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Income Tax Appellate Tribunal, RANCHI
Before: SHRI N.S.SAINI & SHRI PAVAN KUMAR GADALE
1 ITA No.107/Ran/2017
IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI
BEFORE SHRI N.S.SAINI, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER
ITA No.107/Ran/2017 A.Y. : 2006-2007 M/s Anant Metals Pvt. Ltd. vs ITO, Ward-1(1), C/o-Sri Vinay Kumar Jalan, Jamshedpur M/s O.P.Jalan & Associates Consultants LLP, 48 Cart Sarai Road, Upper Bazaar, Ranchi, Jharkhand-834001 PAN No. : AABCA 6546 P Respondent (Appellant) .
Assessee by : Shri Vinay Kumar Jalan & Rajiv Ranjan, Adv Revenue by :Shri P.K.Mondal, JCIT Date of Hearing : 29.05.2018 Date of Pronouncement : 30.05.2018
O R D E R Per Pavan Kumar Gadale, JM: This is an appeal by the assessee against the order of CIT(A),
Ranchi, all dated 15.03.2017 for the assessment year 2006-2007, wherein
the assessee has raised the following grounds of appeal :-
For that, the Ld.CIT(A) under the facts and circumstances of the case, erred in confirming the addition of Rs.10,251/- debited by the appellant as other charges such as service tax, demat expenses etc. in the profit and loss account. 2. For that, the Ld.CIT(A) under the facts and circumstances of the case, erred in confirming the addition of Rs.10,21,999/- considering it to be profit @8% of the turnover on an estimate basis in spite of the fact taken on record that the assessee has submitted the voluminous records which was
2 ITA No.107/Ran/2017 verified by the Hon’be CIT(A) by calling for the remand report.
At the outset, ld. AR of the assessee has not pressed the ground
No.1 and made endorsement. Accordingly, we dismiss the ground No.1 as
not pressed.
Brief facts relating to the ground No.2, are that the assessee is
engaged in the business of trading and filed the return of income for the
assessment year 2006-2007 on 30.11.2006 with total income of
Rs.202,982/- and the return of income was duly processed u/s.143(1) of
the Act and the case was selected for scrutiny. Subsequently, notice
u/s.143(2) & 142(1) of the Act were issued to the assessee. In compliance,
the AR of the assessee appeared from time to time and case was
discussed. Thereafter the AO completed the assessment and made
various additions and assessed total income at Rs.36,48,643/- and passed
order u/s.144 of the Act, dated 26.12.2008.
Aggrieved by the assessment order, the assessee has filed an
appeal with the CIT(A). In the appellate proceedings the assessee argued
the grounds and reiterated the submissions made before the AO. The
CIT(A) after considering the submissions of assessee and the findings of
AO, partly allowed the appeal of the assessee.
Aggrieved by the order of CIT(A), the assessee has filed an appeal
before the Tribunal.
3 ITA No.107/Ran/2017
Ld. AR before us submitted that the AO considered the sale of the
assessee from the profit and loss account and estimated the income
irrespective of the fact that the assessee’s books of accounts are audited.
The AO at the time of hearing has found that no books of accounts have
been produced and no submission has been made. Therefore, the AO
estimated the income at 10% of turnover of Rs.1,53,09,970/- and made
addition of Rs.15,30,099/-. On appeal, the ld.CIT(A) has restricted the
addition to the extent of 8% after giving credit to the profit already offered
by the assessee at Rs.2,02,091/-, therefore, effective addition sustained by
the CIT(A) is Rs.12,24,980/-.
Contra, ld.DR relied on the orders of lower authorities.
We heard the rival submissions and perused the material on record.
The sole disputed issue with regard to estimating the income by the AO at
10% on the total turnover, whereas the CIT(A) granted relief restricting the
estimation at 8% as against 10% estimated by the AO. The contention of
the assessee before us that the estimation is at higher side and the
assessee has been offering net profit at the following rates for the
preceding and subsequent years :- Assessment Year Sales NP/Sales Net Profit (Profit % before Tax as per P&L Account) 2016 - 2017 (as on 31.03.2016) 3,86,19,303 2,17,017 0.562 2015 - 2016 (as on 31.03.2015) 5,14,58,514 6,61,549 1.286 2014 - 2015 (as on 31.03.2014) 4,42,49,819 7,05,796 1.595 2013 - 2014 (as on 31.03.2013) 3,69,25,356 6,45,747 1.749 2012 - 2013 (as on 31.03.2012) 2,90,91,405 13,03,886 4.482 2011 - 2012 (as on 31.03.2011) 1,37,02,359 8,02,552 5.857 2010 - 2011 (as on 31.03.2010) 1,46,96,797 4,956 0.034
4 ITA No.107/Ran/2017 2009 - 2010 (as on 31.03.2009) -53,392 1,62,66,757 -0.328 2008 - 2009 (as on 31.03.2008) 17,128 2,27,20,602 0.075 2007 - 2008 (as on 31.03.2007) 9,271 1,69,10,354 0.055 2006 - 2007 (as on 31.03.2006) 9,71,513 1,53,09,970 6.346 2005 - 2006 (as on 31.03.2005) 10,77,862 1,37,88,682 7.817 2004 - 2005 (as on 31.03.2004) 54,739 1,58,60,903 0.345 2003 - 2004 (as on 31.03.2003) 26,960 1,47,29,124 0.183 2002 - 2003 (as on 31.03.2002) 29,083 1,22,32,522 0.238 2001 - 2002 (as on 31.03.2001) 1,23,130 74,42,693 1.654 2000 - 2001 (as on 31.03.2000) 61,809 60,75,630 1.017
Therefore, the ld.AR submitted that the addition made by the AO is higher
and considering the chart given by the assessee regarding net profit rate
offered for the subsequent and preceding assessment years, the net profit
may be estimated at a reasonable rate. Ld. AR before us also filed audit
report, balance sheet and profit and loss account for the assessment year
2006-07 along with computation of income. Ld. AR drew our attention to
the computation of income and submitted that the amount of Rs.2,02,981/-
is the gross total income of the assessee which includes income from
various other sources other than the head profits & gains from business &
profession and also it excludes the incomes which are exempt under the
Income Tax Act. Ld. AR further drew our attention to the profit and loss
account and submitted that the amount of Rs.9,71,513/- is the profit before
tax, which includes profit on sale of long term investments Rs.7,45,252/-,
profit on sale of current investment Rs.1,77,877/-, dividend received
Rs.70,607/- and interest from income tax refund Rs.5,842/- and submitted
that if these amounts are reduced from the aforementioned profit before
tax, the net amount comes to Rs.(-)28,065/- as shown in the computation
5 ITA No.107/Ran/2017 of income. We have perused the chart placed by the assessee containing
the net profit rate shown by the assessee for the different assessment
years and considering the same, we are of the considered view that the
matter needs verification and examination at the end of AO, who shall
consider the claim of the assessee as per the chart placed before us with
respect to net profit on the total turnover shown by the assessee in the
different assessment years. This ground of appeal of the assessee is
allowed for statistical purposes.
In the result, appeal of the assessee is partly allowed for statistical
purposes.
Order pronounced in the open court on 30/05 /2018
Sd/- Sd/- (N.S.SAINI) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER Ranchi, Dated 30/05/2018 Prakash Kumar Mishra , Sr. Ps Copy of the Order forwarded to : 1. The Appellant – M/s Anant Metals Pvt. Ltd. C/o-Sri Vinay Kumar Jalan, M/s O.P.Jalan & Associates Consultants LLP, 48 Cart Sarai Road, Upper Bazaar, Ranchi, Jharkhand-834001 2. The Respondent – ITO, Ward-1(1), Jamshedpur 3. The CIT(A) concerned 4. CIT , concerned 5. DR, ITAT, Ranchi 6. Guard file. BY ORDER,
//True Copy// SR.PS, ITAT, RANCHI