M/S PEST-O-KILL vs. COMMISSIONER OF INCOME TAX BILASPUR

Briefly stated, facts oftthe case are that the appellant/assessee tiled ‘f? return showing total income of Rs.7,675l along with photocopy of the audited account as per Section 44AB of tie Act including Balance Sheet contract and Profit & Loss Account The casle was taken up for scrutiny afte l l l x u d 1 t n, n r

On the basis of aforesaid facts, incom lot the assessee was assessed as Rs.4,86,980/— after adding disallowancbs under various heads as mentioned in para-6 of the Assessment Order and accordingly, demand note was issued.

On appeal by the assessee, CIT(Ai partly allowing the appeal, reduced disallowances to an across the board figure of Rs.50,000/-. However, addition of Rs.2,97,839/~ in income of the assessee by the Assessing Officer (AO) was confirmed.

On second appeal by the assesse, the income Tax Appellate Tribunal (ITAT) confirmed the order of the C (A) and dismissed the appeal by the impugned order.

Shri Rajeev Shrivastava, learned couri ei appearing for the appellant, vehemently argued that the sum of Rs.2,97, 39l- received by the assessee was towards the gross payment received by: him from Balco for the work of a: repair and maintenance done by the assessee, and the same has been added in income of the assessee, whereas, the AO ought to have computed ll l l r x i r i r l i li ‘

Tax, Central [I Vs. Suresh N. Gupta1, it was argued that under the Income Tax Act‘ tax is ievied on income and nothing else.

Is the rate at whlch tax Is Imposed and» the fourth Is the value to which the rate Is applied for computing tax liability Ilf there is any ambigwty in any of the four concepts then levy would fail i’

On the other hand Shri Rajeshwara Rao learned counsel for the respondent-revenue argued that the appellant was afforded With several opportunities before making ex—parte assessment under Section 144 of the Act There was a difference of Rs 2 97 839l- between the receipt shown in the return fled by the assessee and the adtual receipt from Balco derived from TDS certificate enclosed with the returh and also from the documents received from Balco in respect of the dontract work executed by the assessee Firm during the assessment year 001 -02. The appellant/assessee was served with a show-cause notice and called upon to explain the above l if :i i difference failing which ex-parte assessmetnt was contemplated. However, despite service of notice, the assesses did } ot come forward to explain the discrepancy and in these circumstances, Rsl ii 2,97,839i- was added in income of the assessee. The argument of the ap‘i ellant that the total amount of Rs.2,97.839/- could not be added in inco ‘ e of the assessee and for the purposes of assessing income. profit oud t to have been computed as computed on the return amount tiled by ]he assessee, has rightly been rejected on the ground that expenses owards purchases and other expenses in the business have been duly a counted for- by the assessee in his Profit & Loss Account submitted along ii k.“ th his return. ln the absence of ’ any valid explanation for suppression of the above receipts in his return, the same has rightly been accepted as addition l income of the assessee ii ll

We have heard learned counsel for the parties and perused the material available on record, including the orders of both the Tribunals l ‘ i

The Iaw laid down in the iudgments cited by the appellants, is that the income tax on a given rate can be applied to the assessee oniy after assessing the taxable income, meaning thereby that before applying the rate at which tax is to be levied upon the assessee, his income has to be assessed. In thednstant case. the assessee filed his return for the assessment year showing gross receipt of Rs.38,75,298. On verification of the documents enclosed with the return and information received from Balco, it revealed that the assessee had suppressed gross receipt of Rs.2,97,839/-. The appellant had also filed Profit & Loss Account showing total income of Rs.7l675/-. The appellant was afforded withl an opportunity to explain the above discrepancy. The explanation forwaided by the appellant for the aforesaid discrepancy was again forwardedl‘to the AO and remand report was obtained. 0n receiving the remand reporti, the CIT (A) forwarded copy of the same along with annexures to the appellant for giving his response, however, he failed to give his response. ‘ In these circumstances, the suppressed receipt amount of Rs.2,97,839/-§ihas been added in income of the appellant.’ In our considered opinion, thetfreasoning assigned by the A0, which has been subsequently confirmed in CIIT (A) and ITAT. is proper and addition of the aforesaid amount in income ofi the assessee has been rightly made. No substantial question of law, as progposed by the appellant, arises for adjudication of this appeal.

In the result, the appeal being devoit1I‘ of substance deserves to be dismissed at the admission stage itself and isl, accordingly, dismissed. / L l I Sd/— . l fk ,Jgl, I . R.N. Chandrakar Dhirentira Mishra ‘ ‘ Judge k” Judge /r"i: