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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: Shri Rajpal Yadav & Shri Amarjit Singh
आदेश/ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- The instant appeals for assessment year 2004-05 and 2005-06 vide ITA Nos. 72 &73/Rjt/2013 have been filed against the decision of CIT-IV, Rajkot on the identical issue in sustaining the addition of Rs. 2,50,000/- and Rs. 10 lacs respectively on earing commission importing quantity of CPO for lending his license. The assessment for both the years i.e. 2004-05 and 2005-06 was
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completed u/s. 144 of the act. In spite of giving number of opportunities, the assessee not made any compliance to the letters and notices issued during the course of assessment proceedings. Since the issue in appeal in both the assessment years is on identical facts, therefore, for the sake of convenience, we are taking assessment year 2044-05 contested vide ITA No. 72/Rjt/2013 as lead case and its finding will also be applicable to ITA No. 73/Rjt/2013.
The fact in brief is that the assessee received information from DRI, Gandhidham that assessee had made an application before Central Excise Divison- 2 Rajkot intending to import 1250.000 MT of CPO (IG) on the basis of their Central Excise Registration obtained by the assesseee. Accordingly, the assessee had imported total 1245.64 MT of CPO (IG) during the period from March, 2004 to August, 2004 which is reproduced as under:-
Vessel's name Bill of entry no. & dt Quantity MT Novena 3357/05/03/04 250 Novena 5978/29/04/04 250 Shamrock moon 9078/24/06/04 245.46 Shamrock moon 10599/15/07/04 250 Pacific sound 12239/09/08/04 250 Total 1245.64
The assessee had admitted in his statement recorded before the DRI that assessee under his proprietary concern Sri Ganesh Soap and Chemical Industries has given his license for importing the aforesaid consignment through Mr. Dinesh Pavari to other parties and he has received an amount of Rs. 2.5 lacs per import.
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Consequently, the assessing officer has added an amount of Rs. 2.5 lacs to the total income of the assessee.
The assessee has filed appeal before the ld. CIT(A). During the course of appellate proceedings before the ld. CIT(A), the authorized representative of the assessee has suggested income of the assesse be estimated at 5% of the total receipt of Rs. 2.5 lacs and the assessing officer was not justified in estimating the income at Rs. 2.5 lacs without any material. The ld. CIT(A) has rejected the contention of the assessee and held that it is undisputed fact that it is evident from the admission of the material on record that assessee has imported 1245.64 MT (IG) during the period from Marcy, 2004 to August, 2004 for some other business houses for which he has received an amount of Rs. 2.50 lacs for each bill of lading for just lending his license. This undisputed fact could not be disproved by the assessee before the ld. CIT(A) , therefore, the appeal of the assessee was dismissed.
During the course of appellate proceedings before us, it is noticed that the instant appeal was filed by the assessee in 2013 and the case was adjourned for 15 times, most of the times, the adjournment was taken by the counsel of the assessee. Considering the facts that it was quite old case, the adjournment application of the asessee was not found to be appropriate after considering the old appeal and issue involved in this case, therefore, request for adjournment was rejected.
We have ld. departmental representative and perused the material on record carefully. It is noticed from the statement of the assessee given before the Directorate of Revenue and the maternal referred by the assessing officer mentioned in detail at page 4 to 6 of the assessment order and submission of the
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assessee made before the ld. CIT(A) that it is clearly undisputed fact that assessee has received an amount of Rs. 2.50 lacs for which bill of lading for just lending his license. In spite of giving opportunities by the assessing officer and the ld. CIT(A) during the course of assessment and appellate proceedings, the assessee has failed to disprove the material fact that assessee has not disclosed the aforesaid amount earned from lending his license to some other business houses. During the course of appellate proceedings, the assessee has not given any evidence that he has incurred any expenditure for earning such income. Under such circumstances, we observed that it is not possible to earn such income without incurring any expenditure, therefore, we consider that it appropriative to allow 20% of such income which comes to Rs. 50,000/- as expenditure incurred for earning the aforesaid income. Accordingly, an amount of Rs. 2 lacs (Rs. 2,50,000/- - Rs. 50,000/-) is sustained as income earned from lending license. Similarly on identical fact and issue for assessment year 2005-06, 20% of 10 lacs which comes to Rs. 2 lacs is allowed as expenditure for earning the income in assessment year 2005-06. Therefore, an amount of Rs. 8 (10 lacs- 2 lacs) is sustained as income earned from lending his license to some other parties. Therefore, the appeal of the assessee is partly allowed.
In the combined result, both the appeals of the assessee are partly allowed.
Order pronounced in the open court on 13-09-2019
Sd/- Sd/- (RAJPAL YADAV) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad : Dated 13/09/2019 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:-
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Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order, Assistant Registrar, Income Tax Appellate Tribunal, Rajkot