Income Tax Appellate Tribunal - Cuttack
Sudhir Nath, Angul vs Ito, Dhenkanal Ward, Dhenkanal on 3 April, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL,
CUTTACK BENCH, CUTTACK
BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER
AND PAVAN KUMAR GADALE, JUDICIAL MEMBER
IT A No.323/ CT K/2016
Assessment Year : 2010-2011
Shri Sudhir Nath, Baula Chhak, Vs. ITO, Angul Ward, Angul.
PO: Talcher, Dist: Angul.
PAN/GI R No. ADTPN 0786 A
(Appellant) .. ( Respondent)
Assessee by : Shri P.K.Mishra, AR
Revenue by : Shri D.K.Pradhan, DR
Date of Hearing : 02 /04/ 2018
Date of Pronouncement : 3 /04/ 2018
ORDER
Per Pavan Kumar Gadale, JM
This is an appeal filed by the assessee against the order of the CIT(A)-2, Bhubaneswar dated 1.3.2016 for the assessment year 2010-2011.
2. The appeal is filed belatedly by 34 days. The assessee has filed condonation petition along with an affidavit for condoning the delay. After perusing the condonation petition, we are satisfied that the assessee was prevented by sufficient cause in filing the appeal before the Tribunal. Hence, we condone the delay of 34 days in filing the appeal and admit the appeal for hearing.
3. In this appeal, the assessee is aggrieved by the estimation of net profit @ 3.5% made by the Assessing Officer and also application of section 44AE of the Act to determine the truck plying income.
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ITA No .323/ CTK/ 2016 Asse ssment Year : 20 10- 201 1
4. The brief facts of the case are that the assessee is an individual and derives income from transporting business and truck plying activities. During the assessment proceedings, the Assessing Officer found that the assessee has shown gross receipts from transportation work at Rs.3,80,04,702/- and from truck plying at Rs.71,37,090/- aggregating to Rs.4,51,41,792/-. The assessee after debiting various expenses including depreciation of Rs.13,68,168/- on fixed assets, has shown net profit at Rs.11,58,505/- which is around 2.56% of the total gross receipts. The Assessing Officer required the assessee to produce party-wise details of expenditure on freight charges paid/payable, details of truck plying business, books of account including bills and vouchers for verification. Except producing the list of cases showing the vehicle numbers where freight charges is payable, the assessee could not furnish the names and complete address of the parties and details account in respect of transportation business. In view of above, the Assessing Officer rejected the books of account u/s.145(3) of the Act and estimated a net profit at 3.5% of gross transportation receipts, which works out to Rs.13,30,165/-.
5. Similarly, the assessee owns four trucks. Out of four trucks, three trucks were put to use for whole of the year and one vehicle was put to use for 11 months. The assessee has shown gross receipts of Rs.71,37,090/- from truck plying business. Since the assessee could not file any details and bills and vouchers, the Assessing Officer estimated the profit at Rs.1,64,500/- applying the rates as specified in section 44AE of the Act.
6. On appeal, the CIT(A) confirmed the action of the Assessing Officer.
7. We have heard the rival submissions, perused the orders of lower authorities and materials available on record. The sole disputed issue is with respect to the 3 ITA No .323/ CTK/ 2016 Asse ssment Year : 20 10- 201 1 estimation made by the Assessing Officer by rejecting the books of account u/s.145(3) of the Act. The contention of ld A.R. that books of account were audited but could not be produced at the time of assessment proceedings. The assessee has submitted the details of expenditure in respect of truck plying and also produced books of account including bills and vouchers. As the Assessing Officer was not satisfied with the explanation of the assessee, the books of account were rejected u/s.145(3) of the Act and made addition on estimate basis at 3.5% of the gross receipts, which works out to Rs.13,30,165/-. The Assessing Officer also considered the provisions of section 44AE of the Act and made an addition of Rs.1,64,500/- and assessed the total income at Rs.14,94,665/-.
8. Before us, ld A.R. submitted that in the present assessment year i.e. 2010- 2011, the assessee has offered income at 2.56% of the total receipts of Rs.4,51,41,792/- whereas the Assessing Officer has estimated the net profit at 3.35%, which is on higher side. Ld A.R. submitted that in subsequent assessment year i.e. 2011-12, the assessee has offered net income at 1.61% as against the total receipts of Rs.8,21,03,629/- and, therefore, prayed that the returned income by the assessee be accepted. On perusal of the assessment order, we found that the assessee was provided an opportunity with respect to production of books of account and on being failure by the assessee, the Assessing Officer has rejected the book results and made addition on estimate basis. Keeping in view the assessee's turnover and the nature of business being transport business and also considering the net profit @ 1.61% shown by the assessee in the assessment year 2011-12, which is accepted by the department, we are of the substantive opinion that it would meet the ends of justice, if the business income is estimated at 3 % of the total 4 ITA No .323/ CTK/ 2016 Asse ssment Year : 20 10- 201 1 receipts as against 3.5% determined by the Assessing Officer and CIT(A). We order accordingly.
9. In the result, appeal filed by the assessee is partly allowed.
Order pronounced on 3 /04/2018.
Sd/- sd/-
(N.S Saini) (Pavan Kumar Gadale)
ACCOUNTANT MEMBER JUDICIALMEMBER
Cuttack; Dated 3 /04/2018
B.K.Parida, SPS
Copy of the Order forwarded to :
1. The Appellant : Shri Sudhir Nath, Baula Chhak, PO:
Talcher, Dist: Angul
2. The Respondent. ITO, Angul Ward, Angul
3. The CIT(A)-2, Bhubaneswar
4. Pr.CIT-2, Bhubaneswar
5. DR, ITAT, Cuttack
6. Guard file.
//True Copy// BY ORDER,
SR.PRIVATE SECRETARY
ITAT, Cuttack