SUNITA KHINCHI, Jaipur V. ITO, Jaipur

ITA 620/JPR/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2163 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 19-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: POONAM RAI DCIT DHK
• Keywords: Additional evidence; Non compliance
• Section: 144

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPAN] YS[KK LNL; ] DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 620/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 SUNITA KHINCHI, P-51, RAJ ANAGAN, NRI COLONY, PRATAP NAGAR, SANGANER, JAIPUR. CUKE VS. INCOME TAX OFFICER, WARD 6(1), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ALQPK 3638 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL (CA). JKTLO DH VKSJ LS@ REVENUE BY : SMT. POONAM RAI, (DCIT). LQUOKBZ DH RKJH[K@ DATE OF HEARING : 20/04/2017 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 20/04/2017 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 27/04/2015 PASSED BY THE LD CIT(A)-2, JAIPUR FOR TH E A.Y. 2009-10. 2. THE ASSESSEE IS AN INDIVIDUAL, ENGAGED IN THE BUS INESS OF PETROLEUM PRODUCTS AND KOTA STONE JOB WORK THROUGH IT CONCERNS S.R. PETROLEUM AND S.R. MARBLES. THE RETURN OF INCOME WAS FILED ON 30/09 /2009 DECLARING TOTAL INCOME OF RS. 1,91,178/-. THE ASSESSMENT WAS MADE U/ S 144 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) AT AN INCOME OF RS. ITA 620/JP/2015_ SUNITA KHINCHI VS. ITO 2 15,18,740/-. THE ASSESSING OFFICER MADE VARIOUS ADDI TIONS AGAINST THE INCOME OF THE ASSESSEE. 3. AGAINST THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO AFTER CONSIDERING T HE SUBMISSIONS HAD ALLOWED THE APPEAL PARTLY. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE THE ITAT BY T AKING FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS GROSSLY ERRED IN PASSING THE ORDER U/ S 144 OF THE INCOME TAX ACT, 1961,HENCE THE ORDER SO PASSED DESERVES TO BE QUASHED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS GROSSLY ERRED IN DISALLOWING THE INTER EST ON HOUSING LOAN CLAIMED UNDER THE HEAD INCOME FROM HOUSE PROPERTY AMOUNTING TO RS. 2,62,552/- ARBITRA RILY WITHOUT CONSIDERING THE GENUINENESS OF THE CLAIM. HENCE, THE DISALLOWANCE OF RS. 2,62,552/- SO MADE DESERVES TO BE DELETED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS GROSSLY ERRED IN APPLYING THE N.P. RA TE OF 0.52% IN M/S S.R. PETROLEUM ARBITRARILY ON ESTIMATI ON BASIS RESULTING INTO ADDITION OF RS. 4,306/- ARBITR ARILY, THUS THE ADDITION SO MADE DESERVES TO BE DELETED. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE ASSESSING OFFICER HAS GROSSLY ERRED IN APPLYING THE NP RATE OF 18.34% IN M/S S.R. MARBLES ARBITRARILY ON ESTIMATION BASIS RESULTING INTO THE TRADING ADDITIO N OF ITA 620/JP/2015_ SUNITA KHINCHI VS. ITO 3 RS. 1,66,438/- ARBITRARILY THUS THE ADDITION SO MAD E DESERVES TO BE DELETED. 5. THAT THE APPELLANT CRAVES THE RIGHT TO ADD, DELET E, AMEND OR ABANDON ANY OF THE GROUNDS OF APPEAL EITHE R BEFORE OR AT THE TIME OF HEARING OF APPEAL. 5. GROUND NO. 1 OF APPEAL WAS NOT PRESSED BY THE LD. AR OF THE ASSESSEE AT THE TIME OF HEARING, THEREFORE, THE SAM E IS HEREBY DISMISSED AS NOT PRESSED. 6. GROUND NO. 5 OF THE APPEAL IS GENERAL IN NATURE, REQUIRES NO ADJUDICATION. HENCE, THE SAME IS DISMISSED. 7. IN GROUND NO. 2, THE ISSUE INVOLVED IS AGAINST S USTAINING THE DISALLOWANCE OF INTEREST ON HOUSING LOAN CLAIMED UND ER THE HEAD INCOME FROM HOUSE PROPERTY AT RS. 2,62,552/-. THE ASSESSEE HAS CLAIMED INTEREST ON HOUSING LOAN OF RS. 2,62,552/- WHILE THE LD. CIT( A) ALLOWED THE DEDUCTION ONLY UP TO RS. 1.50 LACS U/S 24(B) OF THE ACT TREATING THE PROPERTY AS SELF OCCUPIED. THE RELEVANT PARA OF THE LD. CIT(A)S ORDER IS AS UNDER:- 3. I HAVE PERUSED THE FACTS OF THE CASE, THE ASSESSMENT ORDE R, THE SUBMISSIONS OF THE APPELLANT AND THE REMAND REPORT. THE ASSESSING OFFICER HAS ENUMERATED THE NUMEROUS OPPORTUNITIES WHICH WER E GIVEN TO THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING S, TO WHICH THERE WAS NO COMPLIANCE. THE REPLY OF THE APPELLANT THAT THIS NON COMPLIANCE WAS ITA 620/JP/2015_ SUNITA KHINCHI VS. ITO 4 DUE TO THE FAULT OF THE EARLIER AUTHORIZED REPRESEN TATIVE, DOES NOT MAKE THE PASSING OF THE ASSESSMENT ORDER U/S. 144, BAD I N LAW. THEREFORE, IT IS HELD THAT SUFFICIENT OPPORTUNITIES WERE GIVEN TO TH E ASSESSEE AND HENCE THE PASSING OF THE ORDER U/S. 144 IS UPHELD. GROUND NO. 1 IS DISMISSED. 4. THE APPELLANT HAS STATED THAT BY THE TIME SHE RE ALIZED THAT THE EARLIER AUTHORIZED REPRESENTATIVE WAS NOT ATTENDING TO THE ASSESSMENT PROCEEDINGS AND SHE APPOINTED A NEW AUTHORIZED REPR ESENTATIVE, ORDER U/S. 144 HAD ALREADY BEEN PASSED. THE ADDITIONAL EV IDENCES, REQUESTED FOR ADMISSION, ARE COPY OF THE INTEREST AND REPAYMENT O F THE HOUSING LOAN CERTIFICATE, LEDGER ACCOUNTS OF EXPENSES AND COPY O F RENT DEED. THESE EVIDENCES ARE RELEVANT TO THE GROUNDS OF APPEAL. AL SO, IT APPEARS THAT THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PR ODUCING THESE EVIDENCES BEFORE THE ASSESSING OFFICER. THEREFORE, THE ADDITIONAL EVIDENCES ARE ADMITTED UNDER RULE 46A(1)(C). 5. NOW GROUND NO. 2 SHALL BE DEALT WITH. THE ASSESS ING OFFICER HAS VERIFIED, DURING REMAND PROCEEDINGS, THE HOUSING LOAN CERTIFI CATE OF CITI FINANCIAL CONSUMER FINANCE LTD., SUBMITTED BY THE APPELLANT S HOWING THAT INTEREST PAYMENT OF RS. 4,12,552/- HAS BEEN MADE FOR HOUSING LOAN. THE ASSESSING OFFICER HAS ALSO CONDUCTED INQUIRIES, DURING REMAND PROCEEDINGS, WHICH SHOW THAT THE HOUSE PROPERTY IN QUESTION, WAS WHOLL Y SELF OCCUPIED AND NOT PARTIALLY LET OUT. THE APPELLANT HAS NOT BEEN A BLE TO DISPUTE THIS FINDING OF THE ASSESSING OFFICER, BY GIVING NECESSA RY DETAILS OR EVIDENCE. THEREFORE, IT IS HELD THAT THIS HOUSE PROPERTY WAS ENTIRELY SELF OCCUPIED AND NOT PARTIALLY LET OUT. THEREFORE, THE RENTAL IN COME OF RS. 60,000/- SHOWN BY THE ASSESSEE IS TO BE ASSESSED UNDER THE H EAD- INCOME FROM OTHER SOURCES. THE APPELLANT IS ALLOWED A DEDUCTION OF ONLY RS. 1,50,000/- ON ACCOUNT OF INTEREST U/S. 24(B) ON SELF OCCUPIED PROPERTY. THE BALANCE ITA 620/JP/2015_ SUNITA KHINCHI VS. ITO 5 DISALLOWANCE OF INTEREST OF RS 2,62,552/- IS UPHELD . GROUND NO. 2 IS PARTLY ALLOWED. 