Manoj Kumar Singh,, Lucknow v. Income Tax Officer-3(2),, Lucknow

ITA 292/LKW/2013 | 2008-2009
Pronouncement Date: 24-07-2013 | Result: Allowed

Appeal Details

RSA Number 29223714 RSA 2013
Assessee PAN AZOPS0477N
Bench Lucknow
Appeal Number ITA 292/LKW/2013
Duration Of Justice 2 month(s) 28 day(s)
Appellant Manoj Kumar Singh,, Lucknow
Respondent Income Tax Officer-3(2),, Lucknow
Appeal Type Income Tax Appeal
Pronouncement Date 24-07-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 24-07-2013
Date Of Final Hearing 13-06-2013
Next Hearing Date 13-06-2013
Assessment Year 2008-2009
Appeal Filed On 26-04-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW SMC BENCH LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER ITA NO.292/LKW/2013 ASSESSMENT YEAR:2008-09 MANOJ KUMAR SINGH PROP. M/S ENGLISH WINE SHOP VILLAGE HARDAUR PUR POST KATHWARA BAKSHI KA THALAB LUCKNOW V. ITO 3(2) LUCKNOW PAN:AZOPS0477N (APPELLANT) (RESPONDENT) A PP ELLANT B Y :SHRI. P. K. KA P OOR C.A. RESPONDENT BY: SHRI. ALOK MITRA D.R. DATE OF HEARING: 13.06.2013 DATE OF P RONOUNCEMENT: 24.07.2013 O R D E R THIS APPEAL IS PREFERRED BY TH E ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) ON A SOLITARY GROUND THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN APPLYING THE NET PROFIT RATE OF 4% ON THE TOTAL TURNOVER AS AGAINST 2.46% DECLARED BY THE ASSESSEE AND 5.1% ESTIMATED BY THE ASSESSING OFFICER. 2. THE BRIEF FACTS CULLED OUT FROM TH E ORDERS OF THE LOWER AUTHORITIES ARE THAT THE ASSESSEES MAJOR SOURCE OF INCOME IS FROM HIS PROPRIETARY CONCERN M/S ENGLISH WINE SHOP. THE ASSESSEE FILED RETURN SHOWING TOTAL INCOME OF ` 1 35 080/-. SINCE TH E ASSESSEE DID NOT PR ODUCE THE BOOKS OF ACCOUNT BILLS AND VOUCHERS OF EXPENS ES AND THE REQUIRED DETAILS THE ASSESSMENT WAS COMPLETED UNDER SECT ION 144 OF THE INCOME-TAX ACT 1961 (HEREINAFTER CALLED IN SHORT THE ACT') AND THE INCOME WAS ASSESSED AT ` 3 49 240 BY APPLYING THE NE T PROFIT RATE OF 5.1% ON THE GROSS SALES AS :-2-: AGAINST NET PROFIT OF ` 1 99 639 @ 2.6% DECL ARED IN THE RETURN FILED BY THE ASSESSEE. 3. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WITH THE SUBMISSION THAT THE ASSE SSING OFFICER CANNOT ESTI MATE THE INCOME OF THE ASSESSEE WITHOUT ANY BASIS EVEN IN THE CASE WHER E THE ASSESSEE COULD NOT PRODUCE THE BOOKS OF ACCOUN T BILLS AND VOUCHERS. IT WAS FURTHER CONTENDED THAT IN THE PRECEDING YEARS THE NET PROFIT RATE WAS SHOWN BETWEEN 2.12% AND 2.72%. THEREFORE WHILE ESTIMATING THE NET PROFIT RATE THE PAST RECORD OF THE ASSESSEE IS TO BE TAKEN INTO ACCOUNT. THE LD. CIT(A) EXAMINED THE CLAIM OF THE ASSESSEE BUT WAS NOT FULLY CONVINCED WITH VARIOUS CONTENTIONS OF THE ASSESSEE. HE HOWEVER ESTIMATE D THE NET PROFIT RATE AT 4% OF THE TOTAL TURNOVER AND GRANTED RELIEF OF ` 89 250. 4. NOW THE ASSESSEE IS BEFORE THE TR IBUNAL WITH THE SUBMISSION THAT THE NET PROFIT RATE APPLIED BY THE LD. CIT(A) IS STIL L ON HIGHER SIDE. DURING THE COURSE OF HEARING NO DISPUTE WAS RAISED WITH REGARD TO NON-PRODUCTION OF THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE MAIN DISPUTE RAISED WAS WITH REGARD TO THE ESTIMATION OF NET PROFIT RATE. IT WA S CONTENDED THAT EVEN IN THE CASE OF NON-PRODUCTION OF THE BOOKS OF ACCOUNT THE INCOME CAN ONLY BE ESTIMATED ON THE BASIS OF THE PAST RECORD OF THE ASSESSEE OR MATERIAL AVAILABLE ON RECORD. SINCE IN THE PAST THE ASSESSEE HAS DE CLARED NET PROFIT RATE BETWEEN 2.12% AND 2.72% NET PROF IT RATE CANNOT BE ESTIMATED MORE THAN THAT. 5. THE LD. D.R. ON THE OTHER HAND HAS SUPPORTED THE ORDER OF THE LD. CIT(A). 6. HAVING CAREFULLY EXAMINED THE ORDE RS OF THE AUTHORITIES BELOW AND THE MATERIAL ON RECORD I FIND THAT UNDISPUTEDLY CO MPLETE RECORDS WERE NOT PRODUCED BEFORE THE ASSESS ING OFFICER. IN THE ABSENCE OF REQUISITE BOOKS OF ACCOUNT THE ASSESSING OFFICER HAS NO OTHER OPTION BUT TO ESTIMATE THE :-3-: INCOME OF THE ASSESSEE BY APPLYING THE NET PROFIT RATE. THE ASSESSEE WAS ENGAGED IN THE LIQUOR BUSINESS AND TH E ASSESSING OFFICER HAS APPLIED 5.1% WHICH WAS REDUCED TO 4% BY THE LD. CI T(A). EVEN THEN THE LD. COUNSEL FOR THE ASSESSEE HAS A GRIEVANCE WITH THE ESTIMATION OF INCOME. HE ALTERNATIVELY PRAYED THAT REASONABLE NET PROFIT RATE MAY BE APPLIED. IN THE FACTS AND CIRCUMSTANCES OF THE CASE I AM OF THE VIEW THAT THE NET PROFIT RATE APPLIED BY THE LD. CIT(A) IS STILL ON HIGHER SIDE. THEREFORE IN ORDER TO MEET THE ENDS OF JUSTICE I DIRECT TH E ASSESSING OFFICER TO ADOPT THE NET PROFIT RATE OF 3.5% OF THE TOTAL TURN OVER AND CALCULATE THE TOTAL INCOME OF THE ASSESSEE IN ACCORDANCE WITH LAW. ACCORDINGLY THE ORDER OF THE LD. CIT(A) IS SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR RE-COMPUTATION OF INCOME IN TERMS INDICATED ABOVE. 7. IN THE RESULT APPEAL OF THE A SSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 24.7.2013. SD/- [SUNIL KUMAR YADAV] JUDICIAL MEMBER DATED:24.7.2013 JJ:2606 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR