Parveen Kumar Goyal, Hisar v. ITO, Hisar

ITA 4387/DEL/2009 | 2006-2007
Pronouncement Date: 30-07-2010 | Result: Partly Allowed

Appeal Details

RSA Number 438720114 RSA 2009
Assessee PAN ADNPG0005D
Bench Delhi
Appeal Number ITA 4387/DEL/2009
Duration Of Justice 8 month(s) 13 day(s)
Appellant Parveen Kumar Goyal, Hisar
Respondent ITO, Hisar
Appeal Type Income Tax Appeal
Pronouncement Date 30-07-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted F
Tribunal Order Date 30-07-2010
Date Of Final Hearing 21-07-2010
Next Hearing Date 21-07-2010
Assessment Year 2006-2007
Appeal Filed On 16-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : F : NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER ITA NO.4387/DEL/2009 ASSESSMENT YEAR : 2006-07 PARVEEN KUMAR GOYAL C/O A.A. & CO. CHARTERED ACCOUNTANTS 22 GREEN PARK HISAR 125001. PAN : ADNPG0005D VS. INCOME TAX OFFICER WARD 3 AYAKAR BHAWAN SECTOR-14 HISAR 125 001. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAM ROOP SINGLA CA REVENUE BY : SMT. BANITA DEVI NAOREM SR. DR ORDER PER I.P. BANSAL JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DI RECTED AGAINST THE ORDER OF THE CIT (A) DATED 29 TH OCTOBER 2009 FOR ASSESSMENT YEAR 2006-07. THE GR OUNDS OF APPEAL READ AS UNDER:- 1. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APP EALS) ROHTAK HAS ERRED IN LAW AND IN FACTS IN DIRECTING T HE LD. ITO HISAR TO ADOPT AN ADHOC RATE OF N.P. @ 0.37% AS AGA INST 0.40% ADOPTED BY HIM IN THE INSTANT CASE. THE SAID ORDER PASSED BY THE WORTHY CIT (APPEALS) IS HIGHLY UNJUST AND UNWARRANTED LOOKING TO THE FACTS OF THE CASE. 2. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APP EALS) ROHTAK HAS ERRED IN LAW AND IN FACTS IN ARBITRARILY CONFIRMING THE ADDITION ON ACCOUNT OF LOW HOUSEHOLD EXPENSES T O THE EXTENT OF 45200/- WITHOUT ANY BASIS IN THE INSTANT CASE. THE SAID ORDER IS BASED UPON SURMISES AND CONJECTURES A ND HIGHLY ITA NO.4387/DEL/2009 2 UNJUST AND UNLAWFUL. 3. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APP EALS) ROHTAK WAS NOT JUSTIFIED IN NOT CONSIDERING THE SUB MISSIONS OF THE APPELLANT THAT THE ACCOUNTS OF THE APPELLANT WE RE DULY AUDITED U/S 44 AB OF THE ACT IBID AND NO IMPROPRIET Y WAS FOUND BY THE LD. ITO IN THE FINANCIAL STATEMENTS SU BMITTED ALONG WITH RETURN OF INCOME AND ACCORDINGLY ADOPTIO N OF ARBITRARY HIGHER NP RATE BY THE LD. ITO IS HIGHLY U NJUST AND UNWARRANTED. 4. THAT THE REASONS FOR DECLINE IN NP RATE WERE DU LY SUBMITTED DURING THE ASSESSMENT PROCEEDINGS AND THE WORTHY CIT (APPEALS) WAS NOT JUSTIFIED IN DISREGARDING THE SAME IN THE INSTANT CASE. 5. THAT THE ORDER PASSED BY THE WORTHY COMMISSIONE R TAX (APPEALS) ROHTAK IS NOT A SPEAKING ORDER SO FAR AS THE CONFIRMATION OF ADDITIONS. 6. THAT THE APPELLANT MAYBE PERMITTED TO ADD/ALTER SUCH OTHER GROUNDS OF APPEAL AS MAY BE URGED UPON BEFORE THE A PPEAL IS FINALLY HEARD AND DISPOSED OFF. IT IS THEREFORE MOST HUMBLY PRAYED THAT THE ADDIT IONS CONFIRMED BY THE WORTHY CIT (APPEALS) ROHTAK VIDE HIS ORDER PASSED U/S 250 OF THE INCOME TAX ACT 1961 WHICH A RE WHOLLY AGAINST FACTS AND ILLEGAL MAY KINDLY BE DELETED AND THE APPEAL MAY KINDLY BE ACCEPTED INTOTO. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS ACTIVITY OF IMPORTER AND WHOLESALE DISTRIBUTOR OF TIMBER. ON THE GROSS TURN OVER OF RS.10 86 68 580/- NET PROFIT DISCLOSED WAS RS.2 46 835/- WHICH IS WORKED OUT TO 0.22% AS AGAINST 0.40% DECLARED DURING THE IMMEDIATE PRECEDING YEAR. THE ASSESSEE WAS REQUIRED TO EXPLAIN THE FALL IN GP RATE. ACCORDING TO THE ASSESSING OFFICER NO PLAUSIBLE EXPLANATION WAS FILED BY THE ASSESSEE. T HE ASSESSING OFFICER NOTED THAT THOUGH THE ASSESSEE HAS PRODUCED THE BOOKS OF ACCOUNT BUT FAILED TO PRODUCE THE VOUCHERS FOR PURCHASE AND SALES AS THE SAME WAS STATED TO BE LYING AT GANDHI DHAM (GUJRAT). THEREFORE TAKING A VIEW THAT THE BOOK RESULT DECLARED BY THE ASSESSEE IS NOT GIVING A TRUE AND FAIR VIEW OF THE PROFITS THE ASSESSING ITA NO.4387/DEL/2009 3 OFFICER APPLIED 0.40% GP RATE AND ACCORDINGLY MAD E AN ADDITION OF RS.1 87 839/-. 3. FURTHER THE ASSESSING OFFICER FOUND THAT HOUSEH OLD WITHDRAWALS SHOWN BY THE ASSESSEE WERE ONLY A SUM OF RS.30 800/- WHICH W AS LOW. IT WAS EXPLAINED THAT THE ASSESSEES FAMILY CONSISTED OF SELF AND WI FE ONLY. THEREFORE HOUSEHOLD WITHDRAWALS WERE SUFFICIENT. THE ASSESSING OFFICER OBSERVED THAT THE HOUSEHOLD EXPENSES SHOWN BY THE ASSESSEE ARE ONLY 2 566/- PER MONTH WHICH ARE NOT SUFFICIENT EVEN FOR THE FAMILY CONSISTING OF TWO ME MBERS. HE ESTIMATED THE HOUSEHOLD EXPENSES AT RS.10 000/-PER MONTH. ACCORD INGLY AN ADDITION OF RS.69 200/- WAS MADE. 4. THUS BY MAKING THE ABOVE MENTIONED ADDITIONS T HE INCOME WAS ASSESSED AT RS.5 12 140/- IN PLACE OF RETURNED INCO ME OF RS.2 55 100/-. 5. THE LD. CIT (A) BY TAKING INTO CONSIDERATION THA T FOR IMMEDIATE TWO PRECEDING ASSESSMENT YEARS THE NET PROFIT SHOWN BY THE ASSESSEE WAS 0.34% AND 0.40% RESPECTIVELY ADOPTED 0.37% BEING THE AVE RAGE OF TWO RATES AND THUS PARTLY UPHELD THE ADDITION. 6. IN RESPECT OF HOUSEHOLD EXPENSES LD. CIT (A) TA KING INTO CONSIDERATION THAT ADDITION ON ACCOUNT OF LOW GP HAS BEEN UPHELD THE ADDITION TO THAT EXTENT THE ADDITION WAS REDUCED TO RS.45 200/-. IT IS AGA INST THESE FINDINGS OF THE CIT (A) THE ASSESSEE HAS RAISED THE AFOREMENTIONED GROU NDS OF APPEAL. 7. DURING THE COURSE OF HEARING LD. COUNSEL OF THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS AND RELIED UPON THE WRITTEN SUB MISSIONS. THE CHART STATING THE TURNOVER GROSS PROFIT NET PROFIT AND RETURNED INCOME WAS FURNISHED EVEN BEFORE THE ASSESSING OFFICER WHICH IS AS UNDER:- ITA NO.4387/DEL/2009 4 2003-04 2004-05 2005-06 2006-07 TURNOVER 86778442.00 39990763.00 46393553.00 108668 580.00 GROSS PROFIT 0.60% 1.21% 1.51% 1.03% NET PROFIT 0.19% 0.34% 0.40% 0.23% RETURNED INCOME 200200/- 164180/- 194420/- 255100/- 8. IT IS THE SUBMISSION OF THE ASSESSEE THAT IT WAS SUBMITTED TO THE ASSESSING OFFICER THAT THE BOOKS OF ACCOUNT ARE BEING MAINTAI NED AT GANDHI DHAM BEING THE MAIN BUSINESS LOCATION AND THUS IT WAS REQUESTED TO THE ASSESSING OFFICER THAT TIME SHOULD BE GIVEN TO PRODUCE THESE VOUCHERS. IT WAS SUBMITTED THAT ON 29 TH DECEMBER 2008 THE ASSESSEE HAD CONFIRMED OF HAVING ALL THE BOOKS OF ACCOUNT ALONG WITH VOUCHERS BUT WITHOUT CONSIDERING THE S AME THE ASSESSING OFFICER HAS INVOKED THE PROVISIONS OF SECTION 145 (3). IT WAS SUBMITTED THAT A CHART FOR COMPARISON WAS ALSO FILED VIDE LETTER DATED 29 TH DECEMBER 2008 FOR FOUR YEARS. IT WAS SUBMITTED THAT THE ASSESSEE WAS ABLE TO ACHI EVE A TURNOVER OF RS.4.64 CRORES DURING ASSESSMENT YEAR 2005-06 AS AGAINST TH E TURNOVER OF RS.10.87 CRORE DURING THE ASSESSMENT YEAR 2006-07. THE INCR EASE IN TURNOVER WAS POSSIBLE ONLY AFTER MARGINAL DECLINE IN NET PROFIT RATE AND SUCH FACT WAS NOT CONSIDERED BY THE ASSESSING OFFICER. 9. IT WAS SUBMITTED BY LD. AR THAT FOR ASSESSMENT Y EAR 2007-08 THE NET PROFIT RATE WAS APPLIED AT 0.30% ON THE TURNOVER OF RS.8.5 0 CRORE AND THUS APPLICATION OF 0.37% FOR THE YEAR UNDER CONSIDERATION IS ALSO U NJUSTIFIED. 10. IN REGARD TO HOUSEHOLD EXPENSES IT WAS SUBMITT ED THAT DURING THE ASSESSMENT YEAR 207-08 THE ASSESSING OFFICER HIMSEL F HAS ALLOWED THE BENEFIT OF TELESCOPING OF INCOME AGAINST THE ADDITIONS MADE ON ACCOUNT OF LOW GROSS PROFIT RATE WHICH HAS NOT BEEN GIVEN DURING THE YEAR UNDER CONSIDERATION. THUS IT WAS PLEADED BY LD. AR THAT THE ADDITION SHOULD BE DELET ED. ITA NO.4387/DEL/2009 5 11. ON THE OTHER HAND LD. DR RELYING UPON THE ORDE R OF CIT (A) PLEADED THAT THE CIT (A) HAS ALREADY GIVEN THE REQUISITE RELIEF TO THE ASSESSEE AND NO INTERFERENCE SHOULD BE MADE IN THE ORDER OF THE CIT (A). 12. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. IT HAS BEEN OBSERVED BY THE ASSESSING OFFICER THAT THE VOUCHERS WERE NOT PRODUCED. WHEN VOUCHERS ARE NOT PRODUCED THEN HOW THE ASSESSING OFFICER COULD MAKE VERIFICATION. THEREFO RE REJECTION OF BOOK CANNOT BE INTERFERED WITH. HOWEVER THERE IS A SUBSTANCE IN THE CONTENTION OF THE ASSESSEE THAT THE INCREASE IN TURNOVER WAS POSSIBLE ONLY FOR DOING THE BUSINESS ON LOW MARGIN. FOR ASSESSMENT YEAR 2007-08 THE NET PROF IT RATE APPLIED IS 0.30% AS MENTIONED IN THE SUBMISSIONS MADE BY THE LD. COUNSE L. THEREFORE TAKING STOCK OF ALL THESE FACTUAL ASPECT WE ARE OF THE OPINION THAT APPLICATION OF 0.30% NET PROFIT RATE WILL BE JUSTIFIED. THE ASSESSING OFFIC ER WILL COMPUTE THE ADDITION ACCORDINGLY. 13. SO FAR AS IT RELATES TO HOUSEHOLD EXPENSES IT WAS SUBMITTED BY LD. AR THAT ASSESSEES FAMILY CONSISTS OF SELF SPOUSE AND TWO CHILDREN. HOWEVER HE WAS NOT ABLE TO STATE THE AGE OF TWO CHILDREN. IN THE ASSESSMENT ORDER IT IS WRITTEN THAT THE ASSESSEES FAMILY CONSISTED OF SELF AND SPOUSE. EVEN IF IT IS CONSIDERED THAT ASSESSEES FAMILY CONSISTED OF ONLY TWO PERSONS TH EN ALSO THE MONTHLY EXPENSES OF RS.2 566/- ARE NOT SUFFICIENT. LD. CIT (A) HAS REDUCED THE ADDITION BY A SUM OF RS.24 000/- ON THE GROUND THAT TRADING ADDITION HAS BEEN UPHELD PARTLY. KEEPING IN VIEW THIS FACT AND KEEPING IN VIEW THE HOUSEHOLD EXPENSES OF THE ASSESSEE WE ARE OF THE OPINION THAT THE CIT (A) HAS RIGHTLY UPHELD THE ADDITION TO THE EXTENT OF RS.45 200/- AND WE DECLINE TO INTERFERE IN THIS ADDITION. THIS GROUND OF THE ASSESSEE IS DISMISSED. 14. IN VIEW OF THE ABOVE DISCUSSIONS GROUND NOS.1 3 AND 4 WHICH RELATES TO THE ISSUE REGARDING APPLICATION OF NET PROFIT RATE ARE PARTLY ALLOWED GROUND NO.2 WHICH RELATES TO HOUSEHOLD EXPENSES IS DISMISSED. GROUND NO.5 RELATES TO THE GRIEVANCE OF THE ASSESSEE THAT ORDER OF THE CIT (A) IS NOT A SPEAKING ORDER. WE ITA NO.4387/DEL/2009 6 FIND NO SUBSTANCE IN SUCH A GROUND AND EVEN IN THE WRITTEN SUBMISSIONS MADE BY LD. COUNSEL THERE IS NO SUCH PLEADING THEREFORE G ROUND NO.5 IS ALSO DISMISSED. GROUND NO.6 IS GENERAL IN NATURE AND NEEDS NO ADJ UDICATION. 15. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED IN THE MANNER AFORESAID. THE ORDER PRONOUNCED IN THE OPEN COURT ON 30.07.20 10. SD/- SD/- [R.C. SHARMA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 30.07.2010. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES