IRFAN AHMED ANSARI, MUMBAI V. ITO 19(1)(3), MUMBAI

ITA 7609/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100966 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 23-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 27-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M M CHATEDR
• Assessee Lawyers: VIJAY C KOTHARI; AJIT SHETTY
• Section: 40A(3); 142(1); 28; 68

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES I, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.7609/MUM/2013 ASSESSMENT YEAR: 2009-10 IRFAN AHMED ANSARI, BIJNORE BAKERY, HAJI KI CHAWL, JAWAHAR NAGAR, KHAR(EAST), MUMBAI-400051 / VS. ITO-19(1)(3), PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI-400012 ( !'# /ASSESSEE) ( % / REVENUE) P.A. NO. AEKPA7894L !'# / ASSESSEE BY SHRI VIJAY C. KOTHARI & SHRI AJIT SHETTY % / REVENUE BY SHRI M.M.CHATE-DR % & ' / DATE OF HEARING : 09/09/2015 & ' / DATE OF ORDER: 28/09/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DA TED 31/10/2013 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE FIRST GROUND RAISED IN THE APPEAL PERTAINS TO A SSESSING IRFAN AHMED ANSARI ITA NO.7609/MUM/2013 2 THE INCOME UNDER THE HEAD INCOME FROM BUSINESS OR PROFESSION AT RS.16,46,920/- ON A TOTAL TURNOVER OF RS.18,34,790/- IN SPITE OF THE FACT THAT THE ASSESS EE WAS REQUIRED TO BE ASSESSED AS PER THE PROVISIONS OF SE CTION 44AF OF THE INCOME TAX ACT, 1921 (HEREINAFTER THE ACT) O N THE RETAIL BAKERY BUSINESS OF THE ASSESSEE. 2. THE CRUX OF ARGUMENT ADVANCED BY SHRI VIJYA C. KOTHARI ALONG WITH SHRI AJIT SHETTY, LD. COUNSEL FO R THE ASSESSEE IS IDENTICAL TO THE GROUND RAISED BY CONTE NDING THAT ON A TURNOVER OF RS.18,34,790/- (IN A RETAIL BUSINE SS) AT MOST THE PROFIT CAN BE ASSESSED AT 5% OF THE TURNOVER. W HEREAS, THE ASSESSEE HAS ALREADY DISCLOSED THE PROFIT AT RS .1,94,990/- . THE LD. DR, SHRI M.M. CHATE, THOUGH DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER, BUT DI D NOT CONTROVERT THE EXPLANATION OF THE ASSESSEE. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE DEALS IN RETAIL BUSINESS OF B AKERY IN THE NAME OF BIJNORE BAKERY. THE ASSESSEE IS ASSESSED IN THE STATUS OF INDIVIDUAL. THE ASSESSEE DECLARED INCOME OF RS.1,94,990/- IN HIS RETURN FILED ON 16/12/2009, WH ICH WAS PROCESSED U/S 143(1) ON 24/03/2011. IN RESPONSE TO NOTICES ISSUED U/S 143(2) AND 142(1) OF THE ACT, THE ASSESS EE FURNISHED THE NECESSARY DETAILS ALONG WITH EXPLANAT ION CALLED BY THE LD. ASSESSING OFFICER DURING ASSESSMENT PROC EEDINGS. THE ASSESSEE DULY FURNISHED THE COMPUTATION OF INCO ME, BALANCE SHEET AS ON 31/03/2009, PROFIT & LOSS ACCOU NT FOR IRFAN AHMED ANSARI ITA NO.7609/MUM/2013 3 THE YEAR ENDED 31/03/2009, CASH BOOK FOR THE PERIOD FROM 01/04/2008 TO 31/03/2009 ALONG WITH THE SALES ACCOUNT/PURCHASE ACCOUNT OF THE RELEVANT PERIOD FR OM 01/04/2008 TO 31/03/2009, STATEMENT OF PUNJAB NATIO NAL BANK OF THE RELEVANT PERIOD INDIRECT EXPENSES/LEDGE R ACCOUNT/CONFIRMATION LETTER OF MR. SYED BABAR MAHMO OD, BANK PASSBOOK AND EXPLANATIONS VIDE LETTERS DATED 08/08/2011 AND 30/09/2011. THE TOTAL TURNOVER OF T HE ASSESSEE WAS RS.18,34,790/-, THUS, EVEN AS PER THE PROVISIONS OF SECTION 44AF, IN THE RETAIL BUSINESS, THE PRESUMPTIVE PROFIT DEEMED TO BE 5% OF THE TURNOVER, WHICH COMES TO RS.91,740/-, WHEREAS THE ASSESSEE HAS ALRE ADY DISCLOSED INCOME OF RS.1,94,990/-, THUS, WE FIND ME RIT IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. SEC TION 44AF OF THE ACT IS A SPECIAL PROVISION FOR COMPUTING PRO FIT & GAINS OF RETAIL BUSINESS, WHICH ITSELF SAYS NOTWITHSTANDI NG ANYTHING TO THE CONTRARY CONTAINED IN SECTIONS 28 TO 43C OF THE ACT, IN THE CASE OF AN ASSESSEE ENGAGED IN RETAIL TRADE IN ANY GOODS AND MERCHANDISE A SUM EQUAL TO 5% OF THE TOTAL TURN OVER IN PREVIOUS YEAR ON ACCOUNT OF SUCH BUSINESS OR, AS TH E CASE MAY BE, A SUM HIGHER THAN THE AFORESAID SUM, AS DEC LARED BY THE ASSESSEE IN HIS RETURN OF INCOME SHALL BE DEEM ED TO BE PROFIT & GAINS OF SUCH BUSINESS CHARGEABLE TO TAX U NDER THE HEAD PROFIT & GAINS OF BUSINESS OR PROFESSION. THE ASSESSEE HAS ALREADY DISCLOSED HIGHER INCOME, THEREFORE, THE ASSESSEE, AT THIS STAGE, CANNOT TAKE THE BENEFIT OF 5%, AS PR OVIDED IN THE SECTION. AT THE SAME TIME, THE ASSESSING OFFICE R ALSO IS NOT EXPECTED TO MAKE MORE ADDITION THAN DECLARED BY THE IRFAN AHMED ANSARI ITA NO.7609/MUM/2013 4 ASSESSEE. THEREFORE, WE DIRECT THE ASSESSING OFFICE R TO DELETE THE ADDITION MADE U/S 40A(3) OF THE ACT. MORE SPECI FICALLY, WHEN THERE WAS NO PAYMENT, MADE IN CASH, IN EXCESS OF RS.20,000/- ON ANY DAY TO A SINGLE PERSON. THUS, GR OUNDS NO.1 & 2 ARE DECIDED IN FAVOUR OF THE ASSESSEE. 3. GROUND NO.3 & 4 PERTAINS TO MAKING ADDITION OF RS.1,50,000/- U/S 68 OF THE ACT, ON ACCOUNT OF CRED IT IN THE BANK ACCOUNT ON 25/12/2008. THE CRUX OF ARGUMENT ADVANCED ON BEHALF OF THE ASSESSEE IS THAT THE IMPU GNED AMOUNTS ARE SALE PROCEED, RECEIVED BY THE ASSESSEE AND DULY DISCLOSED IN THE TOTAL TURNOVER OF THE BUSINESS OF THE ASSESSEE. THE LD. DR, DEFENDED THE CONCLUSION ARRIV ED AT IN THE IMPUGNED ORDER. 3.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE NO TE THAT THE LD. ASSESSING OFFICER MADE ADDITION OF RS.1,50,000/ -. THE IMPUGNED AMOUNT HAS BEEN RECORDED IN THE SALE REGISTER/BOOKS OF ACCOUNTS, THUS, IT CANNOT BE ADDE D U/S 68 OF THE ACT AS THE SAME IS THE SALE PROCEEDS OF THE BUSINESS OF THE ASSESSEE ITSELF. WE HAVE PERUSED THE SALES ACCO UNT OF THE ASSESSEE AND FROM PAGE 5 OF THE PAPER BOOK, THERE I S ENTRY DATED 07/11/2007 OF RS.2 LAKH (EARLIER YEAR LOAN) T O SYED BABAR. THE POSITION IS CLARIFIED BY THE ENTRY DATED 11/12/2007 (CHEQUE NO.227012 FIGURING THE IMPUGNED AMOUNT). IT IS CLEARLY EXPLAINED, THEREFORE, THE AD DITION IS, DIRECTED TO BE DELETED. IRFAN AHMED ANSARI ITA NO.7609/MUM/2013 5 FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 09/09/2015. SD/ - (RAJESH KUMAR) SD/ - (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER MUMBAI; ) DATED : 28/09/2015 F{X~{T? P.S/. .. %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. +,-. / THE APPELLANT 2. /0-. / THE RESPONDENT. 3. 1 ( +, ) / THE CIT, MUMBAI. 4. 1 / CIT(A)- , MUMBAI 5. 3%4 / ! , +,' +! 5 , / DR, ITAT, MUMBAI 6. 6' 7 / GUARD FILE. / BY ORDER, 03, / //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI