M/S Shri Ram Tractors, Ujjain V. THE ITO Ward-1(2), Ujjain

ITA 979/IND/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2361 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 1997-1998
• Appeal Filed On: 23-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S S DESHPANDE
• Section: 148; 144; 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.979/IND/2016 ASSESSMENT YEAR:1997-98 SHRI RAM TRACTORS, 61, FAJALPURA, UJJAIN / VS. ITO, WARD - 1 ( 2 ), UJJAIN (APPELLANT) (REVENUE ) P.A. NO. AAFFS0812B APPELLANT BY SHRI S.S. DESHPANDE CA , REVENUE BY SHRI RAJIV JAIN , SR. DR DATE OF HEARING: 04.01.2018 DATE OF PRONOUNCEMENT: 12.01.2018 / O R D E R PER MANISH BORAD, A.M: THIS APPEAL OF ASSESSEE PERTAINING TO A.Y. 1997-98I S DIRECTEDAGAINST THE ORDER OF LD. COMMISSIONER OF IN COME TAX(APPEALS)-UJJAIN,(IN SHORT CIT(A)), DATED 01.0 7.2016 WHICH IS ARISING OUT OF THE ORDER U/S 154 OF THE INCOME TAX ACT 1961(HEREINAFTER CALLED AS THE ACT) FRAMED ON 06. 06.2014 BY ITO- 1(2). THE SOLE GROUND RAISED BY THE ASSESSEE READS AS UNDER: THE LD. CIT(A) HAS ERRED IN LAW AND WAS NOT JUSTIF IED IN CONFIRMING ACTION OF AO NOT RECTIFYING HIS ORDER GI VING EFFECT ON RAM TRACTORS 2 ACCOUNT OF REVISED SALE OF RS.25,87,818/- DETERMINE D BY THE SALES TAX AUTHORITIES AS AGAINST UNDISCLOSED SALES OF RS.1,68,22,976/- EARLIER ASSESSED AND THEREBY NOT R EDUCING THE INCOME ON APPLYING NET PROFIT RATIO OF 3% ON REVISE D SALES. 2. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED RECO RD PLACED BEFORE US AND GONE THROUGH PAPER BOOK SUBMITTED BY THE ASSESSEE. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A PARTNERSH IP FIRM AND IT WAS CARRYING A BUSINESS OF SALE AND PURCHASE OF OLD AND NEW TRACTORS AND TRACTOR PARTS ETC. THE RETURN OF INCOME FILED O N 04.09.1998 DECLARING INCOME OF RS.1,72,730/-. THE SURVEY OPERA TION WAS CONDUCTED BY COMMERCIAL TAX DEPARTMENT, ON 1.11.199 6 WHEREIN UNACCOUNTED SALES WERE ESTIMATED AT RS.1,68,22,976/ -. ON THE BASIS OF THE INFORMATION FROM SALES TAX DEPARTMENT, AO ISSUED NOTICE U/S 148 OF THE ACT ON 29.05.2001 AND SUBSEQU ENTLY, PASSED ASSESSMENT ORDER U/S 144 ON 25.03.2003 ADDING GROSS PROFIT @ 9.42% ON UNACCOUNTED SALES OF RS.1,68,22,976/-. 132 3. THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT( A) AND PARTLY SUCCEEDED AS THE PROFIT ESTIMATED ON UNACCOUNTED SA LES WAS SUSTAINED APPLYING NET PROFIT RATE @3%. 4. HE FURTHER FILED AN APPEAL BEFORE THE TRIBUNAL A GAINST THE ADDITION SUSTAINED BY THE LD. CIT(A) BUT FAILED TO SUCCEED, AS TRIBUNAL CONFIRMED THE VIEW OF LD. CIT(A) SUSTAININ G ADDITION APPLYING NET PROFIT RATE OF 3%. THE AO GAVE APPEAL EFFECT AS PER RAM TRACTORS 3 DIRECTION OF I.T.A.T., AFTER RECEIVING AN APPLICATI ON U/S 154 OF THE ACT. 5. SIMULTANEOUSLY, THE APPELLANT WAS UNDER APPEAL B EFORE THE SALES TAX AUTHORITIES FOR ALLEGED UNACCOUNTED SALES AND F INALLY PARTLY SUCCEEDED VIDE ORDER OF ACIT, SALES TAX, UJJAIN DAT ED 19.01.2012 WHICH HELD THAT THE UNDISCLOSED SALES WERE ONLY RS. 25,87,818/- AS AGAINST FIGURES DETERMINED BY SALES TAX DEPARTMENT , AT THE TIME OF SURVEY AT RS.1,68,22,976/-. ACCORDINGLY ASSESSEE RE QUESTED THE LD.A.O TO CALCULATE THE ADDITION ON THE UNDISCLOSED SALES OF RS.25,87,818/- IN THE APPLICATION FILED U/S 154 OF THE ACT. HOWEVER, THE LD. AR REJECTED THE APPLICATION OBSERVING THAT THE ORDER OF TRIBUNAL WAS PRONOUNCED ON 30.09.2006 WHICH WAS MUC H BEFORE THE ORDER OF SALES TAX APPELLATE AUTHORITY PASSED O N 19.01.2012. FURTHER, IN THE APPEAL BEFORE THE LD. CIT(A) AGAINS T THE REJECTION OF APPLICATION U/S 154, THE ASSESSEE FAILED TO SUCCEED . 6. WE FURTHER OBSERVE THAT THE ESTIMATION OF INCOME ON UNDISCLOSED SALES BY BOTH THE LOWER AUTHORITIES AS WELL AS BY T HE TRIBUNAL WAS BASED ON THE UNDISCLOSED SALES UNEARTHED BY THE SAL ES TAX DEPARTMENT. IT WAS ONLY ON THE BASIS OF THE INFORMA TION FROM SALES TAX DEPARTMENT THAT THE ADDITION WAS MADE. FROM PER USAL OF THE ORDER PASSED BY SALES TAX, ACIT(A), WE FIND THAT FI GURE OF UNDISCLOSED SALES HAS BEEN REVISED TO RS.25,87,818/ -.WHEREAS THE ADDITIONS MADE BY THE AO AS WELL AS THE NET PROFIT RATE SUSTAINED BY THE LD. CIT(A) AND THE TRIBUNAL WAS ON THE UNDISCLO SED SALES OF RS.1,68,22,976/-. CERTAINLY IN THE GIVEN FACTS AND CIRCUMSTANCES, THE LD. COUNSELS CONTENTIONS HAVE SUBSTANCE AND, W E, THEREFORE, RAM TRACTORS 4 DIRECT THE LD.AO TO VERIFY THE REVISED UNACCOUNTED SALES FIGURE AS HELD BY APPELLATE AUTHORITY OF SALES TAX DEPARTMENT AND IF FOUND CORRECT THEN REVISE THE FIGURE OF ADDITION BY APPLY ING NET PROFIT RATE @ 3%(AS CONFIRMED BY THE TRIBUNAL ORDER DATED 30.09 .2006) ON THE UNACCOUNTED SALES OF RS.25,86,818/- AND GIVE NECESS ARY RELIEF TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 12 .01.20 18. SD/- (KUL BHARAT) SD/- (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER INDORE; DATED : 12 / 01/2018 CTX? P.S/. . . COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER PRIVATE SECRETARY/DDO, INDORE