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Income Tax Appellate Tribunal, KOLKATA ‘B’ BENCH, KOLKATA
Before: Sri J. Sudhakar Reddy & Sri Aby T. Varkey
Appearances by: Sh. S.K. Tulsiyan, Adv., Ms. Puja Somani, ACA & Ms. Lata Goyal, ACA, appeared on behalf of the Assessee. Smt. Ranu Biswas, Addl. CIT, appeared on behalf of the Revenue. Date of concluding the hearing : March 9th, 2021 Date of pronouncing the order : March 24th, 2021 ORDER
Per J. Sudhakar Reddy, AM:
This is an appeal filed by the assessee directed against the order of the Learned Commissioner of Income Tax (Appeals), Burdwan [hereinafter the “CIT(A)”], passed u/s. 250 of the Income Tax Act, 1961 (the ‘Act’), dated 23.09.2019 for the Assessment Year 2015-16.
There is a delay of 328 days in filing of the appeal. After hearing the contentions and perusing the petition for condonation of delay and the affidavit filed, we are convinced that the assessee is prevented from sufficient cause from filing of this appeal in time. The partner of the assessee firm who was looking after the income-tax matter of the firm had severe illness and due to COVID-19 Pandemic filing of the appeal got delayed. Hence, we condoned the delay and admit the appeal. 3. The assessee is a partnership firm and is in the business of rice milling and rice bran. There was a survey u/s 133A of the Act on the business premises of the firm on 04.02.2015. The assessee filed its return of income for the AY 2015-16 on 24.03.2016 declaring total income of ₹6,74,800/-. The AO passed an order u/s 143(3) of the Act
Assessment Year: 2015-16 Lakshmi Mata Rice Mill. determining the total income at ₹1,20,14,790/-, inter alia making an addition by estimating the Gross profit @ 8% of sales in the place of 2.44% declared by the assessee on the ground that the declared Gross Profit rate is low. The AO records that “I am satisfied that in the absence of the books of accounts the true and correct Profit are not ascertainable and therefore it is a fit case for application of the provision of Section 145(3) and therefore the book of accounts are rejected.” He also records that the assessee had not produced concrete evidence nor has substantiated the expenses.
Aggrieved, the assessee carried the matter in appeal. None appeared before the first appellate authority. The ld. CIT(A) dismissed the appeal of the assessee. Further aggrieved, the assessee is before us.
We have heard Sh. S.K. Tulsiyan, ld. advocate on behalf of the assessee and Smt. Ranu Biswas, Addl. CIT(D/R) on behalf of the Revenue. On a careful consideration of the facts and circumstances of this case and the papers on record we hold as follows.
In this case the AO has estimated the Gross Profit of the assessee @ 8% of Gross sales. We find that under similar circumstances the ld. CIT(A), Burdwan in the case of M/s. Jamini Rice Mill in Appeal No. 32/CIT(A)/BWN/ITO,Wd-1(3)/Bwn/2018-19 for the AY 2014-15 order dated 31.12.2018 the ld. CIT(A) at para-5.6 held as follows:
“5.6. In similar cases, the GP rates shown by some other 5 rice mills of Burdwan District for the A.Y. 2014-15 which are under the jurisdiction of Income Tax Office, Burdwan are taken into consideration: Name: PAN: A.O. Jurisdiction: GP Rate in % R.S. Agro Industries AAHFR2286C WD - 2(2) 3.40 Nirala Rice Mill (P) Ltd. AADCN0244R Cir - 2 2.80 Astha Rice Mill AAGCA5179B Cir- 1 2.77 Radha Krisbna.RiceMill AAEFR-l-l-5 !P WD – 2(4) 2.20 Radha Damodar Rice Mill AAJFR7904F WD - 2(4) 1.80 As such, it is found that the average GP rate of the 15 rice mills mentioned above, for the A.Y. 2014-15 comes to 2.90% of the total turnover whereas the appellant has submitted that its GP rate for the A.Y. 2014-15 is 2.25%. In the facts and circumstances of the case, it is reasonable and justiciable to adopt the G.P rate for the A.Y. 2014-15 at 3% of the turnover.” 5.1. Similar was the view of the ld. CIT(A), Burdwan in the case of Bharat Tirtha Rice Mill in Appeal No. 33/CIT(A)/BWN/ITO, Wd-1(1)/Bwn/2018-19 for the AY 2014-15 order dated 02.01.2019. We do not find any reason for the ld. CIT(A), Burdwan to take a different view in this case, and estimate Gross Profit @ 8% of the Gross sales when the Assessment Year: 2015-16 Lakshmi Mata Rice Mill. very same ld. CIT(A), Burdwan has estimated the Gross Profit @ 3% of the turnover in those cases. The ld. CIT(A), Burdwan should be consistent in his view. We find that during the year the assessee disclosed the Gross Profit of 2.4% of the total turnover. We also note that the turnover of the assessee during the current financial year is ₹20,40,22,835/- which is much higher than the turnover for the preceding AY 2014-15 which is ₹13.34 crores and for the AY 2013-14 which was only ₹5.13 crores. The turnover for the consequent AY 2016-17 and AY 2017-18 are much lesser than the turnover of the current year. Under these facts and circumstances we are of the considered opinion that interest of justice would be met if the Gross Profit of the assessee is estimated @ 3% of the total turnover, as was done by the very same ld. CIT(A) in the case of M/s. Jamini Rice Mill (supra) and in the case of Bharat Tirtha Rice Mill (supra) on similar facts and circumstances. The ld. D/R could not point out any variation in facts between the case of the assessee and the other two cases referred above. 5.2. As this is a case of estimation of income, we do not see any justification to the plea of the ld. D/R to restore the matter to the file of the ld. CIT(A) for fresh estimation as it would be an empty formality. 5.3. All other grounds raised by the assessee are dismissed. The AO is directed to compute the Gross Profit of the assessee @ 3% of the turnover.
6. In the result, the appeal of the assessee is allowed in part. Kolkata, the 24th March, 2021. Sd/- Sd/- [Aby T. Varkey] [J. Sudhakar Reddy] Judicial Member Accountant Member Dated: 24.03.2021 Bidhan (P.S.)
Assessment Year: 2015-16 Lakshmi Mata Rice Mill. Copy of the order forwarded to:
1. 1. Lakshmi Mata Rice Mill, Village-Balabati, PO-Torkona, Burdwan-713 423.
2. ITO, Ward-2(1), Burdwan.
3. CIT(A), Burdwan. (sent through mail) 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. (sent through mail)