M/s Shah Brother, V. DCIT,

ITA 84/RAN/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8564 (ITAT-RANCHI)
• Duration Of Justice: 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2014
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 03-03-2014
• Court: TRIBUNAL
• Department Lawyers: DEEPAK ROSHAN SENI OR S C
• Assessee Lawyers: R R MITTAL CA LD
• Keywords: Business income
• Section: 143(3); 153A; 132; 15

Judgement Text

INCOME TAX APPELLATE TRIBUNAL, CIRCUIT BENCH, RANCHI BEFORE HON'BLE SHRI H.L. KARWA, PRESIDENT , AND HON'BLE SHRI B.R. BASKARAN, ACCOUNTANT M EMBER ITA NO S . 84 & 85 /RAN/201 4 A.Y S 200 8 - 09 AND 2009 - 10 M/S. SHAH BROTHERS VS. D.C.I.T, CENTRAL CIRCLE - 1, RANCHI PAN: A A ZFS7498F ( APPELLANT ) ( RESPONDENT ) FOR THE APPELLANT :SH RI R.R. MITTAL, CA, LD.AR FOR THE RESPONDENT : SHRI DEEPAK ROSHAN, SENI OR S .C DATE OF HEARING : 2 7 - 11 - 2014 DATE OF PRONOUNCEMENT: 2 7 - 11 - 201 4 ORDER SHRI B.R. BASKARAN, ACCOUNTANT MEMBER : BOTH THE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER DATED 31 - 01 - 2014 PASSED BY LD. CIT(A) , JAMSEHEPUR AND THEY RELATE TO THE ASSESSMENT YEAR S 200 8 - 09 AND 2009 - 10. SINCE IDENTICAL IS ISSUE INVOLVED IN BOTH THE APPEALS, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IN BOTH THE APPEAL S T HE ASSESSEE IS AGGRIEVED BY THE DECISION OF THE LD.CIT(A ) IN CONFIRMING THE INCOME ESTIMATED BY THE ASSESSING OFFICER BY REJECTING THE BOOKS OF ACCOUNT . 3. THE FACTS RELATING TO THE ABOVE SAID ISSUE ARE STATED IN BRIEF. THE ASSESSEE WAS SUBJECTED TO SEARCH U/S. 132 OF THE ACT ON 16 - 02 - 2010 . CONSEQUENT TO TH E SEARCH OPERATION THE ASSESSMENT S WERE COMPLETED U/S. 153A R.W.S 143(3) OF THE ACT FOR BOTH THE ASSESSMENT YEARS UNDER CONSIDERATION. IN BOTH THE ASSESSMENT YEARS , THE ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNT AND HE ESTIMATED THE INCOME AT 2.5% O F THE GROSS RECEIPTS FOR T HE ASSESSMENT YEAR 2008 - 09 AND AT 3% FOR THE ASSESSMENT YEAR 2009 - 10. 2 ITA NO S . 84 & 85/RAN/14 M/S. SHAH BROS. 4. IN THE APPELLATE PROCEEDINGS , THE LD.CIT(A) CONFIRMED THE SAME. HE NCE, THE ASSESSEE HAS FILED THE APPEALS BEFORE US. 5. THE LD. COUNSEL APPEARING ON BE HALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008 - 09 WITHIN THE DUE DATE PRESCRIBED UNDER THE ACT AND FURTHER THE TIME LIMIT FOR ISSUING THE NOTICE U/S. 143(2) OF THE ACT HAD ALREADY EXPIRED. HE FURTHER SUBMITTED THAT THE ASSESSMENT YEAR 2008 - 09 WOULD FALL IN THE CATEGORY OF COMPLETED ASSESSMENT . HENCE, THE SAME WOULD NOT ABATE IN TERMS OF SEC. 153A OF THE ACT . HE ALSO SUBMITTED THAT THE DEPARTMENT DID NOT UNEARTH ANY INCRIMINATING MATERIAL RELATING TO THE ASSESSMENT YEAR 2008 - 09 WARRANTING ANY ADDITION IN THE ASSESSMEN T PROCEEDINGS INITIATED U/S. 15 3A O F THE ACT . B Y PLACING HIS RELIANCE ON THE DECISION /ORDER DATED 24 - 05 - 2013 RENDERED BY THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF J AI ST EEL (INDIA ), JODHPUR VS. ACIT , JODHPUR & ORS ( ITA NO. 53/2011 & OR S ) , H E FURTHER SUBMITTED THAT IN ABSENCE OF ANY INCRIMINATING MATERIAL NO ADDITION COULD BE MADE IN THE COMPLETED ASSESSMENT . 6. WITH REGARD TO THE ASSESSMENT MADE FOR THE ASSESSMEN T YEAR 2009 - 10 , THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS HIMSELF DECLARED THE NET PROFIT AT 2.73 % ON GROSS RECEIPTS, WHICH WAS HIGHER THAN THE RATE OF PROFIT AS ESTIMATED BY THE ASSESSING OFFICER IN THE ASSESSMENT YEAR 2008 - 09. HENC E, THERE WAS NO REQUIREMENT FOR T HE ASSESSING OFFICER TO ESTIMATE THE INCOME AT 3% OF THE GROSS RECEIPTS. 7. ON THE CONTRARY , THE LD.DR SUBMITTED THAT THE ASSESSEE DID NOT PRODUCE ANY BOOKS OF ACCOUNT AND OTHER DETAILS AS CALLED FOR BY THE ASSESSING OF FICER DURING THE ASSESSMENT PROCEEDINGS. HE NCE THE AO WAS CONSTRAINED TO ESTIMATE THE BUSINESS INCOME OF THE ASSESSEE BY REJECTING THE BOOKS OF ACCOUNT. 8. WE HEARD THE RIVAL CONTENTIONS AND CAREFULLY PERUSED THE RECORD. DURING THE COURSE OF HEARING THE LD. AR FOR THE ASSESSEE COULD NOT FURNISH THE DATE OF FILING OF ORIGINAL RETURN RELATING TO THE ASSESSMENT YEAR 2008 - 09 , THOUGH HE SUBMITTED THAT 3 ITA NO S . 84 & 85/RAN/14 M/S. SHAH BROS. THE SAME WAS FILED WITHIN THE DUE DATE. IT IS ALSO PERTINENT TO NOTE THAT THE LD.DR ALSO COULD NOT CONTRADICT THE SAID SUBMISSION MADE BY THE LD.AR . HENCE, WE ACCEPT THE STATEMENT MADE AT BAR BY THE LD.AR . ACCORDINGLY, THE ASSESSMENT YEAR 2008 - 09 WOULD FALL IN THE CATEGORY OF COMPLETED ASSESSMENT AND THE SAME WOULD NOT ABATE. IT IS AN ADMITTED FACT THAT THE DEPARTMENT DID NOT FIND ANY INCRIMINATING MATERIAL RELATING TO THE ASSESSMENT YEAR 2008 - 09 . HENCE, THE ASSESSING OFFICER IS NOT ENTITLED TO DISTURB THE ORIGINAL ASSESSMENT MADE DURING THE COURSE OF 153A P ROCEEDINGS. WE FIND SUPPORT FOR THIS VIEW FROM THE DECISION TAKEN BY THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEEL (INDIA) (SUPRA) . ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD.CIT(A) PASSED FOR THE ASSESSMENT YEAR 2008 - 09 AND DIRECT THE ASSESSING OFFICER TO ACCEPT THE RETURN FILED BY THE AS SESSEE. 9. WITH REGARD TO THE ASSESSMENT YEAR 2008 - 09, WE NOTICE THAT THE ASSESSEE DID NOT PRODUCE THE BOOKS OF ACCOUNT BEFORE THE ASSESSING OFFICER. HENCE, HE WAS CONSTRAINED TO REJECT THE BOOK RESULT AND ESTIMATED THE PROFIT AT 3% OF THE GROSS RECEIP TS AS AGAINST AT 2.73% DECLARED BY THE ASSESSEE. THOUGH THE LD. AR FOR THE ASSESSEE CONTENDED THAT THERE IS NO JUSTIFICATION TO ENHANCE THE GROSS PROFIT RATE, YET HE DID NOT FURNISH ANY MATERIAL BEFORE US IN ORDER TO COMPEL US TO INTERFERE WITH THE ESTIMAT E MADE BY THE TAX AUTHORITIES. 10 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2008 - 09 IS ALLOWED AND THE APPEAL FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2009 - 10 IS DISMISSED. PRONOUNCED ACC ORDINGLY ON 27 - 11 - 2014 SD/ - SD/ - [ H.L. KARWA ] [ B.R. BASKARAN ] PRESIDENT ACCOUNTANT MEMBER DT. 2 7 - 11 - 2014 PLACE : RANCHI 4 ITA NO S . 84 & 85/RAN/14 M/S. SHAH BROS. PP, SR. PS COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT : M/S. S HAH BROS, SADAR BAZAR,CHAIBASA I 2 THE RESPONDENT: DCIT,CC - 1, RANCHI 3. .THE CIT, 4.THE CIT(A), 5.DR, ITAT CIRCUIT BENCH, RANCHI 6. GUARD FILE. TRUE COPY, BY OR DER, ASSTT. REGISTRAR 5 ITA NO S . 84 & 85/RAN/14 M/S. SHAH BROS. 1. DATE OF DICTATION ............. 2 7 - 11 - 2014 ....................... 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ........................OTHER MEMBER .. 28 ..... - 11 - 2014 ..... ................... 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. ..................... 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.................................. 2 7 - 11 - 2014 .................... ............................... 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S ................ 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK ....................................... 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ..... .................................... 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER ................................................................................................. 9. DATE OF DESPATCH OF THE ORDER ..............................................................