What did the Tribunal hold?

The Tribunal found that an estimation of 4% business profit on gross receipts was reasonable. The Assessing Officer was directed to re-estimate the profit at 4% for the relevant assessment years.

The assessee, a transport contractor, declared a certain income. The Assessing Officer estimated profit at 5% of gross receipts due to incomplete details in lorry hire charge bills. The CIT(A) reduced this to 4.5%.

What were the issues?

The primary issue was the reasonableness of the estimated profit on lorry hire charges due to insufficient documentation of payments to lorry owners.

Suman Choudhari vs DCIT | ITAT Visakhapatnam 2018

Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM

Before: SHRI V. DURGA RAO, HON’BLE & SHRI D.S. SUNDER SINGH, HON’BLE

For Appellant: Shri G.V.N. Hari – Advocate

For Respondent: Shri P.S. Murthy – Sr.DR

Hearing: 22/02/2018

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.302/VIZ/2016 (Asst. Year : 2010-11) AND ITA Nos. 378 & 379/VIZ/2017 (Asst. Year : 2009-10 & 2012-13)

Suman Choudhari, vs. 1. DCIT, Circle-1(1), Proprietrix : Triveni Transport, Visakhapatnam. DNo. 10-1-43, Siripuram Fort, Sampath Vinayaka Temple 2. ACIT, Circle-1(1), Road, Visakhapatnam. Visakhapatnam PAN No. ADIPC 8524 C (Appellant) (Respondents)

Assessee by : Shri G.V.N. Hari – Advocate. Department By : Shri P.S. Murthy – Sr.DR Date of hearing : 22/02/2018. Date of pronouncement : 23/02/2018. O R D E R PER V. DURGA RAO, JUDICIAL MEMBER

These appeals by the assessee are directed against the separate orders of Commissioner of Income Tax (Appeals)-1, Visakhapatnam, dated 23/03/2016 for the Assessment Year

2 ITA Nos.378 & 379/VIZ/2017 ITA No.302/VIZ/2016 (Suman Choudhari)

2010-11; and dated 21/03/2017 for the Assessment Years 2009-10 & 2012-13. Assessment Year 2009-10: 2. Facts of the case, in brief, are that assessee is in the business of transport contractor, filed his return of income by declaring total income of Rs. 14,45,030/-. The case of the assessee was selected for scrutiny and after following due procedure, assessment is completed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as "Act"). During the course of assessment proceedings, the Assessing Officer has issued a notice under section 143(2) of the Act. In response to the notice, the assessee produced books of account, bills & vouchers for verification. The Assessing Officer has noted, upon examination of the bills and vouchers, that most of the bills/ vouchers for lorry hire charges are self-made and complete details are not available for lorry owners, to whom these charges are paid. Most of the bills contain only some lorry numbers and owner names with neither PAN nor complete address particulars of lorry owners. By observing the above, the Assessing Officer has estimated the income of the assessee at 5% of the gross receipts and assessment is completed.

3 ITA Nos.378 & 379/VIZ/2017 ITA No.302/VIZ/2016 (Suman Choudhari)

On appeal, ld. CIT(A) restricted the estimation made by the Assessing Officer from 5% to 4.5%. 4. Before us, ld. counsel for the assessee has submitted that estimation made by the Assessing Officer and restricted by the ld.CIT(A) is on higher side, the same may be reduced. 5. On the other hand, ld. Departmental Representative relied on the orders of the authorities below. 6. We have heard both the parties, perused the material available on record and orders of the authorities below. 7. The assessee is in business of transport contractor, filed his return of income admitting total income of Rs. 14,45,030/-. The assessee has also filed all the details before the Assessing Officer, such as, books of account, bills & vouchers. After verification, the Assessing Officer estimated the business profit at 5% of gross receipts, which was reduced to 4.5% by the ld. CIT(A). By considering the business carried by the assessee, we are of the opinion that estimation of the business profit of the assessee at 4% is reasonable. Accordingly, we set aside the order passed by the ld. CIT(A) and direct the Assessing Officer to estimate the business profit of the assessee at 4% on gross contract receipts. Thus, this appeal filed by the assessee is partly allowed.

4 ITA Nos.378 & 379/VIZ/2017 ITA No.302/VIZ/2016 (Suman Choudhari)

Assessment Years 2010-11 & 2012-13 8. In regard to Assessment Years 2010-11 & 2012-13 are concerned, in view of our decision in Assessment Year 2009-10, the Assessing Officer is directed to follow the same in these assessment years also. 9. In the result, appeals filed by the assessee are partly allowed. Order Pronounced in open Court on this 23rd day of Feb., 2018.

Sd/- sd/- (D.S. SUNDER SINGH) (V. DURGA RAO) Accountant Member Judicial Member Dated :23rd February, 2018. vr/- Copy to: 1. The Assessee - Suman Choudhari, Proprietrix : Triveni Transport, DNo. 10-1-43, Siripuram Fort, Sampath Vinayaka Temple Road, Visakhapatnam. 2. The Revenue - 1)DCIT, Circle-1(1), Visakhapatnam 2) ACIT, Circle-1(1), Visakhapatnam 3. The Pr.CIT-1, Visakhapatnam. 4. The CIT(A)-1, Visakhapatnam. 5. The D.R., Visakhapatnam. 6. Guard file. By order

(VUKKEM RAMBABU) Sr. Private Secretary, ITAT, Visakhapatnam.

5 ITA Nos.378 & 379/VIZ/2017 ITA No.302/VIZ/2016 (Suman Choudhari)

SUMAN CHOUDHARI,VISAKHAPATNAM vs. DCIT, CIRCLE-1(1), VISAKHAPATNAM

What did the Tribunal hold?

What were the facts?

What were the issues?

Which sections of the Income-tax Act were involved?

Recent GST High Court judgments