8. NOW THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. THE LD AR OF THE ASSESSEE HAS REITERATED THE ARGUMENTS AS MADE BEFOR E THE LD. CIT(A). AT THE OUTSET, THE LD DR HAS SUPPORTED THE ORDER OF TH E LOWER AUTHORITIES. 9. I HAVE HEARD BOTH THE SIDES ON THIS ISSUE. THE AS SESSEE CLAIMS THAT THE PROPERTY WAS LET OUT DURING THE RELEVANT PERIOD, HOWEVER, THE INVESTIGATION MADE BY THE ASSESSING OFFICER ESTABLI SHES THAT DURING THE RELEVANT PERIOD, THE PROPERTY WAS NOT LET OUT AND IT WAS SELF OCCUPIED. THE ASSESSEE HAS NOT GIVEN ANY EVIDENCE REGARDING THE D ETAILS OF THE TENANT AND THE PERSON, WHO WAS THE TENANT. DURING THE ASSES SMENT PROCEEDINGS IN ASSESSMENT YEAR 2011-12, ENQUIRIES WERE CONDUCTED TH ROUGH THE WARD INSPECTOR AND HE HAS REPORTED THAT FROM THE ENQUIRY FROM THE NEIGHBOURHOOD I.E. FROM HOUSE NO. P-52, NRI COLONY, RAJ AANGAN, JAGATPURA, IT WAS FOUND THAT THE ASSESSEE AND HER HU SBAND ARE STAYING IN THE HOUSE AND THERE WAS NO TENANT IN THE HOUSE SINCE LAST FIVE YEARS. IN ABSENCE OF ANY POSITIVE EVIDENCE REGARDING THE TENA NCY EXCEPT THE BALD CLAIM OF THE ASSESSEE, WHICH WAS NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE, THE ASSESSEES CLAIM FOR INTEREST ON HOUS ING LOAN IS UNJUSTIFIED. ITA 620/JP/2015_ SUNITA KHINCHI VS. ITO 6 THEREFORE, I SUSTAIN THE ORDER OF THE LD. CIT(A) ON T HIS ISSUE. ACCORDINGLY, THIS GROUND OF THE ASSESSEE IS DISMISSED. 10. GROUND NO. 3 OF THE APPEAL IS AGAINST SUSTAINI NG THE ADDITION ON THE BASIS OF NP RATE ADOPTED @ 0.52% IN M/S S.R. PETROLE UM. AT THE OUTSET OF HEARING, THE LD AR OF THE ASSESSEE HAS SUBMITTED TH AT THIS ISSUE IS COVERED BY THE DECISION OF THE HONBLE ITAT IN ASSESSEES O WN CASE FOR THE ASSESSMENT YEAR 2008-09 IN ITA NO. 237/JP/2014 ORDE R DATED 03/11/2015. ON THE CONTRARY, THE LD. DR HAS VEHEMENTLY SUPPORTE D THE ORDERS OF THE AUTHORITIES BELOW. 11. I HAVE HEARD BOTH THE SIDES ON THIS ISSUE. THE I TAT, JAIPUR BENCH WHILE DECIDING ITA NO. 273/JP/2014 FOR THE ASSESSMEN T YEAR 2008-09 HAS HELD AS UNDER:- I HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PAR TIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. I NOT ED THAT THE REJECTION OF BOOKS OF ACCOUNT HAS NOT BEEN DISPUTED BY THE ASSESSEE. THE ONLY COURSE, THEREFORE, REMAINS WITH T HE ASSESSING OFFICER IS THE ESTIMATION OF THE PROFIT. IN THIS CASE, I NOTED THAT THE LD CIT(A) APPLIED THE N.P. RATE @ .52 % WHILE THE ASSESSEE HAS DECLARED .32% IN M/S S.R. PETROLEU M. I FIND SUBSTANCE IN THE SUBMISSION OF THE LD AR THAT SINCE THE SALES HAS INCREASED DURING THE YEAR, THEREFORE WITH INCREA SE OF SALE, THE NET PROFIT IS GOING TO FALL. BUT IN ABSENCE OF ANY ITA 620/JP/2015_ SUNITA KHINCHI VS. ITO 7 COMPARATIVE INSTANCE ON BEHALF OF THE ASSESSEE I DI RECT THE ASSESSING OFFICER TO ESTIMATE THE INCOME OF M/S S.R . PETROLEUM BY APPLYING THE N.P. RATE OF .42%. THIS, I N MY OPINION, WILL MEET THE ENDS OF JUSTICE. THIS GROUND O F APPEAL IS PARTLY ALLOWED. RESPECTFULLY FOLLOWING THE ORDER OF THE COORDINATE B ENCH ON THE SAME ISSUE, I DIRECT THE ASSESSING OFFICER TO ESTIMATE THE INCO ME BY APPLYING THE NP RATE @ .42% IN THE CASE OF S.R. PETROLEUM. ACCORDING LY, THIS GROUND OF APPEAL IS PARTLY ALLOWED. 12. IN THE GROUND NO. 4 OF THE APPEAL, THE ISSUE IN VOLVED IS AGAINST SUSTAIN THE ADDITION BY APPLYING NP RATE @ 18.34% IN THE CASE OF S.R. MARBLES. AT THE OUTSET OF HEARING, THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THIS ISSUE IS COVERED BY THE DECISION OF THE H ONBLE ITAT IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2008-09 IN ITA NO. 237/JP/2014 ORDER DATED 03/11/2015. ON THE CONTRARY, THE LD. DR HAS V EHEMENTLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 13. I HAVE HEARD BOTH THE SIDES ON THIS ISSUE. THE I TAT, JAIPUR BENCH WHILE DECIDING ITA NO. 273/JP/2014 FOR THE ASSESSMEN T YEAR 2008-09 HAS HELD AS UNDER:- AFTER HEARING THE RIVAL SUBMISSIONS OF BOTH THE PA RTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD, I NOT ED THAT THE ITA 620/JP/2015_ SUNITA KHINCHI VS. ITO 8 ASSESSEE DID NOT DISPUTE THE REJECTION OF THE BOOKS OF ACCOUNT, THEREFORE, THE ONLY QUESTION REMAINS ESTIMATION OF THE NET PROFIT. THE ASSESSING OFFICER APPLIED NET PROFIT RAT E @ 18.34% ON THE BASIS OF THE RESULTS FOR THE PRECEDING ASSES SMENT YEAR. THIS IS ALSO A FACT DURING THE IMPUGNED ASSESSMENT Y EAR THE TURNOVER OF THE ASSESSEE HAS INCREASED BY 2.5 TIMES AND DUE TO THE INCREASE IN THE TURNOVER, THE NET PROFIT IS BOUND TO FALL AS THE ASSESSEE HAS TO MAKE EXTRA SELL AT A LESSER PROFIT. I, THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY TO BOTH THE PARTIES DIRECT THE ASSESSING OFFICER TO ESTIMATE TH E N.P. RATE @ 16.52%. THIS, IN MY OPINION, WILL MEET THE ENDS OF JU STICE. ACCORDINGLY, THIS GROUND OF APPEAL IS PARTLY ALLOWED . RESPECTFULLY FOLLOWING THE ORDER OF THE COORDINATE B ENCH ON THE SAME ISSUE, I DIRECT THE ASSESSING OFFICER TO ESTIMATE THE INCO ME BY APPLYING THE NP RATE @ 16.52% IN THE CASE OF S.R. MARBLES. ACCORDING LY, THIS GROUND OF APPEAL IS PARTLY ALLOWED. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20/04/2017. SD/- HKKXPAN (BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 20 TH APRIL, 2017 *RANJAN ITA 620/JP/2015_ SUNITA KHINCHI VS. ITO 9 VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SMT. SUNITA KHINCHI, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD 6(1), JAIPUR.. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDR @ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 620/JP/2015) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR