PRIYABRATA SAMAL,JAJPUR vs. ITO, WARD-1, PARADEEP

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ITA 148/CTK/2016Status: DisposedITAT Cuttack29 March 2017AY 2010-117 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal confirmed the CIT(A)'s order, upholding the rejection of the assessee's books of account and the estimation of income. The assessee's arguments regarding the estimation rate were unsubstantiated.

What were the facts?

The assessee failed to produce books of account and supporting documents for verification despite repeated opportunities. The Assessing Officer rejected the book results and estimated income based on Form 26AS, which the CIT(A) confirmed.

What were the issues?

Whether the rejection of books of account and estimation of income by the Assessing Officer was justified due to non-production of evidence. Whether the estimated profit rate was excessive.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CUTTACK

Before: SHRI N.S SAINI

For Appellant: Shri Keshav Dubey, AR
For Respondent: Shri D.K.Pradhan, DR
Pronounced: 29/03

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK ‘SMC’ BENCH, CUTTACK

BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER

ITA No.179/CTK/2015 Assessment Year : 2009-2010

ITA No.148/CTK/2016 Assessment Year: 2010-2011

Priyabrata SamalProp. Maa Vs. ITO, Ward-1, Paradeep Biraja Transport Association, Banishree Bhawan, Banapur, Baidyarajpur, Jajpur PAN/GIR No. AMSPS 1762 P (Appellant) .. ( Respondent)

Assessee by : Shri Keshav Dubey, AR Revenue by : Shri D.K.Pradhan, DR

Date of Hearing : 29 /03/ 2017 Date of Pronouncement : 29/03/ 2017

O R D E R These are appeals filed by the assessee against the order of CIT(A)-

Cuttack, dated 30.1.2015, for the assessment year 2009-2010 and dated

25.1.2016 for the assessment year 2010-2011.

2.

In ITA No.179/CTK/2015 for assessment year 2009-2010, the

only grievance of the assessee is that the CIT(A) erred in confirming the

order of the Assessing Officer making addition of entire gross receipts

2 ITA No. 179/CT K/ 2015 Asse ssment Year : 20 09- 201 0 ITA No. 148/CT K/ 2016 Asse ssment Year: 20 10- 201 1

instead of difference gross receipts declared by the assessee in its profit

and loss account and as reflected in Form 26AS on estimate basis.

3.

I have heard the rival submissions and perused the orders of lower

authorities and materials available on record. The Assessing Officer

observed that the gross receipts as per 26AS statement was

Rs.5,95,29,916/- whereas the assessee has shown gross contract receipts

in its profit and loss account at Rs.5,89,20,731. The Assessing Officer

observed that no books of account and evidences were produced by the

assessee during the course of assessment proceedings for his verification

inspite of sufficient opportunities allowed to the assessee on 1.6.12,

14.8.12, 7.9.12, 25.9.12 and 9.11.12. Therefore, he rejected the book

results of the assessee and estimated the income of the assessee by

applying rate of 5% to the gross receipts reflected in Form 26AS statement

at Rs.5,95,29,9616/- and arrived at the income of the assessee at

Rs.29,76,496/-.

4.

Being aggrieved, the assessee filed appeal before the CIT(A) and

contended before her that the Assessing Officer had not allowed sufficient

opportunity of hearing to the assessee and that the addition should be

made only in respect of profits embedded in difference of gross receipts as

shown in assessee’s book and as reflected in 26AS statement.

5.

The CIT(A) rejected the appeal of the assessee on the ground that

the assessee has failed to put in appearance on various dates fixed for

3 ITA No. 179/CT K/ 2015 Asse ssment Year : 20 09- 201 0 ITA No. 148/CT K/ 2016 Asse ssment Year: 20 10- 201 1

hearing by the Assessing Officer. Further, during the course of assessment

proceedings or even during the appeal hearing before her, the assessee

has not objected to the gross receipts of Rs.5,95,29,916/- as found in Form

26AS statement. She observed that this Bench of the Tribunal in the case

of Phulchand Agarwala & Co. Angul (ITA No.182/CTK/2005) for assessment

year 2001-02 has held that non production of cash book can lead to

rejection of books of account. It is the cash book where major transaction

of expenditure and income are accounted for on day today basis. In

absence of the same, the Assessing Officer was right in rejecting the book

results and estimating the net profit @ 5% of gross turnover as per 26AS

statement. The Assessing Officer by estimating the net profit at 5% of

gross turnover found in Form 26AS statement has taxed the profit element

embedded in the difference of turnover. Therefore, there was no anomaly

in the action of the Assessing Officer and sustained the order of the

Assessing Officer.

6.

Being aggrieved by the said order of the CIT(A), the assessee is in

appeal before me.

7.

Ld Authorised Representative of the assessee reiterated the

submissions made before the lower authorities. He could not point out any

specific error in the order of the CIT(A). I find that the CIT(A) has observed

that during the course of assessment proceedings, the assessee did not

object to the gross receipts of Rs.5,95,29,916/- as per 26AS statement.

4 ITA No. 179/CT K/ 2015 Asse ssment Year : 20 09- 201 0 ITA No. 148/CT K/ 2016 Asse ssment Year: 20 10- 201 1

He has also not controverted the observation of the CIT(A) that the

assessee failed to produce cash book before the Assessing officer, which is

primary books of account wherein, the major transactions of expenditure

and income are accounted for on day today basis. The CIT(A) upheld the

rejection of book results of the assessee by following the order of the

Tribunal in the case of Phulchand Agarwal (supra), wherein, under similar

facts and circumstances of the case, the Tribunal has upheld the rejection

of book results and estimation of profit by the Assessing Officer. This

finding of the CIT(A) has not been controverted by the Authorised

Representative of the assessee. The contention of the Authorised

Representative of the assessee before me was that the assessee has

disclosed net profit @ 2% in the income tax return in this year and that in

the immediately preceding two assessment years in an assessment

u/s.143(3) of the Act, rate of net profit of 1.75% was accepted by the

department and, therefore, the rate of net profit @ 5% applied by the

Assessing Officer was excessive. When asked by the Bench to produce the

assessment orders in support of his contention, ld Authorised

Representative expressed his inability to do so. Thus, as the contention of

ld A.R. of the assessee was un-substantiated with the submission of

assessment order of the immediately preceding assessment years, the plea

of the ld A.R. cannot be accepted for want of evidence and hence, rejected.

Therefore, I confirm the order of the CIT(A) and dismiss the ground of

appeal of the assessee.

5 ITA No. 179/CT K/ 2015 Asse ssment Year : 20 09- 201 0 ITA No. 148/CT K/ 2016 Asse ssment Year: 20 10- 201 1

8.

In the result, appeal for assessment year 2009-10 is dismissed.

ITA No.148/Ctk/2016 : A.Y. 2010-11.

9.

In assessment year 2010-11, the first grievance of the assessee is

that the CIT(A) erred in confirming the addition on estimate of net profit

@ 5% on the entire gross receipts.

10.

I have heard the rival submissions and perused the orders of lower

authorities and materials available on record. In the instant case, the

Assessing Officer observed that the assessee was asked to produce the

books of account and supporting documents for verification for the claims

made in the accounts. There was no compliance from the assessee even

though the Assessing Officer allowed repeated opportunities to the

assessee to produce the details. In absence of books of account, the

Assessing Officer, rejected the book results of the assessee and estimated

the net profit by applying rate of 5% to the gross receipts of

Rs.1.46,26,945/- as reflected in 26AS statement instead of

Rs.1,38,97,967/- shown by the assessee and determined the income of the

assessee at Rs.7,31,347/-.

11.

On appeal, the CIT(A) confirmed the action of the Assessing Officer

on the ground that before her the assessee claimed that the gross receipts

were wrongly taken by the Assessing Officer and produced certain invoices

to explain the details.The assessee submitted that an amount of

Rs.4,29,857/- was paid to him by M/s. Rexon Strips Ltd., and these details were

6 ITA No. 179/CT K/ 2015 Asse ssment Year : 20 09- 201 0 ITA No. 148/CT K/ 2016 Asse ssment Year: 20 10- 201 1

forwarded to the Assessing Officer for verification and further report

u/s.250(4) of the Act. The Assessing Officer reported that though a

questionnaire was prepared by him and issued to the assessee requesting

compliance on or before 24.8.2015, the assessee preferred to remain silent

and there was no compliance from him. Therefore, the Assessing Officer

could not draw any judicious conclusion on the issues forwarded to him for

a report u/s.250(4) of the Act.

12.

Ld Authorised Representative of the assessee could not controvert

the observations and findings of the CIT(A). In absence of the same, I find

no good and justifiable reason to interfere with the order of the CIT(A),

which is hereby confirmed and ground of appeal of the assessee is

dismissed.

13.

The second issue relates to addition of Rs.4,29,957/- twice as against

transport contract receipts and commission receipts.

14.

As observed by me while deciding the first issue in this appeal that

the CIT(A) called for a remand report from the Assessing Officer u/s.250(4)

of the Act and the Assessing Officer issued questionnaire to the assessee

for compliance on or before 24.8.2015 but the assessee did not comply

with the same and, therefore, the Assessing Officer could not draw any

judicious conclusion. Hence, the CIT(A) dismissed the appeal of the

assessee. The above observations and findings of the CITR(A) has

remained uncontroverted before me during the course of hearing. Hence,

7 ITA No. 179/CT K/ 2015 Asse ssment Year : 20 09- 201 0 ITA No. 148/CT K/ 2016 Asse ssment Year: 20 10- 201 1

I confirm the order of the CIT(A) and dismiss this ground of appeal of the

assessee.

15.

In the result, the appeal filed by the assessee is dismissed.

Order pronounced in the open court on 29/03/2017 in the presence of parties. Sd/- (N.S Saini) ACCOUNTANT MEMBER Cuttack; Dated 29/03/2017 B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellant : Priyabrata SamalProp. Maa Biraja Transport Association, Banishree Bhawan, Banapur, Baidyarajpur, Jajpur 2. The respondent: ITO, Ward-1, Paradeep 3. The CIT(A): Cuttack 4. Pr.CIT, Cuttack 5. DR, ITAT, Cuttack 6. Guard file. BY ORDER, //True Copy//

SR.PRIVATE SECRETARY ITAT, Cuttack

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