DCIT CIR 23(2), MUMBAI V. GEETA ADITYA ANAM, MUMBAI

ITA 5576/MUM/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62433 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 13-03-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 09-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M RAJAN
• Assessee Lawyers: N O N E
• Section: 142(1)

Judgement Text

ITA NO.5576 OF 2010 GEETA ADITYA ANAM MUMBAI-G BENCH PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL 'G' BENCH, MUMBAI BEFORE SHRI D.K. AGARWAL, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO.5576/MUM/2010 (ASSESSMENT YEAR: 2007-08) DCIT, CIR 23(2) C-10/202, 2 ND FLOOR, PRATYA- SHAKER BHAVAN, BKC VS GEETA ADITYA ANAM C-2 MAYUR PANKAH, N.S. ROAD MULUND (W) MUMBAI 400051 MUMBAI 400080 PAN NO: ACOPA 6034 G (APPELLANT) (RESPONDENT) DEPARTMENT BY: SHRI M. RAJAN ASSESSEE BY: N O N E DATE OF HEARING: 15/05/2012 DATE OF PRONOUNCEMENT: 18 /05/2012 O R D E R PER N.K. BILLAIYA, A.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT (A)-33 MUMBAI DATED 6-4-2010. THE REVENUE I S AGGRIEVED BY THE DIRECTIONS OF THE CIT (A) WHO HAS DIRECTED AO T O RECALCULATE THE PROFITS OF ASSESSEE AT 8% OF THE GROSS RECEIPTS. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT ASSES SEE IS CARRYING ON THE BUSINESS OF TRANSPORTATION AS COMMI SSION AGENT UNDER THE NAME AND STYLE OF ASHAPURA CONTAINER CAR RIERS. RETURN FOR THE YEAR UNDER CONSIDERATION WAS FILED ON 2 ND NOVEMBER, 2007 DECLARING A TOTAL INCOME OF 1657580/-. THE RETURN WAS SELECTED FOR SCRUTINY ASSESSMENT AND ACCORDINGLY THE NOTICES UND ER SECTION 143(2) AND UNDER SECTION 142(1) OF THE ACT WAS ISSU ED AND SERVED UPON ASSESSEE. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AO FOUND THAT OUT OF THE TOTAL RECEIPTS OF 3.01 CRORES, AS HIRE CHARGES, ASSESSEE HAS SHOWN NET PROFIT AT 12.34 LAKHS, WHICH ITA NO.5576 OF 2010 GEETA ADITYA ANAM MUMBAI-G BENCH PAGE 2 OF 4 WORKED OUT AT 4.10%. IT WAS FURTHER OBSERVED BY AO THAT IN THE IMMEDIATELY PRECEDING YEAR ON A TURN OVER OF 58.54 LAKHS, ASSESSEE HAS SHOWN NET PROFIT @ 10%. IT WAS FURTHER OBSERVED BY AO THAT IN THE IMMEDIATELY PRECEDING YEAR THE HIRE CHARGES PAI D BY ASSESSEE WAS TO THE TUNE OF 33.65% AGAINST WHICH IN THE YEAR UNDER CONSIDERATION, THE HIRE CHARGES PAID BY ASSESSEE AR E AT 81%. AO SOUGHT EXPLANATION FROM ASSESSEE FOR SUCH ABNORMAL INCREASE IN THE HIRE CHARGES PAID. AFTER CONSIDERING THE EXPLANATIO N FILED BY ASSESSEE AO MADE AN ADDITION OF 11256203/-. AFTER MAKING OTHER DISALLOWANCES THE ASSESSMENT WAS COMPLETED AT 13968780/-. AGGRIEVED ASSESSEE TOOK THE MATTER BEFORE THE CIT ( A). 3. BEFORE THE CIT (A) ASSESSEE ARGUED THAT AO HAS NOT CONSIDERED THAT FOR THE YEAR UNDER CONSIDERATION AS SESSEE WAS HAVING ONLY 5 TRUCKS WHICH COULD INDEPENDENTLY EARN HIRE CHARGES. ASSESSEE COULD NOT HAVE HOLD THE GROSS RECEIPTS OF MORE THAN .3 CRORES, IF IT HAD NOT OUTSOURCED THE WORK. IT IS ON LY BECAUSE OF THE SERVICES UTILIZED FROM OUTSIDE TRANSPORTERS THAT AS SESSEE HAD TO SHELF HIRE CHARGES WHICH HAS RESULTED INTO HIGHER P AYMENT OF HIRE CHARGES. THE CIT (A) AFTER CONSIDERING THE SUBMISSI ONS AND THE FACTS OF THE CASE HELD THAT: I FIND THAT THE BASE INDICATOR OF APPLICATION OF GP SHOULD BE THE HISTORY OF THE CASE. IN THE IMMEDIATE LY PRECEDING PREVIOUS YEAR, A PROFIT OF 10% HAS BEEN DECLARED BY THE APPELLANT WHEREAS IN THIS YEAR THE APPELLANT HAS DECLARED PROFIT OF 4.10%. IN THE IMMEDIATELY FOLLOWING YEAR I.E. A.Y 2008-09, I FIND THAT THE APPELLANT DECLARED PROFIT OF ALMOST 8%. THE APP ELLANT HAS NOT BEEN ABLE TO STATE AS TO WHY THERE WAS DIP IN THE PROFITS I.E. THE EXTREME VARIANCE STANDS UNEXPLAINE D. EVEN IF A SINGLE CONTRACT RECEIVED FROM GILL & CO. IS REMOVED, I FIND THAT THE ACCOUNTS OF THE APPELLANT DO NOT IN ANY WAY CORRESPOND TO THE ACCOUNTS AS DECLARED I N THE ASSESSMENT YEAR 2006-07 AND 2008-09, WHICH HAVE BEEN STATED TO HAVE BEEN ACCEPTED BY THE DEPARTMENT . KEEPING ALL THE CIRCUMSTANCES IN MIND, IT WOULD BE IN THE FITNESS OF THINGS, IF THE PERCENTAGE AS SHOWN BY TH E ITA NO.5576 OF 2010 GEETA ADITYA ANAM MUMBAI-G BENCH PAGE 3 OF 4 APPELLANT IN ASSESSMENT YEARS 2006-07, 2007-08 AND 2008-09 ARE CONSIDERED FOR ARRIVING AT A PERCENTAGE OF PROFIT TO BE TAXED. IT IS SEEN THAT BY CONSIDERING ALL THESE THREE YEARS, A NET PROFIT OF 8% OF GROSS RECEIPTS S HOULD BE CONSIDERED. AO IS DIRECTED TO CALCULATE THE PROFIT OF THE APPELLANT AT 8% OF THE GROSS RECEIPTS. AO FURTHER I S DIRECTED TO TAKE INTO CONSIDERATION THE PROFIT ALRE ADY DECLARED BY THE APPELLANT WHILE COMPUTING THE INCOM E OF THE APPELLANT FOR THE YEAR UNDER CONSIDERATION. AGGRIEVED BY THIS FINDING, THE REVENUE IS BEFORE US . 4. THE LEARNED DR SUPPORTING THE ORDER OF AO ARGUED TH AT THE CIT (A) HAS NO BASIS FOR DIRECTING AO TO ADOPT A NE T PROFIT RATE OF 8% AND SUBMITTED THAT THE FINDINGS OF AO DESERVES TO B E CONFIRMED. 5. WE HAVE PERUSED THE ORDERS OF THE LOWER AUTHORITIES . WE FIND THAT THE CIT (A), WHILE DECIDING THE APPEAL HAS COM PARED THE PROFIT RATE OF ASSESSEE WITH THE IMMEDIATELY PRECEDING YEA R AND THE SUCCEEDING YEAR AND ONLY AFTER COMPARING THE PROFIT FIGURE, THE CIT (A) HAS ADOPTED THE NET PROFIT RATE OF 8%. AS WE DO NOT FIND ANY ERROR OR INFIRMITY IN THE ORDER OF THE CIT (A), WE CONFIR M THE FINDINGS OF THE CIT (A). 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH MAY, 2012. SD/- SD/- (D.K.AGARWAL) (N.K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 18 TH MAY, 2012. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, G BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI