Income Tax Appellate Tribunal - Pune
Sachin Naginchand Chordiya,, Jalgaon vs Pr. Commisisoner Of Income-Tax - 2,, on 7 June, 2017
आयकर अपील�य अ�धकरण "बी" �यायपीठ पुणे म� ।
IN THE INCOME TAX APPELLATE TRIBUNAL "B" BENCH, PUNE
�ी डी. क�णाकरा राव,लेखा सद�य, एवं �ी �वकास अव�थी, �या�यक सद�य के सम�
BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM
आयकर अपील सं. / ITA No. 771/PUN/2015
�नधा�रण वष� / Assessment Year : 2010-11
Sachin Naginchand Chordiya
522-14, Shanti Sagar, Ganesh Wadi,
Behind Panchmukhi Hanuman Mandir,
Jalgaon-425 001
PAN : ADSPC4588J
.......अपीलाथ� / Appellant
बनाम / V/s.
Pr. Commissioner of Income Tax-2,
Nashik.
......��यथ� / Respondent
Assessee by : Shri Nikhil Pathak
Revenue by : Smt. Reena Jha Tripathi
सुनवाई क� तार�ख / Date of Hearing : 05.06.2017
घोषणा क� तार�ख / Date of Pronouncement : 07.06.2017
आदे श / ORDER
PER VIKAS AWASTHY, JM
This appeal by the assessee is directed against the order of Commissioner of Income Tax-2, Nashik dated 27.03.2015 passed under section 263 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') for the assessment year 2010-11.
2. The assessee is a wholesale dealer of food-grains and partner in a firm. The assessee filed his return of income for the impugned assessment year on 07.10.2010 declaring total income of Rs.7,83,140/-. 2 ITA No. 771/PUN/2015
A.Y. 2010 -11 During the course of scrutiny assessment proceedings, the Assessing Officer made ad-hoc addition of Rs. 90,360/- on account of low GP. The Commissioner of Income Tax invoked the provisions of Section 263 of the Act and issued notice to the assessee on 12.02.2015. The Commissioner of Income Tax observed that assessee had issued bearer cheques to his creditors in respect of cash purchases. The payments were made in contravention of provisions of Section 40A(3) and (3A) of the Act. The Commissioner of Income Tax disallowed Rs. 53,25,500/- ( Rs. 23,04,500/-+ Rs. 30,21,000/-).
Aggrieved by the revisional proceedings initiated by the Commissioner of Income Tax u/s 263 , the assessee is in appeal before the Tribunal.
3. Shri Nikhil Pathak appearing on behalf of the assessee submitted that the assessee had shown total sales of wheat at Rs.19,03,167/- and declared GP at Rs. 4,797/-. This GP declared by the assessee was 0.25%. The Assessing Officer estimated the GP at 5% and made addition of Rs. 90,360/-. The assessee had produced books of account before the Assessing Officer. The Assessing Officer after examining the same had made addition by adopting 5% GP. The order passed by the Assessing Officer is just and reasonable.
4. On the other hand, Smt. Reena Jha Tripathi representing the Department vehemently supported the order of the Commissioner of Income Tax in making addition. The ld. DR submitted that the Assessing Officer had not made inquiries and estimated GP at 5% without any basis. The assessment order is cryptic. The Commissioner of Income Tax has resorted to revisional proceedings under section 263 of the Act, as 3 ITA No. 771/PUN/2015 A.Y. 2010 -11 the assessment order is erroneous and prejudicial to the interest of Revenue. The Assessing Officer has failed to carry out proper investigation/verification before making ad-hoc GP addition at 5%. In support of her submissions, the ld DR has placed reliance on the decision of Hon'ble Calcutta High Court, in the case of Rajmandir Estates (P) Ltd. Vs. Principal Commissioner of Income Tax reported as 136 DTR (Cal.) 345.
5. We have heard the submissions made by the representatives of rival sides and have perused the orders of authorities below. The ld. AR of the assessee has merely reiterated the submission made before the Commissioner of Income Tax. A perusal of the assessment order shows that the Assessing Officer has estimated GP at 5% without any basis. There is nothing on record to show that any inquiry was made by the Assessing Officer before estimating GP. It is a well settled law that where no inquiry was made by the Assessing Officer at the time of assessment, the order of Assessing Officer is amenable to revisional proceedings u/s 263 of the Act. In the present case, the Commissioner of Income Tax under revisional jurisdiction has carried out independent verification of the bank statements of the assessee in account Nos. 1860 and 1560 of Jalgaon Janta Sahakari Bank Ltd. It transpired that the assessee had issued bearer cheques to his creditors for cash purchases. The Commissioner of Income Tax has given detailed list of the persons (Creditors) to whom bearer cheques were given by the assessee. The Commissioner of Income Tax disallowed the total sum of Rs. 53,25,500/- u/s 40A(3) and (3A) of the Act.
6. The assessee has taken a plea that cash payments made are covered under exception mentioned in Rule 6DD of the Income Tax 4 ITA No. 771/PUN/2015 A.Y. 2010 -11 Rules. However, the assessee has failed to substantiate exceptional circumstances under which cash payments were made. The Commissioner of Income Tax in order to grant fair opportunity to the assessee, has directed the Assessing Officer to verify applicability of Rule 6DD of the Act in the case of assessee. We do not find any infirmity in the order of the Commissioner of Income Tax. In the facts of the case, the Commissioner of Income Tax has rightly assumed revisional jurisdiction u/s 263 of the Act. Thus, we find no merit in the appeal of assessee and accordingly, the same is dismissed being devoid of any merit.
7. In the result, appeal of the assessee is dismissed.
Order pronounced on Wednesday, the 07th day of June, 2017.
Sd/- Sd/-
(डी. क�णाकरा राव/D. KARUNAKARA RAO) (�वकास अव�थी /Vikas Awasthy)
लेखा सद�य/ACCOUNTANT MEMBER �या�यक सद�य/JUDICIAL MEMBER
पुणे / Pune; �दनांक / Dated : 07th June, 2017.
SB
आदे श क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to :
1. अपीलाथ� / The Appellant.
2. ��यथ� / The Respondent.
3. The Pr. CIT-2, Nashik.
4. The CIT-2, Nashik.
5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, "बी" ब�च, पुणे / DR, ITAT, "B" Bench, Pune.
6. गाड� फ़ाइल / Guard File.
// True Copy // आदे शानुसार / BY ORDER, सहायक पंजीकार /Assistant Registrar आयकर अपील�य अ�धकरण, पुणे / ITAT, Pune