Keshari Estate Pvt Ltd, Bhubaneswar V. ITO, Bhubaneswar

ITA 79/CTK/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90811 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2015
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 19-05-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 08-02-2013
• Court: TRIBUNAL
• Department Lawyers: SHOVAN KRISHNA SAHU
• Assessee Lawyers: B K MAHAPATRA
• Keywords: Rejection of books of accounts; Principle of natural justice; Additional evidence

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH , CUTTACK [ , . . , BEFORE SHRI SUNIL KUMAR YADAV , J M & SHRI B.P.JAIN , A M ./ ITA NO. 7 9 / CTK /20 1 3 ( [ [ / ASSESSMENT YEAR S : 200 9 - 2010 ) KESHARI ESTATE PRIVATE LIMITED, 98, KHARAVELA NAGAR, BHUBANESWAR - 751001 VS. ITO, WARD - 1 ( 1 ), BHUBANESWAR ./ ./ PAN/GIR NO. : A A BCK 3735 P ( / APPELLANT ) .. ( / RESPONDENT ) [ /ASSESSEE BY : SHRI B.K.MAHAPATRA /REVENUE BY : SHRI SHOVAN KRISHNA SAHU / DATE OF HEARING : 1 9 TH MAY , 201 5 / DATE OF PRONOUNCEMENT 21 ST MA Y ,2015 / O R D E R PER SUNIL KUMAR YADAV ( J .M) : TH IS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF CIT (A) - I , BHUBANESWAR DATED 12 - 11 - 2012 FOR THE ASSESSMENT YEAR 200 9 - 2010 , INTER ALIA , ON FOLLOWING GROUNDS : - 1. THAT THE ORDER DATED 12.11.2012 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [CIT(APPEALS)] IN DISMISSING THE APPEAL BEFORE HIM IS AGAINST PRINCIPLES OF NATURAL JUSTICE, CONTRARY TO FACTS, ARBITRARY, ERRONEOUS, BAD IN LAW AND LEGALLY UNTENABLE. 2. THAT THE LEARNED CIT(A) HAS MISCO NST R UED/MIS - APPRECIATED/IGNORED THE FACTS, DOCUMENTS, PARTICULARS, INFORMATION, SUBMISSIONS AND THE ORDER DATED 12 - 11 - 2012 CONFIRMING SUSTAINING THE REJECTION OF BOOKS OF ACCOUNTS AND THE ESTIMATION OF INCOME @11% AT RS.37,62,048/ - BY THE LEARNED ASSESSING OFFICER IS CONTRARY TO FACTS, ARBITRARY, EXCESSIVE, ERRONEOUS AND BAD IN THE LAW. 3. THAT THE EXPENSES AS PER AUDITED PROFIT AND LOSS ACCOUNT ARE FULLY VERIFIABLE AND SUPPORTED BY VOUCHERS AND EVIDENCE AND BOTH THE LEARNED ASSESSING OFFICER AND CIT(APPEA LS) HAVE MIS - APPRECIATED/MISCONSTRUED THE FACTS AND THE ESTIMATION OF INCOME @11% AT RS.37,62,048/ - IS BASED ON IRRELEVANT CONSIDERATIONS, PRESUMPTIONS, CONJECTURES AND SURMISES, ITA NO. 79 /13 2 WITHOUT ANY MATERIAL EVIDENCE ON RECORD, CONTRARY TO FACTS AND IS UNJUSTIFIE D, EXCESSIVE, ARBITRARY, ERRONEOUS AND BAD IN LAW. 4. THAT THE ASSESSMENT ORDER DATED 26.12.2011 U/S.143(3) OF THE INCOME TAX ACT IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND THE LEARNED CIT(APPEALS) OUGHT NOT HAVE DISCARDED/REJECTED THE DOCUMENTS, PAR TICULARS, INFORMATION, SUBMISSIONS PLACED BEFORE HIM. 5. THAT WITHOUT PREJUDICE TO THE GROUNDS (2) TO (4) ABOVE, THE NON - ADMITTANCE OF THE ALLEGED ADDITIONAL EVIDENCE BY THE LEARNED CIT(APPEALS) IS AGAINST PRINCIPLES OF NATURAL JUSTICE, ARBITRARY, ERRONEO US AND BAD IN LAW. 6. THAT, THE NON ADJUDICATION BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OF GROUND NO.4 BEFORE HIM AND DISMISSAL OF THE APPEAL IS ARBITRARY, ERRONEOUS AND BAD IN LAW. 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE HELD THAT THE RETURNED INCOME BE ACCEPTED. 