The ACIT, Circle-5, Ahmedabad V. Relogistics (Ahmedabad) Pvt.Ltd., Mumbai

ITA 969/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0570 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 23-08-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 09-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR
• Keywords: Business income; Difference of opinion; Change of opinion
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 969/AHD/2013 (ASSESSMENT YEAR: 2006-07) ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-5, AHMEDABAD V/S RELOGSTICS (AHMEDABAD) PVT. LTD. COURT HOUSE, 3 RD FLOOR, L.T. MARG, DHOBI TALAO, MAMBAI-400002 (APPELLANT) (RESPONDENT) PAN: AACCR3224Q APPELLANT BY : SHRI PRASOON KABRA, SR. D. R. RESPONDENT BY : SHRI S.N. SOPARKAR, A.R. ( )/ ORDER DATE OF HEARING : 23 -08-201 6 DATE OF PRONOUNCEMENT : 16 -09-2016 PER MAHAVIR PRASAD, JUDICIAL MEMBER: 1. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)- XI, AHMEDABAD DATED 03.01.2013 PERTAINING TO A.Y. 2 006-07 AND HAS RAISED THE FOLLOWING GROUNDS:- ITA NO. 969/ AHD/2013 . A.Y. 2006-0 7 2 1.THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN Q UASHING THE NOTICE ISSUED U/S. 148 OF THE INCOME TAX ACT. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN QUASHING THE ASSESSMENT ORDER U/S. 143(3) R.W.S. 147 DETERMINING THE TOTAL INCOME OF R S. 44,02,475/-. 2. FACTS OF THE CASE ARE THAT THE ASSESSMENT U/S. 143( 3) OF THE IT ACT WAS COMPLETED ON 11.12.2008 BY MAKING THE ESTIMATIN G THE NET PROFIT OF THE ASSESSEE AT 1.5% OF ALL RECEIPTS OF INCOME A FTER REJECTING THE BOOKS OF ACCOUNTS. IT WAS SEEN FROM THE RECORDS THA T, WHILE ESTIMATING THE GROSS PROFIT AT 1.5% OF THE TOTAL INCOME OF RS. 24,81,46,062/-, A SUM OF RS. 25,20,265/- OF MISCELLANEOUS INCOME WAS ALSO INCLUDED ALONG WITH THE SALES RECEIPTS OF RS. 24,56,25,797/- . A NOTICE U/S. 148 OF THE IT ACT DATED 30.03.2011 WAS ISSUED TO THE AS SESSEE AFTER DULY RECORDING THE REASONS FOR REOPENING. THE ASSESSEE, IN ITS REPLY DATED 02.05.2011 REQUESTED THAT THE ORIGINAL RETURN MAY T REATED AS RETURN FILED IN RESPONSE TO NOTICE U/S. 148. A.O. 3. THE ASSESSEE VIDE THIS OFFICE LETTER DTD. 07.09. 20 11 WAS REQUIRED TO EXPLAIN AMOUNT OF MISCELLANEOUS INCOME OF RS 25,20, 265/- SHOULD NOT BE EXCLUDED FROM THE TOTAL RECEIPTS OF RS 24,81,46, 062/- AND THE NET PROFIT AT 1.5% BE RECALCULATED. THE ASSESSEE, VIDE ITS REPLY DTD. 20.09.2011 SUBMITTED THAT THE MISCELLANEOUS INCOME CONSISTS OF VARIOUS RECEIPTS SUCH AS: DETENTION CHARGES 273351 EXCESS PROVISIONS WRITTEN BACK 28658 MULTIPOINT DELIVERY CHARGES 30050 OTHER DIRECT INCOME* 1955667 TRANSHIPMENT CHARGES 18480 INTEREST ON IT REFUND 80870 SERVICE CHARGE 2520265 ITA NO. 969/ AHD/2013 . A.Y. 2006-0 7 3 *0THER' DIRECT INCOME COMPRISES OF BILLS RAISED TO CUSTOMERS TOWARDS FREIGHT BUT BOOKED IN OTHER DIRECT INCOME AND MUNSH IANA INCOME AS PER TRADE PRACTICE DEDUCTED FROM LORRY OWNERS HIRE CHARGES PAYMENT. 4. THE ASSESSEE FURTHER SUBMITTED THAT THE ABOVE IN COME (EXCEPT INTEREST ON IT REFUND) ARE IN THE NATURE OF BUSINESS INCOME EARNED IN THE COURSE OF BUSINESS ACTIVITY DURING THE YEAR UNDER C ONSIDERATION, AND THEREFORE WHILE ESTIMATING THE GROSS PROFIT OF THE BUSINESS INCOME, THE INCOME RELATED TO THE INTEGRATED BUSINESS ACTIVITY OF TRANSPORTATION. THEREFORE, THE ASSESSEE SUBMITTED THEIR BUSINESS RE LATED OTHER INCOME CANNOT BE EXCLUDED FROM THE TOTAL INCOME FOR ESTIMA TING THE GROSS PROFIT. 6. THE SUBMISSIONS OF THE ASSESSEE HAVE BEEN CAREFU LLY CONSIDERED. THE TOTAL RECEIPTS OF THE ASSESSEE INCLUDES SALES AND M ISCELLANEOUS INCOME. MISCELLANEOUS INCOME INCLUDES VARIOUS RECEIPTS MENT IONED IN PARA 2 ABOVE. ON PERUSAL OF THE DETAILS OF MISCELLANEOUS I NCOME GIVEN BY THE ASSESSEE, IT IS SEEN THAT THESE ARE NOT RECEIPTS FR OM THE TRANSPORTATION BUSINESS OF THE ASSESSEE, BUT ARE RECEIPTS WHICH HA VE ACCRUED / RECEIVED BY THE ASSESSEE, WHICH ARE INCIDENTAL TO T HE MAIN BUSINESS OF THE ASSESSEE. THESE ARE RECEIPTS WHICH ARE IN THE N ATURE OF OTHER INCOME, WHICH CAN AT BEST BE TREATED AS INCIDENTAL INCOME. 7. UNDER THE SAID ORDER, ASSESSEE PREFERRED STATUTORY APPEAL BEFORE THE LD. CIT(A). 8. WHILE ALLOWING THE APPEAL OF THE ASSESSEE, LD. CIT( A) HELD THAT NOTICE U/S. 148 WAS HELD TO BE INVALID AND METHODOLOGY ADO PTED BY THE A.O. WAS NOT TENABLE ON MERITS ALSO. IN THE IMPUGNED ORD ER DATED ITA NO. 969/ AHD/2013 . A.Y. 2006-0 7 4 30.09.2011 AND THE ORIGINAL ASSESSMENT ORDER DATED 11.12.2008, THE A.O. HAD APPLIED NET PROFIT RATE OF 1.5% ON THE TOT AL RECEIPTS FILED BY THE ASSESSEE AND SAME WAS REFERRED UNDER RULE 18(6) . 9. ON PERUSAL OF THE RECORD, IT WAS REVEALED THAT THE HONBLE ITAT IN ITA NO. 4233/AHD/2007 AND ITA NO. 4339/AHD/2007 DATED 1 3.08.2010 HAD SET ASIDE THE ASSESSMENT ORDER FOR THE ASSESSME NT YEAR 2004-05 TO THE FILE OF THE A.O. IN COMPLIANCE OF THE DIRECT ION OF HONBLE ITAT, THE A.O. HAD COMPLETED THE ASSESSMENT ORDER U/S. 14 3(3) R.W.S. 254 ON 29.12.2011. AFTER VERIFYING THE BOOKS OF ACCOUNT S AND OTHER EVIDENCES, THE A.O. ACCEPTED THE RETURNED LOSS OF R S. 28,14,941/- AND HONBLE ITAT HAD SET ASIDE THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2005-06 AND A.O. IN THE ASSESSMENT YEAR 2008-0 9 HAD ACCEPTED THE RETURNED LOSS OF RS.1,48,584/- VIDE ASSESSMENT ORDER COMPLETED U/S. 143(3) ON 26.11.2010. THEREFORE, IT CLEARLY SH OWS THAT THE ESTIMATION OF NET PROFIT IN THE CURRENT ASSESSMENT YEAR IS APPARENTLY NOT TENABLE AS IN THE YEAR WHEN FOR THE FIRST TIME THIS ISSUE WAS RAISED, THE A.O. HAD ACCEPTED THE PROFITS AS DECLARED BY TH E APPEALLANT BUT AFTER THE CURRENT YEAR THE A.O. IS ACCEPTING THE RE TURNED INCOME ON THE SIMILAR FACTS. THEREFORE, THE APPEAL WAS ALLOWED BY THE LD. CIT(A). 10. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMPUGN ED ORDER AND WE FIND THAT THE REASON RECORDED BY THE A.O. BE FORE ISSUING NOTICE U/S. 148 DATED 30.03.2011 DOES NOT MENTION ABOUT AN Y NEW INFORMATION AVAILABLE WITH THE A.O. THUS, THERE IS A CHANGE OF OPINION WITHOUT ANY FRESH INFORMATION AND REOPENING OF THE ASSESSMENT IS LIABLE TO BE QUASHED AND RELIANCE IN THIS REGARD IS PLACED IN THE CASES OF CIT VS. CLAGGET BRACHI & CO. LTD., 177 ITR 409 ( SC), S B (HOUSE ITA NO. 969/ AHD/2013 . A.Y. 2006-0 7 5 AND LAND) PVT. LTD. VS. CIT (1979) 119 ITR 785 (CAL .) AND CIT VS. KELVINATOR OF INDIA LTD. 320 ITR 561 (SC). 11. IN VIEW OF THE ABOVE DISCUSSION, APPEAL OF THE REVE NUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 16 - 09- 2016 . SD/- SD/- (PRAMOD KUMAR) (MAHAVIR PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD