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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI V. DURGA RAO, HON’BLE & SHRI D.S. SUNDER SINGH, HON’BLEShri G.V.N. Hari – Advocate. Shri V. Appala Raju – Sr.DR
IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO, HON’BLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, HON’BLE ACCOUNTANT MEMBER ITA No. 76/VIZ/2016 (Asst. Year : 2012-13) ITO, Ward-1(1), vs. The Guntur District Co-op. Guntur. Marketing Society Ltd., Medical College Road, Kannavarithota, Guntur PAN No. AABCT 3924 G (Appellant) (Respondent)
ITA No. 161/VIZ/2016 (Asst. Year : 2012-13) The Guntur District Co-op. vs. ITO, Ward-1(1), Marketing Society Ltd., Guntur. Medical College Road, Kannavarithota, Guntur PAN No. AABCT 3924 G (Appellant) (Respondent) Assessee by : Shri G.V.N. Hari – Advocate. Department By : Shri V. Appala Raju – Sr.DR
Date of hearing : 24/04/2018. Date of pronouncement : 26/04/2018.
O R D E R PER V. DURGA RAO, JUDICIAL MEMBER
These cross appeals by the Revenue and the assessee are directed against the order of Commissioner of Income Tax (Appeals)-1, Guntur, dated 21/12/2015 for the Assessment Year 2012-13.
2 ITA No.76 & 161/VIZ/2016 (The Guntur Co-op Marketing Society Ltd.)
Facts of the case, in brief, are that assessee is a cooperative marketing society dealing with fertilizers, pesticides, civil supplies, commodities, notebooks, fireworks & govt. textbooks etc., filed its return of income by admitting total income at NIL. The Assessing Officer called upon the assessee to appear and to file all the relevant details before him, but of no avail. Therefore, the Assessing Officer completed the assessment under section 143(3) read with section 144 of the Income Tax Act, 1961 (hereinafter referred to as "Act") by estimating the income at 5% of the gross sales. On appeal, ld. CIT(A) scaled down the same to 2%. 3. On being aggrieved, Revenue carried the matter in appeal before the Tribunal. 4. Ld. Departmental Representative has submitted that Assessing Officer has rightly estimated the income of the assessee at 5% on gross sales and the ld. CIT(A) is not correct in scaling down the same to 2% without any basis. 5. On the other hand, ld. counsel for the assessee has submitted that all the details are available with the assessee and the estimation made by the Assessing Officer is on higher side. Therefore, he strongly supported the order passed by the ld.CIT(A).
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We have heard both the parties, perused the material available on record and gone through orders of the authorities below. 7. As observed by the ld. CIT(A), the assessee is a cooperative marketing society supplying fertilizers, pesticides, civil supplies, commodities, notebooks, fireworks & govt. textbooks etc. to its members. This is under the control of Government of Andhra Pradesh Co-operative Department and all the employees are appointed by the Govt. of Andhra Pradesh. The Chairman is a nominated person and supervises the functioning of employees. The ld. CIT(A) keeping in view of the above facts, scaled down the estimation made by the Assessing Officer from 5% to 2%. The relevant portion of the ld. CIT(A)’s order is extracted as under:- “I have gone through the facts of the case, contents of the assessment order and written submissions of the assessee. The AG has given reasonable opportunity by posting the case several times, but there is no compliance from the assessee, the assessee has neither appeared nor filed the details called for. Hence, the AG has completed the assessment based on the material available on record and worked out the GP at 5% on the total sales of Rs.35,52,99,598.99/-. But the assessee in the written submissions, it is mentioned that the assessee, the Guntur District Cooperative Marketing Society Ltd., is a primary Agricultural Co-operative Society supplying Fertilizers, Pesticides, civil supplies, Note-books, Govt. Text Books to its members. This is under the control of Govt. of Andhra Pradesh Co-operative Department and all the employees are appointed by Govt. of Andhra Pradesh. The Chairman is a nominated person and supervises the functioning of employees. Thus the Co-operative Society Limited is a Quasi-Government body established without any profit
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motto. Since it is a Government Organization dealing with all essential commodities, which are useful to farmers and students, and the element of profit is not a primary thing and usually in such a business the GP may be 2%. Hence, the AG is directed to adopt the GP at 2% on total sales of Rs.35,52,99,598.99/- and the assessee get relief for the remaining 3%. Hence, the AO is directed to re-compute the income of the assessee at 2% GP on total sales. Hence, this ground of appeal of the assessee is partly allowed.” 8. We have considered the assessment order and also the order passed by the ld. CIT(A) and find that ld. CIT(A) has scaled down the estimation made by the Assessing Officer from 5% to 2%, in our opinion, is fair and reasonable, hence, no interference is called for. 9. So far as cross appeal filed by the assessee is concerned, it is only supportive to the order of the ld. CIT(A). In view of the dismissal of the appeal filed by the revenue, the cross appeal filed by the assessee is also dismissed. 10. In the result, appeals filed by the Revenue and the assessee are dismissed. Order Pronounced in open Court on this 26th day of April, 2018.
sd/- sd/- (D.S. SUNDER SINGH) (V. DURGA RAO) Accountant Member Judicial Member Dated : 26th April, 2018. vr/-
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Copy to: 1. The Assessee - The Guntur District Co-op. Marketing Society Ltd., Medical College Road, Kannavarithota, Guntur. 2. The Revenue – ITO, Ward-1(1), Guntur. 3. The Pr.CIT, Guntur. 4. The CIT(A)-1, Guntur. 5. The D.R., Visakhapatnam. 6. Guard file. By order
(VUKKEM RAMBABU) Sr. Private Secretary, ITAT, Visakhapatnam.