Shree Umiya Enterprise, Gandhinagar V. The Addl. CIT, Gandhinagar Range, Gandhinagar

ITA 718/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6295 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 22-03-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 10-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NO: 718/AHD/2014 (ASSESSMENT YEAR: 2010-11) SHRI UMIYA ENTERPRISE PLOT NO. 169, OPP. PETROL PUMP, SECTOR-21, GANDHINAGAR V/S ADDL.CIT, GANDHINAGAR RANGE, GANDHINAGAR (APPELLANT) (RESPONDENT) PAN: AABFU0059J APPELLANT BY : SHRI SAKAR SHARMA, AR RESPONDENT BY : SMT. SONIA KUMAR, SR. D.R. ( )/ ORDER DATE OF HEARING : 22 -03-201 7 DATE OF PRONOUNCEMENT : 03 -04-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE LD. CIT(A), GANDHINAGAR DATED 09.12.2013 PERTAINING TO A.Y. 201 0-11. ITA NO. 718/ AHD/2014 . A.Y. 2010-1 1 2 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE ASSES SEE IS THAT THE LD. CIT(A) ERRED IN ESTIMATING THE INCOME OF THE ASSESS EE AT RS. 16,36,665/- IGNORING THE FACT THAT THE A.O. HAS NOT BROUGHT ANY CASE IN REJECTING THE BOOKS OF ACCOUNTS MAINTAINED IN THE REGULAR COURSE OF BUSINESS. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE A SSESSEE IS IN THE BUSINESS OF TRADING OF STEEL, CEMENT & HARDWARE. THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 1,57,924/- WAS FILED ON 13.09.2010. T HE RETURN WAS SELECTED FOR SCRUTINY ASSESSMENT AND ACCORDINGLY STATUTORY N OTICES WERE ISSUED AND SERVED UPON THE ASSESSEE. 4. THE ASSESSEE DID NOT COMPLY WITH THE NOTICE SERVED U/S. 143(2) OF THE ACT. SUBSEQUENTLY ON FRESH NOTICE, THE AUTHORIZED REPRES ENTATIVE OF THE ASSESSEE ATTENDED AND FURNISHED THE DETAILS/EXPLANA TIONS IN PART. FULL DETAILS WERE NEVER FURNISHED AND THE ASSESSEE ALSO NEVER PRODUCED THE VARIOUS BILLS/VOUCHERS CALLED UPON BY THE A.O. FROM TIME TO TIME. 5. THE A.O. WAS LEFT WITH NO OTHER OPTION BUT TO ESTIM ATE THE PROFIT OF THE ASSESSEE ON THE BASIS OF THE GP RATIO AVAILABLE FOR THREE ASSESSMENT YEARS WHICH WERE (I) A.Y. 2008-09 2.43 (II) A.Y. 2009-10 1.27 (III) A.Y. 2010-11 0.84 ITA NO. 718/ AHD/2014 . A.Y. 2010-1 1 3 6. TAKING A LEAF OUT OF THE PAST RESULTS AND THE NON-C OOPERATIVE ATTITUDE OF THE ASSESSEE, THE A.O. ADOPTED GP RATIO OF 3% AND ESTIM ATED THE GROSS PROFIT AT RS. 44,16,223/-. THE A.O. WAS OF THE OPINION THAT A DEDUCTION OF RS. 8 LACS WILL BE REASONABLE FOR ADMINISTRATIVE EXPENDITURE A ND AFTER ALLOWING THE DEDUCTION OF RS. 8 LACS, THE PROFIT WAS ESTIMATED A T RS. 36,16,223/- WHICH WAS ADDED TO THE INCOME OF THE ASSESSEE. 7. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) A ND ASSAILED THE ASSESSMENT ORDER. BEFORE THE FIRST APPELLATE AUTHOR ITY, IT WAS STRONGLY CONTENDED THAT THE BOOKS OF ACCOUNTS OF THE ASSESSE E ARE AUDITED AND NECESSARY DETAILS WERE FURNISHED DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS ITSELF. THEREFORE, THERE IS NO REASON W HY THE A.O. SHOULD HAVE ESTIMATED THE PROFIT OF THE ASSESSEE. 8. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, T HE LD. CIT(A) FOUND THAT THE ASSESSEE HAS ALSO SHOWN INDIRECT INCOME OF RS. 15,88,389/-. THE LD. CIT(A) FURTHER FOUND THAT THE ASSESSEE HAS ALSO CLA IMED NET INDIRECT EXPENDITURE OF RS. 26,75,062/- WHICH WAS DEDUCTED F ROM THE INDIRECT INCOME RESULTING INTO THE NET INDIRECT EXPENDITURE AT RS. 10,86,673/-. THE LD. CIT(A) WAS OF THE OPINION THAT SINCE THE A.O. H AS ALLOWED EXPENDITURE OF RS. 8 LACS ONLY, THEREFORE, THE BALANCE OF RS. 2,86 ,673/- NEED TO BE FURTHER ALLOWED. ACCORDINGLY, THE LD. CIT(A) DIRECTED THE A .O. TO ALLOW A FURTHER DEDUCTION OF RS. 2,86,673/- AND FURTHER DIRECTED TH E A.O. TO ESTIMATE THE PROFIT AT RS. 16,36,665/- AS AGAINST RS. 36,16,223/ -. ITA NO. 718/ AHD/2014 . A.Y. 2010-1 1 4 9. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. THE L D. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN STATED BEFORE THE LOWER AU THORITIES. PER CONTRA, THE LD. D.R. STRONGLY SUPPORTED THE FINDINGS OF THE REVENUE AUTHORITIES. 10. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. IT IS TRUE THAT THE ASSESSEE DID NOT FURNISH ALL THE REQUISITE DETAILS DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. IF THE ASSESSEE DOES NOT CO-OPERATE WITH THE ASSESSING OFFICER, THE ASSESSIN G OFFICER IS LEFT WITH NO OTHER OPTION BUT TO ESTIMATE THE PROFIT OF THE ASSE SSEE. 11. THE PROFIT ESTIMATED BY THE A.O. DID NOT FULLY FIND ANY FAVOUR WITH THE LD. CIT(A) WHO REDUCED THE ESTIMATED PROFIT OF RS. 36,1 6,223/- TO RS. 16,36,665/-. WHILE DOING SO, THE LD. CIT(A) WAS CON VINCED THAT THE INDIRECT EXPENDITURE SHOULD HAVE FULLY ALLOWED BY THE A.O. 12. IN OUR CONSIDERED OPINION, AFTER THE ESTIMATION OF THE PROFIT, THE LD. CIT(A) OUGHT TO HAVE ALLOWED INTEREST TO PARTNERS AND REMU NERATION TO PARTNERS ALSO. TO THIS EXTENT, WE MODIFY THE FINDINGS OF THE FIRST APPELLATE AUTHORITY AND DIRECT THE A.O. TO ALLOW DEDUCTION IN RESPECT O F INTEREST TO PARTNERS AND REMUNERATION TO PARTNERS AS PER THE PROVISIONS OF T HE LAW. FOR THIS LIMITED PURPOSE, WE RESTORE THIS ISSUE TO THE FILES OF THE A.O. THE ASSESSEE IS DIRECTED TO FURNISH NECESSARY DETAILS BEFORE THE A. O. ITA NO. 718/ AHD/2014 . A.Y. 2010-1 1 5 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 03 - 04- 20 17 SD/- SD/- (RAJPAL YADAV) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 03/04/2017 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD