SHRI SUNIL KUMAR JAIN, v. THE ITO WARD 1 (1),

ITA 392/IND/2006 | misc
Pronouncement Date: 28-02-2011 | Result: Partly Allowed

Appeal Details

RSA Number 39222714 RSA 2006
Assessee PAN ABNPJ7464R
Bench Indore
Appeal Number ITA 392/IND/2006
Duration Of Justice 4 year(s) 8 month(s) 20 day(s)
Appellant SHRI SUNIL KUMAR JAIN,
Respondent THE ITO WARD 1 (1),
Appeal Type Income Tax Appeal
Pronouncement Date 28-02-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 28-02-2011
Date Of Final Hearing 02-12-2010
Next Hearing Date 02-12-2010
Assessment Year misc
Appeal Filed On 08-06-2006
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER ITA NO. 392/IND/2006 A.Y. 2001-02 SUNIL KUMAR JAIN UJJAIN PAN ABNPJ7464R APPELLANT VS INCOME TAX OFFICER WARD 1(1) UJJAIN RESPONDENT APPELLANT BY ASSESSEE HIMSELF RESPONDENT BY SHRI P.K. MITRA O R D E R PER SHRI R.C.SHARMA ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) DATED 2 10.2.2006 FOR THE ASSESSMENT YEAR 2001-02 IN THE MA TTER OF EX-PARTE ORDER PASSED U/S 144 OF THE ACT. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGAG ED IN THE BUSINESS OF COTTON COTTONSEEDS AND FERTILIZERS ON WHOLE-SALE BASIS AND FILED RETURN OF INCOME ALONG WITH TAX AUD IT REPORT AND AUDITED ACCOUNTS ON 18.10.01 DECLARING TOTAL IN COME AT RS.35848/- ONLY. THE AO ON EXAMINATION OF BOOKS OF ACCOUNTS IN PARTICULAR CASH BOOK FOUND THAT TRANSACTIONS WER E RECORDED IN THE CASH BOOK ON THE SAME DAY IN TWO DIFFERENT H AND WRITINGS AND ON SEVERAL PLACES THERE WAS CUTTINGS A S WELL OVER- WRITING AND HE ACCORDINGLY OBTAINED PHOTOCOPIES OF CASH BOOK PAGES NO.23 27 ETC. UP TO 201 AND PLACED THOSE ON ASSESSMENT FOLDER. THE AO OBSERVED THAT THE BOOKS O F ACCOUNTS WERE NOT MAINTAINED IN THE REGULAR COURSE OF BUSINESS. FURTHER AO NOTED THAT DURING THE PERIOD O F 27.12.00 TO 13.1.01 NO SALES WERE RECORDED HOWEVER ON CASH BOOK PAGE-153 DATED 3.2.01 AN AMOUNT OF RS.2 LAKHS WAS F OUND TO BE RECEIVED IN CASH AND ON CASH BOOK PAGE-160 DATED 12.2.01 AMOUNTS WERE FOUND TO BE SHOWN AS RECEIVED IN THE N AME OF 3 SRI DEEPAK KUMAR (RS.25 000/-) SRI SOHAN SINGH (RS.20 000/-) SRI KUNDANLAL VAGER (RS.10 000/-) S RI SAMRATHLAL (RS.4 000/-) AND SRI SAMRATH SINGH (RS.5 000/-) THROUGH CHEQUES AND SUCH AMOUNTS WERE DEPOSITED IN BANK. SIMILARLY THE AO HAS NOTED THAT AN AMOUNT OF RS.20 000/- WAS FOUND TO BE CREDITED IN THE NAME OF SRI PRABHUL AL ON 20.2.01 AND RS.14 000/- IN THE NAME OF SRI PRAHALAD SINGH ON22.2.01 AND ANOTHER AMOUNT OF RS.20 000/- IN THE NAME OF SRI GANGARAM ON 21.3.01. ACCORDINGLY BY REJECTING THE BOOK RESULTS THE ADDITION WAS MADE BY THE ASSESSING OFF ICER AFTER APPLYING GROSS PROFIT RATE OF 7.5%. 3. ADDITION WAS ALSO MADE BY THE ASSESSING OFFICER ON ACCOUNT OF GIFTS OF RS. 2 LACS RECEIVED FROM SMT. K OMALBAI RS. 1 20 000/- SHRI MANOJ JAIN RS.40 000/- AND SHRI MU KESH JAIN RS. 40 000/-. WE FIND THAT THE STATEMENTS OF THESE PERSONS WERE RECORDED BY THE ASSESSING OFFICER. TH E ALLEGATION OF THE ASSESSEE WAS THAT THE COPIES OF THE STATEMEN TS HAVE NOT BEEN PROVIDED TO THE ASSESSEE DESPITE WRITTEN REQUE STS MADE BY THE ASSESSEE TO THE ASSESSING OFFICER. AN ADDIT ION OF RS. 1 90 000/- WAS ALSO MADE BY THE ASSESSING OFFICER O N ACCOUNT 4 OF CASH CREDIT WHICH WAS RECEIVED THROUGH CHEQUE A ND CONFIRMED THROUGH AFFIDAVITS. THE ALLEGATION OF TH E ASSESSEE WAS THAT EVEN THESE STATEMENTS WERE RECORDED AT THE BACK OF THE ASSESSEE AND THE COPIES OF THE STATEMENTS WERE NOT SUPPLIED TO THE ASSESSEE DESPITE WRITTEN REQUESTS M ADE TO ASSESSING OFFICER. THE ASSESSING OFFICER HAS ALSO E STIMATED THE PROFIT OF THE ASSESSEE BY APPLYING GROSS PROFIT RAT E OF 7.5%. THE ADDITION ON ACCOUNT OF PERSONAL USE OF VEHICLES WAS MADE AMOUNTING TO RS.1925/-. THE AGRICULTURAL INCOME DE CLARED BY THE ASSESSEE AT RS.30 614/- WAS ACCEPTED BY THE ASS ESSING OFFICER TO THE TUNE OF RS.20 614/-. ALL THESE ADDI TIONS WERE CONFIRMED BY THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) AND THE ASSESSEE IS IN FURTHER APPEAL BEF ORE US. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE : - 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN NOT CONFIRMING TH AT THE ORDER U/S 144 IS INVALID AS THE SAME HAS BEEN PASSED ON FLIMSY GROUNDS. WHEN THE ACCOUNTS ARE CORRECT AND COMPLETE AND ALSO AUDITED U/S 44AB OF THE ACT. THE QUESTION OF APPLICATION OF SECTION 14 5 DOES NOT ARISE. THE APPELLANT HAS NO OTHER SOURCE O F INCOME. IF THE BOOKS OF ACCOUNTS ARE REJECTED NO FURTHER ADDITIONS ON THE BASIS OF BOOKS OF ACCOUNTS ARE CALLED FOR. 5 2. THAT THE LD. CIT(A) FURTHER ERRED CONFIRMING THE ADDITION OF RS.2 00 000/- ON ACCOUNT OF GIFTS RECEIVED FROM SMT. KOMAL BAI (RS.1 20 000/-) SHRI MANOJ JAIN (RS.40 000/-) AND SHRI MUKESH JAIN (RS.40 000/-) WHICH HAVE BEEN CONFIRMED BY THEM BY GIFT DEEDS. THE STATEMENTS HAVE BEEN RECORDED A T THE BACK OF THE APPELLANT AN COPIES OF THE STATEMENTS HAVE NOT BEEN PROVIDED TO THE APPELLANT DESPITE REQUEST. 3. THAT THE LD. CIT(A) ALSO ERRED IN CONFIRMING THE ADDITION OF RS.1 90 000/- AS CASH CREDITS DESPITE THE FACTS THAT THESE HAVE BEEN RECEIVED THROUGH CHEQUES AND ARE CONFIRMED THROUGH AFFIDAVITS. THE STATEMENTS HAVE BEEN RECORDED AT THE BACK OF THE APPELLANT AND COPIES OF STATEMENTS HAVE NOT BEEN PROVIDED TO THE APPELLANT DESPITE REQUEST. 4. THAT THE LD. CIT(A) ALSO ERRED IN ESTIMATING THE GR OSS PROFIT OF THE APPELLANT AT RS.75 000/- (ESTIMATING G.P. @ 7.5% ON ESTIMATED SALES AT RS.10 00 000/-) INSTEAD OF ACCEPTING THE DISCLOSED G.P. OF RS.71 489/- DESPITE THE FACTS THAT THE ACCOUNTS ARE CORRECT COMPLETE AND AUDITED. 5. THAT THE LD. CIT(A) ALSO ERRED IN CONFIRMING THE ADDITION OFRS. 1 925/- ON ACCOUNT OF ALLEGED PERSONAL USE OUT OF VEHICLE AND TELEPHONE EXPENSES. 6. THAT THE LD. CIT(A) ALSO ERRED IN ACCEPTING THE AGRICULTURAL INCOME ONLY TO THE EXTENT OF RS. 20 614/- INSTEAD OF AGRICULTURAL INCOME OF RS. 30 614/- DISCLOSED IN THE RETURN OF INCOME. 3. WE HAVE CONSIDERED THE RIVAL CONTENTIONS CAREFU LLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FIN D FROM RECORD THAT EX-PARTE ASSESSMENT WAS MADE WHEREIN BO OKS OF ACCOUNTS WERE REJECTED BY INVOKING THE PROVISIONS O F SECTION 145 OF THE ACT. IN VIEW OF THE FINDING RECORDED BY THE 6 ASSESSING OFFICER WITH REGARD TO MAINTENANCE OF BOO KS OF ACCOUNTS WHICH HAVE BEEN CONFIRMED BY THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) AND THE ASSESSE E COULD NOT DISLODGE THE FINDINGS RECORDED BY THE LOWER AUT HORITIES BEFORE US ACCORDINGLY WE DO NOT FIND ANY INFIRMIT Y IN THE ORDER OF THE ASSESSING OFFICER FOR REJECTING THE SA ME AND ESTIMATING PROFIT BY APPLYING GROSS PROFIT RATE OF 7.5%. ON ACCOUNT OF ADDITION FOR PERSONAL USE OF VEHICLE AND TELEPHONE KEEPING IN VIEW THE NATURE OF THE ASSESSEES BUSINE SS WE DIRECT THE ASSESSING OFFICER TO RESTRICT THE SAME T O THE EXTENT OF 10% OF THE EXPENDITURE SO INCURRED. WITH REGARD TO THE GIFTS RECEIVED FROM SMT. KOMALBAI SHRI MANOJ JAIN AND SH RI MUKESH JAIN THE CONTENTION OF THE ASSESSEE WAS THA T THE GIFT DECLARATIONS WERE DULY FILED AND EVEN THE STATEMENT S OF THE DONORS WERE RECORDED. HOWEVER EVEN AFTER MAKING S O MANY REQUESTS THE ASSESSING OFFICER DID NOT PROVIDE COPI ES OF THE STATEMENTS TO CONTROVERT THE SAME. EVEN IN RESPECT OF CASH CREDIT NO OPPORTUNITY WAS GIVEN FOR REBUTTING THE ALLEGATION OF THE ASSESSING OFFICER INSOFAR AS COPIES OF THE STAT EMENTS OF THE CREDITORS WERE NOT FURNISHED TO THE ASSESSEE IN SPI TE OF SO 7 MANY WRITTEN REQUESTS. KEEPING IN VIEW ALL THESE FA CTS IN THE INTEREST OF JUSTICE AND FAIR PLAY AND ALSO KEEPING IN VIEW THE EX-PARTE ORDER FRAMED U/S 144 GROUNDS WITH REGARD TO ADDITION ON ACCOUNT OF GIFT AND CASH CREDIT IS REST ORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE SAME AFRESH AFTER GIVING ADEQUATE OPPORTUNITY TO THE ASSESSEE A ND AFTER SUPPLYING COPIES OF THE STATEMENTS OF THE DONORS AN D CREDITORS RECORDED BY THE ASSESSING OFFICER. WE DIRECT ACCOR DINGLY. 4. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED IN PART IN THE TERMS INDICATED HEREINABOVE. ORDER PRONOUNCED IN OPEN COURT ON 28.2.2011. (JOGINDER SINGH) (R.C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER INDORE FEBRUARY 28 2011 COPY TO ASSESSEE/RESPONDENT/CIT/CIT(A)/DR D/-