Late Shri Mohan Raj Chhajed (Through Legal jeor Shantilal Chhajed), Mumbai V. ITO,Ward-2, MUMBAI

MA 191/MUM/2023

• Counselvise Citation: [2023] 102 COUNSELVISE.COM (IT) 0957 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-10-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 13-07-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 21-02-2023
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Gross profit estimation; Rejection of books of accounts; Proportionate interest; Additional evidence
• Section: 254(2); 44AB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “SMC” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP SINGH KARHAIL (JUDICIAL MEMBER) M.A. No. 191/MUM/2023 (Arising out of ITA No. 193/JODH/2019) Assessment Year: 2012-13 Late Shri Mohan Raj Chhajed (Through Legal heir Shantilal Chhajed), 601, Shilpa Apartments, C.D. Barfiwala Marg, Juhu Lane, Andheri (W), Mumbai-400058. Vs. Income Tax Officer, Ward-2, Pali Rajasthan-306-401. PAN No. AAIPC 6614 N Appellant Respondent Assessee by : Mr. Piyush Chhajed Revenue by : Mr. H.M. Bhatt, Sr. DR Date of Hearing : 14/07/2023 Date of pronouncement : 06/10/2023 ORDER PER OM PRAKASH KANT, AM By way of this Miscellaneous Application filed u/s 254(2) of the Income-tax Act, 1961 (in short ‘the Act’) the assessee is seeking for recall/rectification of the order of the Income-tax Appellate Tribunal dated 27.07.2022 passed in ITA No. 193/JODH/2019 for assessment year 2012-13. 2. In the Miscellaneous Application, the assessee has addressed four issues and submitted that in the Paper Book and various jurisdictional precedents Tribunal has resulted 3. All the issues raised by the assessee in the Miscellaneous Application are being discussed below. 3.1 Firstly, it is submitted that while sustaining the rejection of books of accounts, the Tribunal has not considered various judgments relied upon by the assessee. In this regard, rival submissions of the parties have Tribunal has upheld the rejection of the books of account sustained by the Ld. CIT(A). The Ld. CIT(A) has rejected the books of accounts mainly on the ground stocks of the goods as per the audit report and the ledger account in the books of the assessee. The assessee has contested now in the Miscellaneous Application that reason for rejection of books of account at all neither the said judgment distinguished. We are of the opinion that when books of accounts have not been rejected on the basis of th there is no occasion for getting into that aspect and relying on the relevant judgment. We do not find any infirmity in the order of the Tribunal on this account and accordingly contention of the assessee on this issue are rejected In the Miscellaneous Application, the assessee has addressed four issues and submitted that disregarding complete details filed in the Paper Book and various jurisdictional precedents resulted into mistake apparent from record. All the issues raised by the assessee in the Miscellaneous Application are being discussed below. , it is submitted that while sustaining the rejection of books of accounts, the Tribunal has not considered various dgments relied upon by the assessee. In this regard, rival submissions of the parties have been heard. We find that the Tribunal has upheld the rejection of the books of account sustained by the Ld. CIT(A). The Ld. CIT(A) has rejected the books of accounts mainly on the ground of difference in quantitative tally of various stocks of the goods as per the audit report and the ledger account in the books of the assessee. The assessee has contested now in the Miscellaneous Application that issue of low gross pr reason for rejection of books of account , had not been considered at all neither the said judgments have been discussed referred or distinguished. We are of the opinion that when books of accounts have not been rejected on the basis of the low gross profit there is no occasion for getting into that aspect and relying on the relevant judgment. We do not find any infirmity in the order of the Tribunal on this account and accordingly contention of the assessee on this issue are rejected. Late Shri Mohan Raj Chhajed . 2 M.A No. 191/Mum/2023 In the Miscellaneous Application, the assessee has addressed regarding complete details filed in the Paper Book and various jurisdictional precedents by the e apparent from record. All the issues raised by the assessee in the Miscellaneous , it is submitted that while sustaining the rejection of books of accounts, the Tribunal has not considered various dgments relied upon by the assessee. In this regard, rival been heard. We find that the Tribunal has upheld the rejection of the books of account sustained by the Ld. CIT(A). The Ld. CIT(A) has rejected the books of accounts difference in quantitative tally of various stocks of the goods as per the audit report and the ledger account in the books of the assessee. The assessee has contested now in the low gross profit cannot be a not been considered have been discussed referred or distinguished. We are of the opinion that when books of accounts e low gross profit, then there is no occasion for getting into that aspect and relying on the relevant judgment. We do not find any infirmity in the order of the Tribunal on this account and accordingly contention of the assessee 3.2 Secondly, the Ld. Counsel of the assessee submitted that gross profit @ 8% in view of section 44AB of the Act been applied in the case of the assessee rather than gross profit @ 22.19% upheld by the Tribunal. 3.2.1 We have heard rival s issue. Firstly, the assessee himself did not opted for invoking section 44AB of the Act in the return of income filed and secondly, the lower authorities have taken comparative assessee itself in the accordingly upheld the finding of the lower authorities on this issue. 3.2.2 Further, the Ld. Counsel net profit rate should have been applied rather than the gross profit rate. In our opinion, the Tribunal in view of the difference in quantitative tally has upheld the action of the lower authorities in disturbing the trading r mistake apparent from the record in this finding of the Tribunal. Accordingly, we reject the contention of the as 3.3 Thirdly, the Ld. Counsel the books of accounts have been rejected Rs.3,75,000/- for “thok khata been made. But we find that the lower aut that said addition in respect of speculative trading in wholesale , the Ld. Counsel of the assessee submitted that gross profit @ 8% in view of section 44AB of the Act been applied in the case of the assessee rather than gross profit @ 22.19% upheld by the Tribunal. We have heard rival submission of the parties on this issue. Firstly, the assessee himself did not opted for invoking section 44AB of the Act in the return of income filed and secondly, the lower authorities have taken comparative gross profit result assessee itself in the preceding assessment year and Tribunal accordingly upheld the finding of the lower authorities on this Further, the Ld. Counsel for the assessee submitted that net profit rate should have been applied rather than the gross profit rate. In our opinion, the Tribunal in view of the difference in quantitative tally has upheld the action of the lower authorities in ing the trading results only. In our opinion, there is no mistake apparent from the record in this finding of the Tribunal. we reject the contention of the assessee on , the Ld. Counsel for the assessee submitted that once ccounts have been rejected, no separate addition for thok khata” (wholesale trading) should have been made. But we find that the lower authorities have that said addition in respect of speculative trading in wholesale Late Shri Mohan Raj Chhajed . 3 M.A No. 191/Mum/2023 , the Ld. Counsel of the assessee submitted that gross profit @ 8% in view of section 44AB of the Act should have been applied in the case of the assessee rather than gross profit @ ubmission of the parties on this issue. Firstly, the assessee himself did not opted for invoking section 44AB of the Act in the return of income filed and secondly, gross profit result of preceding assessment year and Tribunal accordingly upheld the finding of the lower authorities on this the assessee submitted that net profit rate should have been applied rather than the gross profit rate. In our opinion, the Tribunal in view of the difference in quantitative tally has upheld the action of the lower authorities in esults only. In our opinion, there is no mistake apparent from the record in this finding of the Tribunal. sessee on his issue. the assessee submitted that once no separate addition for (wholesale trading) should have horities have observed that said addition in respect of speculative trading in wholesale is separate from the regular trading activity and therefore, addition has been made separately. We do not find any mistake in the finding of the Tribunal on this issue mistake and therefore, contention of the Ld. Counsel of the assessee is rejected. 3.4 Fourthly, the Ld. Counsel written submission with respect to interest free advances disallowance should only be made on the proportionate interest. 3.4.1 We have heard rival submission of the parties on the basis of the documentary evidence and movement of the advances made. The lower authorities have paid for interest free advances to related parties. No fresh evidence or additional evidence were filed by the assessee before the Tribunal for seeking disallowance of proportionate amount of interest paid and therefore, we do not find an Tribunal on the issue in dispute. 4. In view of the aforesaid discussion, the Miscellaneous Application filed by the assessee is dismissed. Order pronounced in the open Court on Sd/ (SANDEEP SINGH KARHAIL JUDICIAL MEMBER te from the regular trading activity and therefore, addition has been made separately. We do not find any mistake in the finding of the Tribunal on this issue, much less the apparent mistake and therefore, contention of the Ld. Counsel of the assessee , the Ld. Counsel for the assessee submitted that written submission with respect to disallowance of interest paid for interest free advances to relative has not been considered of and disallowance should only be made on the proportionate interest. We have heard rival submission of the parties on the basis of the documentary evidence and movement of the advances . The lower authorities have made disallowance out of interest paid for interest free advances to related parties. No fresh evidence or additional evidence were filed by the assessee before the Tribunal for seeking disallowance of proportionate amount of interest paid and therefore, we do not find any mistake in the order of the Tribunal on the issue in dispute. In view of the aforesaid discussion, the Miscellaneous Application filed by the assessee is dismissed. nounced in the open Court on 06/ Sd/- Sd/ SANDEEP SINGH KARHAIL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Late Shri Mohan Raj Chhajed . 4 M.A No. 191/Mum/2023 te from the regular trading activity and therefore, addition has been made separately. We do not find any mistake in the much less the apparent mistake and therefore, contention of the Ld. Counsel of the assessee the assessee submitted that disallowance of interest paid for considered of and disallowance should only be made on the proportionate interest. We have heard rival submission of the parties on the basis of the documentary evidence and movement of the advances e out of interest paid for interest free advances to related parties. No fresh evidence or additional evidence were filed by the assessee before the Tribunal for seeking disallowance of proportionate amount of interest paid y mistake in the order of the In view of the aforesaid discussion, the Miscellaneous /10/2023. Sd/- PRAKASH KANT) ACCOUNTANT MEMBER Mumbai; Dated: 06/10/2023 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Late Shri Mohan Raj Chhajed . 5 M.A No. 191/Mum/2023 BY ORDER, (Assistant Registrar) ITAT, Mumbai