PRAVEEN KUMAR JAIN, MUMBAI V. ITO 20(2)(3), MUMBAI

ITA 5560/MUM/2013

• Counselvise Citation: 556019914 RSA 2013
• Duration Of Justice: 1 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 26-08-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NEIL PHLIP
• Assessee Lawyers: RAHUL JAIN SON OF
• Keywords: Principle of natural justice; Reasonable cause

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE HONBLE S/SHRI H.L. KARWA, PRESIDENT AND B. R.BASKARAN (AM) . . , . . , ./ I.T.A. NO.5560/MUM/2013 ( / ASSESSMENT YEAR :2007-08) PRAVIN KUMAR JAIN, MERCURY A-201A,4 TH CROSS-ROAD, LOKHANDWALA COMPLEX, ANDHERI (W), MUMBAI-400053 / VS. INCOME TAX OFFICER, WARD 20(2)(3), MUMBAI. ( / APPELLANT) .. ( ! / RESPONDENT) ./ #$ ./ PAN/GIRNO.:AABPJ5428Q % / ASSESSEE BY : SHRI RAHUL JAIN, SON OF ASSESSEE ! & % /RESPONDENT BY : SHRI NEIL PHLIP. ' ( & ) * / DATE OF HEARING : 31.12.2014 +, & ) * /DATE OF PRONOUNCEMENT : 07 .01.2015 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 09.01.2012 PASSED BY LD CIT(A)-31, MUMBAI AND IT RELATES TO TH E ASSESSMENT YEAR 2007-08. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT (A) IN CONFIRMING THE ESTIMATION OF INCOME MADE BY THE ASSESSING OFFICER. 2. THE APPEAL IS BARRED BY LIMITATION BY 477 DAYS. THE ASSESSEE HAS MOVED A PETITION REQUESTING THE BENCH TO CONDONE THE DELA Y. WE HEARD THE PARTIES ON THIS PRELIMINARY ISSUE. IT IS STATED IN THE PETITI ON THAT THE ASSESSEE IS SUFFERING FROM A KIND OF MENTAL DISORDER NAMED SCHIZOPHRENIA, WHICH LEADS TO LOSS OF MEMORY. THE ASSESSEE HAS ALSO ATTACHED A CERTIFICA TE OBTAINED FROM A QUALIFIED DOCTOR. THE ASSESSEES SON WHO APPEARED BEFORE US THAT THE ASSESSEE FORGOT TO PREFER APPEAL AGAINST THE ORDER OF LD CIT(A) DUE TO THE MEDICAL PROBLEM STATED ABOVE. HE SUBMITTED THAT HE TOOK STEP TO FILE THE PRESENT APPEAL, WHEN THE ORDER ITA NO.5560/M/13 2 OF LD CIT(A) CAME TO HIS NOTICE SUBSEQUENTLY. HAVIN G REGARD TO THE SUBMISSIONS MADE IN THE PETITION, WE ARE OF THE VIEW THAT THERE WAS REASONABLE CAUSE FOR FILING THE APPEAL BELATEDLY. ACCORDINGLY, IN THE INTEREST OF NATURAL JUSTICE, WE CONDONE THE DELAY AND ADMIT THE APPEAL FOR HEARING. 3. WE HEARD THE PARTIES AND PERUSED THE RECORD. TH E FACTS RELATING TO THE ISSUE UNDER CONSIDERATION ARE STATED IN BRIEF. IT C AME TO THE NOTICE OF THE ASSESSING OFFICER THAT THE ASSESSEE HAS BEEN PROVID ING BOGUS BILLS AND CHARGING COMMISSION THEREON. THE BANK ACCOUNT OF THE ASSESSE E REVEALED THAT THE AGGREGATE AMOUNT OF DEPOSITS MADE DURING THE YEAR U NDER CONSIDERATION WAS RS.2,07,73,671/-. IN THE RETURN OF INCOME, THE ASS ESSEE HAD DECLARED GROSS PROFIT AT 5.19%. BY ADOPTING THE SAME RATE, THE ASSESSING OFFICER ESTIMATED THE COMMISSION INCOME ON THE ABOVE SAID SUM OF RS.2,07, 73,671/- AT RS.10,78,153/- AND ASSESSED THE SAME. THE LD CIT(A) ALSO CONFIRME D THE SAME. 4. AT THE TIME OF HEARING, THE ASSESSEES SON APPE ARED BEFORE US AND HE SUBMITTED THAT THE COMMISSION INCOME WAS EARNED @ 0 .25% ONLY ON PROVIDING ACCOMMODATION BILLS. HE FURTHER SUBMITTED THAT THE GROSS PROFIT RATE OF 5.19% DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME PE RTAINED TO STEEL BUSINESS ACTUALLY CARRIED ON AND ACCORDINGLY SUBMITTED THAT THE TAX AUTHORITIES ARE NOT JUSTIFIED IN ADOPTING THE SAID RATE FOR ESTIMATING INCOME FROM ACCOMMODATION BILLS. ON THE CONTRARY, THE LD D.R STRONGLY DEFEND ED THE ORDER OF LD CIT(A). 5. WE AGREE WITH THE CONTENTIONS OF THE ASSESSEE S SON THAT THE GROSS PROFIT RATE DECLARED IN THE STEEL BUSINESS CANNOT BE ADOPT ED FOR ESTIMATING THE COMMISSION INCOME FOR PROVIDING ACCOMMODATION BILLS , SINCE THE NATURE OF THE SAID TRANSACTION IS ALTOGETHER DIFFERENT FROM THE S TEEL BUSINESS. HENCE, WE FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE THAT THE C OMMISSION INCOME SHOULD BE ESTIMATED AT A LOWER FIGURE. AT THE SAME TIME, WE ARE UNABLE TO AGREE WITH THE SUBMISSIONS OF THE ASSESSEES SON THAT THE COMMISSI ON INCOME WAS 0.25% ONLY. HENCE, IN ORDER TO PUT THIS ISSUE AT REST, WE DIREC T THE ASSESSING OFFICER TO ESTIMATE THE COMMISSION INCOME @ 3% OF THE AGGREGAT E AMOUNT OF BANK DEPOSITS REFERRED SUPRA. AT THE TIME OF HEARING, T HE ASSESSEES SON ALSO AGREED TO THE SAID RATE PROPOSED BY US. ACCORDINGLY, WE M ODIFY THE ORDER OF LD CIT(A) ITA NO.5560/M/13 3 ON THIS ISSUE AND DIRECT THE ASSESSING OFFICER TO D ETERMINE THE INCOME AS DISCUSSED ABOVE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OP EN COURT ON 7TH JAN,2015 . +, ' - ./ 0 1 7TH JAN 2015 , & 2( 3 SD SD ( . . / H.L. KARWA) ( . . , / B.R. BASKARAN ) / PRESIDENT / ACCOUNTANT MEMBER . ' ( MUMBAI: 7TH JAN, 2015. . . ./ SRL , SR. PS ! ' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. ! / THE RESPONDENT. 3. ' 7) ( ) / THE CIT(A)- CONCERNED 4. ' 7) / CIT CONCERNED 5. 6. 89 2 ): , * : , . ' ( / DR, ITAT, MUMBAI CONCERNED 2 ; < ( / GUARD FILE. = ' / BY ORDER, TRUE COPY > # (ASSTT. REGISTRAR) * : , . ' ( /ITAT, MUMBAI