M/s R. K. Mondal and Brothers, Burdwan v. ITO, Wd-1, Durgapur, Durgapur

ITA 339/KOL/2014 | 2010-2011
Pronouncement Date: 28-10-2016

Appeal Details

RSA Number 33923514 RSA 2014
Assessee PAN AAHFR6294C
Bench Kolkata
Appeal Number ITA 339/KOL/2014
Duration Of Justice 2 year(s) 8 month(s) 2 day(s)
Appellant M/s R. K. Mondal and Brothers, Burdwan
Respondent ITO, Wd-1, Durgapur, Durgapur
Appeal Type Income Tax Appeal
Pronouncement Date 28-10-2016
Appeal Filed By Assessee
Bench Allotted SMC
Tribunal Order Date 28-10-2016
Date Of Final Hearing 01-09-2016
Next Hearing Date 01-09-2016
Assessment Year 2010-2011
Appeal Filed On 25-02-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL D BENC H KOLKATA BEFORE SHRI K. NARASIMHA CHARY JM & DR. A.L.SAINI AM ./ ITA NO.339/KOL/2014 ( / ASSESSMENT YEAR :2010-2011) M/S. R.K.MONDAL & BROTHERS VILLAGE&POST-KAJORAGRAM DISTRICT BURDWAN PIN-713338 VS. ITO WARD-1(1) CITY CENTRE DURGAPUR KOLKATA ./ ./PAN/GIR NO. : AAHFR 6294 C ( /APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI DIPTEN ROY ADVOCATE /REVENUE BY : SHRI PINAKI MUKHARJEE JCIT / DATE OF HEARING : 21/10/2016 /DATE OF PRONOUNCEMENT 28/10/2016 / O R D E R PER DR. ARJUN LAL SAINI AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERTAIN ING TO THE ASSESSMENT YEAR 2010-2011 IS DIRECTED AGAINST AN O RDER PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS)-DURGAPUR IN A PPEAL NO.125/CIT(A)/DGP/2012-13 DATED 20.01.2014 WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE ASSESSING OFF ICER (AO) UNDER SECTION.144/185 OF THE INCOME TAX ACT 1961 (IN SHO RT THE ACT) DATED 30.11.2012. 2. BRIEF FACTS OF THE CASE QUA THE ASSESSEE IS THAT THE ASSESSEE FILED ITS RETURN OF INCOME ELECTRONICALLY ON 13.10.2010 D ECLARING TOTAL INCOME OF RS.3 70 399/-. THE CASE WAS SELECTED FOR SCRUTINY U /S.143(3) OF THE INCOME TAX ACT AND THE AO COMPLETED ASSESSMENT AFTE R MAKING THE ADDITION AT RS.30 71 400/- BY APPLYING THE PROFIT R ATE AT @8% OF GROSS ITA NO.339/14 M/S R.K.MONDAL & BROTHERS 2 CONTRACT RECEIPTS OF RS.389 92 446/- U/S.144 OF TH E INCOME TAX ACT. NO DEDUCTION FOR REMUNERATION PAID TO THE PARTNERS AND INTEREST ON CAPITAL TO THE PARTNERS ARE ALLOWED IN COMPUTING THE TAXABLE I NCOME. 3. AGGRIEVED FROM THE ORDER OF AO THE ASSESSEE FIL ED AN APPEAL BEFORE THE LD. CIT(A) WHO HAS CONFIRMED THE ADDITI ON MADE BY THE AO AFTER GIVING MARGINAL RELIEF IN THE GROSS PROFIT RA TIO. LD. CIT(A) HAS REDUCED THE GROSS PROFIT RATIO TO 5.56% FROM 8%. THEREFORE LD. CIT(A) OBSERVED THE FOLLOWING :- BESIDES IT IS SEEN FROM THE ASSESSMENT ORDER THAT WITHOUT REJECTING BOOKS OF ACCOUNTS U/S.145(3) OF THE ACT THE A.O. HAS RESORTED TO SEC.144 OF THE ACT. HOWEVER WHILE ESTI MATING THE PROFIT @ 8% THE A.O. HAS PICKED UP THE GROSS CONTRACT REC EIPTS FROM THE AUDITED P/L ACCOUNT OF RS.3 83 92 446/-. HOWEVER IN OVERALL FACTS AND CIRCUMSTANCES OF THE CASE IT IS SEEN THAT THE E STIMATION @ 8% IN THIS BEST JUDGMENT ASSESSMENT U/S.144 OF THE ACT IS BIT ARBITRARY AND CAPRICIOUS. FROM THE DETAILS OF THE NET PROFIT RATIO AS PER THE AUDITED BALANCE SHEETS IT IS SEEN THAT A NET PROFI T ARE OF 3.30% AND 5.56% FOR THE A.Y.2009-10 AND 2011-12 RESPECTIVELY. WHEREAS THE NET PROFIT RATIO IS 3.46% FOR THE A.Y 2010-11. SINC E THE APPELLANT IS CARRYING OUT THE SAME LINE OF BUSINESS OVER THE YEA RS THE NET PROFIT RATIO OF 8% AS ADOPTED BY THE A.O. DOES NOT MEET TH E PARAMETERS OF JUSTICE AS PER THE PROVISIONS OF BEST JUDGMENT ASSE SSMENT U/S144 OF THE ACT. HENCE CONSIDERING THESE FACTUAL MATRIX OF THE CASE AND LEGAL POSITION I AM OF THE CONSIDERED OPINION THAT ESTIMATION OF NET PROFIT @5.56% WILL MEET BOTH ENDS OF JUSTICE. ACCOR DINGLY THE NET PROFIT ON THE GROSS RECEIPTS OF RS.3 83 92 446/- @ 5.56% COMES TO RS.21 34 620/- AND THE A.O. IS DIRECTED TO ADOPT T HIS NET PROFIT AS AGAINST RS.30 71 400/- AS DETERMINED BY HIM IN THE ASSESSMENT ORDER. THUS THE BALANCE AMOUNT OF ADDITION OF RS.9 36 780/- IS HEREBY DELETED. 8.THE A.O. HAS FURTHER DIRECTED TO ALLOW THE REMUNE RATION TO PARTNERS AMOUNTING TO RS.7 60 000/- AND INTEREST ON CAPITAL TO THE PARTNERS AMOUNTING TO RS.2 00 868 OUT OF AMOUNT OF RS.21 34 620/- AFTER DUE VERIFICATION FROM COMPUTATION FILED WITH THE RETURN OF INCOME FOR THE A. Y. 2010-11. ACCORDINGLY THESE GRO UNDS ARE PARTLY ALLOWED. ITA NO.339/14 M/S R.K.MONDAL & BROTHERS 3 4. BEFORE THE LD. CIT(A) THE ASSESSEE IN ADDITION T O THE PAPERS AND EVIDENCES SUBMITTED BEFORE THE AO SUBMITTED THE EX PLANATION THAT THE GROSS PROFIT RATIO FOR THE PURPOSE OF COMPUTATION O F TAXABLE INCOME SHOULD BE LOWER THAN 5.56%. AGGRIEVED FROM THE ORDER OF LD . CIT(A) THE ASSESSEE IS IN FURTHER APPEAL BEFORE US AND HAS TAKEN THE FO LLOWING GROUNDS/ADDITIONAL GROUNDS OF APPEAL :- THE LD. ASSESSING OFFICER IN THIS CASE ERRED IN EST IMATING PROFIT 8% ON TOTAL TRANSPORT RECEIPT DISCLOSED BY THE ASSESSE E IN AUDITED ACCOUNTS U/S 44AB I.E. LD. ASSESSING OFFICER ACCEPT ED THE NET RECEIPT DISCLOSED WITHOUT ESTIMATING SAME WHICH APP EARS TO BE NOT PERMISSIBLE AS PER LAW. LD. ASSESSING OFFICER DID T HIS WITHOUT REJECTING THE BOOKS OF ACCOUNTS. HENCE ADDITION WAS ARBITRARY IN NATURE TO BE DELETED IN FULL. IN ORIGINAL ASSESSMEN T LD. ASSESSING OFFICER CALLED FOR BOOKS OF ACCOUNTS. BUT SEVEN DAY S TIME WAS PRAYED WHICH WAS NOT GRANTED AND FOLLOWED THE EASIE ST WAYS OF MAKING ASSESSMENT U/S 144/185 OF TAX ACT 1961. THE BOOKS OF ACCOUNTS WERE PRODUCED TO THE LD. CIT( APPEALS) AND TO THE LD. ASSESSING OFFICER FOR REMAND REPORT ON S EVERAL OCCASIONS AND BEING SATISFIED LD. CIT (APPEALS) DIRECT TO MAK E THE ASSESSMENT U/S 143(3)/185 INSTEAD OF U/S 144/185 OR IGINALLY MADE. IN THIS LINE OF BUSINESS PROFIT IS GENERALLY ARRIVE D AT 2% TO 3% OF GROSS RECEIPT AS APPEAR IN APPEAL NO-1L2/CIT(A)/DGP /2010-2011 DATED 10-01-2012 IN RESPECT OF THIS FIRM FOR AY.-20 08-2009.(COPY OF WHICH WAS PRODUCED TO LD. CIT(APPEALS)) NOW RESJUDICATA IS NOT APPLICABLE IN CASE OF INCOME TAX ASSESSMENT I.E. AN ASSESSMENT YEAR UNDER THE INCOME TAX ACT IS A SELF CONTAINED ASSESSMENT PERIOD AND DECISION IN ONE ASS ESSMENT YEAR DOES NOT ORIGINALLY OPERATES AS RESJUDICATA IN RESP ECT OF THE MATTER DECIDED IN ANY SUBSEQUENT YEAR FOR THE ASSESSING OF FICER IS NOT A COURT AND HE IS NOT PRECLUDED FROM ARRIVING AT A CO NCLUSION IN CONSISTENT WITH THE CONCLUSION IN ANOTHER YEAR AS D ECIDED IN JOINT FAMILY OF UDYAN CHINUBHAI VIS CIT(1967)63 ITR416(SC ). HERE IS THIS CASE LD CIT(APPEALS) TOOK THE PERCENTA GE OF PROFIT AT 5.56% (DISCLOSED IN AY.-2011-2012) INSTEAD OF 3.47% (DISCLOSED). BUT THE ASSESSMENT YEAR 2011-2012 WHERE PROFIT WAS DISCLOSED AT 5.56% WERE NOT DERIVED INCOME SAME TYPE OF BUSINESS . IN ASSESSMENT YEAR 2011-2012 ASSESSEE DERIVED INCOME F ROM TRANSPORT CONTRACT BUSINESS AS WELL AS HYBA HIRE CH ARGES INCOME WHICH IS NO WAY BE THE SIMILAR TYPE OF BUSINESS. MO REOVER LD. CIT(APPEALS) MAY CONSIDER PERCENTAGE OF BUSINESS ON LY FOR EARLIER ITA NO.339/14 M/S R.K.MONDAL & BROTHERS 4 YEAR. BUT HERE THE LD. CIT (APPEALS) CONSIDER THE P ERCENTAGE OF PROFIT DISCLOSED BY THE ASSESSEE FOR LATTER YEAR. H ENCE THE ENTIRE ADDITION KEPT AFTER ORDERS OF LD. CIT(APPEALS) IS B AD - IN -LAWS AND MADE TO BE DELETED IN FULL. ADDITIONAL GROUNDS OF APPEAL :- IN THIS APPEAL 5.56% PROFIT OF GROSS TURNOVER DISCL OSED AS BECAUSE HYBA TRANSPORT CHARGES INCOME WERE INCLUDED IN ADDITION TO CONTRACT BUSINESS FOR THE ASSESSMENT YEAR 2011-2012(COPY OF AUDITED P ROFIT & LOSS ACCOUNT AND BALANCE SHEET ENCLOSED). BUT IN ASSESSM ENT YEAR 2010-2011 THERE ARE NO HYBA TRANSPORT CHARGES INCOME EVEN THA T PROFIT WAS DISCLOSED AT 3.46% (COPY OF AUDITED PROFIT & LOSS A CCOUNT AND BALANCE SHEET ENCLOSED). WE DISCLOSED PROFIT 3.30% IN PREV IOUS YEAR I.E. 2009- 2010 WHICH WAS ACCEPTED BY THE LD. CIT (APPEALS) DU RGAPUR. HENCE PROFIT ACCEPTED AT 5.56% APPARENTLY ON HIGHER SIDE FOR THE SAME LINE OF BUSINESS AND NEEDS TO BE INTERFERENCE IN APPEAL. HE NCE THE APPELLANT PRAYS BEFORE YOUR GOOD SELF KINDLY HONOUR TO ACCEPT THE PROFIT DISCLOSED FOR THE ASSESSMENT YEAR 2010-2011 IN THE LOWER SIDE I.E . 3.46% WHICH WILL BE JUSTIFIABLE. HOPE YOUR KIND HONOUR PLEASE ACCEPT THE NET PROFIT AT 3.46% AND SHALL EVER REMAIN GREAT FULL. 5. ALTHOUGH IN THIS APPEAL THE ASSESSEE HAS RAISED MULTIPLE GROUNDS OF APPEAL AND HE RAISED THE ADDITIONAL GROUND OF AP PEAL ALSO. AT THE TIME OF HEARING THE MAIN GROUND OF THE ASSESSEE HAS BEEN CONFINED TO GROSS PROFIT RATIO TO ESTIMATE THE INCOME OF THE AS SESSEE. THE AO HAS COMPUTED THE INCOME OF THE ASSESSEE BY APPLYING THE 8% RATIO ON THE GROSS RECEIPTS. LD.CIT(A) HAS REDUCED THE SAME TO 5 .56% OF GROSS RECEIPTS OF THE ASSESSEE. NOW THE ASSESSEE IS IN F URTHER APPEAL BEFORE US AND REQUESTED US TO ADOPT THE GROSS PROFIT RATIO AT 3.46% OF THE GROSS RECEIPTS. 6. LD. AR FOR THE ASSESSEE HAS SUBMITTED THAT 5.56% PROFIT OF GROSS TURNOVER DISCLOSED BY THE ASSESSEE BECAUSE OF HYBA TRANSPORT CHARGES INCOME WERE INCLUDED IN ADDITION TO CONTRACT BUSI NESS FOR THE ASSESSMENT YEAR 2011-2012. LD. AR SUBMITTED THAT TH E ASSESSEE HAS ITA NO.339/14 M/S R.K.MONDAL & BROTHERS 5 PRODUCED COPY OF AUDITED PROFIT & LOSS ACCOUNT AND BALANCE SHEET. IN ASSESSMENT YEAR 2010-2011 THERE ARE NO HYBA TRANSPO RT CHARGES INCOME EVEN THEN PROFIT WAS DISCLOSED AT 3.46%. THE ASSESS EE DISCLOSED PROFIT 3.30% IN PREVIOUS YEAR I.E. 2009-2010 WHICH WAS ACC EPTED BY THE LD. CIT (APPEALS). HENCE PROFIT ACCEPTED AT 5.56% APPARENTL Y ON HIGHER SIDE FOR THE SAME LINE OF BUSINESS AND NEEDS TO BE REDUCED. LD. AR REQUESTED TO ACCEPT THE PROFIT DISCLOSED FOR THE ASSESSMENT YEAR 2010-2011 IN THE LOWER SIDE I.E. 3.46% WHICH WILL BE JUSTIFIABLE. 7. ON THE OTHER HAND LD. DR FOR THE REVENUE HAS SU BMITTED AND STRONGLY DEFENDED THE ORDER PASSED BY LD. CIT(A). H E HAS POINTED OUT THAT IN THE PROFIT AND LOSS ACCOUNT THE ASSESSEE HAS SHO WN HYBA TRANSPORT CHARGES AND OTHER CHARGES. HE ALSO POINTED THAT LD. CIT(A) HAS ALREADY GIVEN PARTLY RELIEF BY REDUCING THE GROSS PROFIT RA TIO FROM 8% TO 5.56%. THE ASSESSEE HAS SUBMITTED THE SAME EXPLANATION BEFORE THE LD. CIT(A) AND THE LD. CIT(A) AFTER CONSIDERING THE HYBA TRANSPORT CHARGES AND OTHER EXPLANATION OF THE ASSESSEE HAS COME TO THE CONCLUS ION AND GIVEN THE PARTLY RELIEF TO THE ASSESSEE BY REDUCING THE GROSS PROFIT RATIO FROM 8% TO 5.56%. 8. HAVING HEARD THE RIVAL SUBMISSIONS PERUSED THE MATERIAL AVAILABLE ON RECORD WE ARE OF THE VIEW THAT THERE IS NO MERI T IN THE SUBMISSIONS OF THE ASSESSEE. THE ASSESSEE HAS MADE SAME SUBMISSION S AND EXPLANATIONS WHICH HE MADE BEFORE THE LD. CIT(A) AN D THE LD. CIT(A) AFTER CONSIDERING THE EVIDENCES AND EXPLANATION HAS REDU CED THE GROSS PROFIT ITA NO.339/14 M/S R.K.MONDAL & BROTHERS 6 RATIO FROM 8% TO 5.56%. WITHOUT CONSIDERING THE HY BA TRANSPORT CHARGES INCOME THE GP RATIO IN THIS LINE OF BUSINESS AND C ONSIDERING THE TURNOVER OF THE ASSESSEE IS QUITE REASONABLE. THEREFORE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND HENCE WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER PASSED BY LD. CIT( A). WE ACCORDINGLY CONFIRM THE ORDER PASSED BY LD. CIT(A). 9. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28/1 0/2016. S D/ - (NARASIMHA CHARY) S D/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; $% DATED 28/10/2016 & ()* /PRAKASH MISHRA . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER / ( ASSTT. REGISTRAR) & ' / ITAT 1. / THE APPELLANT-M/S R.K.MONDAL & BROTHERS 2. / THE RESPONDENT.-ITO WARD-1(1) DURGAPUR 3. 4 ( ) / THE CIT(A) KOLKATA. 4. 4 / CIT 5. 56 7 8 8 / DR ITAT KOLKATA 6. 7 9 / GUARD FILE. 5 //TRUE COPY//