Shri Ankit Mehta, Indore V. The ITO Ward 4(1), Indore

ITA 91/IND/2014

• Counselvise Citation: 9122714 RSA 2014
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 05-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rejection of books of accounts

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER ITA NO. 284/IND/2014 A.Y. 2008-09 ITA NO. 91/IND/2014 A.Y. 2008-09 SHRI ANKIT MEHTA INDORE PAN AIPM5329R ::: APPELLANT VS INCOME TAX OFFICER WARD 4(1) INDORE ::: RESPONDENT ` APPELLANT BY SHRI SUDHIR PADLIYA RESPONDENT BY SHRI RAHUL RAMAN DATE OF HEARING 23.6.2015 DATE OF PRONOUNCEMENT 6 . 7 .2015 2 O R D E R PER SHRI B.C. MEENA, AM ITA NO. 284/IND/2014 THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LEARNED CIT(A)-II, INDORE, DATED 27.2.2 014. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CLEARING AND FORWARDING AGENT RUNNING A PROPRIETARY CONCERN UNDER THE NAME AND STYLE OF M/S YOMINI OVERSEAS. THE ASSESSE E DISCLOSED COMMISSION INCOME OF RS. 11,95,361/- AND T HE NET PROFIT WAS SHOWN AT RS. 3,99,937/-. THE ASSESSIN G OFFICER FOUND THAT AS PER TDS CERTIFICATES PRODUCED BY THE ASSESSE, THE ASSESSEE RECEIVED PAYMENTS MUCH HIGHER T HAN THE DISCLOSED IN THE PROFIT AND LOSS ACCOUNT AND IT W AS FOUND THAT THE RECEIPTS WERE MORE THAN RS. 40 LACS AND THE ASSESSEE DID NOT GET ITS ACCOUNTS AUDITED AS PER REQUIREMENTS OF SECTION 44AB OF THE ACT AND HE CALCULAT ED 3 THE UNDISCLOSED INCOME AT RS. 18,70,039/-. THE LEARNE D CIT(A) HAS CONFIRMED THE ADDITION BY HOLDING AS UNDER :- THIS GROUND IS RAISED AGAINST THE REJECTION OF BOOKS OF ACCOUNTS U/S 145(3) OF IT ACT, 1961 AND ESTIMATION OF COMMISSION INCOME OF RS. 18,70,039/-. THE FACTS OF THE CASE ARE DISCUSSED BY A.O. IN DETAIL AT PAGE NO. 1 TO 11 OF THE ASSESSMENT ORDER. THE ASSESSEE HAS CLAIMED TO BE THE CLEARING & FORWARDING AGENT RUNNING A PROPRIETARY CONCERN UNDER THE NAME M/S YOMINI OVERSEAS AND AS PER P&L ACCOUNT SUBMITTED HE HAS DISCLOSED COMMISSION INCOME OF RS.11,95,361/- ON WHICH NET PROFIT IS SHOWN AT RS. 3,99,937/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS FOUND THAT ASSESSEE PER TDS CERTIFICATES PRODUCED BY 4 ASSESSE, THE TOTAL PAYMENTS OF RS. 2,77,26,837/- WERE MADE UNDER CONTRACT/COMMISSION AND TDS OFRS. 6,41,452/- WAS DEDUCTED BY DIFFERENT CONCERNS AS DETAILED IN THE ASSESSMENT ORDER. THEREAFTER THE A.O. HAS MADE DETAILED DISCUSSION ON REQUIREMENTS OF SECTION 44AB OF IT ACT, 1961, APPLICABILITY OF PROVISIONS OF SECTION 145(3) OF IT ACT, 1961 AND AFTER MAKING DETAILED INVESTIGATION AND INQUIRIES BROUGHT OUT IN THE ASSESSMENT ORDER HAD REJECTED THE BOOKS OF ACCOUNTS AND AT PAGE NO. 9 & 10 OF THE ASSESSMENT ORDER HAD WORKED OUT COMPLETE DETAILS OF PAYMENTS RECEIVED BY THE APPELLANT, PAYMENTS MADE, EXPENSES REIMBURSED ETC. FINALLY, THE A.O. HAD WORKED OUT THE NET COMMISSION IN THE HAND OF THE 5 ASSESSEE AT RS. 30,78,027/-. THE TAXABLE PROFIT AFTER THE EXPENSES CLAIMED IN THE P&L ACCOUNT HAS BEEN WORKED OUT AT RS. 22,81,422/- AS AGAINST AN AMOUNT OF RS.4,11,383/- DISCLOSED BY APPELLANT. IT HAS ALSO BEEN BROUGHT OUT IN THE SAID DETAILS THAT FINALLY THE APPELLANT HAD AGREED UPON THE NET UNDISCLOSED INCOME OF RS. 18,70,039/-. I HAVE GONE THROUGH THE WRITTEN SUBMISSIONS FILED BY THE APPELLANT WHICH ARE REPRODUCED ABOVE AND OBSERVED THAT NO SUBMISSIONS HAVE BEEN FILED AGAINST REJECTION OF BOOKS OF ACCOUNTS. REGARDING SUBMISSIONS ON MERIT THE APPELLANT HAS NOWHERE IN THE SUBMISSION HAVE BEEN ABLE TO BRING OUT THE CIRCUMSTANCES UNDER WHICH HE WAS FORCED TO SURRENDER THE AMOUNT. IT HAS ONLY BEEN STATED THAT THE APPELLANT 6 BECOME FED UP WITH THE PROCEDINGS AND THEREFORE CAME OUT WITH THE SURRENDER. THE APPELLANT HAS NOT BEEN ABLE TO CONTROVERT THE DETAILED FINDINGS GIVEN BY A.O. AT PAGE NO. 1 TO 11 OF THE ASSESSMENT ORDER. DURING THE COURSE OF APPEAL PROCEEDINGS, THE APPELLANT HAS NOT DISCUSSED AND BROUGHT TO MY NOTICE ANY THREAT ETC. FOR ENFORCING SURRENDER OF THE COMMISSION INCOME. I HAVE ALSO GONE THROUGH THE VARIOUS CASE LAWS CITED BY THE APPELLANT AND FOUND THAT NONE OF THE CASE LAWS IS APPLICABLE IN THE PRESENT CASE AS THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE HAVE BEEN ALL TOGETHER DIFFERENT. THE A.O. HAS SUMMARIZED HER DETAILED INQUIRES AND DISCUSSIONS OF THE ASSESSMENT ORDER IN THE 7 CONCLUDING PART WHICH IS REQUIRED TO BE REPRODUCED FOR THE SAKE OF CONVENIENCE : IN VIEW OF ABOVE FACTS, IT IS ESTABLISHED THAT THE ASSESSEE HAS NOT ACCOUNTED FOR THE RECEIPTS AND EXPENDITURE AS APPEARING IN THE BOOKS OF VIL. THE TRANSPORTATION CHARGES IN RESPECT OF CONSIGNMENTS WHICH WERE CLAIMED TO BE DELIVERED TO SONY ISPAT LTD. (SIL) AND WHICH NAMCO AFTER GETTING CUSTOMS CLEARANCE ON BEHALF OF VIL WERE IN FACT PAID BY SIL. EVEN AFTER ADMISSION OF FACT, THE ASSESSEE HAS PLEADED THAT THESE AMOUNT REIMBURSED BY SIL ARE ACCOUNTED FOR IN THE HANDS OF VIL. THE EXPENSES 8 INCURRED BY THE ASSESSEE WERE FULLY REIMBURSE. THE NET COMMISSION INCOME AFTER ACCOUNTING FOR ALL THE EXPENSES AS APPEARING IN THE LEDGER ACCOUNTS OF SIL AND NAMCO WORKED OUT AT RS. 18,70,039/- IS TAXABLE IN THE HANDS OF ASSESSEE ON ACCOUNT OF UNDISCLOSED INCOME FOR THE YEAR UNDER CONSIDERATION. THE ASSESSEE HAS ADMITTED THE MISTAKE AND THE SAME IS TAXED AS UNACCOUNTED AND UNDISCLOSED INCOME IN HIS HANDS FOR THE YEAR UNDER CONSIDERATION. THE ASSESSEE HAS SURRENDERED THE INCOME OF RS. 15,36,071/- ON THIS ACCOUNT PLEADING THAT THE PENALTY FOR CONCEALMENT MAY NOT BE LEVIED IN HIS 9 CASE CONSIDERING THE FACT THAT THE DIFFERENCE OF INCOME HAS ARISEN DUE TO METHOD OF ACCOUNTING FOLLOWED BY HIM ON RECEIPTS BASIS. THE PENAL PROVISIONS U/S 271(1)(C) ARE ATTRACTED IN THE ASSESSEES CAASE AS HE WAS NOT ABLE TO RECONCILE AS TO HOW COMMISSION DISCLOSED AS PER P&L ACCOUNT WAS WORKED OUT AND ALSO NO PROPER RECORD OF EVENT OF BUSINESS WAS MAINTAINED. THEREFORE, AMOUNT OFRS. 18,70,039/- IS ADDED TO THE TOTAL INCOME ON ACCOUNT OF UNDISCLOSED INCOME AND PENALTY PROCEEDINGS U/S 271(1) ARE SEPARATELY INITIATED FOR CONCEALMENT 10 AND FURNISHING OF INACCURATE PARTICULARS OF HIS INCOME. IN VIEW OF THE ABOVE DISCUSSION AND THE FACT THAT THE APPELLANT HAD AGREED FOR THE WORKING OF UNDISCLOSED INCOME AT PAGE NO. 9 & 10 OF THE ASSESSMENT ORDER AND ALSO HAD COME OUT WITH THE SURRENDER OF RS.15,36,071/- AS BROUGHT OUT ABOVE, I DO NOT FIND ANY REASON TO INTERFERE WITH THE SPEAKING ORDER OF THE A.O. PARTICULARLY WHEN THE APPELLANT HAS FAILED TO CONTROVERT THE FINDINGS BROUGHT OUT IN THE ASSESSMENT ORDER WITH CONCLUSIVE AND DEFINITE EVIDENCES. THEREFORE, THE ADDITION OF RS. 1,70,039/- IS HEREBY SUSTAINED. THE GROUND OF APPEAL IS DISMISSED. 11 3. BEFORE US, IT WAS SUBMITTED BY THE LEARNED COUNSEL FO R THE ASSESSEE AND THAT THE ASSESSEE IS WORKING AS CLEARIN G AND FORWARDING AGENT AND THE ASSESSEE RECEIVED CERTAIN AMOUNTS FROM VARIOUS CLIENTS TO BE PAID AS CUSTOM DUTY FOR CLEARING THE GOODS. THEREFORE, THESE WERE THE AMOUNTS WHICH WERE NOT AT ALL RELATED TO THE ASSESSEES TURNOVE R BUT TO BE DEPOSITED WITH THE GOVERNMENT. THE ASSESSEE RECEIVED NET COMMISSION INCOME AND AFTER ACCOUNTING FO R THE EXPENSES, THE INCOME WAS DISCLOSED. 4. AFTER HEARING BOTH THE SIDES ON VARIOUS ASPECTS OF T HE CASE, WE ARE OF THE VIEW THAT BEFORE ESTIMATING AND REJE CTING THE BOOKS OF ACCOUNTS FIRST TRUE CHARACTER OF RECEIPTS HAS TO BE DECIDED. WHETHER THESE AMOUNT ARE TRADING RECEIPTS OR OTHERWISE. THE TRUE CHARACTER OF COLLECTION IS IF TRAD ING RECEIPT THEN IT WILL FORM PART OF THE ASSESSEES RECD EIPT AND THE INCOME SHALL BE ESTIMATED ON THE SAME. THE AMOUNT RECEIVED BY THE ASSESSEE ON WHICH HE DID NOT DERIVE ANY 12 BENEFIT BUT HAS CONSTITUTED AS TRUSTEE THEN THE AMOUNT S SO RECEIVED SHALL NOT REQUIRED TO BE REGARDED AS PART OF IT S TRADING RECEIPT. THEREFORE, FOR DECIDING THE TRUE CH ARACTER OF THE RECEIPT, WE FIND IT APPROPRIATE TO RESTORE THE IS SUE TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE CHARACTER OF RECEIPTS WHETHER THESE CAN BE REGARDED AS TRADING RECEI PT IN THE HANDS OF THE ASSESSE. AFTER DECIDING THE SAME, THE INCOME OF THE ASSESSEE BE ESTIMATED. APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 91/IND/2014 5. SINCE WE HAVE RESTORE THE ISSUE TO THE FILE OF TH E ASSESSING OFFICER IN THE QUANTUM APPEAL, THEREFORE, T HE PENALTY LEVIED U/S 271B OF THE ACT FOR NOT GETTING T HE ACCOUNTS AUDITED AS PER REQUIREMENTS OF SECTION 44AB OF THE ACT IS ALSO RESTORED TO THE FILE OF THE ASSESSIN G OFFICER FOR DECIDING THE SAME AFRESH 13 6. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 6 TH JULY, 2015. SD SD (D.T. GARASIA) (B.C.MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 6 TH JULY, 2015 DN/-