Harish Kachroo, Prop.M/s Rotoffset Corporation, New Delhi V. ITO, New Delhi

ITA 932/DEL/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3224 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 17-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S N MEENA
• Keywords: TDS; Set aside
• Section: 80C; 144

Judgement Text

1 I.T.A NO. 932/DEL/2017 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE SH. N. K. BILLAIYA, ACCOUNTANT M EMBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A NO. 932/DEL/2017 (ASSESSMENT YEAR : 2012-13) HARISH KACHROO PROP. M/S. ROTOFFSET CORPORATION, A-1, MOD APARTMENTS, PLOT NO.61, VASUNDRA ENCLAVE, DELHI 110 092. (PAN : AETPK 4285 J) (APPELLANT) VS IT O , WARD 60(4), VIKAS BHAWAN, NEW DELHI. (RESPONDENT) APPELLANT BY SHRI K. V. S. R. KRISHNA, C.A. RESPONDENT BY SHRI S. N. MEENA, SR. D.R. ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 01.11.2016 PASSED BY COMMISSIONER OF INCOME TAX (APPEALS) 19 , NEW DELHI FOR ASSESSMENT YEAR 2012-13. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THE ORDER OF ASSESSING OFFICER IS BAD IN LAW AND A GAINST THE FACTS OF THE CASE. 2. AO HAS WRONGLY ADDED AND CIT(A) HAS WRONGLY UPHELD A SUM OF RS.9,58,796/- BY INCREASING THE GROSS PROFIT RATE W HICH NEEDS TO BE DELETED. DATE OF HEARING 03.12.2019 DATE OF PRONOUNCEMENT 04.12.2019 2 I.T.A NO. 932/DEL/2017 2. THE AO HAS WRONGLY DISALLOWED AND CIT(A) HAS WRO NGLY UPHELD A SUM OF RS.13,00,000/- BEING COMMISSION PAID WHICH N EEDS DELETION. 3. THE ABOVE GROUNDS ARE INDEPENDENT AND WITHOUT PR EJUDICE TO ONE AND ANOTHER. THE APPELLANT ALSO PRAYS TO ADD, AMEND , ALTER TO FORGO ANY OF THE GROUNDS AT THE TIME OF HEARING. 3. THE ASSESSEE IS AN INDIVIDUAL AND STARTED HIS BU SINESS OF FABRICATION / MANUFACTURING OF OFFSET PRINTING MACHINES. THE RETU RN DECLARING GROSS TOTAL INCOME OF RS.5,01,053/- WAS FILED ON TIME ON 29.09. 2012 AND AFTER CLAIMING REBATE U/S 80C OF THE INCOME TAX ACT FOR RS.24,876/ -, TAX ON TAXABLE INCOME OF RS.4,76,180/- WAS DEPOSITED. THE ASSESSEES TURN OVER WAS RS.88.74 LAC. THE CASE WAS TAKEN UP FOR SCRUTINY AND THE ASSESSEE ATT ENDED THE PROCEEDINGS FROM TIME TO TIME AND SUBMITTED BOTH WRITTEN SUBMISSIONS AS WELL AS ORAL SUBMISSIONS. THE ASSESSMENT IN THIS CASE WAS MADE U /S 144 OF THE INCOME TAX ACT, 1961 AT TOTAL INCOME OF RS.69,65,610/- AS AGAINST THE RETURN INCOME OF RS.5,01,053/- (4,76,180/-) AFTER MAKING VARIOUS ADDITIONS AS UNDER: (1) ADDITION DUE TO ENHANCEMENT OF GP RATE : 9, 58,796/- (2) DISALLOWANCE OF UNVERIFIABLE EXPENSES : 21,28,9 73/- (3) DISALLOWANCE OF SUNDRY CREDITORS : 10,24,681/- (4) DISALLOWANCE OF SUNDRY DEBTORS : 8,00,739/- (5) DISALLOWANCE OF COMMISSION PAID : 13,00,000/- (6) ADDITION OF ACCOUNT OF LOW HOUSEHOLD : 2,73 ,624/- WITHDRAWALS 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER THE ASSE SSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5. THE LD. AR SUBMITTED THAT GROUND NO.1 IS GENERAL IN NATURE AND GROUND NO.2 IS NOT PRESSED. THEREFORE, GROUND NO.1 AND 2 A RE DISMISSED. 6. AS REGARDS GROUND NO.3, THE LD. AR SUBMITTED THA T THE ASSESSING OFFICER AS WELL AS CIT(A) WAS NOT CORRECT IN UPHOLDING A SU M OF RS.13 LAC BEING COMMISSION PAID WHICH NEEDS DELETION. THE ASSESSEE HAS PROVED ITS 3 I.T.A NO. 932/DEL/2017 GENUINENESS OF COMMISSION PAID TO THE ASSESSEE AS T HE TDS WAS DULY DEDUCTED BEFORE THE REVENUE AUTHORITIES. THE LD. AR FURTHER SUBMITTED THAT NAME AND ADDRESS AS WELL AS BANK STATEMENT OF RECIPIENT WERE FILED DURING THE ASSESSMENT PROCEEDINGS. THE LD. AR FILED THE COMPUT ATION OF GROSS LOSS / NET PROFIT WHICH IS AS UNDER: PARTICULARS AMOUNT GROSS SALES 14,657,786 NET PROFIT AS PER TRADING PROFIT AND LOSS ACCOUNT DECLARED 501,055 % NET PROFIT TO SALES 3.42% ADDITIONS DUE TO REJECTION OF ACCOUNTS AND APPLYING GP RATE OF 25% 958,796 NET PROFIT AFTER CONSIDERING THE ADDITION 1,459,851 RESULTANT % OF NET PROFIT AFTER ADDITION 9.96% THE LD. AR FURTHER SUBMITTED THAT EVEN UNDER PRESU MPTIVE BASIS OF TAXATION A SUM EQUAL TO 8% OF TOTAL TURNOVER OF THE ASSESSEE IS CONSIDERED AS PROFIT AND GAINS OF BUSINESS CHARGEABLE TO TAX UNDE R THE HEAD PGBP. THE LD. AR, THEREFORE, SUBMITTED THAT HAVING REJECTED THE B OOKS OF ACCOUNTS, THE ADDITION MADE BY THE ASSESSING OFFICER AND SUSTAINE D BY THE CIT(A) RESULTS IN TAXABLE INCOME OF 9.96%. THUS, NO FURTHER DISALLOWA NCE OF COMMISSION WHICH IS BASED ON BOOKS OF ACCOUNTS SHOULD BE MADE. THE L D. AR SUBMITTED THAT THE ASSESSING OFFICER HAS REJECTED THE BOOKS OF ACCOUNT S AND DESPITE THAT ALLOWED SOME EXPENSES WHICH IS CONTRARY TO THE STAND OF THE REVENUE. THE LD. AR FURTHER SUBMITTED THAT NO ESTIMATION IS ALLOWED UND ER THESE CIRCUMSTANCES AND COMMISSION SHOULD NOT BE DISALLOWED SPECIFICALL Y IN CONSEQUENCE WITH GROSS PROFIT. THEREFORE, THE LD. AR PRAYED THAT THI S ADDITION MAY BE DELETED. 7. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AS W ELL AS THE ORDER OF THE CIT(A). THE LD. DR FURTHER SUBMITTED THAT DURING TH E ASSESSMENT PROCEEDINGS AS WELL AS APPELLATE PROCEEDINGS, THE ASSESSEE DID NOT CO-OPERATE AND NO EVIDENCE WHATSOEVER WAS FILED. THEREFORE, THE ASSES SING OFFICER RIGHTLY REJECTED 4 I.T.A NO. 932/DEL/2017 THE BOOKS OF ACCOUNTS AS THE SAME WAS NOT FILED. TH E LD. DR FURTHER SUBMITTED THAT THE GP IN TRADING EXPENSES WAS RIGHTLY ALLOWED BY THE ASSESSING OFFICER. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIALS AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT T HE BOOKS WERE REJECTED BY THE ASSESSING OFFICER WITHOUT GIVING ANY PROPER REASONS AND HAS NOT AT ALL VERIFIED THE BOOKS OF ACCOUNTS DESPITE THE SAME WAS BEFORE T HE ASSESSING OFFICER. THE CIT(A) HAS OBSERVED THAT THE ASSESSEE THROUGH SPEED POST SENT COMPUTATION OF INCOME OF MRS. RUBY RANI JHA AND SHRI PANKAJ JHA EV IDENCING RECEIPT OF COMMISSION. THE CIT(A) HAS RIGHTLY OBSERVED THAT TH E EXPENSES CONSTRUED THE TRADING EXPENSES OF THE ASSESSEE AND DESPITE REJECT ING THE BOOKS OF ACCOUNTS ESTIMATED THE GROSS PROFIT AS A PART OF ASSESSEES TRADING EXPENSES SINCE IT WILL AMOUNT TO DOUBLE ADDITION. THE CIT(A) AS WELL AS TH E ASSESSING OFFICER THEMSELVES ARE CONTRADICTING THE PERTINENT MATERIAL PLACED BEFORE BOTH THE REVENUE AUTHORITIES BY ASSESSEE. THE FINDINGS OF TH E CIT(A) PERTINENTLY STATE THAT THERE WAS A TRADING AND IT IS PROPERLY REFLECT ED IN BOOKS OF ACCOUNTS WHICH WAS REJECTED WITHOUT ANY SUBSTANTIAL REASON BY THE ASSESSING OFFICER. THEREFORE, THE DISALLOWANCE OF COMMISSION WAS NOT R IGHTLY MADE BY THE ASSESSING OFFICER AND CONFIRMATION BY CIT(A) ON THE SAME ISSUE WAS ON A WRONG FOOTING ALTOGETHER. THEREFORE, THE ORDER OF C IT(A) IS SET ASIDE AND THIS ADDITION DOES NOT SUSTAIN. THUS, GROUND NO.3 IS ALL OWED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 4 TH DAY OF DECEMBER, 2019 . SD/- SD/- (N. K. BILLAIYA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 04/12/2019 PRITI YADAV, SR. PS * 5 I.T.A NO. 932/DEL/2017 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 03 . 12 .2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 04 . 12 .2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 0 4 . 1 2 . 2 0 1 9 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS 0 4 . 1 2 . 2 0 1 9 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 0 4 . 1 2 . 2 0 1 9 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 0 4 . 1 2 . 2 0 1 9 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 0 4 . 1 2 . 2 0 1 9 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 0 4 . 1 2 . 2 0 1 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK