M/s.John & Co., Ernakulam V. ACIT, Ernakulam

MA 99/COCH/2013

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 1070 (ITAT-COCHIN)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-10-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 04-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LATHA V KUMAR
• Assessee Lawyers: T BANUSEKHAR

Judgement Text

1 MA NO.99/COCH/2013 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) M.A. NO.99/CCH/2013 (ARISING OUT OF I.T.A NO. 450/COCH/2011) (ASSESSMENT YEAR 2006-07) M/S JOHN & CO VS A.C.I.T., CENT.CIR.2 LOVEDON TOURIST HOME KOCHI KARIMUGHAL P.O. PUTHENCRUZ 682 308 PAN : AABFJ7831M (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI T BANUSEKHAR RESPONDENT BY : SMT. LATHA V KUMAR DATE OF HEARING : 11-10-2013 DATE OF PRONOUNCEMENT : 18-10-2013 O R D E R PER N.R.S. GANESAN (JM) THE ASSESSEE HAS FILED THE PRESENT MISCELLANEOUS P ETITION ON THE GROUND THAT THERE IS AN ERROR IN THE ORDER OF THIS TRIBUNAL. 2. SHRI T BANUSEKHAR, THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THIS TRIBUNAL AT PARAGRAPH 15 ON PAGES 25 & 26 OF ITS ORDER DATED 26 TH APRIL 2013 EXPRESSLY FOUND THAT THE PROFIT ELEMENT ALONE HAS TO BE CONSIDERED FOR TAXATION. THIS TRIBUNAL HAS ALSO FO UND THAT THE CIT(A) HAS 2 MA NO.99/COCH/2013 ESTIMATED THE PROFIT AT 25% OF THE SUPPRESSED TURNO VER, THEREFORE, THE PROFIT HAS TO BE REASONABLY ESTIMATED AT 25%. ACCORDINGLY , THIS TRIBUNAL CONFIRMED THE ORDER OF THE CIT(A) FOR THE ASSESSMEN T YEAR 2006-07. REFERRING TO THE ORDER OF THE CIT(A) ON PAGE 42 AT PARAGRAPH 8 THE LD.REPRESENTATIVE SUBMITTED THAT THE CIT(A) HAS CON FIRMED THE ENTIRE ADDITION OF THE SUPPRESSED TURNOVER TO THE EXTENT O F RS. 62,77,282. THEREFORE, THE OBSERVATION OF THE TRIBUNAL THAT THE CIT(A) HAS ESTIMATED THE GROSS PROFIT AT 25% OF THE SUPPRESSED TURNOVER MAY NOT BE CORRECT. THIS TRIBUNAL SPECIFICALLY FOUND THAT ONLY 25% OF T HE SUPPRESSED TURNOVER HAS TO BE TAKEN AS PROFIT. THEREFORE, THE LD.REPRE SENTATIVE SUBMITTED THAT THE ORDER OF THE TRIBUNAL MIGHT BE MODIFIED ACCORDI NGLY. 3. WE HEARD SMT. LATHA V KUMAR, THE LD.DR ALSO. TH E LD.DR SUBMITTED THAT ORDERS MAY BE PASSED ON MERIT. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD.REP RESENTATIVE FOR THE ASSESSEE AS WELL AS THE LD.DR. NO DOUBT, THIS TRIB UNAL FOUND THAT ONLY 25% OF THE SUPPRESSED TURNOVER SHALL BE TAKEN AS PR OFIT FOR THE ASSESSMENT YEAR 2006-07. THIS TRIBUNAL OBSERVED THAT THE CIT( A) ESTIMATED 25% OF THE SUPPRESSED TURNOVER AS GROSS PROFIT. THIS OBSE RVATION IS APPARENTLY AN ERROR SINCE CIT(A) ON PAGE 42 AT PARAGRAPH 8 HAS TA KEN THE ENTIRE SUPPRESSED TURNOVER OF RS. 62,77,282 AS PROFIT. TH EREFORE, TO THIS EXTENT, 3 MA NO.99/COCH/2013 THERE IS AN ERROR WHICH IS APPARENT ON THE FACE OF THE RECORD NEEDS RECTIFICATION. ACCORDINGLY, THE ORDER OF THIS TRIB UNAL DATED 26 TH APRIL, 2013 IS RECTIFIED AS FOLLOWS: 5. FROM PARAGRAPH 15 ON PAGE 26, THE FOLLOWING SHAL L BE DELETED: IN THIS CASE, THE CIT(A) ESTIMATED THE PROFIT AT 2 5% OF THE SUPPRESSED TURNOVER. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(A) HAS REASONABLY ESTIMATED THE GROSS PROFIT AT 25% OF THE SUPPRESSED TURNOVER. THEREFORE, WE DO N OT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY FOR T HE ASSESSMENT YEAR 2006-07. ACCORDINGLY, THE ORDER OF CIT(A) FOR THE ASSESSMENT YEAR 2006-07 IS CONFIRMED. 6. AFTER DELETING THE ABOVE PORTION FROM PAGE 15 ON PAGE 26, THE FOLLOWING SHALL BE INSERTED: HOWEVER, THE CIT(A) HAS TAKEN THE ENTIRE TURNOVER O F RS.62,77,282 AS PROFIT AFTER CORRECTING AN ARITHMET ICAL ERROR. IN RESPECT OF OTHER YEARS, THIS TRIBUNAL ES TIMATED THE PROFIT AT 25% OF THE SUPPRESSED TURNOVER. THER EFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT ONL Y 25% OF THE SUPPRESSED TURNOVER I.E. 25% OF RS.62,77,282 SH ALL BE 4 MA NO.99/COCH/2013 TAKEN AS PROFIT. ACCORDINGLY, THE ORDERS OF THE LO WER AUTHORITIES ARE SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO TAKE 25% OF RS.62,77,282 AS GROSS PROFI T FOR THE ASSESSMENT YEAR 2006-07. ACCORDINGLY, THE ORDE R OF THE C.I.T.(A) FOR THE ASSESSMENT YEAR 2006-07 IS MO DIFIED. 7. AFTER RECTIFICATION, PARAGRAPH 15 ON PAGES 25 & 26 SHALL READ AS FOLLOWS: 15. NOW COMING TO ASSESSMENT YEAR 2006-07 THE ASSES SING OFFICER HAS TAKEN THE ENTIRE AMOUNT, I.E. DIFFERENC E BETWEEN THE TURNOVER DECLARED AND THAT WAS FOUND IN MKG 12 AS INCOME OF THE ASSESSEE. UNDER THE SCHEME OF THE IN COME-TAX ACT, ONLY THE PROFIT ELEMENT AFTER ALL EXPENSES HAS TO BE CONSIDERED FOR TAXATION. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHEN THE SUPPRESSED SALES T URNOVER WAS FOUND, THE REASONABLE EXPENDITURE WHICH WOULD H AVE BEEN INCURRED BY THE ASSESSEE FOR EARNING INCOME HA S TO BE EXCLUDED FROM THE SUPPRESSED TURNOVER. HOWEVER, THE CIT(A) HAS TAKEN THE ENTIRE TURNOVER OF RS.62,77,282 AS PR OFIT 5 MA NO.99/COCH/2013 AFTER CORRECTING AN ARITHMETICAL ERROR. IN RESPECT OF OTHER YEARS, THIS TRIBUNAL ESTIMATED THE PROFIT AT 25% OF THE SUPPRESSED TURNOVER. THEREFORE, THIS TRIBUNAL IS O F THE CONSIDERED OPINION THAT ONLY 25% OF THE SUPPRESSED TURNOVER I.E. 25% OF RS.62,77,282 SHALL BE TAKEN AS PROFIT. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES AR E SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO TAKE 25% OF RS.62,77,282 AS GROSS PROFIT FOR THE ASSESSMENT YEA R 2006-07. ACCORDINGLY, THE ORDER OF THE C.I.T.(A) F OR THE ASSESSMENT YEAR 2006-07 IS MODIFIED. 8. THE REMAINING PART OF THE ORDER SHALL REMAIN AS SUCH. 9. IN THE RESULT, MISCELLANEOUS APPLICATION OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 18 TH OCTOBER, 2013. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 18 TH OCTOBER, 2013 PK/- 6 MA NO.99/COCH/2013 COPY TO: 1. JOHN & CO, LOVEDON TOURIST HOME, KARIMUGHAL P.O, PUTHENCRUZ 682 308 2. THE ACIT, CENT.CIR.2, ERNAKULAM 3. THE COMMISSIONER OF INCOME-TAX(A)-III, KOCHI 4. THE COMMISSIONER OF INCOME-TAX, CENTRAL KOCHI 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH