ITO, Cuttack V. Rajesh Kumar Agarwal, Cuttack

ITA 443/CTK/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4455 (ITAT-CUTTACK)
• Duration Of Justice: 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2011
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 19-04-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 10-12-2010
• Court: TRIBUNAL
• Department Lawyers: D K SETHM SETH ARS
• Assessee Lawyers: M R

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , S HRI K.S.S.PRASAD RAO , JUDICIAL MEMBER / I.T.A.NO. 4 43 /CTK/2010 / ASSESSMENT YEAR 2007 - 08 INCOME - TAX OFFICER, WARD 2(3), CUTTACK. - - - VERSUS - RAJESH KUMAR AGARWAL, PROP. M/S.RAJESH TEXTILES, JHOLA SAHI, CUTTACK. PAN: ABR PA 6998 H ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI D.K.SETH/M.SETH, ARS / FOR THE RESPONDENT: / SHRI M.R.PANIGARHI, DR / ORDER . . , , SHRI K.K.GU PTA, ACCOUNTANT MEMBER. THE REVENUE IS IN APPEAL AGITATING THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) ON THE PART RELIEF GRANTED TO THE ASSESSEE BEING ESTIMATION OF PROFIT AT A CERTAIN PERCENTAGE FOR CO MPUTING THE UNDISCLOSED INCOME ON UNDISCLOSED SALES AND DISALLOWANCE OF EXPENSES AS OTHERWISE CONSIDERED BY THE ASSESSING OFFICER APPROPRIATE ON THE FACTS AND CIRCUMSTANCES WERE DIRECTED TO BE PART DELETED BY THE LEARNED CIT(A). 2. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE ASSESSEES APPEAL BEFORE THE TRIBUNAL ON THE ORDER OF THE LEARNED CIT(A) WAS ADJUDICATED UPON VIDE ITS ORDER DT.15.2.2011 WHICH COPY IS BEING FURNISHED HAD CONSIDERED THE CONTENTION OF THE ASSESSING OFFICER AS WELL AS THE ASSESS EE APPELLANT S SUBMISSION BEFORE THE LEARNED CIT(A) THAT RESULTED IN GRANTING PART RELIEF TO THE ASSESSEE. THE PART CONFIRMATION ON THE VARIOUS ISSUES AS MENTIONED BY THE REVENUE IN THEIR APPEAL HAVE BEEN APPROPRIATELY I.T.A.NO. 443/CTK/2010 2 DEALT WITH BY THE TRIBUNAL REQUIRES NO FURTHER DEL IBERATION. AS A MATTER OF RECORD, THIS APPEAL SHOULD HAVE BEEN HEARD ALONG WITH THE ASSESSEES APPEAL WHEN THE LEARNED DR DID NOT POINT OUT OF AN APPEAL HAVING BEEN FILED ON THE PART RELIEF GRANTED BY THE LEARNED CIT(A) WHEN QUERIED BY THE TRIBUNAL. ALL T HE ISSUES HAVE BEEN DEALT WITH BY THE TRIBUNAL WHICH ARE NOW BEING AGITATED BY THE ASSESSING OFFICER IN THIS APPEAL THEREFORE STAND COVERED ON HAVING BEEN DELIBERATED UPON BY UPHOLDING THE ORDER OF THE LEARNED CIT(A) PARTLY. 3 . THE LEARNED DR SUBMITTED T HAT THE ESTIMATION OF PROFIT ON ACCOUNT OF UNACCOUNTED PURCHASES AT A CERTAIN PERCENTAGE WAS TO BE CONSIDERED AS DISCLOSED BY THE ASSESSEE AT A HIGHER RATE AND THE DISALLOWANCE OF EXPENSES WAS ALSO ON THE BASIS OF FACTS NOT DELIBERATED UPON BY THE LEARNED CIT(A) MAY THEREFORE BE CONSIDERED AS OF NOW. 4 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON OUR CAREFUL CONSIDERATION OF THE FACTS, WE ARE INCLINED TO HOLD THAT THE TRIBUNAL IN THEIR ORDER ON THE ASSESSEES APPEAL HAD ADJUDICATED ON THE ISSUES AS NOW RAISED BY THE REVENUE BEFORE US. THE FIRST GROUND AGITATING THE ESTIMATION OF PROFIT ON ACCOUNT OF UNACCOUNTED PURCHASES AND ON ACCOUNT OF UNACCOUNTED SALES HAVE BEEN CONSIDERED ELABORATELY IN PARA 8 OF THE ITATS ORDE R WHEN ON THE TOTALITY OF THE F ACTS THE UNACCOUNTED PURCHASES AND SALES WERE RENDERED FOR TAXATION AS THE INVENTORY THEREOF WAS ALSO SOUGHT TO BE TAXED FOR THE IMPUGNED ASSESSMENT YEAR WAS NOT PRESSED FOR BY THE LEARNED COUNSEL FOR THE ASSESSEE, THE PERCEN TAGE OF PROFIT IN THE PURCHASE AND SALES COMBINED THEREFORE RESULTED IN TAXATION OF THE CLOSING STOCK SETTLED THE ISSUE AS WAS ADJUDICATED UPON BY THE TRIBUNAL. WITH RESPECT TO THE DISALLOWANCE OF EXPENSES IN GROUNDS NO.2 I.T.A.NO. 443/CTK/2010 3 AND 4 OF THE PRESENT APPEAL FILED BY THE REVENUE, THE LEARNE D CLT(A) IN PARA 9 AND 10 OF HIS ORDER HAD DELETED THE DISALLOWANCE FOR WANT OF THE BASIS AVAILABLE TO THE ASSESSING OFFICER WHICH DID NOT REQUIRE ANY FURTHER CONSIDERATION BY THE TRIBUNAL. THE LEARNED CIT(A) HAD DELETED THE PART DISALLOWANCE OF EXPENSES SO CLAIMED HOLDING THAT THE AD HOC DISALLOWANCE IS NOT JUSTIFIABLE IN VIEW OF THE FACT THAT THE MAJOR HUMAN RESOURCES AND ASSETS OF THE ASSESSEE HAVE BEEN ACCEPTED AS FOR RENDERING SERVICES TO THE BUSINESS THEREFORE WERE INCURRED FOR THE PURPOSE OF BUSINESS. THE DISALLOWANCE ON ACCOUNT OF VEHICLE MAINTENANCE, STAFF WELFARE EXPENSES, TELEPHONE THEREFORE DID NOT PASS THE TEST FOR PART DISALLOWANCE. THE ASSESSING OFFICER DID NOT POINT OUT ANY DEFECT IN THE CLAIM THEREOF INSOFAR AS WHA T HOLDS GOODS FOR THE MAJOR PORTION CLAIM CANNOT BE A GROUND FOR REJECTION FOR A MINOR PORTION IN THE FINANCIAL YEAR. THESE GROUNDS, THEREFORE, STAND DISMISSED. 5 . IN THE RESULT, THE APPEAL OF THE REVENUE DISMISSED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 21 ST APRIL, 2011 S D/ - S D/ - ( . . . ) , ( K.S.S.PRASAD RAO), JUDICIAL MEMBER ( . . ) , , (K.K.GUPTA), ACCOUNTANT MEMBER. ( ) DA TE: 21 ST APRIL, 2011 ( ), ( H.K.PADHEE ), SENIOR.PRIVATE SECRETARY. I.T.A.NO. 443/CTK/2010 4 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : INCOME - TAX OFFICER, WARD 2(3), CUTTACK. 2 / THE RESPONDENT: RAJESH KUMAR AGARWAL, PROP. M/S.RAJESH TEXTILES, JHOLA SAHI, CUTTACK. 3 . / THE CIT, 4 . ( )/ THE CIT(A), 5 . / DR, CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY, / BY ORDER, [ ] SENIOR PRIVATE SECRETARY