TMI Blog2010 (3) TMI 726X X X X Extracts X X X X X X X X Extracts X X X X ..... r on sale of old tractors’ becomes obsolete - Decided against the assessee - IT APPEAL NOS. 726 TO 728 (BANG.) of 2009 - - - Dated:- 29-3-2010 - Dr. O.K. NARAYANAN, VICE-PRESIDENT J AND GEORGE GEORGE K, JUDICIAL MEMBER J, Jason P. Boaz for the Appellant. G.S. Sriram for the Respondent. Order Per George George K, Judicial Member. These three appeals preferred by the Revenue are directed against the consolidated order of the Ld. CIT(A), Hubli in ITA Nos. 74 to 79/CIT(A) HBL/08-09, dated30-3-2009for the assessment years (AYs) 2002-03, 2003-04 and 2004-05. 2. The Revenue has raised five identical grounds for the AYs under dispute. On a perusal, ground Nos. 1 and 5 being general in nature and no specific issues involved, they were considered as non-consequential. In the remaining grounds, the cruxes of the issues involved are reformulated in a concise manner as under : ( i ) the CIT(A) erred in condoning the delay of 28 months in preferring the appeals without appreciating the fact that there was no sufficient cause for such a delay; and ( ii ) the CIT(A) erred in restricting the estimation of net profit at 5 per cent as against 12 per cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the old tractor, arrange to sell such old tractors and remit the sale proceeds to the assessee. Till such time the proceeds of the old tractors are not received, the buyer of the new tractor is shown as a debtor in the books of the assessee. As and when the sale proceeds of the old tractors are received, the customer s account is credited with the sale amounts. Sometimes, if the sale amount is more than the value initially fixed, the excess amount is returned to the customer of the new tractor. On the other hand, if the sale amount of the old tractor is less than the expected rate, then such shortfall is treated as discount to the new tractor buyer and his account closed. This discount is allowed out of the profit margin of the assessee. Wherever old tractor is brought by a person, invariably he is bringing it with the purpose of buying new tractor from the assessee, and there is no instance of any purchase and sale of only the old tractor without a link to the new tractor deal. 5.1 After duly analyzing the statements recorded from various persons during the course of search proceedings and aftermath the assessee s statements recorded in the course of assessment proceedings, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve details of sales though the old tractors have been sold and the parties accounts have been closed. The money so received has profit component in it. On the basis of the chart, the profit estimation has been resorted to; - if the old tractors were not sold till the date of furnishing of the Chart ( i.e. 18-2-2006); such tractor owners could have been remained as debtors in the assessee s books of account as on31-3-2004; ( x ) the assessee had made profits in the ranges of 5-20 per cent and the assessee also pleaded that there were instances of losses; ( xi ) considering the over all facts that the assessee had advanced money to most of his customers where he stipulated interest @ 2 per cent per month; and that they were continuing as debtors in several cases for more than a year, an average profit margin of 12 per cent on the purchase price on old tractors was considered reasonable and the same was adopted for all the assessment years, namely, 1999-2000 to 2004-05. 6. Aggrieved, the assessee took up the issues before the CIT(A) for redressal. Chiefly, the bone of the contention of the assessee before the CIT(A) was the estimation of profit on old tractors at 12 per ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee at 2 per cent is not considered so also the 12 per cent estimated by Assessing Officer. But if margin is taken at par with new tractors it will be around 5 to 6 per cent, therefore it is held that 5 per cent profit on sale of old tractors is most reasonable and it takes care of arguments made by Assessing Officer as well as appellant, therefore Assessing Officer is directed to adopt 5 per cent of profit on old tractors for each year. 7. Disillusioned with the stand of the CIT(A), the Revenue has come up before us with the twin issues, namely (1) condoning the delay of 28 months in preferring the appeals for the assessment years under dispute; and (2) restricting the estimation of net profit at 5 per cent as against 12 per cent estimated by the Assessing Officer on sale of old tractors. 7.1 The forceful argument of the Revenue was that the medical certificate dated 10-1-2004 filed by the assessee before the Ld. CIT(A) to say that there was a sufficient cause should not have been taken cognizance of, as the assessee during the period between 21-1-2005 and 9-5-2006, had assisted his representatives in preparation and filing of block assessment return, appeared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We have duly considered the rival submissions, carefully perused the relevant records, documentary evidence and also the case laws put forth by either party. 8.1 In his forceful arguments before us, the Ld. A.R. had listed out the manner in which the ld. CIT(A) had dealt with the issue. We reproduce the same for better understanding of the issue (at the cost of repetition) : The CIT(A) based his decision to condone the delay not merely on medical certificate, but, considered the whole facts of the case in a judicious manner; - following the principles laid down by the Supreme Court and condoned the delay, holding that there was sufficient cause for condoning the delay as not condoning the delay on a mere technicality would have prevented justice being done to the assessee. As laid down by the Hon ble Supreme Court, the assessee would not have gained anything by not filing the appeal and the delay in filing the appeal was due to peculiar circumstances which followed the search and seizure operations and was not a deliberate delay; - CIT(A) considered all these factors and held that the petition for condonation of delay should be granted in view of the Supreme Court s j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the alleged medical certificate and again approached the Hon ble Court on 4-3-2005 with a plea to amend the writ petition filed earlier; ( iv ) Appeared before the Assessing Officer on3-1-2005 for disposal of proceedings under section 132B of the Act; ( v ) Furnished a letter dated 24-4-2006 in compliance to the penalty proceedings initiated under section 271(1)( c ) of the Act; and ( vi ) To top it all, after conclusion of the assessment proceedings, the assessee appeared before the Assessing Officer atBangalore on3-4-2007 and took possession of the seized books of account and other documents. 8.1.5 In view of the above, we are of the firm view that the petition for condonation of delay is lacking conviction and that the assessee was not prevented by a reasonable cause in preferring these appeals belatedly. It is pertinent to mention here that the medical certificate dated 14-1-2004 states that the assessee was advised to take complete rest and reduce work load due to diabetics, hypertension and mild chronic changes in ECG, whereas as stated earlier, the assessee was very active during the period between 21-1-2005 and 9-5-2006 in attending to his tax matters, appeared ..... X X X X Extracts X X X X X X X X Extracts X X X X
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