Income Tax Appellate Tribunal - Indore
M/S Shri Ram Tractors, Ujjain vs The Ito Ward-1(2), Ujjain on 12 January, 2018
आयकर अपील
य अ धकरण, इ दौर यायपीठ, इ दौर
IN THE INCOME TAX APPELLATE TRIBUNAL
INDORE BENCH, INDORE
BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER
AND
SHRI MANISH BORAD, ACCOUNTANT MEMBER
ITA No.979/Ind/2016
Assessment Year:1997-98
Shri Ram Tractors, ITO, Ward-1(2),
61, Fajalpura, बनाम/ Ujjain
Ujjain
Vs.
(Appellant) (Revenue )
P.A. No.AAFFS0812B
Appellant by ShriS.S. DeshpandeCA,
Revenue by ShriRajiv Jain, Sr. DR
Date of Hearing: 04.01.2018
Date of Pronouncement: 12.01.2018
आदे श / O R D E R
PER MANISH BORAD, A.M:
This appeal of Assessee pertaining to A.Y. 1997-98is directedagainst the order of Ld. Commissioner of Income Tax(Appeals)-Ujjain,(in short 'CIT(A)'), dated 01.07.2016 which is arising out of the order u/s 154 of the Income Tax Act 1961(hereinafter called as the 'Act') framed on 06.06.2014 by ITO- 1(2). The sole ground raised by the assessee reads as under:
"The Ld. CIT(A) has erred in law and was not justified in confirming action of AO not rectifying his order giving effect on Ram Tractors account of revised sale of Rs.25,87,818/- determined by the Sales Tax Authorities as against undisclosed sales of Rs.1,68,22,976/- earlier assessed and thereby not reducing the income on applying net profit ratio of 3% on revised sales.
2. We have heard rival contentions and perused record placed before us and gone through paper book submitted by the assessee. Facts in brief are that the assessee is a partnership firm and it was carrying a business of sale and purchase of old and new tractors and tractor parts etc. The return of income filed on 04.09.1998 declaring income of Rs.1,72,730/-. The survey operation was conducted by Commercial Tax Department, on 1.11.1996 wherein unaccounted sales were estimated at Rs.1,68,22,976/-. On the basis of the information from Sales Tax Department, AO issued notice u/s 148 of the Act on 29.05.2001 and subsequently, passed assessment order u/s 144 on 25.03.2003 adding gross profit @ 9.42% on unaccounted sales of Rs.1,68,22,976/-.
1323. The assessee filed an appeal before the Ld. CIT(A) and partly succeeded as the profit estimated on unaccounted sales was sustained applying net profit rate @3%.
4. He further filed an appeal before the Tribunal against the addition sustained by the Ld. CIT(A) but failed to succeed, as Tribunal confirmed the view of Ld. CIT(A) sustaining addition applying net profit rate of 3%. The AO gave appeal effect as per 2 Ram Tractors Direction of I.T.A.T., after receiving an application u/s 154 of the Act.
5. Simultaneously, the appellant was under appeal before the Sales Tax Authorities for alleged unaccounted sales and finally partly succeeded vide order of ACIT, Sales Tax, Ujjain dated 19.01.2012 which held that the undisclosed sales were only Rs.25,87,818/- as against figures determined by Sales Tax Department, at the time of survey at Rs.1,68,22,976/-. Accordingly assessee requested the Ld.A.O to calculate the addition on the undisclosed sales of Rs.25,87,818/- in the application filed u/s 154 of the Act. However, the ld. AR rejected the application observing that the order of Tribunal was pronounced on 30.09.2006 which was much before the order of Sales Tax Appellate Authority passed on 19.01.2012. Further, in the appeal before the Ld. CIT(A) against the rejection of application u/s 154, the assessee failed to succeed.
6. We further observe that the estimation of income on undisclosed sales by both the lower authorities as well as by the Tribunal was based on the undisclosed sales unearthed by the Sales Tax Department. It was only on the basis of the information from Sales Tax Department that the addition was made. From perusal of the order passed by sales tax, ACIT(A), we find that figure of undisclosed sales has been revised to Rs.25,87,818/-.whereas the additions made by the AO as well as the net profit rate sustained by the Ld. CIT(A) and the Tribunal was on the undisclosed sales of Rs.1,68,22,976/-. Certainly in the given facts and circumstances, the Ld. Counsel's contentions have substance and, we, therefore, 3 Ram Tractors direct the Ld.AO to verify the revised unaccounted sales figure as held by appellate authority of Sales Tax Department and if found correct then revise the figure of addition by applying net profit rate @ 3%(as confirmed by the Tribunal order dated 30.09.2006) on the unaccounted sales of Rs.25,86,818/- and give necessary relief to the assessee.
7. In the result, the appeal of the Assessee is allowed for statistical purposes.
Order was pronounced in the open court on 12 .01.2018.
Sd/- Sd/-
(KUL BHARAT) (MANISH BORAD)
JUDICIALMEMBER ACCOUNTANTMEMBER
Indore; दनांक Dated : 12 / 01/2018
ctàxÄ? P.S/. न.स.
Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file.
By order Private Secretary/DDO, Indore 4