERELY BY TOTALLING THE CREDIT SIDE OF THE BANK ACCOUNTS WITHOUT CONSIDERING THE RECONCILIATION MADE BY THE APPELLANT DURING THE ASSESSMENT PROCEEDINGS AS SUCH MOST OF THE DEPOSITS IN THE BANK ACCOUNT ARE IN TER ACCOUNT TRANSACTIONS. MOREOVER, THE APPELLANT IS DOING BUSINESS IN REMOTE VILLAGE AREA. THE LD CIT(A) ALSO EQUALLY ERRED IN CONFIRMING THE SAME. B. FOR THAT THE ESTIMATION OF PROFIT @ 8% IS ABSOLUTELY UNREASONABLE AS DETERMINED BY THE AO AND CONFIRME D BY THE CIT(A). ITA NO.438/CTK/2019 ASSESSMENT YEAR : 2016 - 17 P A G E 2 | 5 3. THE APPEAL IS TIME BARRED BY 101 DAYS. THE ASSESSEE HAS FILED CONDONATION PETITION DATED 20.12.2019 STATING THE REASONS FOR CONDONATION OF DELAY. AFTER CONSIDERING THE PETITION AND SUBMISSIONS OF THE PARTIES, I AM OF THE VIEW THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FOR FILING THE APPEAL LATE. HENCE, I CONDONE THE DELAY AND ADMIT THE APPEAL FOR ADJUDICATION. 4 . FACTS IN BRIEF ARE THAT THE ASSESSEE DERIVES INCOME FROM TRADING AND SALE OF TARPOLIN. HE FILED HIS RETURN OF INCOME ON 18.3.2017 DISCLOSING A TAXABLE INCOME OF RS.6,35,860/ - . DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSE SSEE HAD SHOWN A GROSS TURNOVER OF RS.90,14,812/ - AND NET PROFIT SHOWN U/S.44AD OF RS.7,21,288/ - . THE AO ALSO NOTICED THAT THE ASSESSEE HAD FOUR BANK ACCOUNTS AND THE TOTAL CREDITS COMES TO RS.1,92,20,197/ - . THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO EXPLAIN THE SOURCE OF THESE BANK CREDITS. THE ASSESSEE SUBMITTED THAT THESE ARE BANK TRANSFERS BY VIRTUE OF WITHDRAWAL FROM ONE ACCOUNT AND DEPOSIT IN ANOTHER ACCOUNT. THE AO ALSO AFTER CONSIDERING THE LIST FURNISHED BY THE ASSESSEE, WHICH IS EXPLAIN ED BY THE ASSESSEE, FOUND THAT RS.18,80,000/ - IS BANK TRANSFER. HENCE, THE AO REDUCED THE CREDITS RS.1,92,20,197 RS.18,80,000/ - = RS.1,73,40,197/ - AND TREATED THE SAME AS TOTAL TURNOVER OF THE ASSESSEE. SINCE THE ASSESSEE HAD NOT GOT HIS ACCOUNTS AUDIT ED, APPLYING THE PROVISIONS OF SECTION 44AD, THE AO ITA NO.438/CTK/2019 ASSESSMENT YEAR : 2016 - 17 P A G E 3 | 5 DETERMINED THE NET PROFIT @ 8% OF RS.1,73,40,197/ - . AS THE ASSESSEE HAS SHOWN THE BUSINESS INCOME U/S.44AD OF RS.7,21,288/ - , THE DIFFERENCE AMOUNT OF RS.6,65,928/ - (RS.13,87,216 RS.7,21,288) WAS ADDED TO THE INCOME OF THE ASSESSEE. 5 . ON APPEAL, THE LD CIT(A) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 6 . BEFORE ME, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AUTHORITIES BELOW HAVE NOT TAKEN INTO CONSIDERATION THE DEPOSITS AND WITHDRAWALS OF ALL BANK ACCOUNTS. LD COUNSEL FOR THE ASSESSEE ALSO FURNISHED A RECONCILIATION STATEMENT SHOWING DEPOSITS AND WITHDRAWALS, WHEREFROM IT REVEALS THAT THE TOTAL DEPOSITS IS AT RS.1,50,95,634/ - AND WITHDRAWALS AT RS.1,21,68,500/ - . HE SUBMITTED THAT THE A SSESSING OFFICER HAS CONSIDERED THE CREDIT SIDE OF ALL THE BANK ACCOUNTS WITHOUT RECONCILIATION OF THE ACCOUNTS. HE SUBMITTED THAT THE MATTER MAY BE REMANDED BACK TO THE FILE OF THE AO TO VERIFY THE BANK ACCOUNTS AND ITS RECONCILIATION AND DETERMINE THE A CCURATE TURNOVER OF THE ASSESSEE. HE ALSO CONTENDED THAT HE HAS NO OBJECTION TO ADOPT THE NET PROFIT @ 8% ON THE DETERMINATION OF TOTAL SALES AFTER RECONCILIATION. 7 . REPLYING TO ABOVE, LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 8 . ON CONSIDERATIO N OF THE RIVAL SUBMISSIONS, I OBSERVE THAT THE ASSESSING OFFICER HAS TAKEN TOTAL CREDITS MADE IN FOUR BANK ACCOUNTS AS GROSS TURNOVER AT RS.1,73,40,197/ - AS AGAINST THE TURNOVER DISCLOSED BY THE ITA NO.438/CTK/2019 ASSESSMENT YEAR : 2016 - 17 P A G E 4 | 5 ASSESSEE AT RS.90,14,812/ - AND THE ASSESSMENT ORDER WAS PASSE D ON THE ENHANCED TURNOVER OF RS.1,73,40,197/ - AND NET PROFIT @ 8% WAS DETERMINED. THE ACTION OF THE AO WAS CONFIRMED IN FIRST APPEAL. NOW, BEFORE THE TRIBUNAL, THE ASSESSEE HAS FILED RECONCILIATION STATEMENT SHOWING ALL DEPOSITS AND WITHDRAWALS MADE IN ALL BANK ACCOUNTS, WHEREIN, IT IS REVEALED THAT TOTAL DEPOSITS IS RS.1,50,95,634/ - AND TOTAL WITHDRAWALS IS RS.1,21,68,500/ - . FROM THE ABOVE, IT WILL BE JUST AND PROPER TO REMAND THE ISSUE BACK TO THE FILE OF THE AO FOR PROPER VERIFICATION OF THE RECONCIL IATION FURNISHED BY THE ASSESSEE VIS - - VIS THE BANK STATEMENT TO BE FURNISHED BY THE ASSESSEE AND DETERMINE THE ACCURATE TURNOVER OF THE ASSESSEE AND THEN DETERMINE THE NET PROFIT @ 8% ON THE TURNOVER AFTER THE RECONCILIATION. THE AO IS DIRECTED ACCORDING LY. 9 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 24 / 0 6 /20 20 . S D/ - ( CHANDRA MOHAN GARG) JUDICIAL MEMBER CUTTACK; DATED 24 / 0 6 /20 20 B.K.PARIDA, SPS ITA NO.438/CTK/2019 ASSESSMENT YEAR : 2016 - 17 P A G E 5 | 5 COPY OF THE ORDER FORWARDED TO : BY ORDER SR . PVT. S ECRETARY ITAT, CUTTACK 1. THE APPELLANT : DURYODHAN PATRA, AT: RAMACHANDRAPUR, ASTARANGA, DIST: PURI 2. THE RESPONDENT. ITO, PURI WARD, PURI 3. THE CIT(A) - 2 , BHUBANESWAR 4. PR.CIT - 2 , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//