ACIT CEN CIR 37, MUMBAI v. JAGANNATH BUKTE, PALGHAR

ITA 5003/MUM/2009 | 2002-2003
Pronouncement Date: 19-01-2011 | Result: Dismissed

Appeal Details

RSA Number 500319914 RSA 2009
Assessee PAN ADIPB2373C
Bench Mumbai
Appeal Number ITA 5003/MUM/2009
Duration Of Justice 1 year(s) 4 month(s) 18 day(s)
Appellant ACIT CEN CIR 37, MUMBAI
Respondent JAGANNATH BUKTE, PALGHAR
Appeal Type Income Tax Appeal
Pronouncement Date 19-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted J
Tribunal Order Date 19-01-2011
Date Of Final Hearing 18-01-2011
Next Hearing Date 18-01-2011
Assessment Year 2002-2003
Appeal Filed On 01-09-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J MUMBAI BEFORE SHRI R V EASWAR PRESIDENT AND SHRI B RAMAKOTAIAH ACCOUNTANT MEMBER I T A NO: 5003/MUM/2009 (ASSESSMENT YEAR: 2002-03) ASSISTANT COMMISSIONER OF INCOME TAX APPELLANT CENTRAL CIRCLE 37 MUMBAI VS SHRI JAGANNATH BUKTE PALGHAR (PAN: ADIPB2373C) APPELLANT BY: SHRI SUMEET KUMAR RESPONDENT BY: NONE O R D E R R V EASWAR PRESIDENT: THIS IS AN APPEAL BY THE DEPARTMENT AND THE FOLLOW ING GROUNDS HAVE BEEN TAKEN: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS NOT JUSTIFIED IN ADOPTING THE GROSS TURNOVER OF RS.71 77 212/- INSTEAD OF RS.89 LAKHS WITHOUT APPRECIATING THAT THE ASSESSEE HAD HIMSELF ACCEPTED RS.89 LAKHS AS GROSS RECEIPT IN HIS STATEMENT ON OATH RECORDED IN COURSE OF SEARCH ACTION WHICH WAS NEVER RETRACTED BY THE ASSESSEE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN DIRECTING THE AO TO REDUCE RS.3 50 000/- FROM GROSS RECEIPT WITHOUT CONSIDERING THE FACT THAT THE SAME IS NOT BASED ON ANY BOOKS OF ACCOUNT BILLS / VOUCHERS AND IS ONLY BASED ON THE COPY OF ACCOUNT OF THE ASSESSEE IN THE BOOKS OF ACCOUNTS OF M/S THAKKARSONS AUTO ANCILLARY (INDIA) LTD. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS NOT JUSTIFIED IN REDUCING THE NET PROFIT / TURNOVER RATIO FROM 20% TO 15%. ITA NO: 5003/MUM/2009 2 2. THE APPEAL RELATES TO THE ASSESSMENT YEAR 2002-0 3. THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS O F CIVIL CONSTRUCTION WORK FOR THAKKARSON GROUP OF COMPANIES IN THE NAME AND STYLE OF VIJAY CONSTRUCTION. FOR THE YEAR UN DER APPEAL HE FILED RETURN OF INCOME ON 31.07.2002 DECLARING TOTAL INCO ME OF ` 3 01 820/-. IN THE COURSE OF THE ASSESSMENT PROCEE DINGS THE ASSESSING OFFICER POINTED OUT TO THE ASSESSEE THAT CERTAIN PAYMENTS RECEIVED BY THE ASSESSEE FROM M/S KLT AUTO MATIVE AND TABULAR PRODUCTS LTD. WERE NOT ACCOUNTED FOR IN THE RETURN OF INCOME. ACCORDING TO THE REASONS RECORDED BY HIM F OR REOPENING THE ASSESSMENT THE ASSESSEE HAD RECEIVED ` 89 00 000/- FROM THE AFORESAID FIRM WHEREAS IN THE RETURN HE HAD DISCLO SED ONLY ` 37 72 745/-. THE ASSESSEE WAS THEREFORE ASKED TO S HOW CAUSE AS TO WHY THE BALANCE OF ` 51 27 255/- SHOULD NOT BE TREATED AS THE BUSINESS INCOME. THE ASSESSEE COULD NOT COME UP WI TH ANY EXPLANATION NOR COULD HE PRODUCE ANY BOOKS OF ACCOU NTS BILLS AND VOUCHERS FOR RECEIPTS AND PAYMENTS ETC. HE MERELY SUBMITTED THAT OUT OF THE GROSS RECEIPTS SOME PAYMENT REPRESENTED REIMBURSEMENT OF CAPITAL GOODS EXPENSES BORNE BY T HE ASSESSEE AND ONLY THE BALANCE WAS RECEIPTS ARISING OUT OF BU SINESS. ON THE GROUND THAT THERE WAS NO EVIDENCE IN SUPPORT OF THE ASSESSEES CLAIM THE ASSESSING OFFICER TOOK THE GROSS BUSINES S RECEIPTS AT ` 89 00 000/-. HE ALSO REFERRED TO THE STATEMENT REC ORDED BY THE ASSESSEE ON OATH ON 11.12.2006 WHICH IS REPRODUCED IN THE ASSESSMENT ORDER AND HENCE NOT REPRODUCED HERE. TH E GIST OF THE ASSESSEES STATEMENT IS THAT THE ASSESSEE ADMITTED THE RECEIPT OF ` 89 00 000/- FROM M/S KLT AUTOMATIVE AND TABULAR PRO DUCTS LTD. ITA NO: 5003/MUM/2009 3 AND ALSO STATED THAT HE WAS READY TO PAY THE FULL T AX ON THE AFORESAID AMOUNT. RELYING ON THE STATEMENT AS WELL AS THE ABSENCE OF EVIDENCE FROM THE ASSESSEE IN SUPPORT OF HIS CLA IM THE ASSESSING OFFICER ESTIMATED THE INCOME AT 20% OF ` 89 00 000/- WHICH CAME TO ` 17 80 000/-. AFTER ADJUSTING THE AMOUNT OF INCOME RETURNED NAMELY ` 3 01 820/- THE DIFFERENCE OF ` 14 78 180/- WAS ADDED AS UNDISCLOSED BUSINESS INCOME. 3. ON APPEAL THE ASSESSEE FILED A COPY OF HIS ACCO UNT IN THE BOOKS OF M/S THAKKARSON AUTO ANCILLARY (INDIA) LTD. ACCORDING TO WHICH THE TOTAL RECEIPT WAS ` 71 77 212/- ON WHICH TAX HAD ALSO BEEN DEDUCTED. OUT OF THIS AMOUNT A SUM OF ` 3 50 000/- REPRESENTED ADVANCE. THE ASSESSEE ALSO SHOWED FROM THE ACCOUNT THAT A SUM OF ` 30 49 467/- REPRESENTED REIMBURSEMENT OF CAPITAL GOODS AND THEREFORE DID NOT REPRESENT BUSINESS RECE IPT. IT WAS THUS POINTED OUT BY THE ASSESSEE THAT THE ASSESSING OFFI CER HAD ADOPTED WRONG FIGURES AND IN THIS CONNECTION IT WAS SUBMITT ED THAT THE COPY OF THE ACCOUNT HAD BEEN FILED BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. 4. THE CIT(A) NOTED FROM THE ACCOUNT THAT THE ASSES SEES SUBMISSION THAT ` 3 50 000/- REPRESENTED ADVANCE WAS BORNE OUT BY THE ACCOUNT COPY WHICH MENTIONED THE DATES AND AMOU NTS ON WHICH THE ADVANCES WERE MADE. THEY WERE ALSO MADE BY ACC OUNT PAYEE CHEQUES. HE THEREFORE DIRECTED THE ASSESSING OFFIC ER TO REDUCE ` 3 50 000/- FROM THE GROSS RECEIPTS AFTER VERIFICATI ON FOR THE PURPOSE OF CALCULATING THE NET PROFIT OF THE ASSESSEE. 5. AS REGARDS THE ASSESSEES CLAIM THAT ` 30 49 467/- REPRESENTED REIMBURSEMENT OF CAPITAL GOODS THE CIT (A) REFUSED TO ITA NO: 5003/MUM/2009 4 ACCEPT THE SAME SINCE M/S THAKKARSON AUTO ANCILLARY (INDIA) LTD. HAS DEDUCTED TAX AT SOURCE FROM THIS PAYMENT. THE ASSESSEE WAS ALSO NOT ABLE TO PRODUCE ANY WRITTEN AGREEMENT WITH THE COMPANY IN THIS REGARD. NO BOOKS OF ACCOUNTS OR VO UCHERS WERE PRODUCED. IN THIS VIEW OF THE MATTER THE CIT(A) H ELD THAT THE ASSESSING OFFICER HAS RIGHTLY INCLUDED THE AFORESAI D AMOUNT IN THE GROSS BUSINESS RECEIPTS FOR CALCULATING THE NET PRO FIT. 6. THE CIT(A) ALSO DID NOT ACCEPT THE ASSESSEES CL AIM THAT HIS TURNOVER WAS NOT MORE THAN ` 40 00 000/- AND THEREFORE HE HAD RIGHTLY DISCLOSED INCOME AT THE RATE OF 8% THEREON AS PER THE PROVISIONS OF SECTION 44AD OF THE ACT. 7. EVENTUALLY THE CIT(A) HELD THAT THE ASSESSEE HA S RECEIVED ` 71 77 212/- FROM THE CONTRACTEE COMPANY OUT OF WHI CH ` 3 50 000/- REPRESENTED ADVANCE. HE THEREFORE DIREC TED THE ASSESSING OFFICER TO ADOPT THE GROSS RECEIPT OF THE BUSINESS AT ` 68 27 212/-. HE ALSO FELT THAT THE ESTIMATE OF THE NET PROFIT AT 20% OF THE GROSS RECEIPTS IS A BIT TOO HIGH AND REDUCED THE SAME TO 15% LOOKING TO THE FACTS OF THE CASE. APPLYING 15% ON ` 68 27 212/- THE NET PROFIT CAME TO ` 10 24 408/-. DEDUCTING ` 3 01 820/- SHOWN BY THE ASSESSEE IN THE RETURN THE BALANCE OF ` 7 22 261/- WAS DIRECTED TO BE ADDED IN THE PLACE OF ` 14 78 180/-. 8. THE DEPARTMENT IS IN APPEAL. WE HAVE CONSIDERED THE FACTS AND THE CONTENTIONS OF THE LEARNED SENIOR DEPARTMEN TAL REPRESENTATIVE. THE ASSESSEE WAS ABSENT DESPITE NO TICE HAVING BEEN SERVED ON HIM VIDE AD CARD PLACED ON RECORD. IN OUR VIEW NO STRONG GROUNDS HAVE BEEN MADE OUT TO DISTURB THE DE CISION OF THE CIT(A). HE HAS RECORDED A FINDING THAT THE COPY OF THE ASSESSEES ITA NO: 5003/MUM/2009 5 ACCOUNT IN THE BOOKS OF M/S THAKKARSON AUTO ANCILLA RY (INDIA) LTD. HAD BEEN FILED BEFORE THE ASSESSING OFFICER DU RING THE ASSESSMENT PROCEEDINGS WHICH FINDING HAS NOT BEEN CHALLENGED IN THE GROUNDS OF APPEAL TAKEN BEFORE US. THERE IS NO GROUND REFERRING TO RULE 46A OF THE INCOME TAX RULES ALSO. WE HAVE TO THEREFORE PROCEED ON THE BASIS OF THE ACCOUNT COPY. THE CIT( A) HAS DONE SO AND HAS FOUND THAT ONLY A SUM OF ` 71 77 212/- WAS RECEIVED BY THE ASSESSEE FROM THE ABOVE COMPANY ACCORDING TO THE TD S DETAILS AND NOT ` 89 00 000/- AS ASSUMED BY THE ASSESSING OFFICER. H E HAS ALSO FOUND AS A FACT THAT ` 3 50 000/- OUT OF THE ABOVE AMOUNT REPRESENTED ADVANCE. THE ASSESSEES CLAIM THAT ` 30 49 467/- WAS RECEIVED AS REIMBURSEMENT OF CAPITAL GOODS DID NOT FIND FAVOUR WITH THE CIT(A) AS THERE WAS NO EVIDENCE. THUS THE CIT( A) ON THE BASIS OF THE ACCOUNT COPY AND OTHER RELEVANT DETAIL S HAS ARRIVED AT THE FINDING THAT THE GROSS BUSINESS RECEIPTS WERE ` 68 27 212/-. HE HAS ALSO REDUCED THE ESTIMATE OF NET PROFIT FROM 20 % TO 15% AGAINST WHICH NO SPECIFIC ARGUMENTS WERE ADVANCED B EFORE US. THE ORDER OF THE CIT(A) HAVING THUS BASED ON MATERI ALS THAT WERE AVAILABLE EVEN BEFORE THE ASSESSING OFFICER CANNOT THEREFORE BE FAULTED. WE ACCORDINGLY UPHOLD THE SAME AND DISMIS S THE APPEAL FILED BY THE REVENUE. NO COSTS. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH JANUARY 2011. SD/- SD/- (B RAMAKOTAIAH) (R V EASWAR) ACCOUNTANT MEMBER PRESIDENT MUMBAI DATED 19 TH JANUARY 2011 SALDANHA ITA NO: 5003/MUM/2009 6 COPY TO: 1. SHRI JAGANNATH BUKTE B-8 GROUND FLOOR KAMAL APARTMENTS BESIDES PRASHANT HOTEL MAHIM ROAD PALGHAR (W) PALGHAR 2. ACIT CENTRAL CIRCLE 37 3. CIT-CENTRAL III 4. CIT(A)-CENTRAL VIII 5. DR J BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR ITAT MUMBAI