Dr. Swaroop Singh Gautam, Kanpur V. Income TAx Officer, Kanpur

ITA 462/LKW/2011

• Counselvise Citation: 46223714 RSA 2011
• Duration Of Justice: 3 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2014
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 15-07-2014
• Assessment Year: misc
• Appeal Filed On: 27-07-2011
• Court: TRIBUNAL
• Department Lawyers: A R NIGAM
• Assessee Lawyers: SWAROOP SINGH GAUTAM SELF
• Section: 44AD; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO. 462/LKW/2011 ASSESSMENT YEAR: 2003 - 04 DR. SWAROOP SINGH GAUTAM 33, SADANAND NAGAR AHIR WAN, KANPUR V. INCOME TAX OFFICER 1(4) KANPUR PAN: AAQPG7181G (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. SWAROOP SINGH GAUTAM (SELF) RESPONDENT BY: SHRI. A. R. NIGAM, D.R. DATE OF HEARING: 15 07 2014 DATE OF PRONOUNCEMENT: 20 0 8 2014 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON THE FOLLOWING GROUNDS: - 1 . BECAUSE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR (HEREINAFTER REFERRED TO AS THE LD. CIT (A) ERRED ON FACT AND IN LAW IN CONFIRMING THE ORDER OF A.O. ASSESSING THE INCOME OF THE APPELLANT @ 8% OF THE GROSS RECEIPT (INSTEAD OF WHAT WAS DISCLOSED) BY APPLYING THE PROVISIONS OF SEC. 44 - AD WHICH ON FACTS WAS NOT AT ALL APPLICABLE AND FOR THE REASON A LONE ORDER OF THE LOWER AUTHORITIES IS BAD IN LAW AND BE ORDER TO BE SET ASIDE. 2 . BECAUSE ON THE FACTS AND IN THE PECULIAR CIRCUMSTANCES OF THE PRESENT CASE, THE ID. CIT (A) ERRED ON FACTS AND IN LAW IN UPHOLDING THE FINDINGS OF THE A.O. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 2 - : (I) THAT THE COMPL ETE BILLS AND VOUCHERS COULD NOT BE PRODUCED. (II) THAT EXPENSES WERE INCURRED IN CASH ON THE BASIS OF SELF MADE VOUCHERS. 3. BECAUSE ON THE FACTS AND IN THE PECULIAR CIRCUMSTANCES OF THE PRESENT CASE, THE LOWER AUTHORITIES WERE NOT AT ALL JUSTIFIED IN ES TIMATING THE INCOME OF THE APPELLANT @ 8% OF THE GROSS RECEIPTS BY APPLYING THE PROVI SIONS SEC. 44 - AD WHICH WERE NON - APPLICABLE AS RECEIPTS WERE OVER RS.40.00 LAKHS AND THE ORDER OF THE A.O. AND CIT (A) IS BAD IN LAW, HENCE BE ORDERED TO BE SET ASIDE. 4. BECAUSE THE LD. C.I.T. ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS.176500/ - U/S68 OF THE INCOME TAX ACT. 1961. 5. BECAUSE ON THE FACTS AND IN THE PECULIAR CIRCUMSTANCES OF THE PRESENT CASE THE LD. C.I.T. (A) WAS NOT AT ALL JUSTIFIED IN CON FIRMING THE ADDITION OF RS.176500/ - U/S 68 OF THE INCOME TAX ACT, 1961. 2 . APROPOS GROUNDS NO.1 TO 3 RELATING TO THE ESTIMATION OF INCOME OF THE ASSESSEE AFTER REJECTING THE BOOKS OF ACCOUNT MAINTAINED BY HIM, ON PERUSAL OF RECORD IT IS NOTICED THAT THE ASSE SSEE WAS A CIVIL CONTRACTOR AND HIS GROSS RECEIPT WAS AT RS.83, 39 ,628/ - . HAVING NOTED THAT THE BOOKS OF ACCOUNT ARE NOT PROPERLY MAINTAINED BY THE ASSESSEE, THE ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE TOTAL INCOME OF THE ASSESSEE HAVING APPLIED THE PROVISIONS OF SECTION 44AD OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT') AT RS.6,39,570 / - AT 8% OF THE TOTAL RECEIPT. 3 . AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) AND THE LD. CIT(A) HAS ALSO OBSERV ED IN HIS ORDER THAT THE BILLS AND VOUCHERS ARE NOT OPEN FOR VERIFICATION, THEREFORE, THE REJECTION OF THE BOOKS OF ACCOUNT PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 3 - : WAS PROPER. HE ACCORDINGLY DELETED THE ESTIMATION AT 8% OF THE TOTAL RECEIPT. 4 . NOW THE ASSESSEE IS BEFORE US WITH THE SUBMISSION THA T THE ASSESSING OFFICER HAS WRONGLY APPLIED THE PROVISIONS OF SECTION 44AD OF THE ACT AND ESTIMATED THE INCOME AT 8% OF THE TOTAL RECEIPT, WHEREAS THE ASSESSEE HAS CORRECTLY DECLARED THE INCOME EARNED BY IT. 5 . THE LD. D.R., ON THE OTHER HAND, HAS PLACED RELI ANCE UPON THE ORDER OF THE LD. CIT(A). 6 . HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT UNDISPUTEDLY THE BOOKS OF ACCOUNT ARE NOT PROPERLY MAINTAINED AND THEREF ORE THE BOOKS WERE REJECTED BY THE ASSESSING OFFICER. BEFORE US , THE REJECTION OF THE BOOKS OF ACCOUNT HAS NOT BEEN CHALLENGED BY THE ASSESSEE BY RAISING A SPECIFI C GROUND. HE HAS SIMPLY DISPUTED THE ESTIMATION OF INCOME BY THE ASSESSING OFFICER BY APPLY ING THE NET PROFIT RATE OF 8% OF THE GROSS RECEIPTS. SINCE THE ASSESSEE HAS NOT MAINTAINED PROPER BOOKS OF ACCOUNT AND THE SAME WAS REJECTED BY THE ASSESSING OFFICER, THE ONLY ALTERNATIVE IS TO ESTIMATE THE INCOME BY APPLYING THE PROVISIONS OF SECTION 44A D OF THE ACT, AS THE GROSS RECEIPTS OF THE ASSESSEE WAS LESS THAN RS.40 LAKHS. WE, THEREFORE, FIND NO INFIRMITY IN THE ESTIMATION AT 8% OF THE GROSS RECEIPTS BY APPLYING THE PROVISIONS OF SECTION 44AD OF THE ACT. ACCORDINGLY, WE CONFIRM THE ORDER OF THE LD. CIT(A) AND REJECT THE GROUND OF APPEAL. 7 . THE OTHER GROUND IN THIS APPEAL RELATES TO THE ADDITION OF RS.1,76, 3 00/ - MADE UNDER SECTION 68 OF THE ACT. 8 . ON PERUSAL OF RECORD, WE NOTICE THAT THE ASSESSEE HAS INTRODUCED CASH CREDIT RANGING FROM RS.17,000/ - TO RS.19,000/ - IN THE NAME OF 22 PERSONS. THE ASSESSING OFFICER HAS EXAMINED THE CREDITORS ALONG WITH AGRICULTURAL HOLDINGS RECORDED IN ORDER TO ASCERTAIN THE CREDITWORTHINESS AND PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 4 - : GENUINENESS OF THE TRANSACTION. HAVING CONVINCED WITH THE STATEMENTS OF THE C REDITORS, THE LD. CIT(A) HAS RESTRICTED THE ADDITION TO RS.1.76 LAKHS FROM RS.3,92,800/ - AND RS.72,500/ - . THE ADDITIONS WERE CONFIRMED BY THE LD. CIT(A) WITH RESPECT TO 11 CREDITORS FROM WHOM ASSESSEE HAS TAKEN LOAN RANGING FROM RS.17,000/ - TO RS.19,000/ - . THOUGH CONFIRMATIONS WERE FURNISHED BY THE ASSESSEE BEFORE THE LD. CIT(A), BUT IT WAS NOT ACCEPTED BY HIM DOUBTING THE CREDITWORTHINESS OF THE CREDITORS. SINCE THE AMOUNT WAS TOO MEAGER, IT CANNOT BE SAID THAT THE CREDITORS WERE NOT IN A POSITION TO AD VANCE THE AMOUNT RANGING FROM RS.17,000/ - TO RS.19,000/ - . WE, THEREFORE, FIND NO MERIT IN THIS ADDITION AND DELETE THE SAME AFTER SETTING ASIDE THE ORDER OF THE LD. CIT(A) IN THIS REGARD. 9 . IN THE RESULT, APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED. ORD ER PRONOUNCED IN THE OPEN COURT ON 20.8.2014. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 20 TH AUGUST , 2014 JJ: 3107 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ )