Shri Pantul R.Kothari, Baroda V. The Dy.CIT.,Circle-2(2), Baroda

ITA 988/AHD/2012

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7901 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 11-04-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 07-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Keywords: Gift; Corroborative evidences
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER SHRI PANTUL R. KOTHARI, BASEMENT, RUSHIRAJ FLATS, OPP: TUBE COMPANY, OLD PADRA ROAD, BARODA - 390001 PAN: ADEPK9912A (APPELLANT) VS THE DCIT, CIRCLE - 2 (2), BARODA (RESPONDENT) REVENUE BY : S H RI PRASOON KABRA , SR. D . R. ASSESSEE BY: S H RI M.K. PATEL , A.R. DATE OF HEARING : 27 - 11 - 2 017 DATE OF PRONOUNCEMENT : 19 - 12 - 2 017 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - T HIS ASSESSEE S APPEAL FOR A.Y. 2007 - 08 , AR IS ES FROM ORDER OF THE CIT(A) - II, BARODA DATED 24 - 01 - 2012 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - I T A NO . 988 / A HD/20 12 A SS ESSMENT YEAR 2007 - 08 I.T.A NO. 988 /AHD/20 12 A.Y. 2007 - 08 PAGE NO SHRI PANTUL R. KOTHARI VS. DCIT 2 1. THAT O N FACTS AND IN LAW, THE LEARNED CIT(A) HAS GRIEVOUSLY ERRED IN HOLDING THAT THE AR OF ASSESSEE HAS AGREED FOR ADDITION TO BE MADE ON ESTIMATE BASIS @ 10%. 2. THAT ON FACTS AND IN LAW, THE LEARNED CIT(A) HAS GRIEVOUSLY ERRED IN CONFIRMING THE ESTIMATED ADD ITION @10% ON TAXABLE AND ADVERTISEMENT SALES 3. THAT ON FACTS AND IN LAW, THE ENTIRE ADDITION OUGHT TO HAVE BEEN DELETED, AS NO DEFECTS ARE FOUND IN BOOKS OF ACCOUNTS OF ASSESSEE. 3. IN THIS CASE, RETURN OF INCOME DECLARING INCOME OF RS. 12 , 13 , 500/ - WA S FILED ON 31 ST OCTOBER, 2007. SUBSEQUENTLY, THE CASE WAS SELECTED UNDER SCRUTINY BY ISSUING OF NOTICE U/S. 143(2) OF THE ACT ON 29 TH SEPTEMBER, 2008. T HE ASSESSEE IS A PROPRIETARY OF M/S INTEGRA ADVERTISING AND M/S GIFT CRAFT . THE NATU R E OF BUSINE SS OF T HE ASSESSEE IS ADVERTISING, DESIGNING, ART WORK, PAINTING, EVENT MANAGEMENT SERVICES ETC. THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS WORKED OUT NET PROFIT @ 3.37%. THE ASSESSING OFFICER OBSERVED THAT ON SIMILAR LINE OF BUSINESS THE NET PROFI T RANGES BETWEEN 30 TO 36% .THESE FACTS WERE BROUGHT TO THE NOTICE OF THE ASSESSEE AND ASKED FOR DETAILED JUSTIFICATION WITH SUPPORTING EVIDENCES FOR SHOWING NET PROFIT RATE AT SUCH A LOWER SIDE. IT WAS ALSO BROUGHT TO THE NOTICE OF THE ASSESEE THAT IN THE CASE OF THE OTHER ASSESSEE S MT.PUROHIT H SANGEETA ON THE SIMILAR LINE OF THE BUSINESS ASSESSED WITH THE ASSESSING OFFICER THE NET PROFIT WAS SHOWN AT THE RATE OF 36.80%. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AT THE TIME OF VERIFICATION OF NUMBERS OF BILLS AND VOUCHERS ASSESSEE S AUTHORIZED REPRESENTATIVE STATED THAT AFTER GIVING DISCOUNT TO THE PARTIES AT 7.5% TO 10% ON BILL AMOUNT THE NET INCOME OF AROUND 10% TO 15% ARE RECEIVED IN MOST OF THE CASES. D URING THE COURSE OF I.T.A NO. 988 /AHD/20 12 A.Y. 2007 - 08 PAGE NO SHRI PANTUL R. KOTHARI VS. DCIT 3 ASSESSMENT PROCEEDINGS, T HE AUTHORIZED REPRESENTATIVE HAS CONFIRMED THAT ON TEST CHECK , NET INCOME IS DERIVED @ 10% AND MORE IN ADVERTISEMENT BUSINESS AFTER GIVING DISCOUNT TO THE PARTIES. THEREFORE , THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE WAS AGREED BEFORE T HE ASSESSING OFFICER TO ADOPT 10% OF THE NET INCOME OUT OF THE ADVERTISEMENT SALE. CONSEQUENTLY , THE ASSESSING OFFICER HAS COMPUTED THE NET PROFIT @ 10% IN THE CASE OF THE ASSESSEE. 4. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) HAS SUSTAINED THE COMPUTATION OF IN COME @ 10% MADE BY THE ASSESSING OFFICER BY STATING THAT ASSESSEE WAS AGREED FOR THE ADOPTION OF NET INCOME @ 10% DURING ASSESSMENT PROCEEDINGS WHICH HAD BEEN RE - CONFIRMED BY THE ASSESSING OFFICER IN THE REMAND REPORT. 5 . WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD CAREFULLY. D URING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS BROUGHT TO THE NOTICE OF THE ASSESSEE THAT NET PROFIT OF THE ASSESSEE WA S ON THE LOWER SIDE ON COMPAR ING IT WITH THE NET PROFIT OF THE OTHER ASSESSEE OPER ATING IN THE SIMILAR LINE OF BUSINESS. THE REAFTER, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS CONFIRMED ON TES T CHE CK THAT INCOME IS DERIVED 10% AND MORE IN MOST OF THE CASES IN THE ADVERTISEMENT BUSINESS. A T THE TIME OF VERIFICATION OF BILLS AND TEST CHECK, THE AUTHORIZED REPRESENTATIVE WAS AGREED FOR THE ADAPTATION OF NET INCOME @ 10%. WE OBSERVED THAT AFTER CONFRONTING THE AFORESAID MATERIAL AND INFORMATION AVAIL ABLE WITH THE ASSESSING OFFICER AND ON TEST CHECKING THE AUTHORIZED I.T.A NO. 988 /AHD/20 12 A.Y. 2007 - 08 PAGE NO SHRI PANTUL R. KOTHARI VS. DCIT 4 REPRESENTATIVE HAS AGREED FOR NET INCOME AT THE @10% DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE ASSESSEE COULD NOT CONTROVE RT THE ACCEPTANCE OF 10% NET INCOME MADE BEFORE THE ASSESSING OFFICER. THEREFORE, WE DO NOT FIND ANY ERROR IN THE DECISION OF THE L D. CIT(A) . ACCORDINGLY , T HE APPEAL OF THE ASSESSEE IS DISMISSED. 5. IN THE RESULT, THE APPEA L OF THE ASSESSEE IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 19 - 12 - 201 7 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 19 /12 /2017 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,