Shri Jayapal Sriram, Chennai V. ITO, Non Corporate Ward -10(4), Chennai

ITA 47/CHNY/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 8716 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 03-01-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: M MURUGABOOPATHY ADV
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI . . . , , [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ] ./I.T.A. NO. 47/CHNY/2018 ! / ASSESSMENT YEAR : 2013-2014. SHRI. JAYAPAL SRIRAM, NO.413, G.N.T. ROAD, REDHILLS, CHENNAI 600 052. VS. THE INCOME TAX OFFICER, NON CORPORATE WARD 10(4) CHENNAI. [PAN ASNPS 4110L] ( / APPELLANT) ( /RESPONDENT) '# $ % / APPELLANT BY : SHRI. M. MURUGABOOPATHY, ADV. &' '# $ % /RESPONDENT BY : SHRI. AR.V. SREENIVASAN, JCIT. ( ) $ * /DATE OF HEARING : 24-10-2019 +,! $ * /DATE OF PRONOUNCEMENT : 19-11-2019 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-12, CH ENNAI (CIT(A) FOR SHORT) DATED 24.10.2017 FOR THE ASSESSMENT YEAR (AY) 2013-2014. ITA NO. 47/CHNY/2018. :- 2 -: 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE LEARNED CIT (APPEALS) PASSED ORDER CONFIR MING THE DETERMINATION OF PROFIT AT RS.1,37,98,547 ESTIMATED @ 10% ON TURNOVER OF RS.13,79,85,475 BY LEARNED AO WHICH IS CONTRARY TO LAW AND FACTS. 2. THE LEARNED CIT (APPEALS) FAILED TO CONSIDER THE PROFITABILITY PREVALENT IN JEWELLERY BUSINESS WHILE CONFIRMING TH E ESTIMATION @ 10% ON TURNOVER. 3. THE APPELLANT CRAVES PERMISSION TO ADD, AMEND, A LTER OR VARY ALLOW ANY GROUNDS OF APPEAL BEFORE THE DISPOSAL OF APPEAL. 4. IN VIEW OF ABOVE GROUNDS AND ANY OTHER GROUND TH AT WILL BE PERMITTED TO BE ADDUCED AT THE TIME OF HEARING, THE APPELLANT PRAYS THE HONOURABLE TRIBUNAL TO ALLOW THE APPEAL A ND DELETE THE TAX DEMANDED. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT IS AN INDIVIDUAL CARRYING JEWELLERY BUSINESS. THE RETURN OF INCOME FOR THE AY 2013-14 WAS FILED ON 06.08.2014 DISCLOSING TOTAL INCOME OF RS.11,24,560/-. AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY THE INCOME TAX OFFICER, NON CORPORATE WARD 10(4), CHENNAI VIDE ORDER DATED 30.03.2016 PASSED U/S. 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) AT TOTAL INCOME OF RS. 1,37,98,550/-. WHILE DOING SO , THE ASSESSING OFFICER HAD COMPLETED THE ASSESSMENT TO THE BEST J UDGMENT AS ASSESSEE HAD NOT COMPLIED WITH THE NOTICE ISSUED U/ S.143(2) OF THE ACT BY ESTIMATING 10% OF THE TURNOVER AS TAXABLE PROFIT . ITA NO. 47/CHNY/2018. :- 3 -: 4. BEING AGGRIEVED, AN APPEAL WAS PREFERRED BEFORE THE LD.CIT(A) WHO VIDE IMPUGNED ORDER CONFIRMED THE AC TION OF THE ASSESSING OFFICER, AS ASSESSEE HAD FAILED TO SUBSTA NTIATE THE RETURN OF INCOME FILED BY HIM. 5. BEING AGGRIEVED, THE APPELLANT IS IN APPEAL BEFORE US IN THE PRESENT APPEAL. IT IS SUBMITTED THAT PROFIT OF 10% IS EXCESSIVE AND DEPRECIATION SHOULD BE ALLOWED AS DEDUCTION, IN SU PPORT OF THIS, HE PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF DHAKESWARI COTTON MILLS LTD VS. CIT, 26 ITR 775 . 6. ON THE OTHER HAND, THE LD. SR. DEPARTMENTAL REPRESE NTATIVE PLACED RELIANCE ON THE ORDERS OF LOWER AUTHORITIES. 7. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD. ADMITTEDLY, ASSESSEE HAD NOT COMPLIED WIT H THE STATUTORY NOTICE ISSUED U/S.143(2) OF THE ACT NOR BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HE COULD SUBSTANTIATE THE RETU RN OF INCOME FILED BY HIM. THEREFORE, WE ARE OF THE CONSIDERED OPINIO N THAT THE ASSESSING OFFICER WAS JUSTIFIED IN REJECTING THE BO OKS RESULTING IN ESTIMATING THE GROSS PROFIT. THEN THE QUESTION THAT ARISES IS WHAT IS REASONABLE RATE OF PROFIT. IT IS SETTLED PROPOSI TION OF LAW THAT EVEN IN BEST JUDGMENT ASSESSMENT, THE ASSESSING OFFICER IS EXPECTED TO ADOPT ITA NO. 47/CHNY/2018. :- 4 -: REASONABLE PROFIT RATIO HAVING REGARD TO THE PROFI T EARNED IN COMPARATIVE CASES AND PAST HISTORY ETC. ASSESSEE E XCEPT BY MAKING SUBMISSION THAT GROSS PROFIT IS EXCESSIVE AND UNRE ASONABLE, NO EVIDENCE IS FILED BEFORE US DEMONSTRATING THE GROSS PROFIT RATE OF 10% IS EXCESSIVE AND UNREASONABLE. NO CLAIM OF ALLOWANC E OF DEPRECIATION WAS MADE BEFORE LOWER AUTHORITIES, THEREFORE DEPREC IATION CLAIMED CANNOT BE ALLOWED AT THIS STAGES OF PROCEEDINGS, AS THE ESTIMATED PROFITS. THEREFORE, WE ARE OF THE CONSIDERED OPI NION THAT 10% GROSS PROFIT IS REASONABLE IN THE JEWELLERY BUSINESS AND ACCORDINGLY, WE CONFIRM THE ORDERS OF THE LOWER AUTHORITIES. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED ON 19TH DAY OF NOVEMBER, 2019, A T CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER - ) / CHENNAI . / DATED:19 TH NOVEMBER, 2019 KV $ &*01 21!* / COPY TO: 1 . '# / APPELLANT 3. ( 3* () / CIT(A) 5. 16 &*7 / DR 2. &' '# / RESPONDENT 4. ( 3* / CIT 6. 8 9) / GF