Sachin Naginchand Chordiya, Jalgaon V. Pr. Commisisoner of Income-tax - 2,

ITA 771/PUN/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9379 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 25-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Gross profit estimation; Business income
• Section: 40A(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO , AM AND SHRI VIKAS AWASTHY, JM . / I TA NO. 771 /PUN/20 15 / ASSESSMENT YEAR : 2010 - 11 SACHIN NAGINCHAND CHORDIYA 522 - 14, SHANTI SAGAR, GANESH WADI, BEHIND PANCHMUKHI HANUMAN MANDIR, JALGAON - 425 001 PAN : ADSPC4588J .... / APPELLANT / V/S. PR. COMMISSIONER OF INCOME TAX - 2, NASHIK. / RESPONDENT A SSESSEE BY : SHRI NIKHIL PATHAK REVENUE BY : SMT. REENA JHA TRIPATHI REVENUE BY : SMT. REENA JHA TRIPATHI / DATE OF HEARING : 05.06.2017 / DATE OF PRONOUNCEMENT : 07 .06.2017 / ORDER PER VIKAS AWASTHY, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX - 2, NASHIK DATED 27.03.2015 PASSED UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR THE ASSESSMENT YEAR 2010 - 11. 2. THE ASSESSEE IS A WHOLESALE DEALER OF FOOD - GRAINS AND PARTNER IN A FIRM. THE ASSESSEE FILED HIS RETURN OF I NC OME FOR THE IMPUGNED ASSESSMENT YEAR ON 07.10.2010 DECLARING TOTAL INCOME OF RS.7,83,140/ - . 2 ITA NO. 771/PUN/2015 A.Y. 2010 - 11 DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER MADE AD - HOC ADDITION OF RS. 90,360/ - ON ACCOUNT OF LOW GP. THE COMMISSIONER OF INCOME TAX INVOK ED THE PROVI SIONS OF SECTION 263 OF THE ACT AND ISSUED NOTICE TO THE ASSESSEE ON 12.02.2015. THE COMMISSIONER OF INCOME TAX OBSERVED THAT ASSESSEE HAD ISSUED BEARER CHEQUES TO HIS CREDITOR S IN RESPECT OF CASH PURCHASES. THE PAYMENTS WERE MADE IN CONTRAVENTION OF PROVISION S OF SECTION 40A(3) AND (3A) OF THE ACT. THE COMMISSIONER OF INCOME TAX DISALLOWED RS. 53,25,500/ - ( RS. 23,04,500/ - + RS. 30,21,000/ - ). AGGRIEVED BY THE REVISIONAL PROCEE DINGS INITIATED BY THE COMMISSIONER OF INCOME TAX U/S 263 , THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3 . SHRI NIKHIL PATHAK APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD SHOWN TOTAL SALES OF WHEAT AT RS.19,03,167/ - AND THAT THE ASSESSEE HAD SHOWN TOTAL SALES OF WHEAT AT RS.19,03,167/ - AND DECLARED GP AT RS. 4,797/ - . THIS GP DECLARED BY THE ASSESSEE WAS 0.25%. THE ASSESSING OFFICER ESTIMATED THE GP AT 5% AND MADE ADDITION OF RS. 90,360/ - . THE ASSESSEE HAD PRODUCED BOOK S OF ACCOUNT BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER AFTER EXAMINING TH E SAME HAD MADE ADDITION BY ADOPTING 5% GP . THE ORDER PASSED BY THE ASSESSING OFFICER IS JUST AND REASONABLE. 4 . ON THE OTHER HAND, SMT. REENA JHA TRIPATHI REPRESENTING THE DEPARTMENT VEHEMENTLY SUPPORTED THE ORDER OF THE COMMISSIONER OF INCOME TAX IN MAK ING ADDITION. THE LD. DR SUBMITTED THAT THE ASSESSING OFFICER HAD NOT MADE INQUIRIES AND ESTIMATED GP AT 5% WITHOUT ANY BASIS. THE ASSESSMENT ORDER IS CRYPTIC. T HE COMMISSIONER OF INCOME TAX HAS RESORTED TO REVISIONAL PROCEEDING S UNDER SECTION 263 OF THE ACT , A S 3 ITA NO. 771/PUN/2015 A.Y. 2010 - 11 THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E. T HE ASSESSING OFFICER HAS FAILED TO CARRY OUT PROPER INV ESTIGATION /VERIFICATION BEFORE MAKING AD - HOC GP ADDITION AT 5%. IN SUPPORT OF HER SUBMISSION S , THE LD DR HAS PLACED RELIANCE ON THE DECISION OF HONBLE CALCUTTA HIGH COURT, IN THE CASE OF RAJMANDIR ESTATES (P) LTD. VS. PRINCIPAL COMMISSIONER OF INCOME TAX REPORTED AS 136 DTR (CAL.) 345. 5 . WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. THE LD. AR OF THE ASSESSEE HAS MERELY REITERATED THE SUBMISSION MADE BEFORE THE COMMISSIONER OF I NCOME TAX. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE ASSESSING OFFICER HAS ESTIMATED GP AT 5% WITHOUT ANY BASIS. THERE IS NO THING ON RECORD TO SHOW THAT ANY INQUIRY WAS MADE BY THE ASSESSI NG OFFICER BEFORE ESTIMATING GP. IT IS A WELL SETTLE D LAW THAT WHERE NO INQUIRY WAS MADE BY THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT, THE ORDER OF ASSESSING OFFICER IS AMENABLE TO REVISIONAL PROCEEDINGS U/S 263 OF THE ACT. IN THE PRESENT CASE, T HE COMMISSIONER OF INCOME TAX UNDER REVISIONAL JURISDICTION HA S CARRIED OUT INDEPENDENT VERIFICATION OF THE BA NK STATEMENTS OF THE ASSESSEE IN ACCOUNT NOS. 1860 AND 1560 OF JALGAON JANTA SAHAKARI BANK LTD. IT TRANSPIRE D THAT THE ASSESSEE HAD ISSUED BEARER C HEQUES TO HIS CREDITORS FOR CASH PURCHASES. THE COMMISSIONER OF INCOME TAX HAS GIVEN DETAIL ED LIST OF THE PERSONS (CREDITORS) TO WHOM BEARER CHEQUE S WERE GIVEN BY THE ASSESSEE. THE COMMISSIONER OF INCOME TAX DISALLOWED THE TOTAL SUM OF RS. 53,25,500/ - U/S 40A(3) AND (3A) OF THE ACT. 6 . THE ASSESSEE HAS TAKEN A PLEA THAT CASH PAYMENTS MADE ARE COVERED UNDER EXCEPTION MENTIONED IN RULE 6 D D OF THE INCOME TAX 4 ITA NO. 771/PUN/2015 A.Y. 2010 - 11 RULES. HOWEVER, THE ASSESSEE HAS FAILED TO SUBST ANTIATE EXCEPTIONAL CIRCUMSTANCES UNDER WHICH CASH PAYMENTS WERE MADE. THE COMMISSIONER OF INCOME TAX IN ORDER TO G RANT FAIR OPPORTUNITY TO THE ASSESSEE, HAS DIRECTED THE ASSESSING OFFICER TO VERIFY APPLICABILITY OF RULE 6D D OF THE ACT IN THE CASE OF ASSESSEE. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE COMMISSIONER OF INCOME TAX. IN THE FACTS OF THE CASE, THE COMMISSIONER OF INCOME TAX HAS RIGHTLY ASSUMED REVISIONAL JURISDICTION U/S 263 OF THE ACT. THUS, WE FIND NO MERIT IN THE APPEAL OF ASSESSEE AND ACCORDINGLY, THE SAME IS DISMISSED BEING DEVOID OF ANY MERIT. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRO NOUNCED ON WEDNESDAY , THE 07 TH DAY OF JUNE , 201 7 . SD/ - SD/ - ( . / D. KARUNAKARA RAO ) ( /VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 07 TH JUNE , 2017 . SB / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE PR. CIT - 2, NASHIK. 4. THE CIT - 2, NASHIK. 5 . , , , / DR, ITAT, B BENCH, PUNE. 6 . / GUARD FILE. // TRUE COPY // / BY ORDER, /ASSISTANT REGISTRAR , / ITAT, PUNE