Kailash Chandra Sharma., Lucknow V. Income Tax Officer-5(2), Lucknow

ITA 79/LKW/2012

• Counselvise Citation: 7923714 RSA 2012
• Duration Of Justice: 2 year(s) 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-05-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 21-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA
• Assessee Lawyers: YOGESH AGRAWAL
• Section: 5(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO. 79/LKW/2012 ASSESSMENT YEAR: 2007 - 08 KAILASH CHANDRA SHARMA LUCKNOW V. INCOME TAX OFF ICER 5(2) LUCKNOW PAN: AQLPS9290F (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. YOGESH AGRAWAL, ADVOCATE RESPONDENT BY: SHRI. ALOK MITRA, D.R. DATE OF HEARING: 21 05 2014 DATE OF PRONOUNCEMENT: 27 05 2014 O R D E R PER SUNIL KUMAR YADAV: THI S APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON THE FOLLOWING GROUNDS: - 1 . THE LEARNED COMM ISSIONER OF INCOME TAX - (APPEALS ) - II, LUCKNOW [HERE - IN - AFTER REFERRED TO AS THE LEARNED CIT (APPEALS)] ERRED ON FACTS IN LAW IN DETERMINING THE RECEIPTS AT RS.24,86,843/ - INSTEAD OF RS.18,51,712/ - AND IN CASE THE TURNOVER WAS TO BE CONFIRMED THE PROPORTIONATE EXPENSES ON DIESEL AND PAYMENT TO TRUCK OWNERS AS HIRE CHARGES OUGHT TO HAVE BEEN ALLOWED ON THE EXCESS TURNOVER. 2 . IN CONFIR MING THE ADDITION OF RS.5,70,585/ - THE LD. CIT (APPEALS) GROSSLY ERRED ON FACTS AND IN LAW IN FIRSTLY ARBITRARILY INCLUDING THE TURNOVER OF APRIL & MAY IN THE CURRENT YEAR ONLY BECAUSE OF A WRONG CERTIFICATE OF TDS ISSUED BY M/S. RAMGARH CHINI MILLS AND PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 2 - : AL SO RS. 1,17,837 / - WHICH WAS RECEIVED FROM SANGHVI FOODS (P) LTD. WHICH WAS TURNOVER OF OWN TRUCKS AND SECONDLY IN CASE IT WAS TO BE SO INCLUDED THE EXPENSES SHOULD HAVE BEEN ALLOWED FOR DIESEL, TRUCK HIRE CHARGES ETC. AND THUS THE ADDITION SO CONFIRMED OUGH T TO BE DELETED AS THE SAME IS NOT SUSTAINABLE IN LAW. 3 . WHILE CONFORMING THE ADDITION OF RS.5,70,585/ - THE LD. CIT (APPEALS) CHOSE TO IGNORE OR RATHER FAILED TO APPRECIATE THAT IN SIMILAR NATURE OF TRADE EVEN IF SEC. 44AF IS NOT APPLICABLE STILL 5% PROFIT O N TURNOVER IS CONSIDERED AS REASONABLE EVE N BY THE DEPARTMENT AND IS AN ACCEPTED NORM AND PRACTICE IN THIS NATURE OF TRADE AND THUS ANY ADDITION ON THIS COUNT IS WHOLLY UNJUSTIFIED AND NEEDS TO BE DELETED. 4 . THE LD. CIT (APPEALS) GROSSLY ERRED ON FACTS AND I N LAW IN ADDING AN AMOUNT OF RS.91,000 / - TO THE TOTAL INCOME WHEREAS THE SAID AMOUNT HAD NOT BEEN SEPARATELY ADDED BY THE AO WHILE PASSING THE ORDER AND THUS THIS AMOUNT OF RS.91,000 / - MAY KINDLY BE ORDERED TO BE DELETED. 5 . THAT THE LD. CIT(A)'S DID NOT AFFO RD THE APPELLANT ANY PROPER OR SUFFICIENT OPPORTUNITY TO HAVE HIS SAY OR MAKE NECESSARY COMPLIANCE OF THE REASONS RELIED UPON BY HIM IN PASSING THE PRESENT ORDER AND THUS THE ORDER PASSED WITHOUT AFFORDING ADEQUATE OPPORTUNITY MAY KINDLY BE ORDERED TO BE Q UASHED. 2 . THOUGH VARIOUS GROUNDS ARE RAISED, BUT THEY ALL RELATE TO THE ESTIMATION OF NET PROFIT OF THE ASSESSEE FROM THE BUSINESS OF TRUCK PLYING AND TRANSPORT COMMISSION. 3 . THE BRIEF FACTS CULLED OUT FROM THE ORDERS OF THE LOWER AUTHORITIES ARE THAT THE ASSE SSEE HAS DISCLOSED INCOME FROM TRUCK PLYING BUSINESS PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 3 - : UNDER SECTION 44AF OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT') AND TRANSPORT COMMISSION INCOME AT 5% PROFIT OF THE GROSS RECEIPTS OF RS. 18,51,712/ - SHOWN IN THE PROFIT AND LOSS AC COUNT AND DEEMED PROFIT ON TRANSPORT BUSINESS AND TRANSPORT COMMISSION HAS BEEN SHOWN AT RS.91,000/ - AND RS.1,40,316/ - RESPECTIVELY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED GROSS RECEIPTS AS PER TDS CERTIFICATE AT RS. 28, 06,336/ - AND THE ASSESSEE WAS ASKED AS TO WHY GROSS RECEIPTS SHOULD NOT BE TAKEN AT RS.28,06,336/ - IN PLACE OF RS.18,51,712/ - . IT WAS CONTENDED BEFORE THE ASSESSING OFFICER THAT INCOME WAS CALCULATED AS PER PREVAILING PRACTICE IN THE NATURE OF TRADE. IT WAS ALSO EXPLAINED TO THE ASSESSING OFFICER THAT WHILE FILING THE RETURN OF INCOME, THE ASSESSEE HAS INADVERTENTLY SHOWN THE INCOME BY APPLYING THE PROVISIONS OF SECTION 44AF OF THE ACT AND THE TURNOVER SO DISCLOSED WAS ALSO INADVERTENTLY TAKEN AT RS.28,0 6,336/ - AS PER THE TDS CERTIFICATES INSTEAD OR RS.18,51,712/ - . THE RE - CASTED PROFIT AND LOSS ACCOUNT WAS FILED BEFORE THE ASSESSING OFFICER , IN WHICH GROSS RECEIPTS WERE ACTUALLY SHOWN AT RS. 18,51,712/ - . IT WAS ALSO CONTENDED BEFORE THE ASSESSING OFFICER THAT TDS CERTIFICATE ISSUED TO THE ASSESSEE HAD WRONGLY INCLUDED THE FIGURE OF APRIL AND MAY, 2007, THUS, EXCESS TURNOVER WAS SHOWN. ONE TDS OF SANGHWAVI FOODS (P) LTD. WAS DEDUCTED ON THE WORK DONE BY THE ASSESSEES TRUCK, OF WHICH INCOME IS DULY ACCOUN TED FOR AND DISCLOSED AS PER PROVISIONS OF SECTION 44AE OF THE ACT. 4 . THE ASSESSING OFFICER WAS NOT CONVINCED WITH THE EXPLANATION OF THE ASSESSEE AND HE ESTIMATED THE NET PROFIT AT RS.8,82,118/ - , AGAINST WHICH AN APPEAL WAS FILED BEFORE THE LD. CIT(A), BU T THE ASSESSEE DID NOT FIND FAVOUR WITH HIM, AS HE WAS NOT CONVINCED WITH THE EXPLANATION OF THE ASSESSEE. THE LD. CIT(A), HOWEVER, RESTRICTED THE ADDITION TO RS.5,70,585/ - . 5 . AGGRIEVED, THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL WITH THE SU BMISSION THAT AT THE TIME OF FILING THE RETURN OF INCOME, PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 4 - : RECEIPT OF RS. 28,06,336/ - INCLUDED THE PAYMENTS RECEIVED FROM M/S RAMGARH CHINI MILLS AND M/S SINGHIVI FOODS (P) LTD. TDS CERTIFICATE FROM M/S RAMGARH CHINI MILLS WAS DULY RECEIVED BEFORE FILING TH E RETURN OF INCOME, WHEREAS THE TDS CERTIFICATE FROM M/S SINGHIVI FOODS (P) LTD. WAS NOT RECEIVED TILL FILING THE RETURN OF INCOME. THE FIGURES WERE OBTAINED TELEPHONICALLY AND CONSEQUENTLY THERE WAS DIFFERENCE IN THE TDS AS OBTAINED TELEPHONICALLY AND AC TUAL LY SHOWN IN THE TDS CERTIFICATE. THE TURNOVER SHOWN BY THE ASSESSEE WAS IN EXCESS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS CONTENDED THAT THE TURNOVER WAS DISCLOSED INADVERTENTLY AS PER TDS CERTIFICATE AT RS.28,06,336/ - INSTEAD OF RS.18,5 1,712/ - WHICH WAS THE GROSS RECEIPTS OF THE YEAR UNDER CONSIDERATION. 6 . IT WAS ALSO CONTENDED THAT THE TDS CERTIFICATE ISSUED TO THE ASSESSEE HAD WRONGLY INCLUDED THE FIGURES OF APRIL AND MAY, 2007, THUS THE TURNOVER WAS SHOWN IN EXCESS. IT WAS ALSO CONTEND ED THAT TDS OF SANGHWAVI FOODS (P) LTD. WAS DEDUCTED ON THE WORK DONE BY THE ASSESSEES TRUCK, OF WHICH INCOME IS DULY ACCOUNTED FOR AND DISCLOSED AS PER PROVISIONS OF SECTION 44AE OF THE ACT. THE ASSESSEE HAS ALSO FILED RE - CASTED PROFIT AND LOSS ACCOUNT AND BALANCE SHEET BEFORE THE ASSESSING OFFICER, BUT IT WAS NOT TAKEN INTO ACCOUNT. THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT EXCESS TURNOVER FOR THE MONTH OF APRIL AND MAY, 2007 SHOULD BE EXCLUDED FROM THE TURNOVER SHOWN AS PER TDS CERTIFICA TE. THOUGH THE ASSESSEE HAS TAKEN A SPECIFIC PLEA BEFORE THE ASSESSING OFFICER, BUT ASSESSING OFFICER HAS REJECTED THE SAME WITHOUT MAKING ANY PROPER VERIFICATION FROM THE DEDUCTEES. THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT EITHER THIS EXC ESS TURNOVER BE EXCLUDED FROM THE TURNOVER SHOWN AS PER TDS CERTIFICATE OR THE CORRESPONDING EXPENDITURE FOR THE MONTH OF APRIL AND MAY, 2007 BE ALLOWED IN ORDER TO DETERMINE THE NET PROFIT OF THE ASSESSEE AT 5%. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 5 - : 7 . THE LD. D.R., ON THE OTHER HAND, HAS STRONG LY PLACED RELIANCE UPON THE ORDER OF THE LD. CIT(A). 8 . HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT THOUGH THE ASSESSEE HAS INITIALLY ADOPTED THE FIGURE OF TU RNOV ER SHOWN IN THE TDS CERTIFICATE, BUT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS EXPLAINED THAT HE HAS TAKEN THE TOTAL TURNOVER SHOWN IN THE TDS CERTIFICATE WRONGLY AND THE TURNOVER FOR THE MONTH OF APRIL AND MAY, 2007 WERE INCLUDED I N THE FIGURE OF TOTAL TURNOVER SHOWN IN THE TDS CERTIFICATE, BY FILING A LETTER DATED 10.11.2008. COPY OF THE LETTER IS PLACED ON RECORD. BUT THE ASSESSING OFFICER DID NOT EXAMINE THIS CONTENTION OF THE ASSESSEE AND OUT RIGHTLY ESTIMATED THE NET PROFIT O F THE ASSESSEE. BEFORE THE LD. CIT(A) , THE ASSESSEE HAS ALL AGA IN FILED THE WRITTEN SUBMISSION TAKING THIS PLEA BEFORE THE LD. CIT(A), BUT THE LD. CIT(A) HAS ALSO NOT VERIFIED THE FACTS AND HAS REJECTED THE CONTENTIONS OF THE ASSESSEE. SINCE THE ASSESSEE HAS TAKEN A PARTICULAR STAND DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER SHOULD HAVE ADJUDICATED THE SAME BY MAKING NECESSARY VERIFICATION. WHEN THE ASSESSEE HAS CONTENDED THAT THE TURNOVER FOR THE MONTH OF APRIL AND MAY, 2007 WAS INCLUDED IN THE GROSS RECEIPTS SHOWN AS PER TDS CERTIFICATE, THE ASSESSING OFFICER SHOULD HAVE VERIFIED THE SAME BY MAKING NECESSARY VERIFICATION FROM THE DEDUCTEES. BUT IT WAS NOT DONE BY THE ASSESSING OFFICER. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMI TTED THAT EITHER TURNOVER FOR THE MONTH OF APRIL AND MAY, 2007 IS TO BE EXCLUDED FROM THE GROSS TURNOVER SHOWN AS PER TDS CERTIFICATE OR CORRESPONDING EXPENDITURE FOR THE MONTH OF APRIL AND MAY, 2007 MAY BE ALLOWED FROM THE GROSS RECEIPTS , IN ORDER TO DETE RMINE THE NET PROFIT OF THE ASSESSEE AT THE RATE ADOPTED IN EARLIER YEARS. 9 . IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND FORCE IN THE CONTENTIONS OF THE ASSESSEE. SINCE THIS ASPECT REQUIRES PROPER PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 6 - : VERIFICATION BY THE ASSESSING OFFICER, WE SE T ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO THE ASSESSING OFFICER WITH A DIRECTION TO MAKE NECESSARY VERIFICATION IN THIS REGARD. IF THE ASSESSEE SUCCEEDS IN ESTABLISHING THESE FACTS, THE NET PROFIT SHOULD BE WORKED OUT EITHER EXCLUD ING THE TURNOVER FOR THE MONTH OF APRIL AND MAY, 2007 FROM THE GROSS RECEIPTS AS PER TDS CERTIFICATE OR THE CORRESPONDING EXPENDITURE FOR THE MONTH OF APRIL AND MAY, 2007 BE ALLOWED TO THE ASSESSEE , IN ORDER TO COMPUTE THE NET PROFIT OF THE ASSESSEE AT THE RAT E ADOPTED IN EARLIER YEARS. 10 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 27.5.2014. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 27 TH M AY , 2014 JJ: 2105 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ )