SK. MD. HARUN,HOOGHLY vs. ITO, WARD - 23(4), HOOGHLY, HOOGHLY

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ITA 1657/KOL/2018Status: DisposedITAT Kolkata28 February 2019AY 2009-102 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal restricted the addition on alleged sales to the net profit component at 10% and reduced the ad hoc disallowance of labour charges from 5% to 2%. These modifications were made without prejudice to future assessment years.

What were the facts?

The assessee's appeal for AY 2009-10 was filed with a delay of 27 days due to health issues, which was condoned. The appeal challenged additions made to alleged sales and disallowance of labour charges.

What were the issues?

The key issues were the validity of additions made to alleged sales and the justification for ad hoc disallowance of labour charges.

Which sections of the Income-tax Act were involved?

Section 263,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA BENCH “SMC” KOLKATA

Before: Shri S.S, Godara

This assessee’s appeal for assessment year 2009-10, arises against the Commissioner of Income-tax (Appeals)-6, Kolkata’s order dated 07.05.2018 passed in case No.111/CIT(A)-6/Kol/28(4)/HG/15-16, involving proceedings u/s. 263 r.w.s.143(3) of the Income Tax Act, 1961; in short ‘the Act’. Heard both the parties. Case file perused.

2.

I notice at the outset that assessee’s instant appeal suffers of 27 days delay in filing stated to be attributable health related issues. The Revenue is fair enough in not disputing all these averments. I therefore condone the impugned delay of 27 days in filing of the instant appeal. The case is now taken up for adjudication on merits.

3.

The assessee’s former substantive ground seeks to reverse both the lower authorities action adding the entire alleged sales of ₹4,20,600/- in sarees job work business. Both the parties failed to dispute that the entire alleged sales also includes

ITA No.1657/Kol/2018 A.Y. 2009-10 Sk. Md. Harun Vs. ITO Wd-23(4) HGY Page 2 cost component of the raw materials and other heads of labour etc., I take into account all these clinching facts and circumstances to direct the Assessing Officer to restrict the impugned addition to the extent of net profit component therein @ 10% only with a rider that same shall not be treated as precedent in any other assessment year. The assessee gets part relief in above terms.

4.

Next comes labour charges disallowance of 5% of ₹57,20,435/- coming to ₹2,86,021/- on ad hoc basis. It transpires during the course of hearing that neither the lower authorities have drawn any comparative charge of labour expenditure nor the assessee could produce all the relevant details of the impugned expenditure. I therefore deem it appropriate in view of these facts and circumstances to restrict the impugned disallowance@ 5% to that @ 2% only with a rider that same shall not be treated as a precedent in any other assessment year. The Assessing Officer shall finalize consequential computation as per law.

5.

This assessee’s appeal is partly allowed in above terms. Order pronounced in open court on 28/02/2019 (S.S. Godara) Judicial Member Kolkata, *Dkp/Sr.PS "दनांकः- 28/02/2019 कोलकाता आदेश क" ""त"ल"प अ"े"षत / Copy of Order Forwarded to:- 1. अपीलाथ"/Appellant-Sk. Md. Harun Prop. Harun Jori Centre, Khanakul, Arambagh, Hooghly-712406

2.

""यथ"/Respondent-ITO, Ward-23(4), Aaykar Bhawan, G.T. Road, Khadina More, P.O. Chinsurah, Hooghly-712101 3. संबं"धत आयकर आयु%त / Concerned CIT 4. आयकर आयु%त- अपील / CIT (A) 5. &वभागीय ")त)न"ध, आयकर अपील"य अ"धकरण कोलकाता / DR, ITAT, Kolkata 6. गाड+ फाइल / Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील"य अ"धकरण, कोलकाता ।

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