Income Tax Officer, V. Shri Sanjay Kr. Agarwal,

ITA 66/RAN/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0363 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 06-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEEPAK ROUSHAN SR S C
• Keywords: Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI CIRCUIT BENCH, RANCHI BEFORE SHRI N.S. SAINI, HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 66/RAN/2014 (ASST. YEAR : 2006-07) ITO, WARD-3(1), RANCHI. VS. SHRI SANJAY KUMAR AGARWAL, PROP. WHILE N WHILE ROAD LINES, JALAN ROAD, UPPER BAZAR, RANCHI. PAN NO. ABOPA 7616 H (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE. DEPARTMENT BY : SHRI DEEPAK ROUSHAN SR.SC DATE OF HEARING : 28/10/2015. DATE OF PRONOUNCEMENT : 28/10/2015. O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), RANCHI, DATED 18/11/2013. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT TH E COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN RESTRICTING THE ADDIT ION ON ACCOUNT OF GROSS PROFIT TO RS. 1,41,456/- IN PLACE OF RS. 21,6 4,367/- MADE BY THE ASSESSING OFFICER. 3 . WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE O RDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. 2 ITA NO. 66/RAN/2014 4. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSIN G OFFICER OBSERVED THAT THE ASSESSEE HAD SHOWN GROSS PROFIT @ 1.62% AN D NET PROFIT @ 0.46% OF THE GROSS RECEIPTS ALTHOUGH THE ASSESSEE ENGAGED IN THE SIMILAR NATURE OF BUSINESS SHOULD SHOW GROSS PROFIT FROM 4.57% TO 7.83% AND NET PROFIT @ 2.50% TO 2.60% APPROXIMATELY . THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE WAS DOING BUSINE SS OF TRANSPORTATION AT JODHPUR AND HAS SHOWN GROSS RECEIPT FROM TRUCK H IRE CHARGES OF RS.8,29,11,795/- AND GROSS PROFIT HAS BEEN SHOWN AT RS. 13,50,956/- WHICH COMES TO 1.629% OF THE GROSS RECEIPTS. DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER REQUI RED THE ASSESSEE TO FILE EVIDENCE IN SUPPORT OF TRANSPORTATION CHARGES PAID TO THE VEHICLE OWNERS, BUT THE ASSESSEE FAILED TO PRODUCE THE NECE SSARY DETAILS. ACCORDINGLY, THE ASSESSING OFFICER ESTIMATED THE GR OSS PROFIT OF THE ASSESSEE @ 2.94% OF THE GROSS RECEIPTS AT RS. 24,38 ,114/-. 5. ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) OB SERVED THAT THE ASSESSING OFFICER ESTIMATED THE PROFIT EARNED B Y THE ASSESSEE TO BE AT 2.94% OF THE TOTAL TURNOVER DECLARED. THE COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT THE ASSESSING OFFICER W AS RIGHT IN CONCLUDING THAT THE TRUE PROFITS EARNED BY THE ASSE SSEE COULD NOT BE VERIFIED WITHOUT PROPER SUPPORTING EVIDENCE AND THE REFORE, HE WAS JUSTIFIED IN ESTIMATING THE TAXABLE PROFITS OF THE ASSESSEE OF THE YEAR. HOWEVER, THE COMMISSIONER OF INCOME TAX (APPEALS) O BSERVED THAT THE ESTIMATE MADE WAS SLIGHTLY ON THE HIGHER SIDE KEEPI NG IN MIND THE PAST RECORD OF THE ASSESSEE. THEREFORE, HE HELD THAT IT WOULD BE REASONABLE TO ADOPT GROSS PROFIT RATE OF 1.8% TO THE GROSS RECEIPTS OF RS.8,29,11,795/- DECLARED BY THE ASSESSEE WHICH COM ES TO RS.14,92,412/-. THE ASSESSEE HAS ALREADY DECLARED GROSS PROFIT OF RS.13,50,956/- IN HIS BOOKS OF ACCOUNTS AND ACCORDI NGLY, HE DIRECTED THE ASSESSING OFFICER TO RESTRICT THE ADDITION TO R S. RS. 1,41,456/- AND PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 3 ITA NO. 66/RAN/2014 6 . DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED AND SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 7 . ON THE OTHER HAND, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUPPORTED THE ORDER OF THE COMMISSIONER OF INCOME T AX (APPEALS) AND SUBMITTED THAT THE ASSESSING OFFICER WHILE ESTIMATI NG THE INCOME OF THE ASSESSEE FROM TRANSPORTATION CHARGES HAS NOT GIVEN THE DETAILS OF THE OTHER ASSESSEES, WHOSE RESULTS WERE COMPARED BY HIM WITH THE RESULT OF THE ASSESSEE FOR MAKING THE ADDITION. HE HAS NOT C ONFRONTED THE ASSESSEE THAT THE SAID DETAILS BEFORE USING THE SAM E TO MAKE THE ADDITION OF THE INCOME OF THE ASSESSEE. IT WAS HIS ARGUMENT THAT ON THE OTHER HAND, COMMISSIONER OF INCOME TAX (APPEALS) HA S ESTIMATED THE INCOME OF THE ASSESSEE AT 1.8% IN PLACE OF 2.94% MADE BY THE ASSESSING OFFICER ON THE BASIS OF THE PAST RESULTS OF THE ASSESSEE ACCEPTED BY THE DEPARTMENT. HENCE, HE PRAYED THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) BE CONFIRMED A ND THE APPEAL OF THE REVENUE SHOULD BE DISMISSED. 8 . WE FIND THAT THE ASSESSING OFFICER WHILE ESTIMATI NG THE INCOME OF THE ASSESSEE AT 2.94% HAS STATED THAT ASSESSEE IN T HE SIMILAR NATURE OF BUSINESS SHOULD SHOW GROSS RECEIPTS FROM 4.57% TO 7 .83% AND NET PROFIT @ 2.50% TO 2.60% APPROXIMATELY, BUT HE HAS N OT MENTIONED THE DETAILS OF SUCH ASSESSEES. THUS, THE BASIS OF THE ASSESSING OFFICER FOR ESTIMATING THE INCOME OF THE ASSESSEE FROM TRANSPOR TATION CHARGES CANNOT BE ACCEPTED IN LAW. ON THE OTHER HAND, WE FIND THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ON THE BASIS O F THE PAST ACCEPTED RESULTS OF THE ASSESSEE BY THE DEPARTMENT HAS ESTIMATED THE GROSS PROFIT OF THE ASSESSEE AT 1.80% WHICH IS APPR OPRIATE AND ACCEPTABLE IN LAW. WE, THEREFORE, DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF THE COMMISSIONER OF INC OME TAX (APPEALS) WHICH IS CONFIRMED AND THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 4 ITA NO. 66/RAN/2014 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE H EARING ON WEDNESDAY, THE 28 TH DAY OF OCTOBER, 2015 AT RANCHI. SD/- SD/- (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 28 TH OCTOBER, 2015. VR/- COPY TO: 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT 4. THE CIT(A) 5. THE D.R. 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., RANCHI 5 ITA NO. 66/RAN/2014 DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 28/10/2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 29/10/2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 29/10/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 29/10/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 29/10/2015 SR.PS 6. DATE OF PRONOUNCEMENT 28/10/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 29/10/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER