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Income Tax Appellate Tribunal, CUTTACK ‘SMC’
Before: SHRI N.S SAINI
IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK ‘SMC’ BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER
ITA No. 211/CTK/2016 Assessment Year :2010-2011
M/s. Sidhi Cargo Carriers, Vs. ACIT, Circle 1(2), Cuttack Sukinda Block Road Transport, Dist: Jajpur PAN/GIR No.AANFM 8220 B (Appellant) .. ( Respondent)
Assessee by : Shri Damodar Pati, AR Revenue by : Shri D.K.Pradhan, DR
Date of Hearing : 02 /02/ 2017 Date of Pronouncement : 02/02/ 2017
O R D E R This is an appeal filed by the assessee against the order of CIT(A)-
Cuttack, dated 8.12.2015, for the assessment year 2010-2011 .
In this appeal, the grievance of the assessee is that the ld CIT(A)
erred in confirming the action of the Assessing Officer determining the profit
out of transportation business @ 5% and determination of profit @ 6% on
trading business.
At the time of hearing, it was submitted by the AR of the assessee
that the Assessing Officer determined the profit @ 8% on trading business,
which was reduced by the CIT(A) to 6%. Hence, he is not pressing this
ground of appeal. Accordingly, same is dismissed for want of prosecution.
2 ITA No. 211/CT K/ 2016 Asse ssment Year :20 10- 201 1 4. Regarding determination of profit at 5% out of transportation
business, the Assessing Officer observed that the assessee was asked as to
who has executed the transport contract during the year and produce to
books of account particularly the cash book. The assessee only furnished
the ledger account copy of the expenses claimed in support of the profit
and loss account. On verification of such ledger account copies, the
Assessing Officer found that all the transportation charges were paid in
cash. The Assessing Officer verified the bills and vouchers and observed
that in some vouchers they were not having the recipient’s signature and
other details like addresses etc. Since the cash book was not produced and
the bills and vouchers were not regular and could not be verified, therefore,
the Assessing Officer held that the correctness and completeness of the
accounts cannot be accepted and hence, reject the books of account
u/s.145(3) of the Act and, thereafter, estimated the profit from
transportation business at 5% of the gross receipts.
On appeal, the CIT(A) observed that the assessee has relied on the
decision of this Bench of the Tribunal in the case of Harihar Roadways for
the submission that the Tribunal has determined the profit for
transportation business at 1%. The CIT(A) observed that the Tribunal in
the case of Phulchand Agarwal has held that in the absence of cash book,
the accounting results of the assessee can be rejected and estimation of
profit can be made. The decision in the case of Harihar Roaways (supra)
relied on by the assessee was in that particular case which may not have
3 ITA No. 211/CT K/ 2016 Asse ssment Year :20 10- 201 1 application to the present case of the assessee. Hence, he confirmed the
action of the Assessing Officer.
Before me, the only argument of the A.R. of the assessee is that the
determination of income by applying rate of 5% to the transportation
business of the assessee was excessive. He submitted that the assessee
was not owning any vehicles and it was taking vehicles on hire and then
giving to others on hire and thereby making a meagre profit. Therefore, in
the given facts and circumstances of the case, a reasonable estimation of
the income by applying the lower rate should be made.
The D.R. on the other hand supported the orders of lower authorities.
After considering the facts and circumstances of the case, I am of the
considered view that it would meet the ends of justice if the net profit from
transportation business of the assessee is estimated by applying the rate
of 3% to the turnover from transportation business. I, accordingly, modify
the order of the CIT(A) and partly allow the ground of appeal of the
assessee.
In the result, the appeal filed by the assessee is partly allowed. Order pronounced in the open court on 02/02/2017 in the presence of parties. Sd/- (N.S Saini) ACCOUNTANT MEMBER
Cuttack; Dated 02/02/2017 B.K.Parida, SPS
4 ITA No. 211/CT K/ 2016 Asse ssment Year :20 10- 201 1 Copy of the Order forwarded to : 1. The Appellant : M/s. Sidhi Cargo Carriers, Sukinda Block Road Transport, Dist: Jajpur 2. The Respondent. ACIT, Circle 1(2), Cuttack 3. The CIT(A)- Cuttack 4. Pr.CIT, Cuttack 5. DR, ITAT, Cuttack 6. Guard file. //True Copy// BY ORDER,
SR.PRIVATE SECRETARY ITAT, Cuttack