2. DURING THE COURSE OF HEARING, LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE AO HAS REJECTED THE BOOKS OF ACCOUNTS AND APPLIED NET PROFIT @11% OF THE RECEIPTS. AGAINST WHICH THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), BUT HE DID NOT FIND FAVOUR WITH HIM. NOW, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. DURING THE COURSE OF HEARING LEARNED AR OF THE ASSESSEE HAS CANDIDLY ADMITTED THAT ON ACCOUNT OF NON - PRODUCTION OF THE BOOKS OF ACCOUNTS BEFORE THE AO, THE BOOKS OF ACCOUNT WAS REJECTED. ONCE THE BOOKS OF ACCOUNT WAS REJECTED THE AO SHOULD HAVE APPLIED THE NET PROFIT RATE KEEPING IN VIEW THE PAST RECORD OF THE ASSESSEE, BUT THE AO WITHOUT GOING THROUGH THE PAS T RECORD HAS ESTIMATED THE NET PROFIT RATE OF 11%. IN SUPPORT OF HIS CONTENTION, LD. AR HAS FILED A COMPARATIVE CHART SHOWING THE PAST RESULTS RIGHT FROM 2006 - 2007. HE FURTHER CONTENDED THAT IN 2006 - ITA NO. 79 /13 3 07, THE NET PROFIT RATE WAS DECLARED AT 1.27% , IN ASSESSMENT YEAR 2007 - 08, THE NET PROFIT RATE WAS 1.08% AND IN THE ASSESSMENT YEAR 2008 - 09, THE NET PROFIT RATE WAS 0.98%. IT WAS FURTHER CONTENDED THAT IN THE ASSESSMENT YEAR 2011 - 2012 THE NET PROFIT RATE WAS ESTIMATED BY THE AO AT 1. 66% AFTER COMPLETING THE ASSESSMENT U/S.143(3) OF THE ACT. COPY OF THE ORDER FOR ASSESSMENT YEAR 2011 - 12 IS FILED BEFORE US. IT WAS THE FURTHER CONTENTION OF LD. AR THAT IN THE LIGHT OF THESE FACTS, THE INCOME SHOULD ONLY BE ESTIMATED AT 1.66% AS DONE IN T HE ASSESSMENT YEAR 2011 - 12. 5. LD. DR, ON THE OTHER HAND, HAS CONTENDED THAT SINCE THE ASSESSEE HAS NOT PRODUCED THE BOOKS OF ACCOUNTS BEFORE THE AO, THE AO HAS RIGHTLY REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE PROFIT. HE INVITED OUR ATTENTION TO TH E COMPARATIVE CHART FURNISHED BEFORE US AND SUBMITTED THAT IN THE ASSESSMENT YEAR 2010 - 11 THE ASSESSEE HAS DECLARED NET PROFIT RATE AT 3.71%, THEREFORE, IN THE LIGHT OF DIFFERENT RESULTS DECLARED BY THE ASSESSEE, THE AO HAS RIGHTLY ESTIMATED THE NET PROFI T RATE OF 11%. 6. HAVING EXAMINED THE ORDERS OF THE LOWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT IN ABSENCE OF THE BOOKS OF ACCOUNT THE AO HAS RIGHTLY REJECTED THE BOOKS OF ACCOUNTS. WHILE ESTIMATING THE INCOME THE AO HAS TO TAKE I NTO ACCOUNT THE PAST RECORD OF THE ASSESSEE BUT HE DID NOT DO SO AND ESTIMATED THE NET PROFIT RATE @11% . THE ASSESSEE HAS FILED A COMPARATIVE CHART OF THE NET PROFIT DECLARED BY IT AND ASSESSED BY THE AO IN PRECEDING AND SUCCEEDING YEARS. U NDISPUTEDLY IN 2 011 - 2012, THE NET PROFIT RATE WAS DETERMINED BY THE AO AT 1.66% BY ITA NO. 79 /13 4 ESTIMATING THE NET PROFIT AT RS. 6,80,000/ - . IT IS ALSO EVIDENT FROM THIS COMPARATIVE CHART THAT IN THE ASSESSMENT YEAR 2010 - 11, THE NET PROFIT WAS DECLARED A T 3.71%. IN A.Y.2010 - 11, THE TOTAL TURNOVER WAS RS. 3,12,01,519/ - AND IN A.Y.2009 - 10, IE. THE IMPUGNED ASSESSMENT YEAR, THE TOTAL TURNOVER WAS RS. 3,43,98,957/ - , IN WHICH THE ASSESSEE HAS DECLARED THE NET PROFIT RATE @2.09%. SINCE THE ASSESSEE HAS NOT PRODUCED THE BOOKS OF ACCOUNTS, REJ ECTION OF BOOKS OF ACCOUNT IS PROPER . H OWEVER, KEEPING IN VIEW THE PAST AND SUCCEEDING RECORD OF THE ASSESSEE , WE ESTIMAT E THE NET PROFIT RATE OF 3.71 % , WHICH HAS BEEN SHOWN IN THE SUCCEEDING YEARS , TO MEET THE END OF JUSTICE. ACCORDINGLY, WE SET AS IDE THE ORDER OF THE CIT(A) AND DIRECT THE AO TO ESTIMATE THE NET PROFIT RATE @3.71% OF THE GROSS RECEIPTS OF THE ASSESSEE. 7 . IN THE RESULT, AP PEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 / 05 / 201 5 . SD/ - SD/ - ( . . ) ( B. P. JAIN ) ( ) ( SUNIL KUMAR YADAV) / ACCOUNTANT MEMBER / JUDICIAL MEMBER CUTTACK ; DATED 2 1 /0 5 / 201 5 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, CUTTACK 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT , CUTTACK 6. [ / GUARD FILE. //TRUE COPY//