Appeal Details
Counselvise Citation
47824514 RSA 2010
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 4 month(s) 11 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
12-08-2011
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
A
Assessment Year
2006-2007
Appeal Filed On
31-03-2010
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER I.T.A. NO. 478/PN/2010 : A.Y. 2006-07 SHRI RAJESH D. GUGLANI 43 MANISHA APARTMENTS, 2 MOLEDINA ROAD, PUNE-411 001 PAN AAYPG 8775 A APPELLANT VS. I.T.O. WARD 4(5) PUNE RESPONDENT APPELLANT BY: SHRI S.N. DOSHI RESPONDENT BY: SHRI S.K. AMBASTHA ORDER PER SHAILENDRA KUMAR YADAV, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT-(II) PUNE DATED 15-3-2010 FOR A.Y . 2006- 07 ON THE GROUND OF SUSTAINING THE ADDITION OF RS. 1,00,000/- ON ACCOUNT OF LAUNDRY CHARGES RECEIPTS. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF DRY CLEANERS. THE RETURN OF INCOME WAS FILED ON 1-6-200 6 DECLARING THE TOTAL INCOME AT RS. 1,02,180/- WHICH WAS PROCESSED U/S 143(3) OF THE ACT DETERMINING THE TOT AL INCOME AT RS. 2,69,990/- MAKING AN ADDITION OF RS. 1,67,811/- ON ACCOUNT OF CONCEALED LAUNDRY INCOME. ON PAGE 2 OF 5 ITA NO. 478/PN/2010 RAJESH D. GUGLANI A.Y. 2006-07 APPEAL, THE CIT(A) RESTRICTED THE ADDITION TO THE E XTENT OF RS. 1,00,000/-, AGAINST WHICH, THE ASSESSEE IS IN A PPEAL BEFORE US. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE MAINTAINS THE ACCOUNTS UNDER CASH SYST EM OF ACCOUNTING. ACCORDING TO HIM, INCOME ACCRUES TO TH E ASSESSEE ONLY WHEN THE CUSTOMER RETURNS THE ASSESSE E CLOTHES ACKNOWLEDGEMENT RECEIPT-CUM-BILLS AND COLLE CT THE CLOTHES. AS PER PROVISIONS OF SECTION 44AA THE ASS ESSEE IS REQUIRED TO MAINTAIN ACCOUNTS IF THE INCOME EXCEED S RS. 1,20,000/- AND THE TURNOVER EXCEEDS RS. 10,00,000/- . ADMITTEDLY, THE TURNOVER OF THE ASSESSEE IS RS. 4,0 6,230/- WHILE THE NET PROFIT DECLARED BY THE ASSESSEE IS RS . 1,04,312/-. NONETHELESS ASSESSEE MAINTAINED THE BOO KS, VARIOUS REGISTERS AND SUPPORTED THE INCOME RETURNED . IN VIEW OF THIS, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAK ING THE ADDITION OF RS. 1,67,811/- ON ACCOUNT OF CONCEALED LAUNDRY INCOME. IT HAS ALSO BEEN SUBMITTED THAT THE ADDITI ON SUSTAINED BY THE CIT(A) IS ON A HIGHER SIDE AND SUB STANTIAL RELIEF SHOULD BE GRANTED TO THE ASSESSEE. ON THE O THER HAND, THE LEARNED DR SUPPORTED THE ORDER OF THE CIT (A) AND PAGE 3 OF 5 ITA NO. 478/PN/2010 RAJESH D. GUGLANI A.Y. 2006-07 SUBMITTED THAT THE ORDER OF THE CIT(A) DOES NOT CAL L FOR ANY INTERFERENCE. 4. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT THE ASSESSEES GRO SS RECEIPTS, NET PROFIT AND PERCENTAGE OF THE EARLIER YEARS WERE AS UNDER: YEAR ENDING GROSS RECEIPTS (IN RS.) NET PROFIT (IN RS.) PERCENTAGE 31 - 3 - 2003 ,49,04 5/ - 92,752/ - 20.65% 31 - 3 - 2004 4,37,996/ - 94,885/ - 21.6% 31 - 3 - 2005 4,58,021/ - 1,00,473/ - 21.93% 31 - 3 - 2006 4,60,230/ - 1,04,313/ - 22.66% THE AFORESAID FACTUAL DATA APPROVES THE PETTY OR SM ALL SCALE NATURE OF THE BUSINESS AND THAT THE PERCENTAGE OF N ET PROFIT DISCLOSED IS MORE THAN WHAT IS DISCLOSED IN THE EAR LIER YEARS. FURTHER, IF THE ADDITION OF RS. 1,00,000/- I S MADE TO THE TO THE TOTAL INCOME DISCLOSED IN THE FINANCIAL YEAR 2005-06 RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, THE NET PROFIT COMES TO AS HIGH AS 4 4.40% WHICH IS UNREALISTIC. DURING THE PROCEEDINGS BEFORE THE CIT(A), UPHOLDING THE APPLICATION OF PROVISIONS OF SECTION 145(3) OF THE ACT. AND TAKING INTO CONSIDERATION TH E TOTALITY OF THE CIRCUMSTANCES AS WELL AS THE EXPLANATION FU RNISHED PAGE 4 OF 5 ITA NO. 478/PN/2010 RAJESH D. GUGLANI A.Y. 2006-07 BY THE ASSESSEE, THE CIT(A) RESTRICTED THE ADDITION OF RS. 1,00,000/-. CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES, WE FIND THAT THE ADDITION OF RS. 1,0 0,000/- SUSTAINED BY THE CIT(A) ON ESTIMATE BASIS IS FOUND TO BE ON HIGHER SIDE AND HENCE, THE ADDITION OF RS. 50,000/- WOULD MEET THE ENDS OF JUSTICE IN VIEW OF THE FACTS THAT ON ONE HAND, THE ASSESSEE ALLEGES THAT HE IS CARRYING ON B USINESS OF DRYCLEANERS AND ON THE OTHER HAND, HE HAS SUBMIT TED THAT THE ASSESSEE DOES NOT OWN FACILITIES OF DRY CL EANING NOR OWNS MACHINES FOR CLEANING THE CLOTHES. WE THEREFO RE, MODIFY THE ORDER OF THE CIT(A) AND DIRECT THE ASSES SING OFFICER TO MAKE THE ADDITION TO THE EXTENT OF RS. 5 0,000/- ON ESTIMATE BASIS. 5. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN ON 12 TH AUGUST 2011. S D/ - (G.S. PANNU) ACCOUNTANT MEMBER S D/ - (SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER PUNE DATED THE 12 TH AUGUST 2011 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT II PUNE 4. CIT(A)-II PUNE 4. THE D.R, A BENCH, PUNE 6. GUARD FILE BY ORDER PAGE 5 OF 5 ITA NO. 478/PN/2010 RAJESH D. GUGLANI A.Y. 2006-07 ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE
