Ashok Kumar Varshney, Hathras V. A.C.I.T., Central Circle, Agra

ITA 489/AGR/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0519 (ITAT-AGRA)
• Duration Of Justice: 6 year(s) 7 month(s) 5 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 25-02-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 11-10-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: WASEEM ARSHAD SRA
• Assessee Lawyers: NAVIN GARGH
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.489/AGR/2012 ASSESSMENT YEAR: 2006-07 SHRI ASHOK KUMAR VARSHNEY, VS. ASSTT. COMMISSIONE R OF INCOME TAX, A-2, PREM NAGAR COLONY, CENTRAL CIRCLE, AGRA. HATHRAS (U.P.). (PAN : AAQPV 0860 K). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NAVIN GARGH, ADVOCATE RESPONDENT BY : SHRI WASEEM ARSHAD, SRA. D.R. DATE OF HEARING : 20.03.2013 DATE OF PRONOUNCEMENT : 26.03.2013 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 26.03.2012 PASSED BY THE LD. CIT(A)-I, AGRA FOR THE ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 2 ITA NO.489/AGRA/2012 A.Y. 2006-07 1.1 BECAUSE IN ANY VIEW, THE LD. CIT(A) HAS ERRED I N CONFIRMING THE ADDITION OF RS.4,36,100/- (FROM SO CALLED PEAK NOTI NG OF CASH RS.74,36,100/- LESS INCOME DISCLOSED RS.70,00,000/- ). 1.2 BECAUSE WHILE CONFIRMING THE ABOVE ADDITION THE LD. CIT(A) HAS ERRED IN OBSERVING THAT NO SURPLUS CASH WAS AVAILAB LE FROM THE ADDITIONAL INCOME OFFERED OF PRECEDING YEARS & IGNO RING THE FURTHER ADDITIONS CONFIRMED OR PRECEDING YEARS. 2.1 BECAUSE IN ANY VIEW, THE ADDITION CONFIRMED BY LD. CIT(A) OF RS.70,743/- AS INCOME FROM BUSINESS OF CHUAN, CHURA N, CHANI ETC., IS ARBITRARY, WRONG & ILLEGAL. 2.2 BECAUSE WHILE CONFIRMING THE ABOVE ADDITION THE LD. CIT(A) HAS ERRED IN OBSERVING THAT THE APPELLANT HAS SHOWN INC OME BY APPLYING PROFIT RATE OF 8%, IGNORING THE TOTAL INCOME ALREAD Y SHOWN OF RS.70,00,000/- INCLUDES THE INCOME FROM THE BUSINES S OF CHURAN, CHATNI ETC. 3.1 BECAUSE IN ANY VIEW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.18,188/- ASSESSED UNDER THE HEAD INC OME FROM HOUSE PROPERTY U/S 24(4) OF THE INCOME TAX ACT. 3.2 BECAUSE WHILE CONFIRMING THE ABOVE ADDITION THE LD. CIT(A) HAS ERRED IN OBSERVING NO EVIDENCE HAS BEEN PRODUCED B Y THE LD. AR THAT ANY EFFORTS WAS MADE BY THE APPELLANT DURING THE YE AR UNDER CONSIDERATION FOR LETTING OUT THIS HOUSE PROPERTY A ND HE WILL BE CHARGED TO TAX ON THE NOTIONAL ANNUAL LETTING VALUE OF THE HOUSE PROPERTY. THEREFORE NO VACANCY ALLOWANCE CAN BE PR OVIDED TO THE APPELLANT. 4. BECAUSE IN ANY VIEW, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE TOTAL AMOUNT OF RS.4,00,000/- COMPUTING BY A.O. FRO M MAKING INVESTMENT MADE IN HOUSE HOLD ITEMS, ALTHOUGH THE A DDITION HAS BEEN SET OFF OUT OF RS.15,00,000/- DECLARED BY THE APPEL LANT ON ACCOUNT OF INVESTMENT/EXPENDITURE INCLUDING HOUSE HOLD ITEMS, & NO SEPARATE ADDITION HAS BEEN CONFIRMED. 3 ITA NO.489/AGRA/2012 A.Y. 2006-07 5. BECAUSE WITHOUT PREJUDICE AND WITHOUT ADMITTING THE ABOVE ADDITIONS THE LD. CIT(A) HAS ERRED IN NOT TELESCOPI NG THE SO CALLED ADDITION OF PEAK NOTING OF CASH OF RS.4,36,100 (GRO UND NO.1.1 & 1.2) & INCOME CONFIRMED OF RS.70,743/- (GROUND NO.2.1 & 2.2). 6. BECAUSE IN ANY VIEW, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE INTEREST CHARGED U/S 234B WHICH IS WRONG, ILLEGAL, AND AGAINST THE FACTS AND LAW OF THE CASE. 7. BECAUSE IN ANY VIEW, AND WITHOUT PREJUDICE OF TH E ABOVE GROUNDS, ADDITIONS MADE, INTEREST CHARGED U/S 234B, AND THE ASSESSMENT ORDER PASSED IS WRONG, ILLEGAL, WITHOUT PROPER OPPORTUNITY, BAD IN LAW AND AGAINST THE FACTS AND L AW OF THE CASE. 3. AT THE TIME OF HEARING, THE LD. AUTHORISED REPRE SENTATIVE DID NOT PRESS GROUND NOS.1.1, 1.2, 4 & 5. THEREFORE, THESE GROUN DS OF APPEAL ARE DISMISSED AS NOT PRESSED. 4. AS REGARDS GROUND NOS.2.1 & 2.2, THE A.O. HAS ES TIMATED THE PROFIT BY APPLYING 12% RATE OF PROFIT. THE CIT(A) HAS REDUCE D THE SAME TO 10%. 5. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ISSUE IS COVERED BY THE ORDER OF I.T.A.T. IN ITA NOS.410/AGRA/2012 & OTHERS , ORDER DATED 28.12.2012 IN ASSESSEES OWN CASE FOR A.YS. 2000-01 TO 2003-04 WH EREIN THE I.T.A.T. HAS APPLIED 9% PROFIT RATE. THE RELEVANT FINDING OF I. T.A.T. IS REPRODUCED AS UNDER :- 4 ITA NO.489/AGRA/2012 A.Y. 2006-07 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE F ACTS NOTED ABOVE HAVE NOT BEEN DISPUTED BY BOTH THE PARTIES. T HE LD. CIT(A) ACCEPTED THE TURNOVER OF THE ASSESSEE, WHICH WAS BA SED ON THE SEIZED PAPERS AND THE DEPARTMENT HAS NOT CHALLENGED THE OR DER OF THE LD. CIT(A) TO THAT EXTENT. THE ONLY QUESTION LEFT NOW F OR CONSIDERATION IS APPLICATION OF PROFIT RATE OF 10% AS AGAINST 8% DEC LARED BY THE ASSESSEE. IT IS NOT A DENYING FACT THAT THE BUSINES S ACTIVITIES OF THE ASSESSEE ARE FROM UNORGANIZED SECTOR AND THE ITEMS OF THE BUSINESS OF THE ASSESSEE ARE HIGHLY PERISHABLE. THEREFORE, THE EXPLANATION OF THE ASSESSEE IS ACCEPTABLE THAT THE PROFIT MARGIN MAY N OT BE HIGHER AS HAVE BEEN APPLIED BY THE AUTHORITIES BELOW. THE ASS ESSEE HAS DECLARED PROFIT RATE OF 8%, BUT EQUALLY IT IS A FACT THAT TH E ASSESSEE HAS NOT MAINTAINED ANY REGULAR BOOKS OF ACCOUNT. THEREFORE, THE PROFIT DISCLOSED BY THE ASSESSEE IS NOT SUBJECTED TO VERIF ICATION AND AS SUCH, IT WAS NECESSARY TO ESTIMATE THE PROFIT OF THE ASSE SSEE. SINCE NO BASIS HAS BEEN SHOWN EITHER BY THE AO OR BY THE ASSESSEE, THEREFORE, IT WOULD BE REASONABLE AND APPROPRIATE TO DIRECT THE A UTHORITIES BELOW TO ADOPT THE PROFIT RATE OF 9% INSTEAD OF 10% CONFI RMED BY THE LD. CIT(A). THE ORDERS OF THE AUTHORITIES BELOW TO THAT EXTENT ARE MODIFIED AND THE AO IS DIRECTED TO WORK OUT THE PROFIT BY AP PLYING THE PROFIT RATE OF 9% AGAINST TURNOVER AS CONFIRMED BY THE LD. CIT(A). IN THE RESULT, GROUND NO. 1 OF APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED. THE FINDINGS IN THIS ORDER ARE BASED ON THE FACTS OF TH IS CASE AND SHALL NOT BE TREATED AS PRECEDENCE IN OTHER CASES. IN THE RES ULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 6. SINCE THE FACTS OF THE ISSUE ARE IDENTICAL TO TH E CASE DECIDED BY THE I.T.A.T., AGRA BENCH IN ASSESSEES OWN CASE FOR A.YS. 2000-01 TO 2003-04 VIDE ORDER DATED 28.12.2012, WE FOLLOW THE SAID ORDER OF I.T.A.T. I N THE LIGHT OF THAT, THE A.O. IS DIRECTED TO RECALCULATE THE PROFIT BY APPLYING 9% R ATE OF PROFIT AS AGAINST 12% APPLIED BY HIM. 5 ITA NO.489/AGRA/2012 A.Y. 2006-07 7. GROUND NO.3 IS IN RESPECT OF ADDITION OF RS.18,1 88/-. THE ASSESSEE WAS HAVING TWO SELF OCCUPIED PROPERTIES. THE A.O. NOTI CED THAT THE ASSESSEE DID NOT SHOW INCOME FROM HOUSE PROPERTY. THE A.O. CALCULAT ED THE ANNUAL LETTING VALUE IN ACCORDANCE WITH SECTION 23(4) OF THE ACT AND MADE A DDITION OF RS.18,188/-. THE CIT(A) HAS CONFIRMED THE ORDER OF THE A.O. AS UNDER :- (PARAGRAPH NO.8.2, PAGE NO.30) 8.2 AGAINST THE ABOVE DECISION, THE LD. AR IN HIS SUBMISSION DATED 30.01.2012 HAS ARGUED THAT FLAT WAS VACANT AS SUCH THE VACANCY ALLOWANCE SHOULD HAVE BEEN ALLOWED. IN THIS REGARD , I HAVE FOUND AFTER GOING THROUGH THE CASE RECORD THAT THE FLAT W AS VACANT FOR THE WHOLE YEAR AND NO EVIDENCE HAS BEEN PRODUCED BY THE LD. AR THAT ANY EFFORTS WAS MADE BY THE ASSESSEE (APPELLANT) DURING THE YEAR UNDER CONSIDERATION FOR LETTING OUT THIS HOUSE PROPERTY. THEREFORE, NO VACANCY ALLOWANCE CAN BE PROVIDED TO THE ASSESSEE ( APPELLANT) AND HE WILL BE CHARGED TO TAX ON THE NOTIONAL ANNUAL LETTI NG VALUE OF THE HOUSE PROPERTY WHICH HAS BEEN COMPUTED BY THE AO AT RS.18,188/- AFTER FOLLOWING THE DECISION OF THE HONBLE HIGH CO URT IN THE CASE OF RADHA DEVI VS. CIT 125 ITR 134 (SUPRA). THEREFORE, I CONFIRM THE ADDITION MADE BY THE AO ON ACCOUNT OF INCOME FROM H OUSE PROPERTY AT RS.18,188/- AND GROUND NO.4 IS DISMISSED. 8. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ASSESSEE IS ENTITLED TO VACANCY ALLOWANCE IN ACCORDANCE WITH SECTION 23(1)( C) OF THE ACT. 9. AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIV E, WE NOTICE THAT THE CIT(A) HAS RIGHTLY CONFIRMED THE ACTION OF THE A.O. AS THE ASSESSEE HAS FAILED TO PRODUCE ANY EVIDENCE THAT THE HOUSE WAS VACANT. EVEN OTHER WISE ALSO, THE ASSESSEE WAS 6 ITA NO.489/AGRA/2012 A.Y. 2006-07 HAVING SELF OCCUPIED PROPERTIES AND FAILED TO PROVE THAT THE HOUSE WAS LET OUT. SECTION 23(1)(C) OF THE ACT IS APPLICABLE IN RESPEC T OF PROPERTY WHICH IS LET OUT AND REMAINED VACANT. IN THE LIGHT OF THE FACT, WE DO N OT FIND ANY INFIRMITY IN THE ORDER OF CIT(A). ORDER OF CIT(A) IS CONFIRMED. 10. GROUND NOS.6 & 7 ARE IN RESPECT OF CHARGING OF INTEREST UNDER SECTION 234B OF THE ACT WHICH IS CONSEQUENTIAL IN NATURE. THE A .O. IS DIRECTED ACCORDINGLY. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY