Vijay Kumar Gupta, Ghaziabad V. ITO, Ghaziabad

ITA 894/DEL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3249 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 25-04-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 22-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BEDOBANI CHAUDHURI
• Assessee Lawyers: SUNIL TYAGI
• Keywords: Depreciation; Opportunity of being heard; Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER ITA NO.894/DEL/2016 ASSESSMENT YEAR 2010-11 VIJAY KUMAR GUPTA, J- 130A, SECTOR-9, VIJAY NAGAR, GHAZIABAD. PAN: ACSPG 3795Q VS. ITO, WARD-2(5), GHAZIABAD. (ASSESSEE) (RESPONDENT) REVENUE BY : MS. BEDOBANI CHAUDHURI, SR.D.R. ASSESSEE(S) BY : SHRI SUNIL TYAGI, ADV. / DATE OF HEARING : 25/04/2017 / DATE OF PRONOUNCEMENT: 28/04/2017 ORDER THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER O F LEARNED CIT(A), GHAZIABAD, VIDE ORDER DATED 25.08.2015 FOR THE ASSESSMENT YEAR 2010-11. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL AS UNDER: THE GROUNDS OF APPEAL ARE ENUMERATED HEREUNDER, WHI CH ARE WITHOUT PREJUDICE TO ONE - ANOTHER: - 01 . THAT THE IMPUGNED ADDITIONS OF RS. 19,35 , 190 / - MADE ON AN ADHOC BASIS BY THE LD. AO AND CONFIRMED BY THE LD. CIT(A), IS BASED ON MERE S URMISES, CONJECTURES, IMAGINATION AND GUESS WORK OF THE AUTHORITIES BELOW, AS STATED BY THE LD. CIT(A) IN HIS ORDER ALSO, AND THEREFORE THE SAID IMPUGNED ADDITION IS ABSOLUTELY ARBITRARY, SUBJECTIVE, ILLEGITIMATE, UNWARRANTED, UNJUSTIFIED, WITHOUT ANY IOTA OF ANY F INDINGS AND IS ALSO AGAINST THE RUDIMENTARY PRINCIPLES OF CONTEMPORARY JURISPRUDENC E AND SETTLED LEGAL POSITION AND THEREFORE IS UNTENABLE IN LAW AND IS LIABLE TO BE D ELETED. 2. THAT THE ORDER OF THE LD. CIT(A) IS CONTRADICTOR Y TO HIS OWN FINDINGS, AS AT ONE HAND HE HAS GIVEN CATEGORICAL FINDINGS AND DETAILED CHART O F THE GROSS RECEIPTS AGGREGATING TO RS. 1,37,13,668 / -; BUT SURPRISINGLY ON THE OTHER HAND HE HAS CONFIR MED ESTIMATION OF GROSS RECEIPTS BY THE ID. AO AT RS . 2,00,00,000/- AND THUS SUCH ADHOC ENHANCEMENT IN GR OSS RECEIPTS IS ARBITRARY, UNWARRANTED, UNTENABLE AND W ITHOUT ANY IOTA OF ANY BASIS OR FINDINGS AND IS LIABLE TO BE QUASHED, COUPLED WITH THE FACT THAT THE ASSESSEE HIMSELF DECLARED TRUE RECEIPTS AT RS. 1,52 ,11,877/ - AS PER HIS ACCOUNTS DULY AUDITED BY AN INDEPENDENT CHARTERED ACCOUNTANT AND WHICH ARE MUCH HIGHER THAN THE FINDINGS OF THE LD. CIT(A). ITA NO.894/DEL/2016 2 3.THAT THE IMPUGNED ACTION OF THE LD. AO OF MAKING ADHOC ENHANCEMENT IN NET PROFIT RATIO TO 15 % IS ARBITRARY, UNJUSTIFIED, UNLAWFUL AND BASED ON ME RE SURMISES AND CONJECTURES, WITHOUT ANY IOTA OF ANY FINDINGS; COUP LED WITH THE FACT HE NEITHER POINTED OUT ANY SHORTCOMING OR DISCREPANCY IN ANY OF THE EXPENS ES CLAIM NOR DISPROVED OR CONTROVERTED THE SAME NOR REJECTED BOOKS OF ACCOUNT AND HAS PURPORTEDLY INVENTED THE NET PROFIT RATIO @ 15%; ALSO IGNORING THE PERTINENT FACT THAT THE ASSE SSEE HIMSELF HAS DECLARED A NET PROFIT @ 15 . 05% BEFORE THE STATUTORY DEPRECIATION ALLOWANCE AND THUS LOOKED FROM WHATEVER ANGLE, THE ADHOC INCREASE IN N ET PROFIT RATE IS ARBITRARY, UNWARRANTED, UNCALLED-FOR AND UNTENABLE IN LAW AND IS LIABLE TO BE QUASHED. THAT THE AUTHORITIES BELOW ERRED ON THE FACTS AND C IRCUMSTANCES OF THE CASE AND IN LAW AS THEY GROSSLY IGNORED THE SPECIFIC PROVISIONS OF SEC TION 44AE OF THE INCOME TAX ACT, 1961, WHICH ARE SQUARELY APPLICABLE TO THE CASE OF THE ASSESSEE AS IT OWNED NOT MORE THAN TEN GOODS CARRIAGES AT ANY TIME DURING THE SAI D PREVIOUS YEAR AND THEREFORE THE PROFITS OF THE ASSESSEE DESERVES TO BE ACCEPTED AS SUCH, AS THE ASSESSEE HAS DECLARED MORE PROFITS THAN EVEN THE PRESUMPTIVE PROFITS ENVISAGED BY LAW AND THEREFORE ADHOC ADDITIONS MADE AND CONFIRMED BY THE AUTHORITIES BELOW ARE UNL AWFUL, UNCALLED FOR AND ALSO IN VIOLATION OF THE SPECIFIC PROVISIONS OF THE INCOME TAX ACT ; 1961 AND IS LIABLE TO BE QUASHED. THAT THE LD. CIT-A ERRED IN NOT TAKING COGNIZANCE O F EVIDENCE CONTAINED IN ANNEXURE-B; WHICH WERE ALSO SENT BY HIM TO THE LD. AO, WHO AFTE R PERUSING THE SAME GAVE HIS REMAND REPORT THEREUPON AND THEREBY NO PREJUDICE WAS CAUSE D TO THE REVENUE AND THUS REJECTION OF THE SAME IN MECHANICAL MANNER DOES NOT MEET BOTH THE ENDS OF THE JUSTICE AND IS ALSO AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND IS LIA BLE TO BE QUASHED. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A TRANSPORTER AND THE ASSESSEE HAS NOT PRODUCED THE BOOKS OF ACCOUNTS . THE ASSESSEE HAS ALSO NOT PRODUCED BILLS, EXPENSES VOUCHERS, BAN K PAY-IN-SLIPS AND COUNTER-FOIL OF THE CHEQUES ISSUED AND OTHER SU PPORTING VOUCHERS. THE ASSESSEE HAS SHOWN NP OF RS.10,64,811 /- [AS SHOWN IN COMPUTATION OF INCOME] GIVING NP RATE OF 7%. IN THE P&L A/C HE HAS CLAIMED FREIGHT EXPENSES AT RS.37,65,635/- AND DIESEL EXPENSES AT RS.36,48,450/-. NO SERVICE TAX A/C AND COPY OF S ERVICE TAX RETURNS HAVE BEEN FILED BY THE ASSESSEE. HE HAS CLA IMED INTEREST ON HOUSING LOAN. NO DETAILS OF INVESTMENT IN THE CONST RUCTION/PURCHASE OF HOUSE ETC. AS REQUIRED, HAS BEEN FILED BY THE AS SESSEE. IN THE ABSENCE OF BOOKS OF ACCOUNT ETC. PROFESSIONAL/OCCUP ATIONAL RESULTS OF THE ASSESSEE ARE NOT PRONE TO VERIFICATION AND REAS ONABLENESS AND CORRECTNESS OF THE ABOVE EXPENSES AND OTHER ITEMS O F EXPENDITURE CLAIMED IN THE P&L A/C CANNOT BE ESTABLISHED. TAKIN G INTO ITA NO.894/DEL/2016 3 CONSIDERATION ALL THE ABOVE FACTUAL ASPECTS OF THE CASE, A NET PROFIT RATE OF 15% [WHICH IS REASONABLE IN TRANSPORTERS C ASE OWNING 5 TRUCKS] ON THE ESTIMATED RECEIPTS OF RS.2,00,00,000 /- WAS APPLIED WHICH GIVES NP OF RS.30,00,000/- AS AGAINST NP OF R S.10,64,811/- SHOWN BY THE ASSESSEE, MAKING THEREBY AN ADDITION O F RS.19,35,189/- TO HIS INCOME TREATING THE SAME AS U NDISCLOSED INCOME OF THE ASSESSEE. 3. LEARNED CIT(A) CONFIRMED THE ACTION OF THE ASSES SING OFFICER. 5. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE FACTS OF THE CASE. THERE IS NO DISPUTE TO THE FACT THAT ASSESSEE HAS NOT PRODUCED ANY BOOKS OF ACCOUNT, VOUCHERS TO VERIFY THE CLAIM SO MADE BY THE ASSESSEE. THOUGH, THE BOOKS OF ACCOUNT HAS NOT BEEN REJECTED BUT AT THE SAME TIME THE BOOKS OF ACCOUNT WERE NOT AVAILAB LE FOR VERIFICATION BY THE ASSESSING OFFICER SO MADE ASSES SING OFFICER COULD DEDUCE THE ACCURATE INCOME FOR TAXATION PURPO SE. LEARNED AR COULD NOT EVEN PRODUCE THE NET PROFIT DECLARED IN T HE PRECEDING YEARS OR ANY COMPARABLE CASES TO SUBSTANTIATE HIS CLAIM. THE ASSESSING OFFICER ALSO COULD BRING ANY COMPARABLE CASE OR BEI NG NOT BROUGHT ON RECORD THE PRECEDING YEARS RESULT. IN THE CIRCUM STANCES AND FACTS OF THE CASE AND IN THE INTEREST OF JUSTICE THE MATT ER IS SET ASIDE TO THE FACT OF THE ASSESSING OFFICER WHO WILL GIVE FURTHER OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNT AND AGAIN BILLS, VOUCHERS, ETC OR ALTERNATIVELY BRING ON RECORD THE PRECEDING YEARS RESULT AND COMPARABLE CASES AND DECIDE THE ISSUE DENOVO AFTER PROVIDING ITA NO.894/DEL/2016 4 ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . THUS, ALL THE GROUNDS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY 28 TH APRIL, 2017 SD/- (B.P. JAIN) ACCOUNTANT MEMBER DATED: 28/04/2017 PRABHAT KUMAR KESARWANI, SR.P.S. COPY FORWARDED TO: 1.ASSESSEE 2.RESPONDENT 3.CIT 4.CIT(APPEALS) 5.DR: ITAT ASSTT. REGISTRAR, ITAT, NEW DELHI