Shri Sandeep Bindra, New Delhi v. ACIT, New Delhi

ITA 841/DEL/2010 | 2001-2002
Pronouncement Date: 07-05-2010 | Result: Dismissed

Appeal Details

RSA Number 84120114 RSA 2010
Assessee PAN AADPB7687B
Bench Delhi
Appeal Number ITA 841/DEL/2010
Duration Of Justice 2 month(s) 5 day(s)
Appellant Shri Sandeep Bindra, New Delhi
Respondent ACIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 07-05-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 07-05-2010
Assessment Year 2001-2002
Appeal Filed On 02-03-2010
Judgment Text
I.T.A. NO. 841 /DEL/2010 1/10 IN THE INCOME TAX APPELLATE TRIBUNAL NEW DELHI BENCH G BEFORE SHRI A.D. JAIN JUDICIAL MEMBER AND SHRI A K GARODIA ACCOUTANT MEMBER ITA NO. 841 /DEL/2010 (ASSESSMENT YEAR 2001-02) SHRI SANDEEP BINDRA VS. ACIT CC-9 50 DEFENCE COLONY MARKET NEW DELHI NEW DELHI (APPELLANTS) (RESPONDENTS) PAN / GIR NO. AADPB7687B APPELLANT BY: SHRI ANIL JAIN ADV. RESPONDENT BY: SHRI JAYANT MISRA CIT DR ORDER PER A. K. GARODIA AM: 1. THIS IS ASSESSEES APPEAL DIRECTED AGHAST THE OR DER OF LD. CIT(A)-II NEW DELHI DATED 23.12.2009 FOR THE ASSESSMENT YEAR 2001-02. THE GROUNDS RAISED BY THE ASSESSEE READ AS UNDER: 1)THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.90 929/- U/S 43B ON ACCOUNT OF BONUS PAYABLE FOR RS.54 382/- AND SALES TAX PAYABLE RS.36 547/-. 2) THE LD. CIT(A) HAS ERRED IN CONFIRMING THE REJEC TION OF BOOK RESULTS U/S 145(3). 3) THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ESTIMATION OF THE G P RATE AT 25% AS AGAINST DECLARED G.P. RATE OF 17.73% AND 30% ESTIMATED BY THE A.O. IN THE CASE OF MOETS CATERING SERVICE. I.T.A. NO. 841 /DEL/2010 2/10 4) THE LD. CIT(A) HAS ERRED IN REJECTING THE PLEA OF T HE APPELLANT FOR THE TELESCOPY THAT APPELLANT HAS HIMS ELF OFFERED AN ADDITIONAL UNDISCLOSED INCOME OF RS.14 85 494/- OUT OF WHICH RS.13 22 759/- IS A CAS H INCOME AND THE SAME HAS NOT BEEN SET OFF AGAINST TH E VARIOUS ESTIMATED ADDITIONS MADE IN THE ASSESSMENT ORDER AMOUNTING TO RS.9 28 517/- OR ANY AMOUNTS SUSTAINED OUT OF IT. 5) THE ORDER OF THE LD. CIT IS AGAINST LAW AND FACTS O F THE CASE. 6) THE APPELLANT CRAVES THE RIGHT TO ADD AMEND OR WITHDRAW ANY GROUNDS OF APPEAL AT THE TIME OF HEARING. 2. IT WAS SUBMITTED BY THE LD. A.R. THAT GROUNDS 5 & 6 ARE GENERAL. 3. REGARDING GROUND NO.1 IT WAS SUBMITTED THAT ALT HOUGH NO DIRECT EVIDENCE REGARDING PAYMENT OF BONUS AND SALE S TAX WAS FURNISHED BY THE ASSESSEE BUT THE LEDGER COPY O F THE NEXT YEAR IS AVAILABLE IN THE PAPER BOOK AND FROM T HIS IT CAN BE SEEN THAT UNPAID BONUS OF RS.54 382/- WAS PA ID BY CASH ON 28.08.2001 AND THIS LEDGER ACCOUNT OF THE N EXT YEAR IS AVAILABLE AT PAGE 18 OF THE PAPER BOOK. IT IS SUBMITTED THAT SIMILARLY SALES TAX PAYABLE IN THE PRESENT YEAR WAS PAID IN THE NEXT YEAR IN CASH ON 30.04.200 1 AND THIS LEDGER COPY FOR THE NEXT YEAR IS AVAILABLE AT PAGE 21 OF THE PAPER BOOK. IT WAS ALSO SUBMITTED THAT THE REL EVANT CASH BOOK FOR APRIL 2001 IS AVAILABLE AT PAGE 22 OF THE PAPER BOOK AND THE RELEVANT CASHBOOK FOR AUGUST 200 1 IS AVAILABLE AT PAGE 19 OF THE PAPER BOOK. IT WAS SUB MITTED I.T.A. NO. 841 /DEL/2010 3/10 THAT IN VIEW OF THESE FACTS THIS DISALLOWANCE SHOU LD BE DELETED. 4. REGARDING GOURDS NOS. 2 & 3 IT WAS SUBMITTED TH AT REJECTION OF BOOKS IN THE PRESENT CASE IS NOT JUSTI FIED BECAUSE NO SPECIFIC DEFECT IS POINTED OUT IN THE BO OKS OF ACCOUNTS OF THE ASSESSEE. REGARDING ESTIMATION OF GP RATE @ 25% BY THE LD. CIT(A) AS AGAINST 17.73% DECLARED BY THE ASSESSEE IT IS SUBMITTED THAT HE SAME IS NOT J USTIFIED BECAUSE THIS WAS DONE ON THE BASIS OF PRECEDING YEA R BUT THE TURNOVER IN THE PRESENT YEAR HAS GONE DOWN AS COMPARED TO THE PRECEDING YEAR AND HENCE ESTIMATION OF GP ON THE BASIS OF PRECEDING YEAR IS NOT JUSTIFIED. RELIANCE WAS PLACED ON THE DECISION OF THE TRIBUNAL RENDERED IN THE CASE OF SMT. TANUJA BINDRA IN I.T.A . NO. 4479/DEL/2009 DATED 23.04.2010 IN SUPPORT OF THIS CONTENTION THAT IN THE ABSENCE OF ANY FINDING REGAR DING SUPPRESSED SALES ESTIMATION OF G P @ 25% IS NOT JUS TIFIED. IT WAS SUBMITTED IN THE PRESENT CASE ALSO THAT THER E IS NO FINDING THAT THERE WAS SUPPRESSED SALES AND HENCE G P DECLARED BY THE ASSESSEE SHOULD BE ACCEPTED. IN RE PLY TO A QUERY BY THE BENCH AS TO WHETHER ASSESSEE HAS PRODU CED BOOKS OF ACCOUNTS BEFORE THE A.O. IT WAS SUBMITTED THAT THE SAME COULD NOT BE PRODUCED BECAUSE THE BOOKS OF ACCOUNTS WERE MAINTAINED BY SHRI V S MALIK CA AND HE DID NOT PROVIDE THE BOOKS TO THE ASSESSEE AND THER EFORE THE SAME COULD NOT BE PRODUCED BEFORE THE AUTHORITI ES I.T.A. NO. 841 /DEL/2010 4/10 BELOW. IN REPLY TO ANOTHER QUERY AS TO WHETHER ANY ACTION HAS BEEN TAKEN BY THE ASSESSEE AGAINST THE C.A. IT WAS SUBMITTED THAT NO ACTION HAS BEEN TAKEN. 5. REGARDING GROUND NO.4 IT WAS SUBMITTED THAT THE BENEFIT OF TELESCOPY SHOULD BE ALLOWED BECAUSE THE ASSESSEE DID NOT HAVE ANY OTHER SOURCE OF INCOME EXCEPT BUSINESS INCOME ON ACCOUNT OF PROPRIETORSHIP OF TWO BUSINESS CONCERNS I.E. MOITS CATERING SERVICES AND MOITS K ABAB AND SINCE THE ASSESSEE HAD DECLARED UNDISCLOSED INC OME OF RS.13.22 LACS TELESCOPY OF THE SAME SHOULD BE ALLO WED AGAINST ITS BUSINESS INCOME ENHANCED BY THE A.O. 6. AGAINST THIS THE LD. D.R. SUPPORTED THE ORDERS OF AUTHORITIES BELOW. IT WAS ALSO HIS SUBMISSION THAT FOR THE PAYMENT OF BONUS AND SALES TAX THE ASSESSEE HAS NO T PRODUCED ANY EVIDENCE. REGARDING ESTIMATION OF GP IT WAS SUBMITTED THAT IN THE ABSENCE OF BOOKS ESTIMAT ION OF GP IS JUSTIFIED. REGARDING GRANTING OF TELESCOPYI NG IT WAS SUBMITTED THAT THIS INCOME DECLARED IN THE COUR SE OF ASSESSMENT PROCEEDINGS OF RS.13.22 LACS IS DECLARED ON ACCOUNT OF THE INCOME FROM OTHER SOURCES AS CAN BE SEEN AT PAGE 1 OF THE PAPER BOOK I.E. REVISED COMPUTATION O F TOTAL INCOME AND HENCE FOR ANY ADDITION IN THE BUSINESS I NCOME ON ACCOUNT OF ESTIMATION OF GP AND DISALLOWANCE OF EXPENSES U/S 43B NO TELESCOPYING CAN BE ALLOWED AGA INST INCOME FROM OTHER SOURCES. I.T.A. NO. 841 /DEL/2010 5/10 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. REGARDING GROUND NO.1 WE FIN D THAT THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE REGARDIN G PAYMENT OF UNPAID BONUS AND UNPAID SALES TAX IN THE SUBSEQUENT YEAR. MERE ENTRY IN THE BOOKS OF ACCOUN TS OF THE ASSESSEE CANNOT BE EQUATED WITH THE EVIDENCE RE GARDING PAYMENT OF BONUS AND SALES TAX PARTICULARLY WHEN AS PER THE PROVISIONS OF SECTION 43B THE ASSESSEE IS REQU IRED TO FURNISH EVIDENCE OF SUCH PAYMENT. IT IS RELEVANT B ECAUSE FOR THE PURPOSE OF ALLOWING DEDUCTION ON THIS ACCOU NT U/S 43B IN THE PRESENT YEAR IT HAS TO BE SEEN THAT PAY MENT WAS MADE BY THE ASSESSEE BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME. MERE ENTRY IN THE CASHBOOK OF THE ASSES SEE IN NEXT YEAR REGARDING PAYMENT IS NOT AN EVIDENCE TO E STABLISH THAT ACTUALL PAYMENT WAS MADE BY THE ASSESSEE BEFOR E THE DUE DATE OF FILING OF RETURN OF INCOME. UNDER THES E FACTS & CIRCUMSTANCES WE ARE OF THE CONSIDERED OPINION THA T DEDUCTION CANNOT BE ALLOWED TO THE ASSESSEE IN THE ABSENCE OF EVIDENCE FOR PAYMENT OF BONUS PAYABLE AND UNPAID SALES TAX. GROUND NO.1 IS REJECTED. 7.1 REGARDING GROUNDS NOS.2 & 3 OF APPEAL WE FIND THAT IT IS OBSERVED BY THE A.O. AT PAGE 5 OF THE ASSESSMENT OR DER THAT THE ASSESSEE COULD NOT JUSTIFY THE BOOK RESULT S WITH COMPLETE BOOKS OF ACCOUNTS AND PURCHASE AND SALE BI LLS AND OTHER RELEVANT EXPENSES VOUCHERS. IT IS ALSO O BSERVED I.T.A. NO. 841 /DEL/2010 6/10 BY THE A.O. THAT IN THE COURSE OF SEARCH ALSO THE BOOKS OF ACCOUNTS AND OTHER PURCHASE AND SALE BILLS ETC. WER E NEITHER FOUND AT THE ASSESSEES BUSINESS PREMISES NOR IN TH E OFFICE OF SHRI V S MALIK CA WHICH WAS ALSO COVERED U/S 133 A OF THE I. T. ACT. IT IS ALSO OBSERVED BY THE A.O. THA T SHRI V S MALIK CA HAD ALREADY LEFT THE WORK OF THE ASSESSEE MUCH BEFORE THE SEARCH I.E. PRIOR TO FINANCIAL YEAR 2005 -06. WE FIND THAT AS PER THE P & L ACCOUNT OF M/S. MOITS K ABAB AVAILABLE AT PAGE 15 OF THE PAPER BOOK THE SALES W AS DECLARED AT RS.40.80 LACS WHEREAS FROM THIS CONCERN THE A.O. HAS ESTIMATED THE SALES AT RS.42 LACS. REGARD ING THE AMOUNT OF SALES CIT(A) HAD DECIDED THE ISSUE IN FA VOUR OF THE ASSESSEE AND IT WAS HELD BY HIM THAT IN THE ABS ENCE OF ANY DIRECT MATERIAL REGARDING SUPPRESSION IN THE S ALES THE DECLARED SALES CANNOT BE ENHANCED. SIMILARLY FOR ANOTHER CONCERN I.E. FOR MOITS CATERING SERVICES AGAINST THE DECLARED SALES OF RS.53.02 LACS THE A.O. HAD ESTIM ATED THE SALES AT RS.55 LACS AND FOR THE SAME ALSO IT WAS H ELD BY THE LD. CIT(A) THAT THE DECLARED SALES SHOULD BE ACCEPT ED. REGARDING GROSS PROFIT WE FIND THAT IT IS NOTICED BY THE A.O. IN HIS ASSESSMENT ORDER THAT AS AGAINST GP % O F 29.14% IN THE PRECEDING ASSESSMENT YEAR I.E. ASSESS MENT YEAR 2000-01 IN THE PRESENT YEAR THE GP DECLARED BY THE ASSESSEE IS 17.73% ONLY. REGARDING THIS CONTENTION OF LD. A.R. THAT THERE IS REDUCTION IN SALES IN THE PRESEN T YEAR WE FIND THAT IN THE CASE OF MOITS CATERING SERVICES THE SALES I.T.A. NO. 841 /DEL/2010 7/10 WAS REPORTED AT RS.60.90 LACS IN THE PRECEDING YEAR WHEREAS IN THE PRESENT YEAR THE SALES IS REPORTED AT RS.53.02 LACS AND HENCE THERE IS REDUCTION IN THE S ALES OF AROUND 13%. IN THE PRECEDING YEAR THE GP WAS REPO RTED BY THE ASSESSEE @ 29.14% WHEREAS IN THE PRESENT YEA R THE GP HAS BEEN ESTIMATED BY THE LD. CIT(A) @ 25% WHICH IS AGAIN LESSER BY AROUND 14% OF THE PRECEDING YEAR GP RATE. ADMITTEDLY THERE MAY BE SOME FIXED EXPENSES AND HEN CE THE GP WILL BE SLIGHTLY LESS IF THERE IS FALL IN SA LES BUT IN VIEW OF THE FACT THAT LD. CIT(A) HAS ALSO ADOPTED L ESSER PERCENTAGE OF GP I.E. @ 25% AS AGAINST 29.14% GP IN THE PRECEDING YEAR WE ARE OF THE CONSIDERED OPINION TH AT SOME ESTIMATION OF GP BY LD./ CIT(A) @ 25% IS REASONABLE PARTICULARLY WHEN THE ASSESSEE IS NOT PRODUCING ANY BOOKS OF ACCOUNTS AND PURCHASE BILLS AND VOUCHERS FOR EXP ENSES. BEFORE US ALSO EVEN THE AUDITED ACCOUNTS OF THIS CO NCERN M/S. MOITS CATERING SERVICES ARE NOT FURNISHED IN THE PAPER BOOK ALTHOUGH IT WAS CLAIMED BEFORE THE AUTHO RITIES BELOW THAT THE BOOKS ARE AUDITED. NO OTHER JUSTIFI CATION HAS BEEN FURNISHED BEFORE US POINTING OUT THAT SUCH EXPENSES IN THE PRESENT YEAR HAS GONE UP AS COMPARE D TO THE PRECEDING YEAR JUSTIFYING FALL IN GP % AND WHAT ARE THE JUSTIFICATION FOR THE INCREASE IF ANY IN SUCH EXPEN SES IN THE PRESENT YEAR. IN THE ABSENCE OF BOOKS OF ACCOUNTS AUDITED ACCOUNTS BEFORE US AND ANY JUSTIFICATION REGARDING INCREASE IN EXPENSES IN THE PRESENT YEAR WITH DETAILS THEREO F I.T.A. NO. 841 /DEL/2010 8/10 JUSTIFYING FALL IN GP WE ARE OF THE CONSIDERED OPI NION THAT ESTIMATION OF GP @ 25% AS AGAINST 29.14% IN THE PRECEDING YEAR DECLARED BY THE ASSESSEE IS JUSTIFIE D. 7.2 REGARDING THE TRIBUNAL DECISION IN THE CASE OF SMT. TANUJA BINDRA (SUPRA) CITED BY THE LD. A.R. WE FIND THAT THE BOOKS OF ACCOUNTS WERE NOT REJECTED BY THE A.O. IN THAT CASE WHEREAS IN THE PRESENT CASE THE BOOKS OF ACCO UNTS WERE REJECTED BY THE A.O. FOR THE REASONS THAT THE BOOKS WERE NOT PRODUCED BEFORE HIM. HENCE THIS TRIBUNAL DECISION DOES NOT HELP THE ASSESSEE IN THE PRESENT CASE. HENCE GROUNDS NOS. 2 & 3 OF THE APPEAL ARE REJECTE D. 7.3 REGARDING GROUND NO.4 WE FIND THAT IN THE REVI SED COMPUTATION OF INCOME AS AVAILABLE AT PAGE 1 OF THE PAPER BOOK THE ASSESSEE HAS DECLARED FOLLOWING ADDITIONA L INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES: INTEREST FROM BANK RS. 2 953/- INTEREST ON FDR RS.1 59 782/- UNDISCLOSED INCOME RS.13 22 759/- TOTAL RS.14 25 494/- AS AGAINST THIS EXTRA INCOME DECLARED BY THE ASSESS EE IN THE REVISED COMPUTATION OF TOTAL INCOME FILED DURIN G ASSESSMENT PROCEEDINGS WE FIND THAT THE ADDITION W AS MADE BY THE A.O. IN BUSINESS INCOME ON ACCOUNT OF G P ESTIMATION AND FOR DISALLOWANCE U/S 43B. FOR THE DISALLOWANCE U/S 43B THE ASSESSEE CANNOT CLAIM REG ARDING TELESCOPYING. NOW REGARDING THE ADDITIONAL INCOME ASSESSED BY THE A.O. BY ESTIMATING GP CONFIRMED BY THE I.T.A. NO. 841 /DEL/2010 9/10 LD. CIT(A) THE ASSESSEE HAS MADE A CLAIM BEFORE TH E LD. CIT(A) FOR GRANTING TELESCOPYING. THIS CLAIM OF AS SESSEE WAS REJECTED BY THE LD. CIT(A) ON THE BASIS THAT FO R ADDITIONAL INCOME DECLARED BY THE ASSESSEE UNDER TH E HEAD INCOME FROM OTHER SOURCES;TELESCOPYING CANNOT BE GRANTED FOR THE ADDITION MADE BY THE A.O. UNDER THE HEAD INCOME FROM BUSINESS. WE ARE IN AGREEMENT WITH THE LD. CIT(A) ON THIS ISSUE BECAUSE WHEN THE ASSESSEE IS ADMITTING INCOME FROM OTHER SOURCES IN HIS REVISED COMPOTATION OF INCOME LATER ON THE ASSESSEE CANNOT CLAIM SUCH ADDITIONAL INCOME DECLARED BY HIM UNDER THE HE AD INCOME FROM OTHER SOURCES IS NOTHING BUT EXTRA BU SINESS INCOME WHICH WAS ESTIMATED BY THE A.O. FOR THE REAS ON THAT THE ASSESSEE IS NOT PRODUCING BOOKS OF ACCOUNT S PURCHASE BILLS AND EXPENSES VOUCHERS. BEFORE US I T WAS SUBMITTED BY THE LD. A.R. THAT IN ADDITION OF THESE TWO PROPRIETORSHIP CONCERNS THE ASSESSEE DID NOT HAVE ANY OTHER SOURCE OF INCOME BUT THEN IF THIS WAS THE FAC T THEN IT WAS FOR THE ASSESSEE TO DECLARE THE ADDITIONAL INCO ME IN THE REVISED COMPUTATION OF INCOME FILED IN THE COURSE O F ASSESSMENT PROCEEDINGS UNDER THE HEAD INCOME FROM BUSINESS BUT THE ASSESSEE HAS NOT DECLARED THE SAM E UNDER THE HEAD INCOME FROM BUSINESS AND THE SAME WAS DECL ARED BY THE ASSESSEE UNDER THE HEAD INCOME FROM OTHER SOURCES. THE SOURCE OF EXTRA UNDISCLOSED INCOME OF RS.13.23 LACS DECLARED BY THE ASSESSEE WAS KNOWN TO THE I.T.A. NO. 841 /DEL/2010 10/10 ASSESSEE ONLY AND WHEN THE ASSESSEE HAS HIMSELF DEC LARED THE SAME UNDER THE HEAD INCOME FROM OTHER SOURCES AT A LATER STAGE THE ASSESSEE CANNOT CHANGE THE STAND A ND SAY THAT THE SAME WAS OUT OF BUSINESS INCOME. HENCE W E DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD . CIT(A) ON THIS ISSUE. GROUND NO.4 IS ALSO REJECTED. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE STANDS DISMISSED. 9. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT O N 7 TH MAY 2010. SD./- SD./- (A. D. JAIN) (A K GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 7 TH MAY 2010 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR ITAT NEW DELHI