Rajesh Kumar Prop., Karnal V. ITO, Karnal

ITA 5016/DEL/2011

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2878 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 18-05-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 11-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(3); 145; 144

Judgement Text

PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH - F NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI , ACCOUNTANT MEMBER ITA NO. 5016/DEL/20 11 ASSESSMENT YEAR : 2008-09 SHRI RAJESH KUMAR, PROP. M/S. SHIV SHAKTI TRADING CO. INDRI, KARNAL VS. ITO , WARD 4, KARNAL (APPELLANT) (RESPONDENT) PER BHAVNESH SAINI, JUDICIAL MEMBER ORDER THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST T HE ORDER OF LD. CIT(A) KARNAL DATED 3 RD AUGUST, 2011 FOR ASSTT. YEAR 2008-09. THIS APPEAL WAS EARLIER DISMISSED FOR DEFAULT VIDE ORDER DATED 12 TH JANUARY , 2012. HOWEVER BY ALLOWING MISCELLANEOUS APPLICATION OF ASSESSEE THE APPEAL WAS REFIXED FOR HEARING ON MERITS. 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PA RTIES AND PERUSED THE MATERIAL ON RECORD. ASSESSEE BY : SHRI DHARMENDRA KUMAR, CA DEPARTMENT BY: SHRI F.R. MEENA, SR. DR DATE OF HEARING 18//05/2017 DATE OF PRONOUNCEMENT 06 /06/2017 ITA NO. 5016/DEL/2011 SHRI RAJESH KUMAR VS. ITO PAGE 2 OF 6 3. ON GROUND NO. 1,2,3,4,5 AND 7 ASSESSEE CHALLENGE D THE EX PARTE ASSESSMENT ORDER U/S 144 OF THE I.T. ACT AND APPLIC ATION OF NP RATE OF 8%. 4. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSEE FILED RETURN OF INCOME AT RS. 1,52,210/- ON 30 TH SEPTEMBER. THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT. THE AO IN FOUR PAGES OF THE AS SESSMENT ORDER NOTED VARIOUS DATES OF HEARING FIXED AT ASSESSMENT STAGE CALLING FOR EXPLANATION OF ASSESSEE ON VARIOUS ITEMS AND ALSO D IRECTED TO PRODUCE BOOKS OF ACCOUNTS ALONGWITH SUPPORTING BILLS/VOUCH ERS ETC. HOWEVER NONE HAVE BEEN PRODUCED BEFORE THE AO. THE AO ALSO ISSUED SHOW CAUSE NOTICE AS TO WHY BOOKS OF ACCOUNTS BE NOT REJ ECTED U/S 145 (3) AND EX PART ORDER BE NOT PASSED TAKING NET PROFIT RATE @ 8% OF THE GROSS RECEIPT BUT ASSESSEE CONTINUOUSLY DEFAULTED A ND DID NOT PRODUCE THE BOOKS OF ACCOUNTS AND VOUCHERS AND ALSO DID NOT COMPLY WITH STATUTORY NOTICES. THE AO THEREFORE PASSED EX PARTE ORDER U/S 144 OF THE I.T. ACT AND BY REJECTING BOOKS OF ACCOUNTS OF ASSE SSEE DIRECTED TO APPLY NET PROFIT RATE FOR 8% OF THE GROSS RECEIPTS TOWARD S COMPUTING THE NET PROFIT. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(A) AND IT WAS SUBMITTED THAT APPLICATION OF NP RATE OF 8% IS EXCE SSIVE. LD. CIT(A) NOTED THAT ASSESSEE DID NOT PRODUCE BOOKS OF ACCOU NTS AND SUPPORTING VOUCHERS BEFORE AO AND NO STATUTORY NOTICES HAVE BE EN COMPLIED WITH. THEREFORE, AO CORRECTLY FRAMED EX PARTE ASSESSMENT ORDER U/S 144 OF THE I.T. ACT. LD. CIT(A) AS REGARDS APPLICATION OF NP RATE OF 8% ALSO NOTED ITA NO. 5016/DEL/2011 SHRI RAJESH KUMAR VS. ITO PAGE 3 OF 6 THAT APPEAL OF THE ASSESSEE FOR ASSTT. YEAR 2007-08 HAS BEEN DECIDED BY HIM IN WHICH THE AO ESTIMATED THE INCOME BY APPLYIN G NET PROFIT RATE OF 12% OF THE GROSS RECEIPTS ON THE BASIS OF DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. PRABHAT K UMAR CONTRACTOR. ASSESSEE DURING THE APPELLATE PROCEEDINGS SUBMITTE D THAT RATE APPLIED BY THE AO IS VERY MUCH ON HIGHER SIDE SINCE THE SAM E WAS APPLIED @ 8% IN THE NEXT YEAR I.E THE YEAR UNDER CONSIDERATI ON . LD. CIT(A) ACCEDED TO THE REQUEST OF ASSESSEE AND THE APPLICAT ION OF NP RATE OF 12 % AS APPLIED BY THE AO REDUCED THE SAME TO 8% IN AS SESSMENT YEAR 2007-08. LD. CIT(A) FOLLOWING THE DECISION OF HONB LE PUNJAB & HARYANA HIGH COURT AND THE TRIBUNAL AND FOLLOWING HIS ORDER FOR ASSTT. YEAR 2007- 08 CONFIRMED APPLICATION OF THE NET PROFIT RATE AT 8%. 5. AFTER CONSIDERING RIVAL SUBMISSIONS, WE DO NOT F IND ANY MERIT IN THESE GROUNDS OF APPEAL OF ASSESSEE. LD. COUNSEL FO R ASSESSEE FILED COPY OF THE ASSESSMENT ORDER FOR ASSTT. YEAR 2010-11 IN THE CASE OF ASSESSEE DATED 31 ST DECEMBER 2012 U/S 143(3) AND SUBMITTED THAT THE BO OKS RESULTS HAVE BEEN ACCEPTED BY THE AO. HOWEVER WE FI ND THAT IN ASSESSMENT YEAR 2010-11 ASSESSEE PRODUCED BOOKS OF ACCOUNTS AND RELEVANT BILLS AND VOUCHERS BEFORE THE AO WHICH HAV E BEEN EXAMINED IN WHICH NO ADVERSE MATERIAL WAS FOUND AGAINST THE ASS ESSEE. HOWEVER IN THE PRESENT CASE THE ASSESSEE DELIBERATELY DID NOT COMPLY WITH THE SEVERAL NOTICES AND DID NOT FILE ANY EXPLANATION BE FORE AO AS WELL AS DID NOT REPRODUCE BOOKS OF ACCOUNTS, BILLS AND VOUCHERS FOR EXAMINATION BY ITA NO. 5016/DEL/2011 SHRI RAJESH KUMAR VS. ITO PAGE 4 OF 6 THE AO AS WELL AS BEFORE LD. CIT(A). EVEN NOTHING I S PRODUCED BEFORE US AT THE SECOND APPELLATE STAGE. THEREFORE THE ORDER FOR ASSTT, YEAR 2010- 11 CANNOT BE CONSIDERED FAVOURABLY IN FAVOUR OF TH E ASSESSEE. IN THE ABSENCE OF ASSESSEE AND CONTINUOUS DEFAULT ON THE P ART OF THE ASSESSEE, AUTHORITIES BELOW WAS JUSTIFIED IN PASSING AND CONF IRMING THE EX PARTE ORDER U/S 144 OF THE ACT. THE LD. CIT(A) ALSO NOTED THAT IN ASSTT. YEAR 2007-08, AO APPLIED NP RATE OF 12% AS PER DECISION OF THE P & H HIGH COURT IN THE CASE OF CIT VS. PRABHAT KUMAR CONTRACT OR (SUPRA). THE ASSESSEE HOWEVER PLEADED BEFORE HIM THAT 8% NP RATE WILL BE REASONABLE. LD. CIT(A) ACCEPTED THE REQUEST OF THE ASSESSEE AND APPLIED NP RATE OF 8%. LD.CIT (A) THEREFORE CONSIDERING THE HISTORY OF THE ASSESSEE AND ORDER OF THE TRIBUNAL IN THE CASE OF S UKHWINDER SINGH CORRECTLY APPLIED NP RATE OF 8%. THEREFORE, WE DO N OT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A) AND APPLICATION OF RATE OF 8%. THESE GROUNDS OF APPEALS OF ASSESSEE ARE DISMISSED. 6. ON GROUND NO. 6 ASSESSEE CHALLENGED THE ADDITION ON ACCOUNT OF SUNDRY CREDITORS. THE AO NOTED THAT ASSESSEE HAS RE FLECTED UNSECURED CREDITORS IN A SUM OF RS. 14.95 LACS BUT INSPITE OF SHOW CAUSE NOTICE ASSESSEE FAILED TO FURNISH ANY DOCUMENTARY EVIDENCE IN RESPECT OF THEIR GENUINENESS AND CREDITWORTHINESS OF THE SAME. THER EFORE, SAME WAS TREATED AS INCOME OF ASSESSEE FROM UNDISCLOSED SOUR CES AND ADDITION WAS ACCORDINGLY MADE. LD. CIT(A) CONFIRMED THE ADDI TION IN PRINCIPLE ITA NO. 5016/DEL/2011 SHRI RAJESH KUMAR VS. ITO PAGE 5 OF 6 BECAUSE ASSESSEE FAILED TO ESTABLISH GENUINENESS OF THE TRANSACTION IN THE MATTER. HOWEVER, SOME TELESCOPING GIVEN BENEFIT S WAS GIVEN. 7. AFTER CONSIDERING RIVAL SUBMISSIONS, WE DO NOT F IND ANY MERIT IN THIS GROUND OF APPEAL OF THE ASSESSEE. SINCE SUNDRY CREDITORS WERE APPEARING IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE ,THEREFORE ,ONUS UPON ASSESSEE TO PROVE THE IDENTITY OF THE CREDITOR S, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS IN THE MATTER. HOWEVER, ASSESSEE FAILED TO DO ANYTHING IN THE MATTER AND NO DOCUMENT ARY EVIDENCE WAS FILED EITHER BEFORE AO OR BEFORE LD. CIT(A). THEREF ORE, ONUS UPON ASSESSEE HAS NOT BEEN DISCHARGED. LD. COUNSEL FOR A SSESSEE MERELY CONTENDED THAT THE ASSESSEE PAID TO THE CREDITORS T HE SAME AMOUNT IN NEXT YEAR. IN THIS REGARD ALSO NO EVIDENCES HAVE BE EN FURNISHED. EVEN IF THE SUNDRY CREDITORS ARE PAID IN SUBSEQUENT YEAR BY ITSELF IS NO GROUND TO DELETE THE ADDITION BECAUSE ASSESSEE FAILED TO EXPL AIN THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION IN THE MATTER. THIS GROUND OF APPEAL OF ASSESSEE IS DISMISSED. 8. IN THE RESULT APPEAL OF ASSESSEE IS DISMISSED PRONOUNCED IN THE OPEN COURT. SD/- SD/- (PRASHANT MAHARISHI) ( BHAVNESH SAINI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 06 .06.2017 *VEENA* COPY FORWARDED TO: - ITA NO. 5016/DEL/2011 SHRI RAJESH KUMAR VS. ITO PAGE 6 OF 6 1. APPELLANT 2. RESPONDENT 3. PRINCIPAL CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR