ITO, Karnal v. Sh. Ram Pratap Prop., Karnal

ITA 3544/DEL/2011 | 2007-2008
Pronouncement Date: 23-09-2011 | Result: Dismissed

Appeal Details

RSA Number 354420114 RSA 2011
Assessee PAN ADUPM9230B
Bench Delhi
Appeal Number ITA 3544/DEL/2011
Duration Of Justice 2 month(s) 9 day(s)
Appellant ITO, Karnal
Respondent Sh. Ram Pratap Prop., Karnal
Appeal Type Income Tax Appeal
Pronouncement Date 23-09-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted F
Tribunal Order Date 23-09-2011
Date Of Final Hearing 15-09-2011
Next Hearing Date 15-09-2011
Assessment Year 2007-2008
Appeal Filed On 14-07-2011
Judgment Text
BEFORE THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI C.L. SETHI JUDICIAL MEMBER AND SHRI B.C. MEENA ACCOUNTANT MEMBER ITA NO.3442/DEL.2011 (ASSESSMENT YEAR : 2007-08) SHRI RAM PRATAP VS. ITO WARD I PROP. SHYAM JEE TIMBER STORE KARNAL (HARYANA). IMAMBARA KARNAL (HARYANA) (PAN NO.ADUPM9230B) ITA NO.3544/DEL.2011 (ASSESSMENT YEAR : 2007-08) ITO WARD I VS. SHRI RAM PRATAP KARNAL (HARYANA). PROP. SHYAM JEE TIMBER STORE IMAMBARA KARNAL (HARYANA) (PAN NO.ADUPM9230B) (APELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.L. ANEJA ADVOCATE DEPARTMENT BY : SMT. PRATIMA KAUSHIK SENIOR DR O R D E R PER B.C. MEENA ACCOUNTANT MEMBER : BOTH THE CROSS APPEALS FILED BY THE ASSESSEE AS WEL L AS BY THE REVENUE ARISE OUT OF THE ORDER OF CIT (APPEALS) KARNAL DAT ED 25.03.2011 FOR THE ASSESSMENT YEAR 2007-08. 2. THE GROUNDS OF APPEAL OF ASSESSEES APPEAL READ AS UNDER :- 1. THAT THE LEARNED ASSESSING OFFICER ERRED IN LAW AND FACTS IN MAKING AN ADDITION OF RS.13 29 030/- TOWARDS GROSS PROFIT OF TIMBER WITHOUT APPRECIATING AND TAKING INTO CONSIDERATION THE SUBMISSIONS OF THE ITA NO.3442 & 3544/DEL./2011 2 APPELLANT AND PRINCIPALS OF ACCOUNTING PRACTICE AND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS WRONGLY CO NFIRMED THE SAME BY ALLOWING PARTIAL RELIEF TO THE ASSESSEE. 2. THAT THE LEARNED ASSESSING OFFICER HAS FAILED TO PIN POINT ANY SPECIFIC ACCOUNTING INFORMATION/MISTAKE TO THE AFFE CT THAT THE METHOD OF ACCOUNTING MAINTAINED BY THE APPELLANT WAS WRONG AN D NOT IN ACCORDANCE WITH ACCOUNTING PRINCIPLES AND THAT ADDITIONS MADE TOWARDS GROSS PROFIT AS REFERRED TO IN GROUND NO. 1 ARE NO MERE WHIMS AN D CONJECTURES AND THE SAME HAD HAVE BEEN WRONGLY PARTIALLY BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) BY WRONGLY RELYING ON A.O'S OB SERVATION. 3. THAT THE LEARNED ASSESSING OFFICER HAS WRONGLY M ADE AS ADDITION OF RS.1 00 000/- TOWARDS ALLEGED LOW HOUSE HOLD EXPENS ES WITHOUT BRINGING ANY MATERIAL WHATSOEVER ON RECORD AND THAT LEARNED COMMISSIONER OF INCOME TAX APPEALS HAS WRONGLY SUSTAINED AS ADDITIO N OF RS.60 000/- ON THIS SCORE WITHOUT ANY MATERIAL ON RECORD AND NO AD DITION WILL BE MADE ON MERE WHIMS AND CONJECTURES BY WRONGLY REJECTING THE BOOKS OF ACCOUNTS ON OBSERVATIONS CONTAINED BY A.O'S ORDER. 4. THAT THE APPELLANT RESERVES ITS RIGHTS TO ADD A MEND MODIFY AND ELABORATE ANY GROUND OF APPEAL BEFORE FINAL DISPOSA L OF THE APPEAL. THE GROUNDS OF APPEAL OF REVENUES APPEAL READ AS U NDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT (A) HAS ERRED IN DIRECTING TO WORK OUT PROFIT BY APPLYING A G.P. RATE OF 4% AS AGAINST 4.9% APPLIED BY THE AO WITHOUT APPRECIATING THAT G.P. RATE DECLARED IN THE COMPARABLE CASES OF THE LINE RELIED UPON BY THE AO HAD SHOWN BETTER RESULTS AND THE ACCOUNT BOOKS MAINTAIN ED BY THE ASSESSEE SUFFERED FROM DEFECTS SO AS TO WARRANT INVOKING OF SECTION 145(3) OF THE I.T. 2. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD OR DISPOSED OFF. 3. THE RETURN OF INCOME FILED ON 25.09.2007 DECLARI NG INCOME AT RS.2 20 319/-. THE ASSESSMENT WAS FINALIZED AT AN INCOME OF RS.16 49 350/-. THE AO APPLIED THE GROSS PROFIT OF 4.90% AND ADDED RS.13 29 031/- AND ALSO MADE THE ADDITION OF RS.1 LAC ON ACCOUNT OF LOW WIT HDRAWAL FOR HOUSEHOLD EXPENSES. THE CIT (A) GRANTED THE PART RELIEF ON B OTH THE ISSUES. THE CIT ITA NO.3442 & 3544/DEL./2011 3 (A) HELD GROSS PROFIT @ 4% AS REASONABLE AND REDUCE D THE ADDITION FOR LOW HOUSEHOLD EXPENSES TO RS.60 000/-. 4. WE HAVE HEARD BOTH THE SIDES ON BOTH THE ISSUES IN DETAIL. WE HOLD THAT THERE ARE DISCREPANCIES IN RECORDING THE SALES. TH E ACCOUNTS MAINTAINED BY THE ASSESSEE ARE NOT REFLECTING THE CORRECT AND TRUE GR OSS PROFIT EARNED BY ASSESSEE. THE DISCREPANCIES NOTED OUT BY THE AUTHORITIES BELO W ARE SUFFICIENT TO DISTURB THE BOOK RESULTS DECLARED BY ASSESSEE. DURING THE HEARING ITSELF THE LEARNED AR AGREED THAT THE ADDITION MAY BE SUSTAINED BY EST IMATING THE GROSS PROFIT RATE @ 3.6% WHICH THE AO HIMSELF HAS STATED IN THE QUERY LETTER ISSUED TO THE ASSESSEE ON THE BASIS OF PAST HISTORY AND COMPARABL E CASES. AFTER HEARING BOTH THE SIDES AND PERUSING ALL THE MATERIAL AVAILA BLE ON RECORD WE DIRECT TO ESTIMATE INCOME BY ADOPTING G.P. RATE @ 3.6%. SINC E WE HAVE SUSTAINED THE ADDITION ON THE BASIS OF ESTIMATING G.P. THEREFORE WE FIND NO MERIT IN THE ADDITION MADE ON ACCOUNT OF LOW WITHDRAWAL FOR HOUS EHOLD EXPENSES. THEREFORE WE DIRECT TO DELETE THE SAME. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED AND THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 23 RD DAY OF SEPTEMBER 2011. SD/- SD/- (C.L. SETHI) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 23 RD DAY OF SEPTEMBER 2011 TS ITA NO.3442 & 3544/DEL./2011 4 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A) KARNAL. 5.CIT(ITAT) NEW DELHI. AR ITAT NEW DELHI.