ITO, Ward - 2(2), Asansol, Asansol v. Maa Transport Agency, Burdwan

ITA 1090/KOL/2010 | 2006-2007
Pronouncement Date: 25-03-2011

Appeal Details

RSA Number 109023514 RSA 2010
Assessee PAN AAKFM9822A
Bench Kolkata
Appeal Number ITA 1090/KOL/2010
Duration Of Justice 9 month(s) 27 day(s)
Appellant ITO, Ward - 2(2), Asansol, Asansol
Respondent Maa Transport Agency, Burdwan
Appeal Type Income Tax Appeal
Pronouncement Date 25-03-2011
Appeal Filed By Department
Bench Allotted A
Tribunal Order Date 25-03-2011
Date Of Final Hearing 15-03-2011
Next Hearing Date 15-03-2011
Assessment Year 2006-2007
Appeal Filed On 28-05-2010
Judgment Text
1 A IN THE INCOME TAX APPELLATE TRIBUNAL BENCH- A KO LKATA [ . . . . . .. . . .. . ! ! ! !. .. . '# ] BEFORE SHRI B.R.MITTAL JUDICIAL MEMBER & SRI C.D. RAO ACCOUNTANT MEMBER $ $ $ $ / ITA NO. 1090 (KOL) OF 2010 %& '( / ASSESSMENT YEAR 2006-07 INCOME-TAX OFFICER WARD-2(2) ASANSOL. M/S. MAA TRANSPORT AGENCY BURDWAN . (PAN-AAKFM9822A) (+ / APPELLANT ) - % - - VERSUS - (/0+ / RESPONDENT ) C.O. NO. 75 (KOL) OF 2010 [ IN ITA NO. 1090 (KOL)/2010 ] %& '( / ASSESSMENT YEAR 2006-07 M/S. MAA TRANSPORT AGENCY BURDWAN . (PAN-AAKFM9822A) INCOME-TAX OFFICER WARD-2(2) ASANSOL . (CROSS-OBJECTOR) - % - - VERSUS - (RESPONDENT ) $ $ $ $ / ITA NO. 1310 (KOL) OF 2010 %& '( / ASSESSMENT YEAR 2006-07 M/S. MAA TRANSPORT AGENCY BURDWAN . (PAN-AAKFM9822A) INCOME-TAX OFFICER WARD-2(2) ASANSOL . (+ / APPELLANT ) - % - - VERSUS - (/0+ / RESPONDENT ) DEPARTM ENT BY : SRI P.P. SARKAR ASSESSEE BY : SRI K. SADHU '1 / ORDER ( . . . . . .. . ) (B.R.MITTAL) JUDICIAL MEMBER : THESE CROSS APPEALS ARE FILED BY THE DEPARTMENT A ND THE ASSESSEE AGAINST ORDER OF LD. C.I.T.(A) ASANSOL DATED 29/3/2010. THE ASSESS EE HAS ALSO FILED A CROSS OBJECTION IN RESPECT OF REVENUES APPEAL IN I.T.A.NO.1090/K/2010 . AS COMMON ISSUES ARE INVOLVED ALL THESE APPEALS AND THE CROSS-OBJECTION ARE DISPO SED OF BY THIS COMMON ORDER. THE GROUNDS RAISED IN THE APPEALS AND CROSS-OBJECTION A RE AS UNDER :- 2 REVENUES APPEAL (ITA NO.1090/K/10) 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FAC TS BY DELETING THE ESTIMATED DISALLOWANCES AND ESTIMATING NET PROFIT @ 6%. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FA CTS BY ACCEPTING THE ARGUMENTS OF THE ASSESSEE THAT ALL THE RECEIPTS HAVE BEEN SHO WN AS PER TDS CERTIFICATES AND THE OUTSTANDING AMOUNT IS SHOWN IN THE NEXT YEA R. THEN A/CS OF THE ASSESSEE IS ON MERCANTILE BASIS THEREFORE TOTAL WOR K DONE BY ASSESSEE DURING THE YEAR MUST BE REFLECTED IN ITS A/CS. REVENUES APPEAL (ITA NO.1310/K/10) 1. FOR THAT THE LD COMMISSIONER OF INCOME TAX(APPE ALS) ASANSOL ACTED UNLAWFULLY IN ESTIMATING THE NET PROFIT OF THE APPE LLANT AT 6% OF THE GROSS CONTRACT RECEIPTS IN THE AMOUNT OF RS.9 46 238/- AS AGAINST RS.250344/- DECLARED BY THE APPELLANT WITHOUT APPRECIATING THE FACTS OF THE CASE. 2. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (AP PEALS) ASANSOL ACTED ILLEGALITY AND WITH MATERIAL IRREGULARITY IN PARTIA LLY UPHOLDING THE PURPORTED ADDITION MADE BY THE LD.INCOME TAX OFFICER WARD 2( 2) ASANSOL BY DISALLOWING PARTLY OF THE OUTSTANDING HIRE CHARGES FUEL SALARY AND LABOUR CHARGES ON THE ALLEGED FAILURE TO SUBMIT THE BREAKU P OF SUCH EXPENSES AND THE ALLEGED FINDING OF PARTLY SUBSTAINING THE SAID MISC ONCEIVED DISALLOWANCE IS WHOLLY ARBITRARY ERRONEOUS UNWARRANTED AND PERVERS E. 3. FOR THAT THE ID. COMMISSIONER OF INCOME TAX(APP EALS) ASANSOL ERRED IN PARTIALLY UPHOLDING THE ADDITIONS MADE BY THE ID. I NCOME TAX OFFICER WARD 2(2) ASANSOL BY WAY OF DISALLOWANCE OUT OF THE EXPENSES CLAIMED UNDER THE HIRE TRANSPORT CHARGES & FUEL INSURANCE ROAD TAX & M ISCELLANEOUS EXPENSES UNEXPLAINED MONEY HIRE TRANSPORT CHARGES FUEL. LABOUR CHARGES& SALARY PAYABLE WITHOUT ANY REASONABLE BASIS AND HIS PURPO RTED FINDINGS ON THAT BEHALF ARE WHOLLY ARBITRARY UNWARRANTED AND PERVERSE. 4. FOR THAT THE LD. COMMISSIONER OF INCOME TAX(APP EALS) ASANSOL MISREAD EVIDENCES CONSIDERED IMPROPER ISSUES FAILED TO CO NSIDER PROPER ISSUES MISPLACED ONUS OF PROOF AND CAME TO AN ERRONEOUS FI NDINGS THEREUPON. 2. THE ASSESSEE HAS ALSO FILED CROSS-OBJECTION ON THE FOLLOWING GROUNDS WHICH ARE ALL DIRECTED AGAINST ESTIMATION OF NET PROFIT AT 6% BY THE LD. C.I.T.(A) :- 1. FOR THAT THE LD COMMISSIONER OF INCOME TAX(APPEALS) ASANSOL ACTED UNLAWFULLY IN ESTIMATING THE NET PROFIT OF THE APPE LLANT AT 6% OF THE GROSS CONTRACT RECEIPTS IN THE AMOUNT OF RS.9 46 238/- AS AGAINST RS.250344/- DECLARED BY THE RESPONDENT WITHOUT APPRECIATING THE FACTS OF THE CASE. 3 2. FOR THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS ) ASANSOL MISREAD EVIDENCES CONSIDERED IMPROPER ISSUES FAILED TO CO NSIDER PROPER ISSUES MISPLACED ONUS OF PROOF AND CAME TO AN ERRONEOUS FI NDINGS THEREPON. 3. FOR THAT ON A PROPER CONSPECTUS OF MATERIALS ON REC ORD PREPONDERANCE OF PROBABILITIES AND CIRCUMSTANCES ATTENDING THE LD. C OMMISSIONER OF INCOME TAX(APPEALS) ASANSOL OUGHT TO HAVE DELETED THE ENTI RE ADDITIONS ON MERIT. 4. FOR THAT THE FINDING OF THELD. COMMISSIONER OF INCO ME TAX(APPEALS) ASANSOL IS OTHERWISE BAD IN LAW AND FACTS ENDS OF J USTICE NECESSITATES THAT IT BE SET ASIDE. 2. THE RELEVANT FACTS IN RESPECT OF GROUND NO.1 OF THE REVENUES APPEAL AS WELL AS GROUNDS RAISED IN ASSESSEES CROSS-OBJECTION AND GR OUNDS NO.1 & 2 OF ITS APPEAL ARE THAT THE ASSESSEE IS A TRANSPORT CONTRACTOR CARRYING ON ITS ACTIVITIES MAINLY WITH EASTERN COALFIELD LTD. (ECL) AND THE GROSS RECEIPTS FROM SU CH CONTRACT WORKS FOR THE ASSESSMENT YEAR UNDER CONSIDERATION WERE SHOWN AT RS.1 57 70 6 27/-. THE A.O. IN HIS BEST JUDGMENT ASSESSMENT ORDER PASSED U/S. 144 OF THE ACT DISALLO WED THE FOLLOWING EXPENSES ON ESTIMATE BASIS :- (I) 10% OF RS.11 17 980/- ON ACCOUNT OF HIRE TRANSPORT RS. 1 17 798/- & FUEL EXPENSES. (II) 10% OF RS.3 26 410/- ON ACCOUNT OF INSURAN CE ROAD RS. 32 641/- TAX & MISC. EXPENSES. (III) 50% OF RS.34 01 349/- ON ACCOUNT OF HIRE CHARGES RS.17 00 675/- FUEL LABOUR CHARGES & SALARY PAYABLE. THE LD. C.I.T.(A) ALTHOUGH HELD THE ESTIMATED DISAL LOWANCE OF THE AFORESAID EXPENSES MADE BY THE A.O. TO BE CORRECT IN PRINCIPLE BUT HE FOLLOWING THE ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR IMMEDIATELY PRECEDING A SSESSMENT YEAR 2005-06 IN ITA NOS. 337 & 591 (KOL)/2009 DATED 10/8/2009 ESTIMATED THE NET PROFIT AT 6% AND DIRECTED THE A.O. TO COMPUTE THE INCOME ACCORDINGLY WITH THE FOLLOWING OBSERVATION :- 7. I HAVE CONSIDERED THE MATTER. THE A.O. HAS DE TERMINED TOTAL INCOME TO BE RS.54 76 448/-. THE ASSESSEES GROSS RECEIPTS ARE RS.1 57 70 627/-. THUS THE NET PROFIT WORKS OUT TO BE NEARLY 35% OF THE GROSS RECE IPTS. THIS IS DEFINITELY ON THE EXTREME HIGHER SIDE AS CONTRACT PROFITS @ 35% OF TH E GROSS RECEIPTS IS VERY IMPROBABLE. THE SUPREME COURT IN THE CASE OF BRIJB HUSAN LALL PARDUMAN KUMAR VS. CIT 115 ITR 524 OBSERVED THAT THE AUTHORITY MAKING A BEST JUDGMENT ASSESSMENT MUST MAKE AN HONEST AND FAIR ESTIMATE OF THE INCOME OF THE ASSESSEE AND THOUGH ARBITRARINESS CANNOT BE AVOIDED IN SUCH AN ESTIMATE THE SAME MUST NOT BE CAPRICIOUS BUT SHOULD HAVE A REASONABLE NEXUS TO THE AVAILABLE MATERIAL AND THE CIRCUMSTANCES 4 OF THE CASE. SIMILAR OBSERVATIONS WERE MADE IN ANO THER CASE BY THE APEX COURT NAMELY STATE OF KERALA VS. C. VELUKUTTY 60 ITR 239 . AS ALREADY STATED ABOVE MY PREDECESSOR HAD DELETED THE ESTIMATED DISALLOWANCES AND ESTIMATED THE NET PROFIT @ 5.35%. FURTHER THE ITAT HAS CONFIRMED THE ACTION OF THE CIT(A). THE FACTS IN THIS YEAR ARE SIMILAR TO THE EARLIER YEAR. I THEREFORE IN LINE WITH THE DECISION OF MY PREDECESSOR AND IN ACCORDANCE WITH THE ITAT DELETE THE ESTIMATED DISALLOWANCES AS MENTIONED IN GROUNDS 1 2 & 4 AND ESTIMATE NET PROF IT @ 6%. THE A.O. IS DIRECTED TO COMPUTE INCOME ACCORDINGLY. 3. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF THE PARTIES AND GONE THROUGH THE MATERIAL PLACED ON RECORD. WE OBSERVE THAT IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR IN THE CASE OF THE ASSESSEE ON IDENTICAL SET OF FACTS THE LD. C.I.T.(A) ESTIMATED THE NET PROFIT AT 5.35% WHICH WAS CONFIRMED BY THE TRI BUNAL VIDE ORDER DATED 10/8/2009 (SUPRA). THERE BEING NO CHANGE IN THE FACTS AND CIR CUMSTANCES OF THE CASE FOR THE ASSESSMENT YEAR UNDER APPEAL WE RESPECTFULLY FOLLO WING THE AFORESAID ORDER OF THE TRIBUNAL ADOPT THE RATE OF NET PROFIT AT 5.35% OF T HE GROSS CONTRACT RECEIPTS INSTEAD OF 6% ESTIMATED BY THE LD. C.I.T.(A). THE ORDER OF LD . C.I.T.(A) ON THIS ISSUE IS MODIFIED TO THE ABOVE EXTENT AND THE A.O. IS DIRECTED TO RECOMP UTE THE PROFIT ACCORDINGLY. 4. IN VIEW OF OUR DISCUSSIONS ABOVE GROUND NO.1 O F THE REVENUES APPEAL IS DISMISSED. THE CROSS-OBJECTION AND GROUNDS NO.1 & 2 OF THE ASSESSEES APPEAL ALSO STAND DISMISSED. 5. THE ONLY OTHER GROUND I.E. GROUND NO.2 OF THE REVENUES APPEAL IS AGAINST LD. C.I.T.(A)S ACCEPTANCE OF THE ASSESSEES SUBMISSION THAT ALL THE RECEIPTS HAVE BEEN SHOWN AS PER TDS CERTIFICATES AND THE OUTSTANDING A MOUNT IS SHOWN IN THE NEXT YEAR AND THEREBY DIRECTING DELETION OF ADDITION OF RS.26 25 152/- MADE U/S. 69A OF THE ACT SUBJECT TO FILING OF RECONCILIATION STATEMENT AND S UPPORTING EVIDENCE BY THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE A. O. ISSUED NOTICE U/S. 133(6) OF THE ACT TO ECL AND ON THE BASIS OF INFORMATION RECEIVED FROM THEM THE A.O. OBSERVED THAT THERE WAS AN OUTSTANDING CLOSING BALANCE AS ON 31/3 /2006 IN THE SUM OF RS.26 25 152/- WHICH WAS NOT RECORDED IN THE ASSESSEES BALANCE SH EET/BOOKS OF ACCOUNT. AS THE ASSESSEES EXPLANATION IN THIS REGARD WAS NOT FOUND TO BE SATISFACTORY THE A.O. HELD THE ASSESSEE TO BE THE OWNER OF THIS UNEXPLAINED MONEY AND ADDED RS.26 25 152/- TO ITS TOTAL INCOME U/S. 69A OF THE ACT. 5 6. ON APPEAL THE LD. C.I.T.(A) DIRECTED DELETION OF THE SAID ADDITION SUBJECT TO ASSESSEES SUBMISSION OF THE RECONCILIATION STATEME NT ALONG WITH SUPPORTING PAPERS FOR NECESSARY VERIFICATION BY THE A.O. THE OBSERVATION OF THE LD. C.I.T.(A) IN THIS REGARD IS AS UNDER :- 8. GROUND NO.3 IS WITH REGARD TO ADDITION OF RS.26 25 152/- U/S.69A. THE A.O. OBSERVED THAT INFORMATION WAS CALLED FROM E.C.L. IN RESPECT OF THE ASSESSEE AND IT WAS FOUND THAT THERE WAS OUTSTANDING BALANCE OF RS. 26 25 152/- AS ON 31.03.2006. HOWEVER THE SAME WAS NOT REFLECTED IN THE BALANCE OF ACCOUNTS OF THE ASSESSEE. THE ASSESSEE FAILED TO OFFER ANY EXPLANATION AND THE A. O. CONCLUDED THAT THE ASSESSEE WAS THE OWNER OF THE UNEXPLAINED MONEY AND ADDED BA CK THE SAME U/S.69A. DURING COURSE OF THE APPEAL PROCEEDINGS THE LEARNED A/R S TATED THAT THE AMOUNTS WHICH WERE SHOWN TO BE PAYABLE BY E.C.L. WERE ALL RECEIVE D IN THE NEXT F.YR. IT WAS STATED THAT THE ASSESSEE HAD SHOWN ALL THE CONTRACT RECEIPTS WHICH HAD BEEN RECEIVED DURING THE YEAR AS PER THE TDS CERTIFICATE ISSUED B Y M/S. E.C.L. AND FILED ALONG WITH THE RETURN. A RECONCILIATION STATEMENT WAS ALS O FILED SHOWING THAT THE AMOUNTS SHOWN OUTSTANDING WERE RECEIVED IN THE NEXT F.YR. I T WAS STATED THAT THE BILLS IN RESPECT OF THESE AMOUNTS WERE SUBMITTED TO E.C.L. O N OR AFTER 01.04.2006. I HAVE CONSIDERED THE MATTER. FIRSTLY IF ANY AMOUNT WAS R ECEIVABLE BY THE ASSESSEE AND NOT SHOWN ADDITION OF THE WHOLE OF THE AMOUNT WAS NOT WARRANTED AND ONLY THE PROFIT ELEMENT SHOULD HAVE BEEN ADDED. SECONDLY ON PERUSA L OF THE RECONCILIATION STATEMENT WITH THE SUPPORTING PAPERS IT IS SEEN THA T THE AMOUNTS WERE RECEIVED IN THE NEXT F.YR. I THEREFORE DIRECT DELETION OF THE ADDITION SUBJECT TO SUBMISSION OF THE RECONCILIATION STATEMENT ALONG WITH SUPPORTING PAPERS BEFORE THE A.O. FOR NECESSARY VERIFICATION. 7. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED T HAT THE ASSESSEE FOLLOWS MERCANTILE SYSTEM OF ACCOUNTING. HE FURTHER SUBMIT TED THAT ALTHOUGH AS PER STATEMENT OF PAYMENT FURNISHED BY ECL THERE WAS OUTSTANDING CLOS ING BALANCE AS ON 31/3/2006 OF RS.26 25 152/- BUT THE SAME WAS NOT FOUND RECORDED IN THE ASSESSEES BOOKS OF ACCOUNT AND IN THE BALANCE SHEET IT WAS SHOWN AS AMOUNT REC EIVABLE. HE FURTHER SUBMITTED THAT THE LD. C.I.T.(A) DIRECTED TO DELETE THE ADDITION A FTER CONSIDERING THE RECONCILIATION STATEMENT AND VERIFICATION WHETHER THE ASSESSEE REC EIVED THIS OUTSTANDING AMOUNT IN THE NEXT YEAR AND OFFERED FOR TAXATION. THE LD. DEPARTM ENTAL REPRESENTATIVE SUBMITTED THAT THE LD. C.I.T.(A) WENT WRONG IN DIRECTING SO BECAU SE IN VIEW OF MERCANTILE SYSTEM OF ACCOUNTING BEING FOLLOWED BY THE ASSESSEE THIS AMO UNT IS TO BE CONSIDERED IN THE ASSESSMENT YEAR UNDER CONSIDERATION ITSELF. HE FUR THER SUBMITTED THAT SINCE THE ASSESSEE DID NOT SHOW THIS OUTSTANDING AMOUNT IN THE CLOSING BALANCE AND THE ITEM WAS MISSING FROM THE BALANCE SHEET THE A.O. WAS JUSTIFIED TO M AKE THE ADDITION U/S. 69A OF THE ACT. 6 8. THE LD. A/R OF THE ASSESSEE SUPPORTED THE ORDER OF LD. C.I.T.(A). HE FURTHER SUBMITTED THAT THE RECONCILIATION STATEMENT WAS FIL ED BEFORE THE A.O. AND THE A.O. WHILE GIVING EFFECT TO THE ORDER OF THE LD. C.I.T.(A) VID E ORDER DATED 20/05/2010 DID NOT MAKE THE ADDITION. 9. WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IAL PLACED ON RECORD. WE FIND MERIT IN THE SUBMISSION OF THE LD. DEPARTMENTAL REP RESENTATIVE THAT IF THE AMOUNT PERTAINS TO THIS ASSESSMENT YEAR UNDER CONSIDERATIO N AND THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING THE ASSESSEE WAS R EQUIRED TO SHOW IT AS AN OUTSTANDING CLOSING BALANCE IN THE BALANCE SHEET. HOWEVER WE OBSERVE ON PERUSAL OF THE ORDER OF LD. C.I.T.(A) THAT THE ASSESSEE SUBMITTED THE BILLS IN RESPECT OF THE AFORESAID AMOUNT OF RS. 26 25 152/- TO ECL ON OR AFTER 01/4/2006. THEREFOR E AS PER ABOVE OBSERVATION OF LD. C.I.T.(A) THE QUESTION OF SHOWING THE SAID AMOUNT AS OUTSTANDING FROM ECL DOES NOT ARISE. WE OBSERVE THAT THE FACTS AS PLACED ON RECO RD ARE CONTRARY TO EACH OTHER. ON ONE HAND WE OBSERVE THAT THE A.O. HAS STATED THAT THE S UM OF RS.26 25 152/- WAS OUTSTANDING AS CLOSING BALANCE AS ON 31/3/2006 ON THE BASIS OF INFORMATION CALLED FROM ECL WHEREAS ON THE OTHER HAND THE LD. C.I.T.(A) HAS STA TED THAT THE ASSESSEE DID NOT SUBMIT THE BILLS IN RESPECT OF THE SAID AMOUNT TO ECL TILL 31/03/2006 AND THE SAME WAS SUBMITTED ON OR AFTER 01/4/2006. IT IS ALSO STATED THAT THE ASSESSEE HAS OFFERED THE SAID AMOUNT FOR TAXATION IN THE NEXT ASSESSMENT YEAR. B E THAT AS IT MAY WE ARE OF THE CONSIDERED VIEW THAT THE ISSUE REQUIRES RECONSIDERA TION IN THE LIGHT OF THE FACTS TO BE SUBMITTED BY THE ASSESSEE AS TO WHETHER THE ASSESSE E SUBMITTED THE BILLS TO ECL ON OR BEFORE 31/3/2006 AND IF SO THE SAID AMOUNT WAS REQ UIRED TO BE SHOWN AS OUTSTANDING IN THE BALANCE SHEET AS AT 31/3/2006 AND IF THE BILLS WERE NOT SUBMITTED TILL 31/3/2006 BUT WERE SUBMITTED ON OR AFTER 01/4/2006 IN THAT CASE THE QUESTION OF SHOWING THE BILLED AMOUNT AS OUTSTANDING CLOSING BALANCE AS ON 31/3/20 06 DOES NOT ARISE. IN THAT CASE THE SAID AMOUNT COULD NOT BE ADDED TO THE INCOME OF THE ASSESSEE. THEREFORE WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW ON THIS ISSUE A ND RESTORE THE SAME TO THE FILE OF THE A.O. FOR HIS FRESH CONSIDERATION. WE MAY STATE THA T IF THIS AMOUNT IS FOUND TO BE ASSESSABLE IN THE ASSESSMENT YEAR UNDER CONSIDERATI ON I.E. ASSESSMENT YEAR 2006-07 AND IT IS OBSERVED THAT THE ASSESSEE HAS OFFERED THE SA ID AMOUNT FOR TAXATION IN THE NEXT ASSESSMENT YEAR THE A.O. WILL ALSO TAKE NECESSARY STEPS TO SEE THAT THIS AMOUNT IS NOT 7 TAXED TWICE I.E. ONCE IN THE ASSESSMENT YEAR UNDER CONSIDERATION AND AGAIN IN THE NEXT ASSESSMENT YEAR. IN VIEW OF THE ABOVE GROUND NO.2 OF THE DEPARTMENTAL APPEAL IS ALLOWED FOR STATISTICAL PURPOSES BY RESTORING THE I SSUE TO THE FILE OF THE A.O. FOR HIS FRESH CONSIDERATION. 10. VIDE GROUND NO.3 OF THE ASSESSEES APPEAL THE ASSESSEE HAS DISPUTED THE ACTION OF THE LD. C.I.T.(A) IN PARTIALLY UPHOLDING THE ADD ITIONS MADE BY THE A.O. BY WAY OF DISALLOWANCE OF EXPENSES CLAIMED UNDER SEVERAL HEAD S OF EXPENDITURE. THIS GROUND OF THE ASSESSEES APPEAL DOES NOT ARISE OUT OF THE ORD ER OF LD. C.I.T.(A) WHO HAS NOT DISALLOWED ANY EXPENSES IN VIEW OF THE FACT THAT TH E INCOME OF THE ASSESSEE HAS BEEN ESTIMATED BY APPLYING NET PROFIT RATE. IT IS A SETT LED POSITION THAT WHEN THE NET PROFIT RATE IS APPLIED IN THE CASE OF AN ASSESSEE ALL THE DEDU CTIONS EXPENDITURE DISALLOWANCES ETC. ARE ALREADY DEEMED TO BE CONSIDERED THEREIN AND THE REAFTER NO FURTHER DISALLOWANCE CAN BE MADE BY THE A.O. THE HONBLE ALLAHABAD HIGH COURT HAS HELD IN THE CA SE OF CIT VS. BANWARILAL BANSIDHAR [229 ITR 229 (ALL)] HAS HELD A S UNDER :- HELD AFFIRMING THE DECISION OF THE TRIBUNAL THAT NO DISALLOWANCE COULD BE MADE IN VIEW OF THE PROVISIONS OF SECTION 40A(3) READ WITH RULE 6DD(J) OF THE INCOME-TAX RULES 1962 AS NO DEDUCTION WAS ALLOWED TO AND CLAIMED BY THE ASSESSEE. WHEN THE GROSS PROFIT RATE WAS APPLIED THAT WOULD TAKE CARE OF EVERYTHING AND THERE WAS NO NEED FOR THE ASSESSING OFFICER TO MAKE SCRUTINY OF THE AMOUNT INCURRED ON THE PURCHASES MADE BY THE ASSESSEE. THE ABOVE DECISION OF HONBLE ALLAHABAD HIGH COURT WOULD BE SQUARELY APPLICABLE TO THE CASE OF THE ASSESSEE. IN VIEW OF THE ABOVE THE GROUND RAISED BY THE ASSESSEE HAS BECOME INFRUCTUOUS AND HENCE THE SAME IS REJECTED. 11. GROUND NO.4 OF THE ASSESSEES APPEAL IS GENER AL IN NATURE AND THEREFORE NEEDS NO SEPARATE ADJUDICATION. 12. IN THE RESULT THE APPEAL FILED BY THE DEPART MENT IS ALLOWED IN PART FOR STATISTICAL PURPOSES WHEREAS THE CROSS-OBJECTION AND THE APPEA L OF THE ASSESSEE ARE DISMISSED. 2 '1 #3' 4 3% 5 26 THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON 25.03 .2011 SD/- SD/- ( . .. . ! ! ! !. .. . ) '# ( . . . . . .. . ) (C.D.RAO) ACCOUNTANT MEMBER (B.R.MITTAL) JUDICIAL MEMBER ( (( (!# !# !# !#) )) ) DATE: 25 - 03-2011 8 $ $ $ $ / ITA NO. 1090 (KOL) OF 2010 '1 7 /8 9'8':- COPY OF THE ORDER FORWARDED TO: 1. + / THE APPELLANT : I.T.O. WARD-2(2) G.T. ROAD (WEST) ASANSOL-4. 2 /0+ / THE RESPONDENT : M/S. MAA TRANSPORT AGENCY C/O. SRI KANCHAN SADHU ADVOCATE VIVEKANANDA PARK LOWER KU MARPUR ASANSOL-713 304 3. 1% () : THE CIT(A) ASANSOL. 4. 1%/ THE CIT ASANSOL 5 >5 /% / DR ITAT KOLKATA BENCHES KOLKATA 6 GUARD FILE . 08 // TRUE COPY '1%3/ BY ORDER (DKP) ? @ / DY./ASSTT. REGISTRAR .