Lingaraj Biscuits Pvt. Ltd, Bhubaneswar v. ACIT, Bhubaneswar

ITA 319/CTK/2010 | 2007-2008
Pronouncement Date: 29-07-2011

Appeal Details

RSA Number 31922114 RSA 2010
Assessee PAN ABBPP3310Q
Bench Cuttack
Appeal Number ITA 319/CTK/2010
Duration Of Justice 11 month(s) 5 day(s)
Appellant Lingaraj Biscuits Pvt. Ltd, Bhubaneswar
Respondent ACIT, Bhubaneswar
Appeal Type Income Tax Appeal
Pronouncement Date 29-07-2011
Appeal Filed By Assessee
Bench Allotted DB
Tribunal Order Date 29-07-2011
Date Of Final Hearing 30-06-2011
Next Hearing Date 30-06-2011
Assessment Year 2007-2008
Appeal Filed On 24-08-2010
Judgment Text
IN THE INCME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE : HONBLE SHRI K.K.GUPTA ACCOUNTANT MEMBER AND HONBLE SHRI K.S.S.PRASAD RAO JUDICIAL MEMBER. ITA NO. 157/CTK/2011 (ASSESSMENT YEAR 2006 - 07) SRI RADHAKRISHNA PRADHAN PROP. M/S.S HREE JAGANNATH SERVICE STATION LINK ROAD CUTTACK PAN: ABBPP 3310 Q VERSUS INCOME - TAX OFFICER WARD 2(1) CUTTACK. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI SASWAT ACHARYA AR FOR THE RESPONDENT SHRI S.C.MOHANTY DR ORDER SHRI K.S.S.PRASAD RAO JUDICIAL MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE HAVING BEEN AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) DT. 28./9.2010 FOR THE ASSESSMENT YEAR 2006 - 07 IN CASE OF THE ASSESSEE. 2. THE ASSESSEE HAS RAISED THE FOLLOW ING ISSUES IN THE GROUNDS OF APPEAL. 1 . FOR THAT THE ESTIMATION OF NET PROFIT @ 0.75% OF THE GROSS TURNOVER WITHOUT TAKING INTO CONSIDERATION THE REVENUE EXPENSES AND STATUTORY INTEREST & DEPRECIATION IS HIGHLY IRREGULAR EXCESSIVE AND LIABLE TO BE DELE TED. 2 . FOR THAT WHEN THE MINISTRY OF PETROLEUM AND CHEMICALS IN THEIR CIRCULAR HAS FIXED THE GROSS PROFIT AT 1 .33% AND EVAPORATION @ 0.75% THE GROSS PROFIT COMES DOWN TO 0.33% BEFORE ALL REVENUE EXPENSES INCLUDING STATUTORY BANK CHARGES AND DEPRECIATION ETC. 3. BOTH THE PARTIES WERE HEARD REGARDING THE ISSUES RAISED BY THE ASSESSEE AND THEIR LEGAL IMPLICATIONS. 4. ON CAREFUL CONSIDERATION OF THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL AND ANALYZING THE SAME IN THE LIGHT OF RIVAL SUBMISSIONS OF BOTH THE PARTIES THE UNDISPUTED FACTS RELATING TO THE ISSUES ARE THAT THE ASSESSEE IS A PROPRIETOR OF M/S. SHREE JAGANNATH SERVICE STATION DONG THE BUSINESS OF RETAIL ITA NO. 157/CTK/2011 2 SALE OF PETROL DIESEL MOTOR SPIRIT HSD LUBRICANTS OF INDIAN OIL CORPORATION LTD. A GOVERNME NT OF INDIA UNDERTAKING. THE ASSESSEE IS MAINTAINING ALL THE BOOKS OF ACCOUNT FOR THE PURCHASE AND SALES OF THE AFORESAID COMMODITIES. AS THE TURNOVER CROSSED THE LIMIT OF 40 LAKHS HE GOT THE BOOKS OF ACCOUNT AUDITED U/S.44AB AND RETURN WAS FILED ENCLOSING THEREWITH THE AUDIT REPORT. BUT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS NOT ABLE TO PRODUCE THE BOOKS OF ACCOUNT BEFORE THE AO AS THE ASSESSEE WAS BUSY FOR THE TREATMENT OF HIS AILING FATHER AT HYDERABAD AND ON RETURN FROM HYDERABAD HE FOUND THAT THE CITY OF CUTTACK HAD BEEN WASHED AWAY BY AN UNPRECEDENTED RAIN OF 330 ML. IN A SINGLE DAY THE ENTIRE BOOKS OF ACCOUNTS INCLUDING THE BUSINESS PREMISES OF THE ASSESSEE WERE UNDER WAIST DEEP WATER FOR DAYS TOGETHER. THEREFORE THE ASSESSING OFFICER HAS PASSED THE IMPUGNED ASSESSMENT ORDER BY INVOKING THE PROVISIONS OF SECTION 145 OF THE I.T.ACT. IN THE APPEAL FILED BY THE ASSESSEE BEFORE THE CIT(A) THE LEAR NED CIT(A) AFTER HEARING THE ASSESSEE AND CONSIDERING THE ASSESSMENT RECORDS HAS PASSED THE IMPUGNED ORDER DIRECTING THE ASSESSING OFFICER TO ARRIVE AT NET PROFIT @ 0.75% AS AGAINST THE CLAIM OF THE ASSESSEE AT 0.27%. HAVING BEEN AGGRIEVED WITH SUCH ORDER OF THE LEARNED CIT(A) THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. DURING THE COURSE OF HEARING THE LEARNED AR OF THE ASSESSEE HAS SUBMITTED THAT THE MINISTRY OF PETROLEUM AND CHEMICALS HAS ISSUED A CIRCULAR FIXING GROSS PROFIT @ 1. 33% AND ALLOWIN G EVAPORATION @0.75% THEREBY THE NET GROSS PROFIT COMES TO 0.33%. THE ASSESSEE HAS TO INCUR REVENUE EXPENSES INCLUDING BANK CHARGES DEPRECIATION ETC. NECESSARY FOR RUNNING OF THE PETROL PUMP. THEREFORE THE RETURNED INCOME BY THE ASSESSEE @0.27% NET PROF IT IS TO BE ACCEPTED AS REASONABLE AND BOTH THE LOWER AUTHORITIES HAVE NO MATERIAL ON RECORD TO ENHANCE THE SAME. ACCORDINGLY HE SOUGHT FOR ITA NO. 157/CTK/2011 3 SETTING ASIDE THE ORDERS OF THE AUTHORITIES BELOW WITH A DIRECTION TO ACCEPT THE RETURNED INCOME BY ALLOWING THE AP PEAL OF THE ASSESSEE. 6. THE LEARNED DR SUPPORTED THE IMPUGNED ORDERS OF THE LEARNED CIT(A). 7. ON CAREFUL ANALYSIS OF THE ORDERS PASSED BY THE DEPARTMENTAL AUTHORITIES AS WELL AS THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL UNDISPUTEDLY THE MINISTRY OF PE TROLEUM AND CHEMICALS HAS ISSUED A CIRCULAR FIXING GROSS PROFIT @ 1.33% AND ALLOWING EVAPORATION @ 0.7 5 % AND THUS THE NET GROSS PROFIT COMES TO 0.33% . FOR RUNNING THE PETROL PUMP IT IS NECESSARY TO INCUR EXPENDITURES ON SALARY OF STAFF DEPRECIATION OF MAC HINERIES AND INTEREST ON CAPITAL OF THE PROPRIETOR WHICH THE ASSESSEE HAS TO MEET FROM THE ABOVE NET GROSS PROFIT OF 0.33%. UNDER THESE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE THE ASSESSEE DECLARING THE NET PROFIT AT 0.27% APPEARS TO US TO BE REASO NABLE AND ACCEPTABLE ON THE GENERAL PRINCIPLES OF TAXATION. WE ARE THEREFORE OF THE CONSIDERED VIEW THAT THE VIEW TAKEN BY THE DEPARTMENT MERELY ON PRESUMPTION AND ASSUMPTIONS TO DISPUTE THE INCOME RETURNED BY THE ASSESSEE CANNOT BE SUSTAINED FOR LEGAL SCR UTINY. WE THEREFORE SET ASIDE THE IMPUGNED ORDER OF THE LEARNED CIT(A) AND DIRECT THE ASSESSING OFFICER TO ACCEPT THE INCOME SHOWN IN THE RETURN FILED BY THE ASSESSEE. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN OPEN COURT ON D T. 29.07.2011 SD/ - SD/ - (K.K.GUPTA) ACCOUNTANT MEMBER (K.S.S.PRASAD RAO) JUDICIAL MEMBER DATE: 29.07.2011 H.K.PADHEE SENIOR PRIVATE SECRETARY. ITA NO. 157/CTK/2011 4 COPY OF THE ORDER FO RWARDED TO : 1. THE APPELLANT: SRI RADHAKRISHNA PRADHAN PROP. M/S.SHREE JAGANNATH SERVICE STATION LINK ROAD CUTTACK 2. THE RESPONDENT: INCOME - TAX OFFICER WARD 2(1) CUTTACK. 3. THE CIT 4. THE CIT(A) 5. THE DR CUTTACK 6. GUARD FILE (IN DUPLIC ATE) TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY.