ITO, NEW DELHI v. SHRI DILIP KOCHAR, Nagpur

ITA 5752/DEL/2012 | 2008-2009
Pronouncement Date: 19-11-2014 | Result: Partly Allowed

Appeal Details

RSA Number 575223914 RSA 2012
Assessee PAN AGCPK6803H
Bench Nagpur
Appeal Number ITA 5752/DEL/2012
Duration Of Justice 2 year(s) 10 day(s)
Appellant ITO, NEW DELHI
Respondent SHRI DILIP KOCHAR, Nagpur
Appeal Type Income Tax Appeal
Pronouncement Date 19-11-2014
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 19-11-2014
Assessment Year 2008-2009
Appeal Filed On 09-11-2012
Judgment Text
1 DILIP KOCHAR ITA NO. 5752/DEL/2012 NAGPUR IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH NAGPUR . ! ' BEFORE SHRI D. KARUNAKARA RAO AM AND SHRI VIVEK VARMA JM ITA NO. 5752/DEL/2012 (ASSESSMENT YEAR : 2008-09) INCOME TAX OFFICERWARD 36(3) H BLOCK VIKAS BHAWAN NEW DELHI -110 002 #$ / VS. DILIP KOCHAR 314 KRISHNA COMPLEX BHANDARA ROAD KAPSI (KHURD) DIST. NAGPUR MAHARASHTRA % % % % ./ PAN :AGCPK 6803 H ( %& / APPELLANT) : ( '(%& / RESPONDENT) %& ) * / APPELLANT BY : SHRI P R MANE '(%& ) * / RESPONDENT BY : SHRI K K THAKKAR $ + ) / DATE OF HEARING : 10.09.2014 -./ ) /DATE OF PRONOUNCEMENT : 19.11.2014 0 0 0 0 O R D E R ! . ./ PER VIVEK VARMA JM: INSTANT APPEAL IS FILED BY THE DEPARTMENT AGAINST T HE ORDER OF CIT(A)XXX DELHI. THEREAFTER AT THE REQUEST BY TH E ASSESSEE THE APPEAL HAS BEEN TRANSFERRED TO ITAT NAGPUR BENCH NAGPUR. 2. THE DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SES THE LD. CIT(A) HAD ERRED IN REDUCING THE ADDITION OF RS. 2 1 8 675/- MADE BY THE AO TO RS. 10 974/- ON ACCOUNT OF DIFFERENCE IN CONTRACTUAL RECEIPTS AS PER 26AS AND AS DECLARED IN THE RETURN. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAD ERRED IN REDUCING THE ADDITION OF UNEXPL AINED CASH DEPOSIT TO RS. 3 01 504/- U/S 68 OF THE INCOME TAX A CT AS AGAINST RS. 26 36 000/- MADE BY THE AO. THE LD. CIT(A ) ADMITTED ADDITIONAL EVIDENCE WITHOUT FOLLOWING THE DECISION OF THE JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF CIT V MANISH BUILDWELL PVT LTD. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE APPELLANT CRAVES LEAVE TO ADD ALLOW OR AMEND ANY O R ALL THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HE ARING OF THE APPEAL. 2 DILIP KOCHAR ITA NO. 5752/DEL/2012 3. ON THE BASIS OF AIR INFORMATION THE AO MADE THE FOLLOWING ADDITIONS AS NO SATISFACTORY RESPONSE WAS RECEIVED WITH REGARD TO THE FOLLOWING DEPOSITS MADE IN CASH IN HIS SAVINGS BANK ACCOUNT. RS. 2 18 675/- ON ACCOUNT OF CONTRACT RECEIPTS RS. 26 36 000/- ON ACCOUNT OF UNEXPLAINED CREDITS I N THE BANK ACCOUNT. 4. ON BOTH THE ISSUES THE DR VEHEMENTLY ARGUED THE CASE OF THE AO. ON THE OTHER HAND THE AR TOOK UP THE ISSUES AND SUBMITTED HIS ARGUMENTS INDEPENDENTLY. 5. THE AR SUBMITTED THAT IN SO FAR AS THE ADDITION MADE AT RS. 2.18 LACS IT WAS ALLEGED BY THE AO THAT THE SAME WERE R ECEIPTS FROM SHREE SAI ROAD TRADING. THE ASSESSEE DENIED ANY RECEIPTS FROM SUCH PARTY. IT WAS ALSO CONTENDED THAT EVEN IN FORM NO. 26AS NO S UCH RECEIPTS ARE SHOWN. 5. THE ASSESSEE SUBMITTED BEFORE THE REVENUE AUTHOR ITIES THAT EVEN ON ASSUMPTION THAT THE INFORMATION WAS CORRECT AND THESE ARE CONTRACTUAL RECEIPTS THEN BASED ON HISTORIC GROSS PROFIT RATE MEAN OF THE SAME MAY BE APPLIED WHICH COMES AT 1.39%. IN S UCH A SITUATION THE ADDITION THOUGH BEING CHALLENGED AS WRONGLY M ADE WOULD BE RS. 3 040/- ONLY (PAGE 3 OF THE CIT(A) ORDER). 6. WITH REGARD TO ADDITION OF RS. 26 36 000/- THE ASSESSEE SUBMITTED THAT THESE WERE THE DEPOSITS MADE IN CASH BY HIS CUSTOMERS THEREFORE NO ADDITION COULD BE MADE ON ACCOUNT OF SECTION 68 BECAUSE THE REVENUE HAS TO COME TO A CONCLUSION THAT THE MO NEY ACTUALLY BELONGS TO THE ASSESSEE IF THE THREE CONDITIONS AS LAID OUT IN SECTION 68 ARE NOT FULFILLED. 7. THE ASSESSEE IN THE ALTERNATE SUBMITTED THAT SINCE THERE WERE REGULAR DEPOSITS & WITHDRAWALS THE DEPARTMENT SHOU LD HAVE TAKEN THE PEAK AND AT THE MOST PEAK ADDITION COULD ONLY BE MADE. THE ASSESSEE 3 DILIP KOCHAR ITA NO. 5752/DEL/2012 MADE REFERENCE OF A NUMBER OF DECISIONS WHICH FIND PLACE IN THE ORDER OF THE CIT(A) WHICH WE TOO TOOK INTO CONSIDERATIO N. 8. THE CIT(A) AFTER DUE CONSIDERATION CLOSED THE FIRST ISSUE BY TAKING 5% GROSS PROFIT AS REASONABLE DISALLOWANCE. 9. WE HAVE HEARD BOTH THE PARTIES AND WE ARE OF THE VIEW IN SO FAR AS ADOPTION OF 5% GROSS PROFIT AGAINST MEAN OF HIS TORIC GROSS PROFIT AS SUGGESTED BY THE ASSESSEE AT 1.39% WOULD MAKE THE GROSS PROFIT IN THE BUSINESS GO HAYWIRE. WE THEREFORE HOLD THAT TO A RRIVE AT A REASONABLE FIGURE THE GROSS PROFIT AT 2.78% SHALL BRING A QUI ETUS TO THE DISPUTE. 12. WE THEREFORE SET ASIDE THE ORDER OF THE CIT(A ) AND DIRECT THE AO TO FIRST ASCERTAIN WHETHER AT ALL THE ALLEGED CON TRACT RECEIPTS PERTAIN TO THE ASSESSEE. IF ON FACTS THESE RECEIPTS ARE PROVE D TO BE BELONGING TO THE ASSESSEE THEN COMPUTE THE DISALLOWANCE OF GRO SS PROFIT AT 2.78% ON THESE RECEIPTS OF RS. 2 18 675/- IF IN CASE THE RECEIPTS DO NOT PERTAIN TO THE ASSESSEE THEN THE AO SHALL DELETE T HE ADDITION AS SUCH. 13. GROUND NO. 1 IS THEREFORE PARTLY ALLOWED. 14. IN SO FAR AS ADDITION SUSTAINED BY THE CIT(A) A T RS. 3 01 504/- ON THE BASIS OF PEAK WORKING INSTEAD OF RS. 26 36 000 /- WE ARE OF THE VIEW THAT SINCE THERE WERE CONSISTENT DEPOSITS AND WITHDRAWALS THE PEAK ADDITION WAS THE ONLY WORKABLE AND ACCEPTABLE ALTERNATIVE IN PLACE OF MEAN OF GROSS PROFIT RATE BECAUSE IN THE INSTANT CASE THERE IS NO INDICATION OF CONTRACTUAL RECEIPTS. THE ADDITION SUSTAINED BY THE CIT(A) IN OUR OPINION IS A CORRECT METHOD AND WE SUSTAIN THE SAME. 15. GROUND NO. 2 IS THEREFORE REJECTED. 16. WE MUST OBSERVE THAT NO CREDENCE COULD BE GIVEN TO THE SUBMISSIONS MADE BY THE AR IN THE WRITTEN SUBMISSIO NS WHICH HAVE BEEN MADE NOW BEFORE US FOR THE FIRST TIME. THESE SUBMISSIONS WE REJECT. 4 DILIP KOCHAR ITA NO. 5752/DEL/2012 17. IN THE RESULT THE APPEAL AS FILED BY THE DEPAR TMENT IS TREATED AS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19/11/2014 SD/- SD/- ( . ) ( ! ) ( D. KARUNAKARA RAO ) ( VIVEK VARMA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER NAGPUR; (MUMBAI) 1$ DATED 19/11/2014 . $ . ./ * CHAVAN SR. PS 0 0 0 0 ) )) ) ' ' ' ' 2 / 2 / 2 / 2 / / COPY OF THE ORDER FORWARDED TO : 1. %& / THE APPELLANT 2. '(%& / THE RESPONDENT. 3. 3 ( ) -XXX(30) NEW DELHI/ NAGPUR CONCERNED ___________ / THE CIT(APPEALS)- XXX(30) NEW DELHI/ NAGPUR CONCERNED ___________ 4. 3 (CENTRAL) NAGPUR/ CIT NEW DELHI/NAGPUR ______CONCERNED NEW DELHI/ NAGPUR ____________CONC ERNED. 5. 6 7 ' $ NEW DELHI/ NAGPUR / DR ITAT NEW DELHI/NAGPUR 6. 7 ! 8 + / GUARD FILE. 0 $ 0 $ 0 $ 0 $ / BY ORDER / / TRUE COPY / / SENIOR PRIVATE SECRETARY ITAT MUMBAI CAMP: NAGPUR