BHAWAR SINGH RATHORE, UDAIPUR V. DCIT, Jaipur

ITA 637/JPR/2015

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 4029 (ITAT-JAIPUR)
• Duration Of Justice: 4 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 15-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KARNI DAN
• Keywords: Rejection of books of accounts; Reasonable cause; Tax effect
• Section: 144

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH B JAIPUR JH FOT; IKY JKO ] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 637/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 SH. BHANWAR SINGH RATHORE, GOGUNDA UDAIPUR (RAJ.) CUKE VS. THE DCIT, CIRCLE-03, JAIPUR NOW ITO WARD 1(3), UDAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABZPR4664H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI SHRAWAN KUMAR GUPTA (ADV.) JKTLO DH VKSJ LS @ REVENUE BY : KARNI DAN (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 08/08/2019 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 19/08/2019 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT(A)-1, UDAIPUR DATED 02/03/2015 WHEREIN THE SOLE GROUND OF APPEAL READS AS UNDER:- 1. THE LD. CIT(A) HAS GROSSLY ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN PARTLY SUSTAINING THE NET PROF IT RATE @ 4.75% WHEREAS THE ASSESSEE HAS SHOWN NP RATE OF 4.05% AND SUSTAINED THE ADDITION OF RS. 2,33,820/- WITHOUT ANY BASIS, H ENCE THE SAME MAY KINDLY BE DELETED IN FULL. ITA 637/JP/2015_ SH. BHANWAR SINGH RATHORE, UDAIPUR VS. THE DCIT, JA IPUR, NOW ITO, UDAIPUR 2 2. AT THE OUTSET, IT IS NOTED THAT THERE IS A DELAY IN FILING THE PRESENT APPEAL BY 29 DAYS. AFTER HEARING BOTH THE PARTIES AND PURSUING THE ASSESSEES AFFIDAVIT ON RECORD, WE FIND THAT THERE IS A REASONABLE CAUSE FOR DELAY IN FILING THE PRESENT APPEAL. HENCE, THE SAME IS CONDONED AND THE APPEAL IS ADMITTED FOR ADJUDICATION. 3. DURING THE COURSE OF HEARING, THE LD. AR SUBMIT TED THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF SECURITIES SERVICES BY THE NAME OF M/S SALASAR BALAJI SECURITY SERVICES AND HA S DISCLOSED GROSS RECEIPT OF RS. 3,34,57,748/- DISCLOSING THE NET PRO FIT RATE OF 4.05%. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE MOVED AN APPLICATION FOR TRANSFER OF THE CASE FROM JAIPUR TO UDAIPUR DUE TO THE REASON THAT THE ASSESSEE AND HIS BUSINESS HAS SHIFT ED TO GOGUNDA UDAIPUR. HOWEVER, THE AO HAS NOT TRANSFERRED THE CA SE AND PASSED THE ASSESSMENT ORDER U/S 144 BY HOLDING THAT THE ASSESS EE HAS NOT PRODUCED THE BOOKS OF ACCOUNTS AND NOT FURNISHED TH E SUPPORTING BILL/VOUCHERS AND APPLIED THE NP RATE OF 8% ON THE DECLARED GROSS RECEIPTS AND MADE TRADING ADDITION OF RS. 13,21,197 /-. ON APPEAL, THE LD. CIT(A) THOUGH HAS REDUCED NP RATE TO 4.75%, THO UGH THE SAME HAS RESULTED IN SUSTENANCE OF ADDITION OF RS. 2,33,820/ -. AGAINST THE SAID FINDINGS, THE ASSESSEE IS NOW IN APPEAL BEFORE US. 4. IT WAS SUBMITTED BY THE LD AR THAT THE ASSESSEE IS MAINTAINING ITS BOOKS OF ACCOUNTS WHICH ARE DULY AUDITED. IT WAS FU RTHER SUBMITTED THAT THE ASSESSING OFFICER HAS MADE TRADING ADDITION WIT HOUT REJECTING THE BOOKS OF ACCOUNTS AND IT IS A SETTLED LEGAL PROPOSI TION THAT IN ABSENCE OF REJECTION OF BOOKS OF ACCOUNTS, TRADING ADDITION CA NNOT BE MADE IN THE HANDS OF THE ASSESSEE. IT WAS FURTHER SUBMITTED THA T NO BASIS HAS BEEN PROVIDED BY THE ASSESSING OFFICER FOR ESTIMATING TH E NP RATE OF 8% AND ITA 637/JP/2015_ SH. BHANWAR SINGH RATHORE, UDAIPUR VS. THE DCIT, JA IPUR, NOW ITO, UDAIPUR 3 EVEN THE LD. CIT(A) HAS NOT SPECIFIED ANY BASIS FOR APPLYING THE NP RATE OF 4.75%. 5. PER CONTRA, THE LD. DR SUBMITTED THAT THE ASSESS MENT HAS BEEN MADE IN THE PRESENT CASE U/S 144 AND THEREFORE, WHE RE THE ASSESSEE HAS NOT PRODUCED THE BOOKS OF ACCOUNTS, THE ASSESSI NG OFFICER WAS LEFT WITH NO OPTION BUT TO COMPLETE THE ASSESSMENT BASIS THE MATERIAL AVAILABLE ON RECORD. IT WAS FURTHER SUBMITTED THAT THE LD. CIT(A) HAS ALREADY REDUCED THE NP RATE OF 8% TO 4.75% AND AGAI NST WHICH THE REVENUE HAS ALSO MOVED AN APPEAL WHICH HAS APPARENT LY BEEN DISMISSED ON ACCOUNT OF LOW TAX EFFECT. IT WAS ACC ORDINGLY SUBMITTED THAT NO FURTHER RELIEF SHOULD BE GRANTED TO THE ASS ESSEE. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AS WE HAVE NOTED ABOVE, THE L D AR HAS CLAIMED THAT THE ASSESSEE HAS DULY MAINTAINED ITS BOOKS OF ACCOUNTS, HOWEVER, THE SAME COULDNT BE PRODUCED BEFORE THE ASSESSING OFFICER DUE TO SHIFT OF ITS OPERATIONS FROM JAIPUR TO UDAIPUR. IT WAS FU RTHER SUBMITTED THAT BOOKS OF ACCOUNTS HAVE NOT BEEN REJECTED AND IN ABS ENCE OF REJECTION OF BOOKS OF ACCOUNTS, NO ADDITION CAN BE MADE. THE CA SE OF THE REVENUE IS THAT WHERE THE BOOKS OF ACCOUNTS WERE NOT PRODUC ED AT FIRST PLACE AND THE ASSESSMENT HAS BEEN COMPLETED U/S 144, THER E IS NO BASIS FOR THE CONTENTION SO ADVANCED BY THE LD AR AND ESTIMAT ION OF NET PROFIT SO SUSTAINED BY THE LD CIT(A) IS JUSTIFIED. GIVEN THA T THE BOOKS OF ACCOUNTS HAVE BEEN CLAIMED TO BE MAINTAINED AND THE SAME CAN BE PRODUCED FOR VERIFICATION AND FURTHER, THE FACT THAT NO BASIS HA S BEEN GIVEN BY THE ASSESSING OFFICER FOR ESTIMATING NET PROFIT @ 8% AN D EVEN 4.75% AS SO DETERMINED BY THE LD CIT(A) HAS BEEN CHALLENGED BY THE ASSESSEE, WE DEEM IT APPROPRIATE TO SET-ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR THE LIMITED PURPOSES OF EXAMINATION AND VERIFICATION OF BOOKS ITA 637/JP/2015_ SH. BHANWAR SINGH RATHORE, UDAIPUR VS. THE DCIT, JA IPUR, NOW ITO, UDAIPUR 4 OF ACCOUNTS RELATING TO SECURITY SERVICES BUSINESS AND DECIDE THE MATTER AFRESH AS PER LAW. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 19/08/2019 SD/- SD/- FOT; IKWY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 19/08/2019 *GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SH. BHANWAR SINGH RATHORE, UDAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE DCIT, CIRCLE-3, JAIPUR, NOW ITO WARD 1(3), UDAIPUR 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. 637/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR