Income Tax Appellate Tribunal - Ahmedabad
Jain Bulk Pack,, Ahmedabad vs The Ito, Ward-5(3)(4),, Ahmedabad on 14 November, 2019
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "SMC" BENCH
Before: Shri Rajpal Yadav, Judicial Member
And Shri Amarjit Singh, Accountant Member
ITA No. 2846/Ahd/2017
Assessment Year 2014-15
Jain Bulk Pack, The ITO,
229, New Cloth Market, Ward-5(3)(4),
O/s. Raipur Gate, Vs Ahmedabad
Raipur, Ahmedabad (Respondent)
PAN: AAHFJ6069M
(Appellant)
Revenue by: Shri N.K. Goel, Sr. D.R.
Assessee by: Ms. Ruchika Nagar, A.R.
Date of hearing : 03-10-2019
Date of pronounce ment : 14-11-2019
आदेश /ORDER
PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-
This assessee's appeal for A.Y. 2014-15, arises from order of the CIT(A), Ahmedabad-5, dated 15-11-2017, in proceedings under section 143(3) of the Income Tax Act, 1961; in short "the Act".
2. The assessee has raised following ground of appeal:-
"1. The Ld. CIT(A)-5 has erred in law and on facts in confirming the net profit of the Appellant at 0.25% of the total turnover as against 0.5% estimated by the AO.
2. The Ld. CIT(A)-5 has erred in law and on facts in confirming the addition of Rs. 14,638/- on the ground that interest u/s 244A of the Act has been received and not offered for taxation by the Appellant.
3. The Ld. CIT(A)-5 has erred in law and on facts in confirming the action of the AO of disallowing a sum of Rs. 31,274/- u/s 36(1 )(va) of the Act on account of delayed payments of PF / ESIC.I.T.A No. 2846/Ahd/2017 A.Y. 2014-15 Page No 2
Jain Bulk Pack vs. ITO
4. The Ld. CIT(A)-5 has erred in law and on facts in confirming the disallowance of claim of depreciation of Rs. 28,380/- made by the AO.
5. Without prejudice to above, the Ld. CIT(A)-5 has erred in law and on facts in rejecting the alternate plea that no other addition/ disallowance can be made in the event of estimation of net profit."
3. The assessee has filed return of income declaring income at Rs. 2,43,577/- on 30th Sep, 2014. The case was subject to scrutiny assessment and order u/s. 143(3) of the act was passed on 4th Nov, 2016. The assessee has filed the aforesaid grounds of appeal against the various additions and the same are adjudicated as under:-
Ground No. 1 (Confirming net profit at 0.25%)
4. During the course of assessment proceedings, the assessing officer asked the assessee to justify the low net profit and low income recorded during the year under consideration. The assessee has submitted the comparative detail of major expenses for financial year 2012-13 and 2013- 14 and assessment year 2014-15. The assessing officer observed that the turn-over of the assessee has declined from Rs. 92.48 crore to Rs. 29.88 crore from preceding assessment year, however, the correspondence expenses has not decreased. The assessing officer has worked out the increase in expenses to 191% and decrease in the turn over to 209% compared to the preceding year. The assessing officer stated that assessee has not produced the entire books of account and ledger account and supporting bill and voucher, therefore, the net profit of the assessee for the year under consideration was estimated at 0.50% of the total turnover as against the net profit of 0.07% shown by the assessee. Accordingly, an addition of Rs. 12,94,398/- was made to the total income of the assessee.
I.T.A No. 2846/Ahd/2017 A.Y. 2014-15 Page No 3 Jain Bulk Pack vs. ITO
5. Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has partly allowed the appeal of the assessee by restricting the addition to 0.25% as against 0.5% estimated by the assessing officer.
6. We have heard the rival contention on this issue. During the course of assessment, the assessing officer has estimated the net profit of the assessee at 0.5% on account of low turnover and increase of expenses compared to the preceding year. In this regard, the assessee has explained that the turnover of the assessee has been decreased from 92 crore to 29 crore, however, fixed nature of expenses remained same and because of fixed cost there was fall in the gross profit. It is also brought to our notice that in the earlier year, the net profit @ 0.16% was accepted by the assessing officer in the assessment completed u/s. 143(3) of the act. It is also contended that all the major income and expenses along with supporting materials were produced before the assessing officer however the same was not objectively considered by the assessing officer. Considering the above facts and circumstances, we are of the view that it will be reasonable to estimate the net profit of the assessee @ 0.16% of the turn-over. Accordingly, the assessing officer is directed to estimate the net profit @ 0.16% as against 0.25% estimated by the ld. CIT(A), therefore, this ground of appeal of the assessee is partly allowed.
Ground No. 2(Confirming addition of Rs. 14,638/- u/s. 244A of the act)
7. During the course of assessment, the assessing officer noticed that assessee has received interest u/s. 244A to the amount of Rs. 14,588/-. The assessing officer was of the view that assessee has not offered this interest I.T.A No. 2846/Ahd/2017 A.Y. 2014-15 Page No 4 Jain Bulk Pack vs. ITO income in the year under consideration, therefore, the same was added to the total income of the asssessee of the assessee.
8. Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the asessee.
9. We have heard the rival contention on this issue. The ld. counsel has contended that assessee has included the aforesaid interest amount of refund in the interest income shown under the head other income in the P & L account for the year ending 31st March, 2014. With the assistance of ld. representatives, we have gone through the paper book filed by the assessee and noticed that at page no. 21, the assessee has shown schedule no.11 which include interest income of Rs. 15,188/- and further on page no. 38 of the paper book, the assessee has given the detailed interest income including income tax refund of Rs. 14,638/-. Considering the aforesaid undisputed fact, the appeal of the assessee is allowed on this issue.
Ground No. 3 (Disallowance of Rs. 31,274/- u/s. 36(1)(va) on account of delayed payment of PF & ESIC)
10. During the course of assessment, the assessing officer noticed that assessee has not deposited the employee's contribution towards PF and other funds within the stipulated time, therefore, an amount of Rs. 31,274/- in respect of employee's provident fund contribution was added to the total income of the assessee u/s. 2(24)(x) r.w.s. 36(1)(va) of the act.
11. Assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee.
I.T.A No. 2846/Ahd/2017 A.Y. 2014-15 Page No 5 Jain Bulk Pack vs. ITO
12. We have heard the rival contention on this issue. It is undisputed fact that assessee has not deposited the employee's contribution towards PF to the Government Account within the due date prescribed under the provident fund act, therefore, considering the decision of Hon'ble Gujarat High Court in the case of CIT vs. Gujarat State Road Transport Corporation Tax Appeal No. 637 of 2013, we do not find any substance in this ground of appeal of the assessee, therefore, the same stands dismissed.
Ground No. 4(Disallowance of claim of depreciation of Rs. 28,380/-)
13. During the course of assessment, the assessing officer noticed that assessee has failed to produce supporting bill and voucher for purchase of new assets, therefore, the claim of the depreciation on the new assets to the amount of Rs. 28,380/- was disallowed as under:-
Sr. No. New Assets Amount Block of % Depreciation Hydraulic Hand Pallet Truck 32345 15 4,852 2 Pump Motor 16100 15 2,415 3 Sewing Machine 14497 15 2,174 4 S.S. Table 53857 15 8,078 5 Stand Table 22176 15 3,326 6 Ink Mixer 23628 15 3,544 7 Elec. Installation 26607 15 3,991 Total 28,380
14. The assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal.
15. We have head rival contentions and perused the material on record. During the course of assessment, the assessing officer noticed that assessee I.T.A No. 2846/Ahd/2017 A.Y. 2014-15 Page No 6 Jain Bulk Pack vs. ITO has claimed depreciation of Rs. 28,380 on the newly purchased assets, however, the assessee has failed to furnish corresponding bill and voucher, therefore, the assessing officer has disallowed the claim of depreciation of Rs. 28,380/-. Considering the above undisputed fact that assessee has failed to produce the primary document i.e. bill and voucher for purchase of assets before the lower authorities and even during the course of appellate proceedings before us, we do not find any force in the appeal of the assessee and the same stands dismissed.
16. In the result, the appeal of the assessee is partly allowed.
Order pronounced in the open court on 14-11-2019 Sd/- Sd/-
(RAJPAL YADAV) (AMARJIT SINGH)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad : Dated 14/11/2019
आदेश क त ल प अ े षत / Copy of Order Forwarded to:-
1. Assessee
2. Revenue
3. Concerned CIT
4. CIT (A)
5. DR, ITAT, Ahmedabad
6. Guard file.
By order/आदेश से,
उप/सहायक पंजीकार
आयकर अपील य अ धकरण,
अहमदाबाद