Anamul Rahman , Ballia V. Dy.CIT, Circle - 02, Varanasi

ITA 91/VNS/2020

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 0151 (ITAT-VARANASI)
• Duration Of Justice: 2 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 18-03-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Corroborative evidences
• Section: 148; 139; 143(3); 44AB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CIRCUIT ‘SMC’ BENCH, VARANASI BEFORE SHRI.VIJAY PAL RAO, JUDICIAL MEMBER ITA No.91/VNS/2020 Assessment Year: 2011-12 Shri Anamul Rahman, Khajipura, Ballia, U.P. PAN-AQHPR8122R v. Dy. CIT, Circle-2,Varanasi (Appellant) (Respondent) Appellant by: None Respondent by: Sh. A.K. Singh, Sr. D.R. Date of hearing: 05.07.2022 Date of pronouncement: 01.08.2022 O R D E R SHRI VIJAY PAL RAO, JUDICIAL MEMBER: This appeal by the assessee is directed against the order dated 22.05.2019 of CIT(A) for the assessment year 2011-12. 2. None has appeared on behalf of the assessee when this appeal was called for hearing. It transpires from the record that this appeal was fixed for hearing for 7 seven times from 27 th January, 2022 to 5 th July, 2022 but nobody appeared on behalf of the assessee, whenever this appeal was listed for hearing despite the fact that notices were issued to the assessee on each and every occasion. Thus, all efforts were made by the Registry by issuing the notice through RPAD as well as email to the email ID given by the assessee but nobody has appeared on behalf of the assessee since beginning therefore, the Bench proposes to hear and dispose of this appeal, ex parte. The assessee has raised the following grounds:- “1. Sale made in cash and collected from customers daily has disallowed business of appellant done in cash, being customers are of small ground. ITA No.91/VNS/2020 Anamul Rahman 2 2. Appellant had produced all the books of accounts with details but Assessing Officer had erred in applying arbitrary rate hence must be deleted. 3. Assessing Officer had applied imaginary rate without any reason and hence must be deleted.” 3. The assessee is an individual and engaged in the business of sale and purchase of apple business. The assessee did not file return of income under section 139 of the Act. The Assessing Officer issued notice under section 148 on 28.03.2018. In response to that the assessee filed the return of income on 11.5.2018 declaring total income of Rs. 31,925/-. The Assessing Officer noted that the assessee has disclosed a turnover of Rs. 2,74,32,115/- against which the assessee has claimed the expenses on account of purchase and other expenses which are not open to verification. The sales has been shown in cash which is also not verifiable. The Assessing Officer accordingly estimated the income of the assessee by applying net profit rate at 5% on sale disclosed by the assessee which comes to Rs. 13,71,610/-. Accordingly, the Assessing Officer made an addition of Rs. 13,71,610/- while passing the order under section 143(3) r.w.s. 147 on 24 th July, 2018. The assessee challenged the action of the Assessing Officer before the CIT(A), but could not succeed. 4. I have gone through the submissions of the assessee made before the CIT(A) in para 4 of the impugned order as under:- “During the course of appellate proceedings, it was submitted that the Assessing Officer has arbitrarily applied net profit rate of 5% on disclosed sale of Rs. 2,74,32,115/- and has ignored the books of accounts and sale and purchase which were maintained and produced during the course of assessment proceedings. It was submitted that since the appellant deals in trading of fruits which is perishable in nature, substantial quantity of fruits goes to wastage. It was further submitted that the assessee produced purchase bills and sales details before the Assessing Officer. However, the Assessing Officer has not accepted the same and has estimated the net profit at 5%.” ITA No.91/VNS/2020 Anamul Rahman 3 5. On the other hand, learned DR has submitted that the assessee has declared the turnover of Rs. 2,74,32,115/- but has not produced any material in support of the claim of the expenditure therefore, the income declared by the assessee at Rs. 31,925/- on such a huge turnover cannot be accepted. He has further submitted that the Assessing Officer has applied the net profit @ 5% which is very reasonable and proper. He has relied upon the orders of the authorities below. 6. From the submissions made by the assessee before CIT(A), it is clear that the assessee has not disputed the fact that the entire purchase and sale was shown by the assessee in cash. The assessee has also contended that he deals in trading of fruits which is perishable in nature and substantial quantity of fruits go wastage. The CIT(A) has considered these submissions of the assessee and decided the issue in para 5 as under:- “I have considered the facts of the case and have also gone through the submission made by the appellant. It is also to bring on record that the appellant has not produced books of accounts or vouchers during the course of appellate proceedings. It is also matter of record that the so called books of accounts maintained by the appellant have not been audited u/s 44AB of the IT Act even though the appellant was required to get his books of account audited. The A.O. has clearly mentioned in the assessment order that various details of sales expenses and purchases are not open to verification being incurred mostly in cash. Since the books of accounts are not audited and the same has not been produced, the estimation of net profit @ 5% by the A.O. is more than reasonable and no interference is called for. Accordingly, the addition made by the A.O. is sustained and the appeal is dismissed.” 7. The CIT(A) has stated in the impugned order that the so called books of accounts of the assessee are not audited under section 44AB and therefore, the same cannot be verified in the absence of supporting evidence and in view of the fact that the sales as well as the entire expenditure is incurred in cash. The assessee ITA No.91/VNS/2020 Anamul Rahman 4 has not brought any material on record to show that the net profit adopted by the A.O. @ 5% is unreasonable and excessive in comparison to the prevailing net profit in this trade. Accordingly, in the facts and circumstances of the case, I do not find any reason to interfere with the impugned order of the CIT(A). The same is upheld. 8. In the result, the appeal of the assessee is dismissed. Order pronounced on 01.08.2022 at Allahabad, U.P. in accordance with Rule 34(4) of Income Tax (Appellate Tribunal) Rules, 1963. Sd/- [VIJAY PAL RAO] JUDICIAL MEMBER DATED: 01/08/2022 Varanasi/Allahabad Sh Copy forwarded to: 1. Appellant- Anmul Rahman 2. Respondent- Dy. CIT, Circle-2, Varanasi 3. CIT(A),Varanasi 4. CIT 5. DR By order Sr. P.S.