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Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH
Before: Shri Rajpal Yadav & Shri Amarjit Singh
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH Before: Shri Rajpal Yadav, Judicial Member And Shri Amarjit Singh, Accountant Member ITA No. 3079 /Ahd/2016 Assessment Year 2011-12
The DCIT, Sri Suresh Prasad H. Circle-1(2), Yadav, E/25, Aditya Park 2nd Floor, Aayakar Bhavan, Vs Soc. Behind Nilam Hotel, Race Curse Circle, Baroda Janbuva, Crossing Road, (Appellant) Maneja, Baroda-390013 PAN: ACDPY1570A (Respondent)
Revenue by: Shri Mudit Nagpal, Sr. D.R. Assessee by: None
Date of hearing : 11-05-2018 Date of pronouncement : 22-05-2018 आदेश/ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-
This Revenue’s appeal for A.Y. 2011-12, arises from order of the CIT(A)- 5, Vadodara dated 16-08-2016, in proceedings under section 143(3) of the Income Tax Act, 1961; in short “the Act”.
The revenue has raised following grounds of appeal:- “1. On the facts and in the circumstances of the case and in law, the Ld. CIT (Appeals) erred in deleting the disallowance made on account of undisclosed income on receipts, without appreciating the fact that the percentage of net profit as determined by the Ld. CIT (A) i.e. 5.5% is less than the net profit declared by the assessee in his revised return of income which is at 7.7%.”
I.T.A No. 3079/Ahd/2016 A.Y. 2011-12 Page No 2 DCIT vs. Shri Suresh Prasad H. Yadav
The brief fact of the case is that the assessee has furnished return of income on 30th March, 2012 declaring income of Rs. 8,52,790/-. Subsequently, the case was selected under scrutiny by issuing of notice u/s. 143(2) of the act on 1st August, 2012. In this case, the assessee had furnished this original return of income u/s. 139(4) of the act declaring total receipt of Rs. 82,38,675/-. Subsequently, the assessee has furnished revised return of income u/s. 139(5) of the act on 29th March, 2013 which was treated as invalid return of income by the assessing officer. On verification of form no. 26A, the assessing officer has noticed that the total receipt of the assessee was Rs. 6,72,28,775/ which was also disclosed in the revised invalid return of income. The assessing officer noticed that as per the return of income filed u/s. 139(4) the assessee has declared net profit @ 7.7% whereas in the invalid revised return of income, the assessee has declared net profit @ 3.93%. The assessing officer observed that assessee has declared less profit on its total receipt. Therefore, the assessing officer has not accepted the books result based on revised return of income filed by assesse and estimated the net profit @ 14% on the total receipt of the assessee of Rs. 6,35,33,857/- after excluding service tax. Consequently, the assessing officer has made addition of Rs. 77,41,325/- to the total income of the asssessee.
Aggrieved assessee filed appeal before the ld. CIT(A). The ld. CIT(A) has provided part relief to the assessee. The Ld. CIT(A) has restricted the addition to the extent of Rs. 5.5% of the turnover of the assessee on the basis of similar profit declared in the comparable cases of M/s. Chechmate Securities Pvt. Ltd. The ld. CIT(A) has also placed reliance on the judicial pronouncement of Hon’ble Supreme Court in the case of Kachwala Gems Vs. JCIT (2007) 158 taxman 71 (SC).
We have heard the ld. departmental representative and perused the material on record carefully. The assessee has filed his original return of income
I.T.A No. 3079/Ahd/2016 A.Y. 2011-12 Page No 3 DCIT vs. Shri Suresh Prasad H. Yadav
u/s. 139(4) of the act on 30-03-2012 declaring total income of Rs.8,52,790/-. Subsequently, the assessee had filed revised return of income u/s. 139(5) of the act on 29-03-2012 which was treated as invalid as per the provision of section 139(5) of the act as the assessee had filed its original return of income u/s. 139(4) of the act and not under section 139(1) of the act. As per information in form no. 26A the total receipt of the assessee was shown at Rs. 6,72,28,775/- whereas in the invalid revised return of income the assessee had shown the total receipt of Rs. 6,35,33,857/- after excluding service tax portion of Rs. 45,68,909/-. The assessee has shown profit @ 7.7% on the total receipt of Rs. 82,38,675/- declared in the return of income filed u/s. 139(4) of the act. The ld. CIT(A) after considering the judicial findings as elaborated a in this order estimated the net profit @ 5.5% on the basis of comparable cases of M/s. Chechmate Security Services Pvt. Ltd. After considering the facts and material on record we observe that the assessing officer has not demonstrated any basis of estimation of net profit @ 14% on the total receipt. In view of the above, we consider that ld. CIT(A) has justified the estimation of the net profit at 5.5% on the basis of net profit of the parties operating in the assessee’s line of business. Therefore, we do not find any infirmity in the findings of ld. CIT (A). Accordingly, the appeal of the Revenue is dismissed.
In the result, the appeal of revenue is dismissed.
Order pronounced in the open court on 22-05-2018
Sd/- Sd/- (RAJPAL YADAV) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad : Dated 22/05/2018 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT
I.T.A No. 3079/Ahd/2016 A.Y. 2011-12 Page No 4 DCIT vs. Shri Suresh Prasad H. Yadav
CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद