Woman Development Organisation, New Delhi v. ADIT (E), New Delhi

ITA 902/DEL/2012 | 2007-2008
Pronouncement Date: 26-11-2014 | Result: Dismissed

Appeal Details

RSA Number 90220114 RSA 2012
Assessee PAN AAATW0576F
Bench Delhi
Appeal Number ITA 902/DEL/2012
Duration Of Justice 2 year(s) 9 month(s) 4 day(s)
Appellant Woman Development Organisation, New Delhi
Respondent ADIT (E), New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 26-11-2014
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted H
Tribunal Order Date 26-11-2014
Date Of Final Hearing 27-08-2014
Next Hearing Date 27-08-2014
Assessment Year 2007-2008
Appeal Filed On 22-02-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH H NEW DELHI) BEFORE SHRI I.C. SUDHIR AND SHRI T.S. KAPOOR ITA NO.902/DEL/2012 ASSESSMENT YEAR: 2007-08 WOMAN DEVELOPMENT ORGANIZATION VS. ADIT 304 SOUTH EX. PLAZA-II TRUST CIRCLE-IV 209 MASJID MOTH NEW DELHI NEW DELHI. (PIN: AAATW0576F) (APPLICANT) (RESPONDENT) ASSESSEE BY: S/SH. ASHWANI TANEJA & ROHA N KHARE ADV. REVENUE BY: SHRI SUMER SHARMA SR. D R ORDER PER I.C. SUDHIR: JUDICIAL MEMBER THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDER O N THE FOLLOWING GROUNDS: 1. IN THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(APPEALS) IS INCORRECT AND UNJUSTIFIED IN ESTIMA TING THE INCOME OF THE ASSESSEE AT RS.20 66 359.00 AS AGAINST THE NIL INCOME AS PER RETURN INCOME FILED. 2. IN THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(APPEALS) IS INCORRECT AND UNJUSTIFIED IN APPLYI NG AS GROSS PROFIT RATE OF 3% FOR THE ESTIMATING THE INCOME OF THE ASS ESSEE. 3. IN THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(APPEALS) IS INCORRECT AND UNJUSTIFIED IN ASSESS ING THE ASSESSEE ON ESTIMATED BASE WITHOUT ANY EVIDENCE. 2 4. IN THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(APPEALS) IS INCORRECT AND UNJUSTIFIED IN REJECT ING THE PROFIT DECLARED BY THE ASSESSEE EVEN WHERE THE SALES DECLA RED HAS BEEN ACCEPTED. 5. IN THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(APPEALS) IS INCORRECT AND UNJUSTIFIED IN ASSESS ING THE ASSESSEE AT RS.20 66 359.00 INCOME WITHOUT ALLOWING EXPENSES NE CESSARY FOR CARRYING ON THE BUSINESS AND ALSO HAVING ADMITTED S ALES THAN RS.6.88 CRORES. 2. GROUND NO.1 : AT THE OUTSET OF HEARING THE LEARNED AR SUBMITTE D THAT THE APPELLANT DOES NOT NEED TO PRESS THIS GROUND. T HIS GROUND NO.1 IS ACCORDINGLY REJECTED AS NOT PRESSED. 3. GROUND NOS. 2 TO 5 : IN THESE GROUNDS THE ASSESSEE HAS BASICALLY QUESTIONED FIRST APPELLATE ORDER WHEREBY THE LEARNE D CIT(APPEALS) HAS ESTIMATED THE INCOME OF THE ASSESSEE APPLYING ON TH E GROSS PROFIT RATE OF 3% (GROUND NOS. 2 TO 4 ) AND THE ACTION OF THE LEARNED CIT(APPEALS) IN NOT ALLOWING EXPENSES NECESSARY FOR CARRYING ON THE BUS INESS WHILE ADMITTING SALES AT RS.6.88 CRORES (GROUND NO. 5). 3 4. THE RELEVANT FACTS ARE THAT THE ASSESSEE IS IN T HE BUSINESS OF PROCESSING OF GRAM-PULSES. IN ABSENCE OF BOOKS OF ACCOUNT THE ASSESSING OFFICER ESTIMATED THE NET TAXABLE INCOME AT RS.51 23 37 730 AGAINST THE TURNOVER OF RS.6.88 CRORES. LEARNED CIT(APPEALS) HAS HOWEVER E STIMATED THE INCOME BY APPLYING G.P. RATE AT 3% WITH THIS OBSERVATION THAT DURING THE ASSESSMENT YEAR 2008-09 THE ASSESSING OFFICER HAD APPLIED 8% OF GROSS PROFIT ON TOTAL INCOME AS PER INCOME AND EXPENDITURE ACCOUNT WITHO UT ALLOWING VARIOUS EXPENDITURE WHEREAS DURING THE YEAR VARIOUS ADDITIO NAL EVIDENCES HAVE BEEN FURNISHED DURING THE COURSE OF FIRST APPELLATE PROC EEDINGS WHICH WERE ADMITTED UNDER RULE 46A OF THE INCOME-TAX RULES 19 62 WHICH INCLUDED DETAILS OF LIABILITY PAYABLE TO NAFED AND ALSO THE DETAILS OF SUM OF RS.1 01 14 787 WITH REGARD TO CLAIM RECEIVED FROM M /S. SAI BABA BUILDERS & CONSTRUCTION. THE LEARNED CIT(APPEALS) ALSO OBSERVE D THAT OTHER VARIOUS DETAILS WITH REGARD TO OCCURRENCE OF FIRE & CERTIF ICATE OF INSURANCE CO. LTD. WERE ALSO FILED. BY APPLYING G.P. RATE AT 3% ON TOT AL SALES OF RS.6 88 78 640 THE LEARNED CIT(APPEALS) HAS ESTIMATED THE PROFIT A T RS.20 66 359. THIS ESTIMATED PROFIT MADE BY THE LEARNED CIT(APPEALS) H AS BEEN QUESTIONED BY THE ASSESSEE. THE ASSESSEE HAS QUESTIONED FURTHER T HE DISALLOWANCE OF EXPENSES FOR CARRYING ON THE BUSINESS ON THE ADMITT ED SALES. 4 5. IN SUPPORT OF THE GROUNDS THE LEARNED AR SUBMIT TED THAT THERE WAS NO EVIDENCE OR INSTANCES BEFORE THE LEARNED CIT(APPEAL S) TO JUSTIFY THE APPLICATION OF GROSS PROFIT RATE OF 3% FOR ESTIMATI NG THE INCOME OF THE ASSESSEE. HE SUBMITTED THAT THE LEARNED CIT(APPEALS ) WAS ALSO NOT JUSTIFIED IN REJECTING THE PROFIT DECLARED BY THE ASSESSEE EV EN WHEN THE SALES DECLARED HAS BEEN ACCEPTED. THE LEARNED AR SUBMITTED FURTHER THAT BENEFIT OF DEPRECIATION AND INTEREST EXPENDITURE BE GIVEN WHIL E ESTIMATING THE INCOME. THE LEARNED AR SUBMITTED THAT IN THE TRADING AND MA NUFACTURING OF PULSES AND AGRICULTURAL ITEMS THE GROSS PROFIT IS VERY LO W DUE TO HEAVY VOLUME ITEMS AND GREAT COMPETITION IN INDIAN MARKET TO SUC H ITEMS. IN FACT THE TURNOVER IS VERY HIGH AND NET PROFIT IS VERY LOW. I N SUPPORT HE FURNISHED THE FOLLOWING INSTANCES: (RS. IN LAKH ) S.NO. NAME OF ORGANISATION FINANCIAL YEAR TURNOVER NET PROFIT (ASSESSABLE INCOME) PERCENTAGE 1 PINTOJI FOODS P. LTD. 2005-06 125 0.005 0.004 2 -DO- 2006-07 130 0.006 0.003 3 -DO- 2007-08 272 0.008 0.003 4. -DO- 2008-09 432 0.006 0.0014 5 5 NARAYAN DAL UDYOG P. LTD. 2008-09 632 1.68 0.27 6 NARAYAN DAL UDYOG P. LTD. 2009-10 203 1.08 0.53 7 RADHA RANI AGRO IMPEX P. LTD. 2007-08 6000 15.77 0.26 8 -DO- 2008-09 7000 20.00 0.29 9 -DO- 2009-10 9100 26.00 0.29 6. WITH THE ASSISTANCE OF ABOVE CHART THE LEARNED AR SUBMITTED THAT THE NET PROFIT COMES LESS THAN % IN MOST OF THE CASES IN THE FIELD OF AGRO TRADING. THE LEARNED CIT(APPEALS) HAS APPLIED 3% GR OSS PROFIT RATE ON TURNOVER BUT HE HAS NOT CONSIDERED THE INDIRECT EXP ENSES. THE BANK TERM LOAN AND CASH CREDIT LIMIT WAS HEAVY AMOUNT DUE TO WHICH INDIRECT EXPENSES WAS MORE. HE SUBMITTED THAT THERE WAS FINANCE CHARGES I NCLUSIVE OF BANK INTEREST AT RS.55 87 856 OFFICE EXPENSES TO RS.22 29 250 S TAFF EXPENSES OF RS.8 14 330 AND DEPRECIATION OF RS.26 46 131. THE I NDIRECT EXPENSES (BANK INTEREST OF RS.55 87 856 AND DEPRECIATION OF RS.26 46 1341) WAS HEAVY AMOUNT DUE TO SECURE LOAN OF RS.5 18 77 821 FROM SY NDICATE BANK NEHRU PLACE NEW DELHI. IN SUPPORT HE PLACED RELIANCE ON THE FOLLOWING DECISIONS: I) CIT VS. CHOPRA BROTHERES (P) LTD. 252 ITR 412 ( P&H); 6 II) GUPTA CONSTRUCTION CO. VS. ACIT 84 TTJ (ALL.) 46; III) TARAT CONSTRUCTION CO. VS. ITO 56 TTJ (JAIPUR ) 492; & IV) ACIT VS. AMAR SINGH KISHAN CHAND 134 TAXMAN 6 80 (RAJ.). 7. THE LEARNED DR ON THE OTHER HAND RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. HE SUBMITTED THAT THE DECISIONS RELIED UPON BY THE LEARNED AR HAVING DISTINGUISHABLE FACTS ARE NOT HELPFUL TO THE ASSESSEE. 8. IT IS A WELL ESTABLISHED PROPOSITION OF LAW THAT ASSESSEES OWN TRADING RESULT IS THE BEST COMPARABLE FOR A REASONABLE ESTI MATION OF THE PROFIT. LAST YEAR ASSESSEE ITSELF WAS ESTIMATED WITH THE PROFIT @ 8%. KEEPING THIS MATERIAL ASPECT IN MIND AND DISCUSSING OTHER FACTOR S REGARDING SOME LIABILITY AND CLAIM RECEIVED WE ARE OF THE VIEW THAT THE LD. CIT(A) WAS VERY REASONABLE IN ESTIMATING THE PROFIT BY APPLYING GRO SS PROFIT RATE AT 3% OF THE TURNOVER AS THE ASSESSEE IS IN PROCESSING AND TRADI NG OF THE GRAM PULSES. WE ALSO NOTE THAT THOUGH THE LD. CIT(A) HAS WRITTEN TH E APPLICATION OF GROSS PROFIT RATE AT 3% HOWEVER UNDER THE ABOVE DISCUSS ED FACTS IN EFFECT IT IS APPLICATION OF THE NET PROFIT RATE AT 3% OF THE TUR NOVER. THE FACTS OF THE EXPENDITURE DEPRECIATION WERE ALREADY THERE BEFORE THE LD. CIT(A). WE THUS DO NOT FIND INFIRMITY IN THE FIRST APPELLATE ORDER IN THIS REGARD. THE SAME IS UPHELD. THE GROUND NOS. 1 TO 5 ARE THUS REJECTED. 7 9. IN RESULT THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 .1 1.2014 SD/- SD/- ( T.S. KAPOOR ) ( I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26 /11/2014 *MOHAN LAL *KAVITA COPY FORWARDED TO: 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR:ITAT ASSISTANT REGISTRAR