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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’ NEW DELHI
Before: SHRI B.P. JAIN
सुनवाई क� तार�ख/Date of Hearing : 25/04/2017 घोषणा क� तार�ख /Date of Pronouncement: 28/04/2017 ORDER This appeal of the assessee arises from the order of learned CIT(A), Ghaziabad, vide order dated 25.08.2015 for the assessment year 2010-11. The assessee has raised the following grounds of appeal as under: The Grounds of appeal are enumerated hereunder, which are without prejudice to one- another:-
01. That the impugned additions of Rs. 19,35,190/- made on an adhoc basis by the ld. AO and confirmed by the ld. CIT(A), is based on mere surmises, conjectures, imagination and guess work of the authorities below, as stated by the ld. CIT(A) in his order also, and therefore the said impugned addition is absolutely arbitrary, subjective, illegitimate, unwarranted, unjustified, without any iota of any findings and is also against the rudimentary principles of contemporary jurisprudence and settled legal position and therefore is untenable in law and is liable to be deleted.
2. That the order of the ld. CIT(A) is contradictory to his own findings, as at one hand he has given categorical findings and detailed chart of the gross receipts aggregating to Rs. 1,37,13,668/-; but surprisingly on the other hand he has confirmed estimation of gross receipts by the Id. AO at Rs. 2,00,00,000/- and thus such adhoc enhancement in gross receipts is arbitrary, unwarranted, untenable and without any iota of any basis or findings and is liable to be quashed, coupled with the fact that the assessee himself declared true receipts at Rs. 1,52,11,877/- as per his accounts duly audited by an independent Chartered Accountant and which are much higher than the findings of the ld. CIT(A).
3.That the impugned action of the ld. AO of making adhoc enhancement in net profit ratio to 15% is arbitrary, unjustified, unlawful and based on mere surmises and conjectures, without any iota of any findings; coupled with the fact he neither pointed out any shortcoming or discrepancy in any of the expenses claim nor disproved or controverted the same nor rejected books of account and has purportedly invented the net profit ratio @15%; also ignoring the pertinent fact that the Assessee himself has declared a net profit @ 15.05% before the statutory depreciation allowance and thus looked from whatever angle, the adhoc increase in net profit rate is arbitrary, unwarranted, uncalled-for and untenable in law and is liable to be quashed. That the authorities below erred on the facts and circumstances of the case and in law as they grossly ignored the specific provisions of section 44AE of the Income Tax Act, 1961, which are squarely applicable to the case of the Assessee as it owned not more than ten goods carriages at any time during the said previous year and therefore the profits of the Assessee deserves to be accepted as such, as the assessee has declared more profits than even the presumptive profits envisaged by law and therefore adhoc additions made and confirmed by the authorities below are unlawful, uncalled for and also in violation of the specific provisions of the Income Tax Act; 1961 and is liable to be quashed. That the ld. CIT-A erred in not taking cognizance of evidence contained in Annexure-B; which were also sent by him to the ld. AO, who after perusing the same gave his remand report thereupon and thereby no prejudice was caused to the Revenue and thus rejection of the same in mechanical manner does not meet both the ends of the justice and is also against the principle of natural justice and is liable to be quashed.
The brief facts of the case are that assessee is a transporter and the assessee has not produced the books of accounts. The assessee has also not produced bills, expenses vouchers, bank pay-in-slips and counter-foil of the cheques issued and other supporting vouchers. The assessee has shown NP of Rs.10,64,811/- [as shown in computation of income] giving NP rate of 7%. In the P&L A/c he has claimed Freight Expenses at Rs.37,65,635/- and Diesel Expenses at Rs.36,48,450/-. No Service Tax A/c and copy of Service Tax Returns have been filed by the assessee. He has claimed interest on housing loan. No details of investment in the construction/purchase of house etc. as required, has been filed by the assessee. In the absence of books of account etc. professional/occupational results of the assessee are not prone to verification and reasonableness and correctness of the above expenses and other items of expenditure claimed in the P&L A/c cannot be established. Taking into consideration all the above factual aspects of the case, a net profit rate of 15% [which is reasonable in transporter’s case owning 5 trucks] on the estimated receipts of Rs.2,00,00,000/- was applied which gives NP of Rs.30,00,000/- as against NP of Rs.10,64,811/- shown by the assessee, making thereby an addition of Rs.19,35,189/- to his income treating the same as undisclosed income of the assessee.
Learned CIT(A) confirmed the action of the Assessing Officer.
I have heard the rival contentions and perused the facts of the case. There is no dispute to the fact that assessee has not produced any books of account, vouchers to verify the claim so made by the assessee. Though, the books of account has not been rejected but at the same time the books of account were not available for verification by the Assessing Officer so made Assessing Officer could deduce the accurate income for taxation purpose. Learned AR could not even produce the net profit declared in the preceding years or any comparable cases to substantiate his claim. The Assessing Officer also could bring any comparable case or being not brought on record the preceding years result. In the circumstances and facts of the case and in the interest of justice the matter is set aside to the fact of the Assessing Officer who will give further opportunity to the assessee to produce the books of account and again bills, vouchers, etc or alternatively bring on record the preceding years result and comparable cases and decide the issue denovo after providing adequate opportunity of being heard to the assessee. Thus, all the grounds of the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on this day 28th April, 2017