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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2ND DAY OF JANUARY, 2020 PRESENT THE HON’BLE MR. JUSTICE ARAVIND KUMAR AND THE HON’BLE MR. JUSTICE N.S. SANJAY GOWDA ITA NO.862/2018 BETWEEN:
SHRI. M.B. GANAPATHY M.B. WINES, PONNANPET ROAD, GONIKOPPAL POST VIRAJPET TALUK KODAGU – 571 213 PAN NO : AHOPG1640F. ...APPELLANT (BY SMT. VANAJA M.R, ADVOCATE)
AND: ITO, WARD - 1 MADIKERI. …RESPONDENT (BY SRI. E.I. SANMATHI, ADVOCATE)
THIS APPEAL IS FILED UNDER SECTION 260A OF INCOME TAX ACT, 1961 PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE AND ANSWER THE SAME IN FAVOUR OF THE APPELLANT AND TO ALLOW THE APPEALS BY HOLDING THAT THERE WAS NO VALID ASSESSMENT, PASSED BY MAKING THE ADDITION ON THE GROUND OF ACCEPTANCE BY THE APPELLANT AN D THEREBY ALL THE SUBSEQUENT APPEAL ORDERS ARE ALSO NULL AND VOID..
THIS APPEAL COMING ON FOR ADMISSION THIS DAY, ARAVIND KUMAR J, DELIVERED THE FOLLOWING :
JUDGMENT Heard Smt.Vanaja.M.R, learned counsel appearing for appellant and Sri.E.I.Sanmathi, learned panel counsel appearing for revenue. Perused the records.
This appeal is preferred by the assessee challenging the order passed by the Income Tax Appellate Tribunal (for short ‘ITAT’) in ITA No.1051/Bang/2018 relating to assessment year 2014-15 whereunder appeal filed by the assessee came to be dismissed by upholding addition of 2% gross profit by the assessing officer during the course of assessment proceedings.
Assessee is carrying on the business of wines under the name and style of “M.B.Wines”. For the assessment year 2014-15 return of income came to be filed declaring the income at Rs.5,51,410/- and during the course of assessment proceedings assessing officer found that declared gross profit @ 5.33% of sales turnover is considerably low when compared to other traders in the same line of business. Hence, during the course of assessment proceedings it was proposed to add 2% on the
sales turnover declared on estimate basis, for which the assessee agreed and in fact also indicated or clearly stated that he has no objection for the addition of Rs.8,60,646/- to the return of income. Based on the said agreement, assessment proceedings came to be concluded by order dated 28.12.2016-Annexure-B passed under Section 143(3) of the Act. Being aggrieved by the same, an appeal came to be filed contending that said addition could not have been made particularly in the backdrop of books of accounts having not been rejected. Commissioner of Income Tax (Appeals) (for short ‘CIT(A)’) by order dated 28.09.2017- Annexure-C rejected the appeal by arriving at a conclusion that no appeal lies against a agreed assessment and it was also observed by the appellate Commissioner that neither in the grounds of the appeal nor in the contentions raised it was urged that assessee had made a statement erroneously before the assessing officer under mistaken belief of fact or law and in the absence of said ground having been taken, appeal was not competent. Accordingly, appeal came to be rejected.
Assessee pursued his grievance before the tribunal by reiterating the grounds urged which also did not find favour and tribunal has rightly observed when there is no allegation by the assessee that assessing officer had pressurized for addition, nor there being any contention that as per profit and loss account no such addition of 2% came to be made, held that appeal was bereft of merit and accordingly rejected the same.
In fact, judgments which were relied upon by the assessee before the tribunal and reiterated before us, would also not come to the rescue of appellant, inasmuch as, facts obtained in both the cases are entirely different namely in the case of M/s. Mamata Enterprises vs. ACIT rendered by the tribunal in ITA Nos.1185 & 1186/Bang/1993 dated 19.02.2002 it was noticed by the tribunal that assessee had been pressurized by the department and this fact was recorded by the tribunal as the last fact finding authority vide paragraph 8(i). However, in the instant case, as already observed hereinabove and at the cost of repetition, we notice that
there is no such contention raised before the first appellate authority or before the tribunal in this regard. Even otherwise, gross profit declared by the assessee at 5.33% on the sales turnover, which was found by the assessing officer to be considerably low on comparison basis namely in comparison with other traders, who are in the same line of business and as such addition of 2% was made by the assessing officer as it would be reasonable for which the assessee himself had accepted. As such contentions raised by learned counsel appearing for appellant does not merit consideration. Consequently, appeal deserves to be rejected. Accordingly, it stands rejected.
SD/- JUDGE
SD/- JUDGE