SANTANU KUMAR SATPATHY,ANGUL vs. ITO, WARD-1, DHENKANAL

आयकर अपीऱीय अधिकरण, “एस.एम.सी”, न्यायपीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, CUTTACK श्री चन्द्र मोहन गगग, न्द्याययक सदस्य के समऺ । BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER आयकर अऩीऱ सं./ITA No.434/CTK/2016 (नििाारण वषा / Assessment Year :2010-2011) Sri Santanu Kumar Satpathy, Vs. ITO, Ward-1, Dhenkanal At/PO: Nuapada, Chhendipada, District-Angul स्थायी ऱेखा सं./ जीआइआर सं./ PAN/GIR No. : ATOPS 6582 J (अऩीऱाथी /Appellant) .. (प्रत्यथी / Respondent) यनधागररती की ओर से /Assessee by : Shri Piyus Mishra, Advocate राजस्व की ओर से /Revenue by : Shri Subhendu Dutta, DR सुनवाई की तारीख / Date of Hearing : 13/06/2019 घोषणा की तारीख/Date of Pronouncement 24/07/2019 आदेश / O R D E R This is an appeal filed by the assessee against the order of CIT(A)- 2, Bhubaneswar, dated 23.08.2016 passed in First Appeal No.118/2015- 16 for the assessment year 2010-2011. 2. As per the office note, there is a delay of six days in filing the present appeal. Ld. AR has filed an application along with an affidavit stating therein that due to illness, the Advocate, who is appearing on behalf of the assessee, could not file the appeal in time, which occurred six days delay in filing the appeal and prayed for condonation of delay. Ld.DR did not object to the above contention of the assessee for condoning the delay. I have gone through the application filed by the assessee and observed that there is a sufficient and reasonable cause for

2 ITA No.434/CTK/2016 delay in filing the present appeal. Accordingly, I condone the delay of 6 days in filing the present appeal and appeal is heard on merits. 3. First of all, it is worth mentioning that the originally this appeal was heard and dismissed by my predecessor vide order dated 05.04.2017. Thereafter a miscellaneous application No.17/CTK/2017 under Rule 24 of the Income Tax Appellate Tribunal Rules, 1963 was filed which was allowed by this Bench of the Tribunal vide order dated 27.03.2017. Therefore, this appeal is heard and is being disposed off by this order. 4. Apropos grounds No.1 to 3 along with additional ground. I have heard both the sides and carefully perused the materials available on the record of the Tribunal. 5. Learned Assessee’s Representative (ld. AR) submitted that the estimation of income made by the AO in the order u/s.144 of the Income Tax Act, 1961 (for short ‘the Act’) is illegal and arbitrary as the determination made by him has been passed on his surmises and conjectures without any cogent reasons and considering the nature of goods dealt by the assessee and audited certificate submitted by the assessee. Ld. AR submitted that the estimation of 5% of sales/gross receipts/turnover of assessee is justified and correct in the retail business of cement, steel and rod etc. Therefore, the same may kindly be dismissed and returned income of assessee may kindly be accepted. 6. Replying to the above, learned Department Representative (ld. DR) strongly supported the orders of authorities below and submitted that the assessee did not give any details or documents to prove that the profit

3 ITA No.434/CTK/2016 percentage estimated by the AO is excessive and despite service of several notice on the assessee the assessee did not comply with the same during the assessment proceedings, as well as no submission has been filed. Ld. DR vehemently pointed out that even during the first appellate proceedings the assessee did not submit any submission or explanation or any other documentary evidence establishing that the profit percentage estimated by the AO is incorrect, arbitrary and not justified. Therefore, ld. DR submitted that the estimation of gross profit of 5% of turnover is not correct in view of the fact that the assessee has deposited cash of Rs.52,46,120/- in the saving bank account during F.Y.2009-2010 pertaining to A.Y.2010-2011, which is sale proceeds of sales affected by the assessee. Ld. DR finally submitted that the orders of authorities below may kindly be upheld by dismissing the grounds of appeal of the assessee. 7. On careful consideration of rival submissions of both the sides, I am of the view that neither before the authorities below nor before this bench the assessee has submitted any basis or explanation challenging the estimation made by the authorities below @5% of turnover. If I logically evaluate the estimation of gross profit made by the AO @5% of the total sale receipts/turnover and keeping in view the factum of cash sales of more than Rs.50 lakhs undertaken by the assessee then in absence of any other material favouring the contention of assessee, the estimation of gross profit made by the AO and confirmed by the CIT(A) i.e. 5% of total sales receipts/turnover is quite justified and correct. Accordingly, I have no

4 ITA No.434/CTK/2016 reason to take a different view as has been taken by the authorities below and there is no ambiguity, perversity or any other valid reason to interfere with the same, hence, the grounds No.1 to 3 and additional ground of appeal of the assessee are dismissed. 8. With regard to ground No.4, ld. AR submitted that the ld. CIT(A) has erred in confirming the addition made by the AO on account of interest from OCL India Ltd. On the other hand, ld. DR relied on the orders of lower authorities. 9. On careful consideration of rival submissions of both the sides, I find that the assessee has neither submitted any submission either during the course of assessment proceeding or during the course of appellate proceedings, even before us, there is no submission on the part of the assessee in this regard. In the appellate proceeding the CIT(A) has observed as under :- “Ground No, 4: This ground is regarding addition made by the AO on account of the interest of security deposits and interest received from 0CL India Limited. No submission has been made during the course of appeal proceedings before me on this issue. Considering this additions made by the AO of Rs.9,028/- being interest of Rs.5,257/- being interest from OCL India Limited are confirmed and the ground of appeal is dismissed.” From the above observations of the ld. CIT(A), I do not see any good and valid reason to interfere in the above findings of the CIT(A) and the same is hereby upheld and the ground No.4 of assessee is dismissed. 10. With regard to ground No.5, I find that this issue of determination of income on credit note on Rs.77,709/-, the assessee has not agitated the

5 ITA No.434/CTK/2016 same in its grounds of appeal before the CIT(A) and the same has been raised before the Tribunal for the first time. Accordingly, I am of the view that to render substantial justice, this issue is restored to the file of CIT(A) to decide the same afresh and the assessee is directed to substantiate its claim before the CIT(A) with proper documentary evidence. Needless to say, the assessee should be given sufficient opportunity of hearing. Thus, this ground of appeal of the assessee is allowed for statistical purposes. 11. In the result, appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 24/07/2019. Sd/- (CHANDRA MOHAN GARG) न्यानयक सदस्य / JUDICIAL MEMBER कटक Cuttack; ददनांक Dated 24/07/2019 प्र.कु.मम/PKM, Sr.P.S. आदेश की प्रनिलऱपप अग्रेपषि/Copy of the Order forwarded to : अऩीऱाथी / The Appellant- . 1. Sri Santanu Kumar Satpathy, At/PO: Nuapada, Chhendipada, District-Angul 2. प्रत्यथी / The Respondent- ITO, W ard-1, Dhenkanal आयकर आयुक्त(अऩीऱ) / The CIT(A), 3. आयकर आयुक्त / CIT 4. 5. ववभागीय प्रयतयनधध, आयकर अऩीऱीय अधधकरण, कटक / DR, ITAT, Cuttack 6. गार्ग पाईऱ / Guard file. सत्यावऩत प्रयत //True Copy// आदेशािुसार/ BY ORDER,

(Senior Private Secretary) आयकर अपीऱीय अधिकरण, कटक / ITAT, Cuttack