SMITA BHARGAVA, Jaipur V. ITO, Jaipur

ITA 634/JPR/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5225 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2003-2004
• Appeal Filed On: 02-07-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DR DHK
• Keywords: Sale consideration of property below Jantri Value; Business income
• Section: 50C

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 HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 634/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2003-04 SMT. SMITA BHARGAVA B-85, GANESH MARG, BAPU NAGAR, JAIPUR CUKE VS. THE ITO WARD- 6 (4) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ABFPB 2570 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI RAJEEV SOGANI , CA JKTLO DH VKSJ LS@ REVENUE BY :SHRI R.A. VERMA, ADDL CIT-. DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 02/8/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 10 /08/2016 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A)-2, JAIPUR DATED 21-04-2015 FOR THE ASSESSME NT YEAR 2003-04 RAISING THEREIN FOLLOWING GROUNDS:- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW TH4E LD. CIT(A) HAS ERRED IN CONFIRMING THE ACT ION OF THE AO IN NOT ALLOWING THE SET OFF OF RS. 1,12,414/- OF SHORT TERM CAPITAL LOSS AGAINST THE BUSINESS INCOME. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTI ON OF THE ITA NO. 634/JP/2015 SMT. SMITA BHARAGAVA VS. . ITO, WARD- 6 (4), JAIPUR . 2 AO IN ADDING A SUM OF RS. 23,790/- FROM FOLLOWING P ARTIES TO THE INTEREST INCOME OF THE ASSESSEE S.N. PARTICULARS AMOUNT 1. M/S. VIJAY ELECTRONICS RS. 8,190/- 2. M/S. DEEPAK FINANCE & LEASING CO. RS. 15,600/- 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTI ON OF THE AO IN ESTIMATING THE INCOME FROM NATH MOBILES AT RS . 1,00,000/- AGAINST DECLARED INCOME OF RS. 80,468/- WHICH RESULTED INTO TRADING ADDITION OF RS. 19,532/-. 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTI ON OF THE AO IN ESTIMATING THE INCOME FROM M/S. NATH LENSES A ND HEARING AID CENTER AT RS. 1,00,000/- AGAINST THE DE CLARED INCOME OF RS. 83,592/- WHICH RESULTED INTO TRADING ADDITION OF RS. 16,408/-. 2.1 APROPOS GROUND NO. 1, THE AO OBSERVED THAT DURI NG THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD CLAIMED SHORT TERM C APITAL LOSS OF RS. 1,21,414/- ON ACCOUNT OF SALE OF MOBILE VAN IN THE PROFIT AND LOSS ACCOUNT. THE AO NOTICED THAT AS PER SECTION 50 OF T HE I.T. ACT SHORT TERM CAPITAL LOSS CANNOT BE SET OFF AGAINST BUSINESS INC OME. THE AO THUS ASKED THE ASSESSEE TO SUBMIT THE REPLY IN THIS REGA RD BUT IN SPITE OF PROVIDING VARIOUS OPPORTUNITIES BY THE AO, THE ASSE SSEE FAIL TO SUBMIT THE REPLY. HENCE, THE CLAIM OF LOSS OF RS. 1,21,414/- W AS DISALLOWED AND ADDED IN THE TOTAL INCOME OF THE ASSESSEE BY THE AO . ITA NO. 634/JP/2015 SMT. SMITA BHARAGAVA VS. . ITO, WARD- 6 (4), JAIPUR . 3 2.2 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R BEFORE THE LD. CIT(A) WHO HAS CONFIRMED THE ACTION OF THE AO BY OB SERVING AS UNDER:- 4.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLA NT. THE LOSS INCURRED BY THE APPELLANT ON SALE OF MOBILE IS A SH ORT TERM CAPITAL LOSS U/S 50C OF THE I.T. ACT. THIS SHORT TERM CAPIT AL LOSS IS A LOSS UNDER THE HEAD CAPITAL GAINS AND CANNOT BE SET OF F AGAINST BUSINESS INCOME, NOTWITHSTANDING THE FACT THAT THIS LOSS HAS ARISEN ON A BUSINESS ASSET. THIS IS BECAUSE IN SUCH CASES OF DEPRECIABLE ASSETS, INCOME /LOSS THEREFOM IS CONSIDERED TO BE T AXABLE UNDER THE HEAD CAPITAL GAINS. THEREFORE, IT IS HELD THAT SHOR T TERM CAPITAL LOSS CANNOT BE SET OFF AGAINST BUSINESS INCOME. THIS GRO UND IS DISMISSED. 2.3 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE PRAYED FOR ALLOWING THE SET OFF OF RS. 1,12,414/- OF SHORT TER M CAPITAL LOSS AGAINST THE BUSINESS INCOME. 2.4 THE LD. DR RELIED ON THE ORDERS OF THE LOWER AU THORITIES. 2.5 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. I DO NOT FEEL TO ELABORATE TH E ISSUE AGAIN AS THE LD. CIT(A) HAS RIGHTLY TAKEN INTO CONSIDERATION ALL THE ASPECTS OF THE ISSUE IN QUESTION AND HELD THAT SHORT TERM CAPITAL LOSS CANN OT BE SET OFF AGAINST BUSINESS INCOME. THEREFORE, I CONCUR WITH THE FINDI NGS OF THE LD. CIT(A) ON THIS ISSUE. HENCE, THE GROUND NO. 1 OF THE ASSES SEE IS DISMISSED. ITA NO. 634/JP/2015 SMT. SMITA BHARAGAVA VS. . ITO, WARD- 6 (4), JAIPUR . 4 3.1 APROPOS GROUND NO. 2, THE AO OBSERVED THAT THE ASSESSEE HAD CLAIMED TDS OF RS. 4,453/- DEDUCTED ON INTEREST OF RS. 42,410-/ WHICH WAS RECEIVED BY THE ASSESSEE FROM FOLLOWING PARTIES . 1. M/S. VIJAY ELECTRONICS RS. 8190/- 2. M/S. DEEPAK FINANCE & LEASING CO. RS. 15600/- 3. PRECISE TURNER RS. 18620/- TOTAL RS. 42410/- ON PERUSAL OF THE RECORDS AVAILABLE BEFORE THE AO, HE NOTICED THAT THE ASSESSEE HAD NOT SHOWN INTEREST AMOUNT RECEIVED FRO M M/S. DEEPAK FINANCE & LEASING CO. AND M/S. VIJAY ELECTRONICS IN HER TOTAL INCOME. THE AO MADE ENQUIRY FROM THE ASSESSEE FOR NOT SHOWI NG THE INTEREST AMOUNT RECEIVED FROM THESE TWO PARTIES BUT THE ASSE SSEE FAILED TO SUBMIT ANY EXPLANATION TO THIS EFFECT. HENCE, THE AO ADDED A SUM OF RS. 23,790/- (RS. 15600+8190) TO THE TOTAL INCOME OF THE ASSESSE E. 3.2 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R BEFORE THE LD. CIT(A) WHO HAS CONFIRMED THE ACTION OF THE AO BY OB SERVING AS UNDER:- 5.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLA NT. THE APPELLANT HAS CLAIMED TDS OF RS. 4,453/- ON INTERES T INCOME FROM THE ABOVE TWO CONCERNS OF RS. 23 790/-. YET THE INT EREST INCOME HAS NOT BEEN DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME ON THE GROUND THAT INTEREST INCOME IS ACCOUNTED FOR, ON CA SH BASIS. THIS EXPLANATION OF THE APPELLANT IS NOT ACCEPTABLE. WHE N THE APPELLANT HAS CLAIMED CREDIT FOR TDS, THE CORRESPONDING INCOM E HAS TO BE OFFERED FOR TAXATION. THE ADDITION OF INTEREST INCO ME MADE BY THE ASSESSING OFFICER IS UPHELD. THIS GROUND IS DISMISS ED. ITA NO. 634/JP/2015 SMT. SMITA BHARAGAVA VS. . ITO, WARD- 6 (4), JAIPUR . 5 3.3 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE PRAYED FOR DELETION OF ADDITION CONFIRMED BY THE LD. CIT(A) ON ACCOUNT OF INTEREST INCOME. 3.4 THE LD. DR RELIED ON THE ORDERS OF THE LOWER AU THORITIES. 3.5 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT EMERGES FROM THE RECORDS TH AT THE ASSESSEE HAD CLAIMED TDS OF RS. 4,453/- ON INTEREST INCOME OF RS . 23,790/- FROM THE ABOVE TWO CONCERNS. IT IS ALSO NOTED THAT THE INTER EST INCOME HAD NOT BEEN DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME O N THE GROUND THAT THE INTEREST INCOME IS ACCOUNTED FOR, ON CASH BASIS. IT IS FELT THAT WHEN THE ASSESSEE HAS CLAIMED CREDIT FOR TDS, THE CORRESPOND ING INCOME IS TO BE OFFERED FOR TAXATION. HENCE, CONSIDERING THE ENTIRE TY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, I FIND NO REASON TO INTE RFERE WITH THE ORDER OF THE LD. CIT(A) ON THIS ISSUE WHICH IS SUSTAINED. TH US GROUND NO. 2 OF THE ASSESSEE IS DISMISSED. 4.1 APROPOS GROUND NO. 3 AND 4 OF THE ASSESSEE, IT IS NOTED THAT THE ASSESSEE HAS SHOWN NET PROFIT OF RS. 80,465/- FROM M/S. NATH MOBILE AND RS. 83,592/- FROM M/S. NATH CONTACT LENSE AND EARIN G AID. BOTH ARE PROPRIETARY CONCERNS OF THE ASSESSEE. THE AO SIMPLY ASKED THE ASSESSEE ITA NO. 634/JP/2015 SMT. SMITA BHARAGAVA VS. . ITO, WARD- 6 (4), JAIPUR . 6 TO ESTIMATE THE INCOME AT RS. 1.00 LAC FROM THESE T WO PROPRIETARY CONCERNS TOTALING TO RS. 2.00 LACS AS THE ASSESSEE HAD NOT SUBMITTED THE BOOKS OF ACCOUNT, VOUCHERS OF EXPENSES AND OTHER RE QUIRED DETAILS BEFORE HIM. SINCE THE ASSESSEE HAD NOT SUBMITTED THE BOOKS OF ACCOUNT, THE AO THEREFORE, REJECTED THE BOOKS OF ACCOUNT OF THE ASS ESSEE AND NET PROFIT WAS ESTIMATED AT RS. 2.00 LACS FOR BOTH THE CONCERNS AS AGAINST RS. 1,64,060/- SHOWN BY THE ASSESSEE. THE AO THUS MADE TRADING ADD ITION OF RS. 35,940/- AND ADDED THE SAME IN THE INCOME OF TH E ASSESSEE AS THE ASSESSEE HAD FAILED TO PRODUCE THE BOOKS OF ACCOUNT AND OTHER DETAILS IN SPITE OF PROVIDING SEVERAL OPPORTUNITIES TO THE ASS ESSEE. 4.2 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R BEFORE THE LD. CIT(A) WHO HAS CONFIRMED THE ACTION OF THE AO BY OB SERVING AS UNDER:- 5.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE SUBMISSION OF THE APPELLAN T. IN THIS CASE, NO BOOKS OF ACCOUNT OR VOUCHERS WERE PRODUCED BY THE ASSESSEE DURING ASSESSMENT PROCEEDINGS OR APPEAL PROCEEDINGS. THEREFORE, I FIND NO REASON TO INTERFE RE WITH THE TRADING ADDITIONS MADE BY THE ASSESSING OFFICER. TH E ABOVE GROUNDS ARE DISMISSED. 4.3 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE PRAYED FOR DELETION OF TRADING ADDITION OF RS. 19,432/- AND RS . 16,408/- RESPECTIVELY AS RAISED IN GROUND NO. 3 AND 4 OF THE ASSESSEES G ROUNDS OF APPEAL. ITA NO. 634/JP/2015 SMT. SMITA BHARAGAVA VS. . ITO, WARD- 6 (4), JAIPUR . 7 4.4 THE LD. DR RELIED ON THE ORDERS OF THE LOWER AU THORITIES. 4.5 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOTED THAT THE COMPARATI VE CHART OF TURNOVER AND GROSS PROFIT RATE OF M/S. NATH MOBILES, ONE OF THE PROPRIETORSHIP OF THE ASSESSEE, WAS AT 37.18% FOR THE YEAR UNDER CONSIDER ATION IN COMPARISON TO GROSS PROFIT RATE AT 35.01% OF IMMEDIATELY PRECEDIN G YEAR. SINCE GROSS PROFIT RATE IS HIGHER THAN THE IMMEDIATELY PRECEDIN G YEAR, THEREFORE, IN MY CONSIDERED VIEW THERE WAS NO JUSTIFICATION FOR ESTI MATING GROSS PROFIT IN THE ABSENCE OF ANY SPECIFIC DEFECTS POINTED OUT BY THE AO. AS REGARDS OTHER CONCERN NAMELY M/S. NATH CONTACT LENSES AND H EARING AID CENTRE, THE COMPARATIVE CHART SHOWS THAT THERE WAS DECLINE IN GROSS PROFIT RATE. HOWEVER, THE TURNOVER OF THE ASSESSEE IS MORE THAN DOUBLE IN THIS PROPRIETORSHIP CONCERN FOR THE YEAR UNDER CONSIDERA TION. THEREFORE, THE SMALL DECLINE OF GROSS PROFIT RATE IS EXPLAINED ON ACCOUNT OF INCREASE IN THE TURNOVER. THUS THE GROSS PROFIT IN ABSOLUTE TER MS WAS AT RS. 3,59,065/- IN COMPARISON TO GROSS PROFIT AT RS. 1,60,145/- IN THE IMMEDIATELY PRECEDING YEAR. THEREFORE CONSIDERING THE ENTIRE FA CTS AND CIRCUMSTANCES OF THE CASE, I ACCEPT THE PLEA OF THE ASSESSEE AS T O DECLINE IN GROSS PROFIT RATE OF BOTH THE PROPRIETORSHIP CONCERNS OF THE ASS ESSEE AND ALLOW THE GROUND NO. 3 AND 4 OF THE ASSESSEE. ITA NO. 634/JP/2015 SMT. SMITA BHARAGAVA VS. . ITO, WARD- 6 (4), JAIPUR . 8 5.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 /08/20 16 SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 10 /08/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. SMITA BHARGAVA, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- 6 (4), JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 634/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR