M/s. Chem Colour Trading Agency, Kolkata v. ITO, Ward - 34(3), Kolkata, Kolkata

ITA 392/KOL/2010 | 2006-2007
Pronouncement Date: 09-04-2010

Appeal Details

RSA Number 39223514 RSA 2010
Bench Kolkata
Appeal Number ITA 392/KOL/2010
Duration Of Justice 1 month(s) 16 day(s)
Appellant M/s. Chem Colour Trading Agency, Kolkata
Respondent ITO, Ward - 34(3), Kolkata, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 09-04-2010
Appeal Filed By Assessee
Bench Allotted A
Tribunal Order Date 09-04-2010
Date Of Final Hearing 07-04-2010
Next Hearing Date 07-04-2010
Assessment Year 2006-2007
Appeal Filed On 22-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH - A KOLKATA ( ) BEFORE . . SHRI B.R.MITTAL JUDICIAL MEMBER. /AND . . SHRI C.D. RAO ACCOUNTANT ME MBER . / I.T.A.NO. 392/KOL/2010 / ASSESSMENT YEAR 2006 - 07 M/S.CHEM COLOUR TRADING AGENCY 34 ARMENIAN STREET FIRST FLOOR KOLKATA 700 001. - - - VERSUS - . ITO WARD 34(3) KOLKATA. ( / A PPELLANT ) ( / RESPOND ENT ) / FOR THE APPELLANT : / SHRI MIHIR BANDYOPADHYAY AR / FOR THE RESPONDENT : / SHRI P.K.MISHRA DR / ORDER . . SHRI B.R.MITTAL JUDICIAL MEMBER. THE ASSESSEE HAS FILED TH IS APPEAL FOR THE ASSESSMENT YEAR 2006 - 07 AGAINST ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) DT.23.10.2009. 2. IN GROUNDS NO.1 TO 4 OF THE APPEAL THE ASSESSEE HAS DISPUTED THE ORDER OF THE LEARNED CIT(A) IN CONFIRMING THE ACTION OF THE ASS ESSING OFFICER TO ESTIMATE GROSS PROFIT AT 5% OF SALES AS AGAINST 4.39% DECLARED BY THE ASSESSEE. 3. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. 4. THE LEARNED AR OF THE ASSESSEE CONCEDED THAT THE ASSESSEE COULD NOT PRODUCE THE BOOKS OF ACCOUNT BEFORE THE ASSESSING OFFICER AND ACCORDINGLY THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER U/S.144 OF THE INCOME - TAX ACT 1961 BY ESTIMATING GROSS PROFIT @5% ON THE TOTAL SALES DISCLOSED BY THE ASSESSEE AT RS.14 46 86 150 AND THUS MADE THE ADDITION OF RS.8 81 356 AFTER CONSIDERING THE GP SHOWN BY THE ASSESSEE OF RS.63 52 951. DURING THE COURSE OF HEARING THE / I.T.A.NO. 392/KOL/2010 2 LEARNED AR OF THE ASSESSEE SUBMITTED THAT IN THE PRECEDING ASSESSMENT YEARS THE GP DISCL OSED BY THE ASSESSEE HAD BEEN ACCEPTED BY THE DEPARTMENT AND IN THE ASSESSMENT YEAR 2003 - 04 ONLY A TOKEN ADDITION OF RS.20 000 WAS MADE WHICH HARDLY CHANGE THE PERCENTUAL RATE OF GP. HOWEVER THE LEARNED AR OF THE ASSESSEE COULD NOT STATE THE REASONS FOR N OT BEING ABLE TO PRODUCE THE BOOKS OF ACCOUNT BEFORE THE AUTHORITIES BELOW. THE LEARNED DR SUPPORTED THE ACTION OF THE AUTHORITIES BELOW TO ESTIMATE GP @5%. CONSIDERING THE ABOVE FACTS AND SUBMISSIONS OF LEARNED REPRESENTATIVES OF THE PARTIES WE ARE OF TH E CONSIDERED VIEW THAT THERE IS NO INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) TO CONFIRM THE ACTION OF THE ASSESSING OFFICER. HENCE WE REJECT GROUNDS NO.1 TO 4 OF THE APPEAL TAKEN BY THE ASSESSEE. 5. IN GROUNDS NO.5 TO 7 OF THE APPEAL THE ASSESSEE HAS DISPUTED THE ADDITION OF RS.24 59 027 AND RS.20 000 MADE OUT OF EXPENDITURES CLAIMED BY THE ASSESSEE. 6. SINCE THE ASSESSING OFFICER HAS ESTIMATED THE INCOME OF THE ASSESSEE WE ARE OF THE CONSIDERED VIEW THAT NO OTHER ADDITIONS OUT OF EXPENSES CLAIMED B Y THE ASSESSEE IN THE PROFIT & LOSS ACCOUNT COULD BE MADE. HONBLE ANDHRA PRADESH HIGH COURT HAS HELD IN THE CASE INDWELL CONSTRUCTIONS V. CIT ( 232 ITR 776 ) THAT ONCE THE BOOKS OF ACCOUNT HAVE BEEN REJECTED BY THE A.O. RELIANCE CANNOT BE PLACED ON THE SAME BOOK S FOR ADDITION OF AN EXTRA ITEM OF EXPENDITURE IN THE P & L ACCOUNT. HONBLE ALLAHABAD HIGH COURT HAS ALSO HELD IN THE CASE OF CIT V. BANWARI LAL BANSHIDHAR (229 ITR 229) THAT WHEN INCOME OF THE ASSESSEE WAS COMPUTED BY APPLYING GP RATE NO FURTHER ADDITIO N U/S.40A(3) OF THE ACT WAS WARRANTED. IT WAS HELD THAT WHEN THE GP RATE WAS APPLIED THAT WOULD TAKE CARE OF EVERYTHING AND THERE WAS NO NEED FOR THE ASSESSING OFFICER TO MAKE SCRUTINY OF THE AMOUNT INCURRED ON PURCHASES MADE BY THE ASSESSEE. ITAT AMRITSA R BENCH HAS HELD IN THE CASE OF ASSESSING OFFICER V. POOJA CONSTRUCTION CO. [1999] 69 ITD 147 (ASR.) THAT ONCE NET RATE OF PROFIT WAS APPLIED IT WAS NOT OPEN TO THE ASSESSING OFFICER TO ANY OTHER CLAIM DEBITED TO THE P & L ACCOUNT. / I.T.A.NO. 392/KOL/2010 3 7. IN VIEW OF THE ABOV E DECISIONS AND THE FACT THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE HAVE NOT BEEN ACCEPTED AND GP HAS BEEN ESTIMATED WE HOLD THAT THE SAID ADDITION S OF RS.24 59 027 AND RS.20 000 MADE BY THE ASSESSING OFFICER BY DISALLOWING THE EXPENDITURES CLAIMED BY THE ASSESSEE CANNOT SURVIVE. THEREFORE GROUNDS NO.5 TO 7 OF THE APPEAL ARE ALLOWED. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED IN PART. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 09.04.2010 SD/ - SD/ - ( . . ) (C.D. RAO) ACCOUNTANT MEMBER ( . . ) ( B.R.MITTAL ) JUDICIAL MEMBER ( ) DATE : 09.04.2010 - COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT : M/S.CHEM COLOUR TRADING AGENCY 34 ARMENIAN STREET FIRST FLOOR KOLKATA 700 001. 2 / THE RESPONDENT - ITO WARD 34(3) KOLKATA 3. / THE CIT 4. ( )/ THE CIT(A) 5. / DR KOLKATA BENCH 6. GUARD FILE . / TRUE COPY / BY OR DER / DEPUTY REGISTRAR . ( / ) H.K.PADHEE / SNR.PRIVATE SECRETARY.