Sanjay Bahl, New Delhi V. ITO, Ward-50(3), New Delhi

ITA 5709/DEL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7714 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 05-09-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: VARUN KOHLI
• Keywords: Business income
• Section: 44AD; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A .NO.-5709/DEL/2018 (ASSESSMENT YEAR-2015-16) SANJAY BAHL, R-520, 2 ND FLOOR, NEW RAJINDER NAGAR, NEW DELHI. PAN NO. AAWPB3860H (APPELLANT) VS ITO WARD 50(3), NEW DELHI. (RESPONDENT) & I.T.A .NO.-5710/DEL/2018 (ASSESSMENT YEAR-2015-16) SANGEETA BAHL, R-520, 2 ND FLOOR, NEW RAJINDER NAGAR, NEW DELHI. PAN NO. AAWPB3861G (APPELLANT) VS ITO WARD 50(3), NEW DELHI. (RESPONDENT) APPELLANT BY SHRI VARUN KOHLI, CA RESPONDENT BY SHRI S.L. ANURAGI, SR. DR ORDER THESE APPEALS FILED BY THE DIFFERENT ASSESSEES ARE D IRECTED AGAINST THE SEPARATE ORDERS DATED 20.07.2018 AND 19.07.2018 OF THE LD. CIT(APPEALS)-17, NEW DELHI RELEVANT TO ASSESSMENT YEA R 2015-16. SINCE THE ISSUE INVOLVED IN THESE APPEALS IS COMMON, EXC EPT THE DIFFERENCE IN FIGURES, HENCE, THE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE, BY DEALING WITH ITA NO. 5709/DEL/2018 (AY 2015-16)- SH. SANJAY BEHL VS. ITO AND THE ITA NOS. 5709 & 5710/D/2018 2 RESULT THEREOF WILL APPLY MUTATIS MUTANDIS TO OTHER ITA NO. 5710/DEL/2018 (AY 2015-16) SMT. SANGEETA BAHL VS. ITO. GROUNDS OF ITA NO. 5709/DEL/2018 - SANJAY BEHL : 1. IN LAW, FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LD. COMMISSIONER OF INCOME TAX (APPEAL) WAS NOT JUSTIFIE D IN CONFIRMING THE ADDITION OF RS. 1,22,983/- BEING THE A MOUNT OF DUTY DRAWBACK ADDED BY THE ASSESSING OFFICER INSTEAD OF 8% AS MANDATED BY THE PROVISIONS OF SECTION 44AD OF THE INCOME TAX ACT, 1961. 2. THAT THE APPELLANT CRAVES LEAVE TO ALTER, AMEND OR AD D TO THE FORGOING GROUNDS BEFORE OR AT THE TIME OF HEARING O F THE APPEAL. GROUNDS OF ITA NO. 5710/DEL/2018 SMT. SANGEETA BE HL: 1. IN LAW, FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LD. COMMISSIONER OF INCOME TAX (APPEAL) WAS NOT JUSTIFIE D IN CONFIRMING THE ADDITION OF RS. 1,47,271/- BEING THE A MOUNT OF DUTY DRAWBACK ADDED BY THE ASSESSING OFFICER INSTEAD OF 8% AS MANDATED BY THE PROVISIONS OF SECTION 44AD OF THE INCOME TAX ACT, 1961. 2. THAT THE APPELLANT CRAVES LEAVE TO ALTER, AMEND OR AD D TO THE FORGOING GROUNDS BEFORE OR AT THE TIME OF HEARING O F THE APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS ENGAGED IN THE BUSINESS OF TRADE AND EXPORT OF HANDICRAFT IN HIS PROPRIETORSHIP CONCERN UNDER THE NAME AND STYLE OF M/S GENEX EXPORTS . ASSESSEE FILED ITS E-RETURN OF INCOME ON 21.3.2016 DECLARING A TOTAL INCOME OF RS. 1,53,200/-. THE ASSESSEE WAS ISSUED SHOW CAUSE NO TICE DATED ITA NOS. 5709 & 5710/D/2018 3 13.12.2017 WHEREIN THE ASSESSEE WAS ASKED TO RECONCIL E THE EXPORT TURNOVER DECLARED AT RS. 21,38,294/- WITH THE EXPORT SU MMARY DATA PROVIDED BY CBEC. COPIES OF THE SALE INVOICES AND SHIPPING BILLS WERE FURNISHED AND THE TURNOVER RECONCILED TO THE ENTIRE SA TISFACTION OF THE AO AND NO DISCREPANCY THEREAFTER WAS POINTED OUT TO THE ASSESSEE. IN THE SAME SHOW CAUSE NOTICE THE AO REFERRED TO THE FIGUR E OF DUTY DRAW BACK SANCTIONED TO THE ASSESSEE AMOUNTING TO RS. 1,22 ,983/- AND PROPOSED TO INVOKE THE PROVISIONS OF SECTION 28(IIIC ) OF THE ACT TO TREAT THE DUTY DRAW BACKS AS PART OF THE TURNOVER AND ASSESSEE THE ASSESSEE BUSINESS INCOME AT 8% OF THIS INCREASED FIGURE OF TUR NOVER. THE AO DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND ACCORDING LY, MADE THE ADDITION OF RS. 1,22,983/- BY ASSESSING THE INCOME A T RS. 2,76,180/- U/S. 143(3) OF THE ACT VIDE ORDER DATED 26.12.2017. AGAINST THE ASSESSMENT ORDER, THE ASSESSEE APPEALED BEFORE THE L D. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 20.7.2018 HAS DISMISS ED THE APPEAL OF THE ASSESSEE. AGGRIEVED WITH THE IMPUGNED ORDER, ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT LD. C IT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 1,22,983/- BEING THE AMOUNT OF DUTY DRAWBACK ADDED BACK BY THE AO INSTEAD OF 8% AS MANDATED BY THE PROVISIONS OF SECTION 44AD OF THE ACT. HE FURTHER SUBMITTED THAT AO WITHOUT POINTING OUT ANY DISCREPANCY OR COMMUNICATING FURTHER FRAMED ITA NOS. 5709 & 5710/D/2018 4 THE ASSESSMENT U/S. 143(3) OF THE ACT ON 26.12.2017 A ND MADE AN ADDITION OF RS. 1,22,983/- TO THE RETURNED INCOME TRE ATING THE DUTY DRAW BACK SANCTIONED AS UNDISCLOSED. 4. ON THE CONTRARY, LD. DR HEAVILY RELIED UPON THE O RDER OF THE LD. CIT(A) AND STATED THAT HE HAS PASSED A WELL REASONED, WHICH DOES NOT NEED ANY INTERFERENCE. 5. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECOR DS, ESPECIALLY THE IMPUGNED ORDER. I FIND THAT THE ASSESSEE HAS DEC LARED HIS BUSINESS INCOME U/S. 44AD OF THE ACT AND THE GROSS RECEIPTS/ TURNOVER HAS BEEN SHOWN AS RS. 21,38,294/- AND PROFIT HAS BEEN DECLARE D AS @8% OF TURNOVER WHICH AMOUNTS TO RS. 1,17,064/- AND AS PER E XPORT SUMMARY DATA PROVIDED BY CBEC, RS. 1,22,983/- HAS BEEN SANCT IONED TO THE ASSESSEE AS DUTY DRAWBACK DURING THE FY 2014-15. THE AO OBSERVED THAT THE AMOUNTS SANCTIONED AS DUTY DRAWBACK HAS NOT BEEN TAKEN INTO ACCOUNT WHILE COMPUTING INCOME OF THE ASSESSEE FOR THE RELEVANT YEAR. I FURTHER FIND THAT THE PROVISIONS OF SECTION 44AD CLEA RLY STIPULATES THAT A SUM EQUAL TO 8% OF TOTAL TURNOVER OR GROSS RECEIPTS OF THE ASSESSEE IN THE PREVIOUS YEAR ON ACCOUNT OF SUCH BUSINESS OF THE SUCH BUSINESS SHALL BE DEEMED TO BE THE PROFITS AND GAINS OF THE SUCH BUSI NESS CHARGEABLE TO TAX UNDER THE HEAD OF PROFITS AND GAINS OF BUSINES S OR PROFESSIONS. I FURTHER NOTE THAT IN THIS CASE THE DUTY DRAWBACK OF RS. 1,22,983/- IS UNDOUBTEDLY PART OF GROSS RECEIPTS OF THE ASSESSEE, T HEREFORE, IT IS TO BE ITA NOS. 5709 & 5710/D/2018 5 INCLUDED WHILE WORKING OUT PROFIT %8% OF THE GROSS REC EIPTS. FURTHER, SECTION 28(III) OF THE ACT CLEARLY BRINGS THE RECEIPT OF DUTY DRAW BACK IN THE NATURE OF BUSINESS RECEIPTS. THEREFORE, THE ADDIT ION MADE BY THE AO WAS RIGHTLY CONFIRMED BY THE LD. CIT(A), WHICH DOES NOT NEED ANY INTERFERENCE ON MY PART, HENCE, I UPHOLD THE ACTION OF THE LD. CIT(A) ON THE ISSUE IN DISPUTE AND REJECT THE GROUND RAISED BY THE ASSESSEE. 6. IN THE RESULT, BOTH THE APPEAL OF THE ASSESSEES ARE DISMISSED. ORDER PRONOUNCED ON 24-04-2019. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE: 24/04/2019 SRBHATNAGAR COPY FORWARDED TO: - 1.APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. DR , ITAT BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES