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Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA
Before: Sri J. Sudhakar Reddy
Assessment Year: 2010-11 Dasarath Gorai……….…............…..…….……………………..…………………………………..……….……..Appellant Vill. Poradih P.O. Bogra Dist. Purulia PIN - 723145 [PAN : AAEFD 2410 R] Income Tax Officer, Ward 3(2), Purulia…..………………………………...……...…………….......Respondent Appearances by: Shri M. Goenka, CA, appeared on behalf of the assessee. Shri Provash Roy, JCIT, appearing on behalf of the Revenue. Date of concluding the hearing : June 28th , 2018 Date of pronouncing the order : July 18th , 2018 ORDER Per J. Sudhakar Reddy, AM :-
This is an appeal filed by the assessee directed against the order of the Commissioner of Income Tax (Appeals)-Asansol, (hereinafter the ‘Ld. CIT(A)’), dt. 07/09/2017, passed u/s 250 of the Income Tax Act, 1961 (hereinafter the ‘Act’), relating to Assessment Year 2010-11.
The assessee is a partnership firm and is in the business of supply of labour to various organizations. The issue before us is whether, the amount of Rs.2,05,708/-, received by the assessee from Gammon Drnkely & Co. and payment of Rs.5,99,123/-, received from S.T.P.S. by the assessee company, should be considered as income of the assessee u/s 69A of the Act, for the reason that the assessee had not reflected these receipts in its books of accounts. The assessee pleads that the books of accounts have to be rejected and the profits estimated. He further pleads that salary of interest paid to partners should be deduction from the profit so estimated. The Assessing Officer rejected the contention of the assessee. The ld. CIT(A) held that the entire unaccounted receipt has to be treated as the income of the assessee.
After hearing rival contentions, I am of the considered opinion that only a percentage of these unrecorded receipts have to be taken as income, entire turnover cannot be taken as profit. As the assessee had disclosed 3.66% of his gross receipts as Assessment Year: 2010-11 Dasarath Gorai income, this rate of profit may be applied on this unrecorded receipts for the purpose of estimation of suppressed profits. The assessee gets part relief. 3.1. As the assessee is a partnership firm, payment of salary to partners and interest paid to partners should be deducted from the profits so estimated. Both these amounts are taxable in the hands of the partners. The assessee further claims that security deposit was receivable from WBPDCL. Adjustment may be granted to the same.
I set aside this issue to the file of the Assessing Officer for fresh adjudication, in accordance with law.
In the result, appeal of the assessee is allowed for statistical purposes. Kolkata, the 18th day of July, 2018. Sd/- [J. Sudhakar Reddy] Accountant Member Dated : 18.07.2018 {SC SPS} Copy of the order forwarded to: 1. Dasarath Gorai Vill. Poradih P.O. Bogra Dist. Purulia PIN - 723145 2. Income Tax Officer, Ward 3(2), Purulia 3. CIT(A)- 4. CIT- , 5. CIT(DR), Kolkata Benches, Kolkata.