Shri Pal Yadav, Gurgaon V. ITO, Ward- 4(2), Gurgaon

ITA 5778/DEL/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2879 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 07-09-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Assessee Lawyers: SUSHIL KUMAR TANDON

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES SMC: DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA.NO.5778/DEL./2018 ASSESSMENT YEAR 2010-2011 SHRI PAL YADAV, CS-66, MALIBU TOWNE, SOHNA ROAD, SECTOR-47, GURGAON. PAN AFZPP8771M VS., THE INCOME TAX OFFICER, WARD-4(2), GURGAON. HARYANA. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI SUSHIL KUMAR TANDON, FCA FOR REVENUE : SHRI S.L. ANURAGI, SR. D.R. DATE OF HEARING : 22.08.2019 DATE OF PRONOUNCEMENT : 02.09.2019 ORDER THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED A GAINST THE ORDER OF THE LD. CIT(A)-1, GURGAON, DATED 29 TH JUNE 2018, FOR THE ASSESSMENT YEAR 2010-11 2. BRIEFLY THE FACTS OF THE CASE ARE THAT ON THE B ASIS OF THE INFORMATION AVAILABLE WITH THE DEPARTMENT TH AT ASSESSEE HAS RECEIVED CONTRACTUAL PAYMENTS AMOUNTIN G TO RS.1,00,02,953/- DURING THE ASSESSMENT YEAR UNDER A PPEAL AND ON PERUSAL OF THE ITD DATABASE, IT WAS FOUND TH AT 2 ITA.NO.5778/DEL./2018 SHRI PAL YADAV, GURGAON. ASSESSEE HAS NOT FILED THE RETURN OF INCOME FOR ASS ESSMENT YEAR UNDER APPEAL. NOTICE WAS ISSUED TO ASSESSEE, B UT, NO REPLY WAS FILED IN RESPONSE TO THE NMS NOTICE. THE ASSESSING OFFICER, THEREFORE, REOPENED THE ASSESSMENT ON THE GROUND THAT THE INCOME FROM CONTRACTUAL PAYMENTS CHARGEAB LE TO TAX HAS ESCAPED ASSESSMENT. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE IS ENGAGED IN THE BUSIN ESS OF RUNNING STAGE CARRIAGES AS A PROPRIETOR UNDER THE N AME AND STYLE OF SAGAR TOUR AND TRAVEL. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE HAS SUBMITTED THAT HE HAS NOT RECEIVED ANY AMOUNT FROM M/S. RUPTECH EDUCA TION INDIA AND M/S. SRF FOUNDATION. THE ASSESSEE HAS SHO WN TOTAL RECEIPTS OF RS.58,43,303/-. THE ASSESSEE WAS ASKED TO FURNISH LEDGER OF ALL THE EXPENSES DEBITED UNDER PR OFIT AND LOSS ACCOUNT AND TO EXPLAIN AS TO WHY THE PENALTY S HOULD NOT BE LEVIED FOR NON- AUDIT AS REQUIRED UNDER SECT ION 44AB OF THE INCOME TAX ACT, 1961. THE ASSESSEE WAS ASKED TO FURNISH COPIES OF ALL THE LEDGER OF EXPENSES AND BILLS/VOUCHERS. IT WAS ALSO CLARIFIED THAT IN CASE OF NON- FURNISHING OF BOOKS OF ACCOUNT WITH BILLS / VOUCHER S, 3 ITA.NO.5778/DEL./2018 SHRI PAL YADAV, GURGAON. ASSESSMENT WILL BE FRAMED AT 12% OF THE TOTAL RECEI PTS DECLARED BY THE ASSESSEE. IN THE ABSENCE OF PRODUCT ION OF THE BOOKS OF ACCOUNT, BILLS/VOUCHERS, THE ASSESSING OFFICER ASSESSED THE INCOME BY APPLYING 12% OF RS.58,43,303 /- AND COMPUTED INCOME OF RS.7,01,196/-. THE ASSESSING OFFICER ALSO INITIATED THE PENALTY PROCEEDINGS FOR NON-AUDIT OF THE BOOKS OF ACCOUNT OF ASSESSEE. 3. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LD. CIT(A). THE WRITTEN SUBMISSIONS OF THE ASSESSEE ARE REPRODUCED IN THE APPELLATE ORDER IN WHICH THE ASSE SSEE EXPLAINED THAT THE ASSESSING OFFICER HAS VERY HASTI LY PASSED THE ASSESSMENT ORDER WITHOUT AFFORDING PROPER OPPOR TUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE HAS BR OUGHT WITH HIM ALL THE LEDGER ACCOUNTS OF EXPENSES, BILLS / VOUCHERS, BUT, AT THAT TIME ASSESSING OFFICER WAS N OT PRESENT IN THE OFFICE. IT WAS SUBMITTED THAT APPLICATION OF 12% IS VERY HIGH. LD. CIT(A), HOWEVER, NOTED THAT ASSESSEE FAILED TO PRODUCE THE BOOKS OF ACCOUNT, BILLS AND VOUCHERS BE FORE THE ASSESSING OFFICER AND THAT CONTENTION OF ASSESSEE T HAT HE HAD GONE TO THE ASSESSING OFFICERS OFFICE WITH BOO KS OF 4 ITA.NO.5778/DEL./2018 SHRI PAL YADAV, GURGAON. ACCOUNT AND BILLS/VOUCHERS, BUT, THE ASSESSING OFFI CER WAS NOT PRESENT IN THE OFFICE IS FACTUALLY INCORRECT BE CAUSE THE CASE WAS DISCUSSED WITH THE ASSESSING OFFICER ON TH AT DATE. THE LD. CIT(A) IN THE ABSENCE OF PRODUCTION OF THE BOOKS OF ACCOUNT, BILLS AND VOUCHERS, CONFIRMED THE ADDITION AND DISMISSED THE APPEAL OF ASSESSEE. 4. LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. HE H AS REFERRED TO PB-71 WHICH IS ORDER SHEET OF ASSESSING OFFICER AND SUBMITTED THAT ASSESSING OFFICER HAS NOT GIVEN SUFFICIENT TIME TO PRODUCE THE BOOKS OF ACCOUNT AND OTHER DETA ILS. HE HAS SUBMITTED THAT ASSESSEE PRODUCED ALL THE BILLS AND VOUCHERS BEFORE ASSESSING OFFICER WHICH HAVE NOT BE EN EXAMINED. THE ASSESSEE IN THE REPLIES BEFORE ASSESS ING OFFICER, HAS FURNISHED COPIES OF THE BILLS OF EXPEN SES ETC., HE HAS SUBMITTED THAT LD. CIT(A) NEVER CALLED FOR THE BOOKS OF ACCOUNT, THEREFORE, SAME WERE NOT PRODUCED BEFORE H IM. HE HAS SUBMITTED THAT ADDITION IS EXCESSIVE IN NATURE. 5 ITA.NO.5778/DEL./2018 SHRI PAL YADAV, GURGAON. 5. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDERS OF THE AUTHOR ITIES BELOW. 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE L D. CIT(A) HAS SPECIFICALLY NOTED IN HIS FINDINGS THAT ASSESSEE HAS FAILED TO PRODUCE BOOKS OF ACCOUNT, BILLS AND V OUCHERS BEFORE ASSESSING OFFICER. LEARNED COUNSEL FOR THE A SSESSEE REFERRED TO THE ORDER SHEET OF THE ASSESSING OFFICE R WHICH ALSO SUPPORTS THE FINDINGS OF THE AUTHORITIES BELOW . THE ASSESSING OFFICER IN THE ORDER SHEET HAS SPECIFICAL LY NOTED THAT IN CASE BOOKS OF ACCOUNT WILL NOT BE PRODUCED, INCOME WILL BE ASSESSED BY APPLYING 12% AGAINST RECEIPTS D ECLARED. LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO THE RE PLIES FILED BEFORE AUTHORITIES BELOW, BUT, IT NO WHERE PROVES T HAT ASSESSEE PRODUCED BOOKS OF ACCOUNT BEFORE LD. A.O. OR CIT(A). SINCE IT IS SPECIFICALLY MENTIONED IN THE O RDER SHEET THAT INCASE ASSESSEE WOULD NOT PRODUCE BOOKS OF ACC OUNT, PROFIT RATE OF 12% WOULD BE APPLIED, EVEN IF CONTEN TION OF ASSESSEE MAY BE ACCEPTED THAT NO PROPER OPPORTUNITY HAS BEEN GIVEN TO THE ASSESSEE TO PRODUCE BOOKS OF ACCO UNT 6 ITA.NO.5778/DEL./2018 SHRI PAL YADAV, GURGAON. BEFORE ASSESSING OFFICER, THE ASSESSEE COULD HAVE P RODUCE THE SAME BEFORE THE LD. CIT(A) WHO HAS CO-TERMINUS POWERS TO THAT OF THE ASSESSING OFFICER. HOWEVER, THE LEAR NED COUNSEL FOR THE ASSESSEE COULD NOT SATISFY IF BOOKS OF ACCOUNT WERE PRODUCED BEFORE THE LD. CIT(A). HE HAS MERELY CONTENDED THAT LD. CIT(A) NEVER ASKED FOR PRODUCTIO N OF THE BOOKS OF ACCOUNT WHICH WOULD NOT ABSOLVE THE ASSESS EE FROM PRODUCING BOOKS OF ACCOUNT BEFORE THE LD. CIT(A). F URTHER, DURING THE COURSE OF ARGUMENTS, LEARNED COUNSEL FOR THE ASSESSEE DID NOT PRODUCE BOOKS OF ACCOUNT TO THE SATISFACTION OF THE TRIBUNAL. IT, THEREFORE, STANDS PROVED THAT ASSESSEE FAILED TO PRODUCE BOOKS OF ACCOUNT BEFORE ANY OF THE AUTHORITIES BELOW AND WHATEVER CLAIM WAS MADE, HAS NOT BEEN SUBSTANTIATED THROUGH ANY EVIDENCE OR MATERIAL ON RECORD. THEREFORE, AUTHORITIES BELOW WERE JUSTIFIED IN ESTIMATING THE INCOME OF ASSESSEE BY APPLYING HIGHE R PROFIT RATE. HOWEVER, CONSIDERING THE SMALLNESS OF THE TOT AL TURNOVER OF THE ASSESSEE AND NATURE OF BUSINESS OF ASSESSEE, IT WOULD BE REASONABLE AND PROPER IF THE INCOME BE ASSESSED BY APPLYING PROFIT RATE OF 8% AS AGAINST 12% APPLIE D BY THE 7 ITA.NO.5778/DEL./2018 SHRI PAL YADAV, GURGAON. AUTHORITIES BELOW. IN VIEW OF THE ABOVE DISCUSSION, I CONFIRM THE FINDING OF FACT RECORDED BY THE AUTHORITIES BEL OW TO ESTIMATE INCOME. HOWEVER, I DIRECT THE ASSESSING OF FICER TO MODIFY THE APPLICATION OF PROFIT RATE BY APPLYING P ROFIT RATE OF 8% AGAINST TOTAL RECEIPTS OF RS.58,43,303/- AND COM PUTE INCOME OF ASSESSEE ACCORDINGLY INSTEAD OF 12%. 7. IN THE RESULT, APPEAL OF THE ASSESSEE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DELHI, DATED 2 ND SEPTEMBER, 2019 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT SMC BENCH 6. GUARD FILE //BY ORDER// ASST. REGISTRAR : ITAT : DELHI BENCHES : DELHI. 8 ITA.NO.5778/DEL./2018 SHRI PAL YADAV, GURGAON. DATE OF DICTATION 22.08.2019 DATE ON WHICH THE TYPED DRAFT ORDER IS PLACED BEFOR E THE DICTATION MEMBER 30.08.2019 DATE ON WHICH THE APPROVAL DRAFT COMES TO THE SR. P S 02.09.2019 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATION MEMBER FOR PRONOUNCEMENT 02.09.2019 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S. 02.09.2019 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 02.09.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 02. 09.2019 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER.