Appeal details
Counselvise Citation
[2022] 103 COUNSELVISE.COM (IT) 7650 (ITAT-KOLKATA)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
19 year(s) 4 month(s) 2 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
12-12-2022
Appeal Filed By
Assessee
Order Result
PartlyAllowed
Bench Allotted
SMC
Next Hearing Date
07-12-2022
Assessment Year
misc
Appeal Filed On
09-08-2003
Judgement Text
ITA No.566/KOL/2020 Assessment Year: 2011-12 Sudipta Dutta 1 IN THE INCOME TAX APPELLATE TRIBUNAL, ‘A(SMC)’ BENCH, KOLKATA Before Dr. Manish Borad, Accountant Member & Shri Sonjoy Sarma, Judicial Member I.T.A. No. 566/KOL/2020 Assessment Year: 2011-2012 Sudipta Dutta,.......................................Appellant 5, Dwartik Ganguly Street, Kalighat, Kolkata-700026 [PAN:ADNPD9431G] -Vs.- Assistant Commissioner of Income Tax,...Respondent Circle-29, Kolkata, 2, Gariahat Road (South), 4 th Floor, Kolkata-700068 Appearances by: Shri Debanuj Basu Thakur, Advocate, appeared on behalf of the assessee Shri P.P. Barman, Addl. CIT(Sr. DR), appeared on behalf of the Revenue Date of concluding the hearing : 8 th December, 2022 Date of pronouncing the order: 13 th December, 2022 O R D E R Per Dr. Manish Borad, Accountant Member:- This appeal at the instance of assessee for assessment year 2011-12 is directed against the order of ld. Commissioner of Income Tax (Appeals)-8, Kolkata dated 21.09.2020 passed under section 250 of the Income Tax Act, 1961. ITA No.566/KOL/2020 Assessment Year: 2011-12 Sudipta Dutta 2 2. In this appeal, the assessee has raised the following grounds:- (1) For that the order of the ld. CIT(A) is arbitrary, illegal and bad-in-law. (2) For that the ld. CIT (A) erred in determining the income of the assessee at Rs.39,33,768/-. (3) For that the ld. CIT(A) erred in conf irming the determination of income at Rs.39,33,768/- as against declared loss of Rs.21,39,561/-. Such determination of income without any verif ication of documents is absolutely unjust and improper. (4) For that on the f acts and circumstances of the case, the order of the CIT(A) be modif ied and the assessee be given the relief prayed for. 3. Brief facts of the case are that the assessee is an individual and engaged in the business of trading in oil under the style of proprietorship concern M/s. Bengal Oil Traders. The assessee filed return of income on 28.04.2014 declaring loss of Rs.21,39,561/-. In the case of assessee, a survey was conducted under section 133A of the Act on 15.03.2011. Thereafter notice under section 148 of the Act was issued and served upon the assessee on 08.04.2013. The case was selected for scrutiny assessment followed by serving of valid notice. During the course of assessment proceedings, various details were called for. The assessee submitted details of sales, purchases, unsecured loans, bank account, sundry debtors and creditors. However, ld. Assessing Officer was ITA No.566/KOL/2020 Assessment Year: 2011-12 Sudipta Dutta 3 not satisfied and issued show-cause notice dated 25.02.2015 for estimating net profit @ 5%, to which the assessee vide letter dated 09.03.2015 submitted as under:- “I am very grateful to your kind for giving me so many times for appearing before you for submitting papers and documents as required for assessment proceedings. I am sorry to say but it is f act that I am not able to comply with your requirements. You have proposed to estimate my income from the business @ 5% of total turnover (excluding interest income and other income). Though the tax arrive on the income will cause a hardship to me, I agree to your proposal with humble not to initiate any penalty proceedings under any provisions of the Income Tax Act, 1961. Respected Sir, my present financial condition is very poor, I will not be able to deposit at a time the amount what would be determined af ter adjusting advance tax. So please make the payment schedule a long period so that I can able to honour your assessment order”. The ld. Assessing Officer completed the assessment estimating the net profit @ 5% and assessed income at Rs.39,33,768/-. 4. Aggrieved, the assessee preferred appeal before the ld. CIT(Appeals) but failed to succeed as the ld. ITA No.566/KOL/2020 Assessment Year: 2011-12 Sudipta Dutta 4 CIT(Appeals) was of the view that the assessee has himself accepted the estimation of net profit @ 5%. 5. Being aggrieved, the assessee is now in appeal before the Tribunal. 6. The ld. Counsel for the assessee submitted that for the year under appeal, the assessee suffered huge losses. Complete details of sale, purchase, debtors, creditors and bank details were filed. No specific defect was pointed out by the ld. Assessing Officer in the details filed by the assessee. In the past, net profit rate of assessee was in the range of 1% to 3% and, therefore, prayed that alleged addition may be deleted. 7. On the other hand, ld. D.R. supported the order of both the lower authorities. 8. We have heard the rival submissions and perused the relevant records placed before us. Through this appeal only issue raised by the assessee is against estimation of net profit @ 5% of the turnover. Assessee has declared loss of Rs.21,39,561/-. Turnover of the assessee during the year is Rs.7,57,16,480/- and the ld. Assessing Officer estimated the net profit @ 5%. In the assessment order, the ld. Assessing Officer has referred to the letter dated 09.03.2015, wherein the assessee has ITA No.566/KOL/2020 Assessment Year: 2011-12 Sudipta Dutta 5 accepted the estimation of net profit @ 5% of total turnover excluding interest income and other income and also stating that the tax arrived on such estimated income will cause a hardship and is presently in a poor financial condition and will not be able to deposit the tax in time. Ld. Assessing Officer also observed that the assessee has filed the complete details of sales, purchases, unsecured loans, bank account, sundry debtors and sundry creditors and all other necessary details. Ld. Assessing Officer asked for the books of account but since books of account were lying in the Income-tax Department on account of survey proceedings, the assessee was unable to file the same and for such non-filing of books of account, ld. Assessing Officer show-caused the assessee for estimating the net profit @ 5%. 9. It is worth noting that ld. Assessing Officer has not pointed out any specific defect in the details filed by the assessee, which consisted of relevant information to reasonably arrive at the profit for the year. Books of account were not in the possession of assessee. As per the audited balance-sheet for A.Y. 2009-10 and 2010-11, we notice that the net profit for A.Y. 2009-10 has been declared at 1.16% and for A.Y. 2010-11 at 1.11%. Ld. Assessing Officer did not refer to any comparable cases and past history of profit declared by the assessee. ITA No.566/KOL/2020 Assessment Year: 2011-12 Sudipta Dutta 6 10. However, looking to the fact of the case referring to the financial data of preceding two years appearing in the audited financial statements and the assessee being unable to bring any other details on record; and considering the factual matrix as well as past trend of profit earned by the assessee and the fact that ld. Assessing Officer has not pointed out any specific defect in the details filed by the assessee, we, therefore, in order to bring to an end to this litigation estimate the net profit @ 2.5% as against the net profit rate of 5% confirmed by the ld. CIT(Appeals). Accordingly net profit of the assessee for A.Y. 2011-12 is estimated at Rs.18,92,912/- as against Rs.37,85,824/- estimated by the ld. Assessing Officer. Thus the assessee gets relief of Rs.18,92,912/-. We, therefore, partly sustain the addition and thus the ground raised by the assessee is partly allowed as per the terms indicated above. 11. In the result, the appeal of the assessee is partly allowed. Order is pronounced in the open court on December 13 th , 2022. Sd/- Sd/- (Sonjoy Sarma) (Manish Borad) Judicial Member Accountant Member Kolkata, the 13 th day of December, 2022 ITA No.566/KOL/2020 Assessment Year: 2011-12 Sudipta Dutta 7 Copies to : (1) Sudipta Dutta, 5, Dwartik Ganguly Street, Kalighat, Kolkata-700026 (2) Assistant Commissioner of Income Tax, Circle-29, Kolkata, 2, Gariahat Road (South), 4 th Floor, Kolkata-700068 (3) Commissioner of Income Tax (Appeals)-8, Kolkata; (4) Commissioner of Income Tax- , Kolkata; (5) The Departmental Representative (6) Guard File TRUE COPY By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S.
AI Insights
The case involves Sudipta Dutta, an individual engaged in oil trading, who appealed against the order of the Commissioner of Income Tax (Appeals) which confirmed the Assessing Officer's estimation of his net profit at 5% of turnover for the Assessment Year 2011-12. The assessee had declared a loss in his return, which was contested by the tax authorities following a survey and subsequent scrutiny. The Tribunal's decision to lower the estimated profit rate was influenced by the assessee's past profit margins and the lack of specific defects in the financial details submitted.
