Narendra Kumar Behera, Boudh V. ITO, Phulbani Ward, Phulbani, Phulbani

ITA 93/CTK/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5086 (ITAT-CUTTACK)
• Duration Of Justice: 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 29-03-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: G NAIKRAJAT KARS K SARANGI ARS
• Keywords: Reassessment proceedings
• Section: 44AD

Judgement Text

P A G E 1 | 4 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG , JUDICIAL MEMBER ITA NO. 9 3 /CTK/201 9 ASSESSMENT YEA R: 2014 - 15 NARENDRA KUMAR BEHERA, FCI ROAD, PHULBANI, DIST: KANDHAMAL VS. ITO, PHULBANI WARD, PHULBANI PAN/GIR NO. AHOPB 4630 N (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI G NAIK/RAJAT KAR/S.K.SARANGI, ARS REVENUE BY : SHRI SUBHENDU DUTTA, DR DATE OF HEARING : 26 / 0 4 / 201 9 DATE OF PRONOUNCEMENT : 13 / 0 5 / 201 9 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS) - 1, BHUBANESWAR DATED 18.1.2019 FOR THE ASSESSMENT YEAR 201 4 - 15. 2. GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS UNDER: 1. FOR THAT THE ORDER DATED 8.1.2019 FOR THE A.Y. 14 - 15 PASSED BY THE CIT(A) IS FAR FROM JUST AND LEGAL ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 2. FOR THAT THE INITIATION OF REASSESSMENT PROCEEDINGS U/S.147 OF THE I.T.ACT BY THE AO AND CONFIRMATION OF THE ITA NO.9 3 /CTK/2019 ASSESSMENT YEAR: 2014 - 15 P A G E 2 | 4 SAME BY TH E CIT(A) IS ILLEGAL AND WITHOUT JURISDICTION ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 3. FOR THAT THE CIT(A) IS NOT JUSTIFIED TO CONFIRM THE ORDER OF THE AO IN ESTIMATING PROFIT @ 8% U/S.44AD OF THE I.T.ACT WHEN THE SALES TURNOVER OF THE ASSESSEE HAS EXCEEDED THE MONETARY LIMIT OF RS.1 CRORE ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 3. AT THE TIME OF HEARING, LD A.R. OF THE ASSESSEE DID NOT PRESS GROUND NO.1 AND 2 OF APPEAL, HENCE, SAME ARE DISMISSED AS NOT PRESSED. 4. GROUND NO.3 RELATE S TO ESTIMATION OF PROFIT @ 8% ON THE ENTIRE BANK DEPOSITS. 5. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD MADE CASH/CHEQUE DEPOSITS AMOUNTING TO RS.1,48,24,129/ - IN THE BANK ACCOUNTS OF UCO BANK, STATE BANK OF INDIA AND UTKAL GRAMEEN BANK, BOUDH. THE ASSESSING OFFICER ALSO OBSERVED THAT THE ASSESSEE IS NOT MAINTAINING BOOKS OF ACCOUNT U/S.44AD AND DISCLOSED TURNOVER OF RS.65,14,665/ - . IN ABSENCE OF BOOKS OF ACCOUNT, THE ASSESSING OFFICER ESTIMATED THE NET PROFIT OF THE ASSESSEE AT 8% U/S.44AD O F THE I.T.ACT, 1961 CONSIDERING THE TOTAL BANK DEPOSITS OF RS.1,48,24,129/ - , THE ASSESSING OFFICER ESTIMATED NET PROFIT AT 8% U/S.44AD AND ADDED RS.6,64,757/ - TO THE INCOME OF THE ASSESSEE, WHICH WAS CONFIRMED IN FIRST APPEAL. ITA NO.9 3 /CTK/2019 ASSESSMENT YEAR: 2014 - 15 P A G E 3 | 4 6. AT THE TIME OF HEARING, L D A.R. SUBMITTED THAT THE ESTIMATION OF NET PROFIT AT 8% IS EXCESSIVE AND SAME SHOULD BE REDUCED TO 4% AS THE ASSESSEE IS IN FOOTWARE TRADING BUSINESS IN THE BOUDH DISTRICT. LD A.R RELIED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF MOHD ASI F HABIBR, VS PR.CIT IN I.T.A. NO.36 OF 2015 DATED 20.8.2018 AND CONTENDED THAT PROVISIONS OF SECTION 44AD DOES NOT APPLY AS THE TURNOVER OF THE ASSESSEE HAS EXCEEDED RS.1 CRORE AND NET PROFIT @ 8% IS ILLEGAL. 7. LD D.R. SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES AND SUBMITTED THAT THE ESTIMATION HAS BEEN MADE AS PER THE DISCLOSURE OF THE ASSESSEE ON A TURNOVER OF RS.65,14,665/ - . 8. AFTER HEARING THE RIVAL SUBMISSIONS AND PERUSING THE ORDERS OF LOWER AUTHORITIES, I OBSERVE THAT AS PER THE AMENDMENT MADE BY THE LEGISLATURE IN THE FINANCE (NO.2)ACT, 2014 W.E.F. 1.4.2013, THE TURNOVER OF RS.1 CRORE HAS BEEN SUBSTITUTED BY RS.2 CRORES AND THE PERCENTAGE OF ESTIMATION OF PROFIT HAS BEEN REDUCED TO 6%. I ALSO OBSERVE T HAT THE WHILE APPLYING NET PROFIT 2 8%, THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY COMPARABLE CASES. ANOTHER ASPECT HAS TO BE TAKEN INTO CONSIDERATION THAT THE ASSESSEE IS CARRYING ON ITS BUSINESS ACTIVITIES IN BOUDH DISTRICT, A REMOTE AREA, WHER E THE PROFIT MARGIN IS VERY LOW. THEREFORE, ITA NO.9 3 /CTK/2019 ASSESSMENT YEAR: 2014 - 15 P A G E 4 | 4 LOOKING INTO THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND THAT CONSIDERING THE FACT THAT THE ASSESSEE IS IN FOOT - WARE TRADING BUSINESS, AS NOTED ABOVE, I FOUND IT APPROPRIATE TO REDUCE THE ESTIMATION OF NET PROFIT FROM 8% TO 6%. THE ASSESSING OFFICER IS DIRECTED TO RECOMPUTE THE NET PROFIT ACCORDINGLY. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 13 / 0 5 /201 9 . S D/ - ( CHANDRA MOHAN GARG ) JUDICIALMEMBER CUTTACK; DATED 13 / 0 5 /20 9 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER SR. PVT. SECRETARY, ITAT, CUTTACK 1. THE APPELLANT : NARENDRA KUMAR BEHERA, FCI ROAD, PHULBANI, DIST: KANDHAMAL 2. THE RESPONDENT. ITO, PHULBANI WARD, PHULBANI 3. THE CIT(A) - 1, BHUBANESWAR 4. PR.CIT - 1, BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//