Rajni Kant, Faizabad V. Income Tax Officer-II, Faizabad

ITA 812/LKW/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4847 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 03-11-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 10-11-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 44AD

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.812/LKW/2014 ASSESSMENT YEAR 2010-11 ITO - II, FAIZABAD VS RAJNI KANT 149, AVADHPURI AVAS VIKAS COLONY, AMANI GANJ, FAIZABAD PAN ADRPK 0472 C (RESPONDENT) (APPELLANT) SHRI SHAILENDRA MISHRA, ADVOCATE APPELLANT BY SHRI AMIT NIGAM, DR RESPONDENT BY 0 3 / 1 1 /2015 DATE OF HEARING 01 / 01 / 2016 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE O RDER OF LD. CIT (A)-I, LUCKNOW DATED 15.07.2014 FOR THE AY 2010-11. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. THAT THE LEARNED COMMISSIONER OF INCOME-TA X (APPEALS) HAS ERRED IN LAW AS WELL AS ON FACTS IN HOLDING THA T ' IT WOULD BE REASONABLE TO ESTIMATE THE PROFIT OF APPEL LANT AT RS.26,17,211/-AT RATE OF 6 % OF GROSS RECEIPTS ' AN D IGNORING THE DECISIONS IN COMPARABLE CASES QUOTED B Y THE APPELLANT. 2 2. THAT THE APPELLANT CRAVES PERMISSION FO R AMENDING THE AFORESAID GROUND OF APPEAL AND 7 OR RAISING F RESH GROUNDS OF APPEAL. 3. IT WAS SUBMITTED BY THE LD. AR OF THE ASSESSEE THAT THE INCOME WAS ESTIMATED BY THE ASSESSING OFFICER AT THE RATE OF 7 % OF THE TURNOVER WHICH HAS BEEN REDUCED BY THE LD. CIT(A) TO 6%. HE SUBMITTED THAT EVEN 6% RATE OF PROFIT ADOPTED BY THE LD. CIT(A) IS EXCESSIVE. 4. LD. DR OF THE REVENUE SUPPORTED THE ORDERS OF AU THORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIN D THAT IT IS NOTED BY THE LD. CIT(A) IN PARA 4.2 OF HIS ORDER THAT THE PROVIS IONS OF SECTION 44AD OF THE ACT, WHICH PROVIDE FOR THE PRESUMPTIVE SCHEME OF TAXATIO N AT THE RATE OF 8% ARE NOT APPLICABLE IN THE PRESENT CASE BECAUSE THE TURNOVER IS IN EXCESS OF RS.40.00 LAKH. HE HAS ESTIMATED THE INCOME AT THE RATE OF 6% OF TH E TURNOVER AS AGAINST NET PROFIT DECLARED BY THE ASSESSEE AT 1.23%. WE ALSO F IND THAT AS PER VARIOUS TRIBUNALS ORDERS NOTED BY THE CIT(A) IN THIS PARA OF HIS ORDER, THE TRIBUNAL HAS CONFIRMED N. P. RATE OF 6% IN SOME CASES AND 7.5% A ND 9.6% ALSO IN SOME OTHER CASES. LD. CIT(A) HAS ADOPTED THE N. P. RATE OF 6% BEING LOWEST NET PROFIT ADOPTED BY THE TRIBUNAL AS PER THE JUDGMENTS NOTED BY HIM. BUT IN THE PAPER BOOK, THE ASSESSEE HAS FILED A COPY OF TRIBUNALS O RDER RENDERED IN THE CASE OF ITO VS. SHRI DHARAM DEO SHUKLA IN ITA NO. 435/LKW/2 012 DATED 22.03.2013 AND IN THIS CASE, THE ASSESSING OFFICER HAS ADOPTED 8% RATE OF NET PROFIT WHICH WAS REDUCED TO 3% BY LD. CIT(A) AND IN THIS ORDER OF TH E LD. CIT(A) IN THAT CASE WAS UPHELD BY THE TRIBUNAL IN THAT CASE. HENCE, IT IS S EEN THAT THE RATE OF 6% ADOPTED BY THE LD. CIT(A) IS NOT THE MINIMUM RATE A PPROVED BY THE TRIBUNAL IN OTHER CASES. 3 6. IN OUR CONSIDERED OPINION, ADOPTION OF SUITABLE NET PROFIT RATE SHOULD BE DECIDED ON THE BASIS OF FACTS OF EACH CASE AND THER EFORE, AFTER CONSIDERING THE FACTS OF THE PRESENT CASE, WE HOLD THAT ADOPTING 5% RATE OF NET PROFIT IN THE PRESENT CASE WILL MEET THE ENDS OF JUSTICE. WE HOLD ACCORDINGLY. THE A.O. IS DIRECTED TO ASSESS THE INCOME OF THE ASSESSEE @ 5% OF TURNOVER. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/- SD/- (SUNIL KUMAR YADAV) (A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED: 01 /01/2016 AKS COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR