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Shri Chetan C. Patel and Others Versus The ACIT, Circle-7, Ahmedabad

2016 (1) TMI 494 - ITAT AHMEDABAD

Estimation of income - whether the gross profit rate (GP rate) or the net Profit rate (NP rate) should be adopted - Held that:- A.O proceeded to adopt the GP rate at 6.19% and did not grant the deduction of expenses of transportation of loading and unloading charges only for the reason that Assessee could not prove the genuineness of expenses. It is an undisputed fact that Assessee is engaged in the business of coal trading and in the nature of business in which Assessee is engaged into, the exp .....

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it was adopted. Thus we are of the view that in the present case when the sales are undisputed, the ends of justice shall be met if the income of the Assessee is estimated after taking into consideration the net profit rate of 1.5%. - Decided in favour of assessee. - IT(SS)A Nos: 522 to 524/AHD/2011 - Dated:- 4-11-2015 - SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER For The Appellant : Shri Tushar Hemani, AR For The Respondent : Smt. Vibha Bhalla, CIT/ D.R. ORDER .....

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peals can be heard together. Ld D.R did not object to the aforesaid submissions of Ld. A.R. We therefore proceed to dispose of all the appeals together for the sake of convenience and thus proceed with the facts in IT(SS)A No. 522/Ahd/2011 in the case of Chetan C. Patel. 3. Assessee is an individual stated to be doing business in the trading of coal in the name & style of M/s. Best Coal Depot and carting in the name of P.M. Services. A search and seizure operation u/s. 132 of the Act was car .....

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7; 12,91,715/- including G.P addition of ₹ 12,51,520/- in respect of A.Y. 93-94 to 96-97 instead of net income of Rs. Nil declared by the Assessee. Aggrieved by the order of A.O, Assessee carried the matter before ld CIT(A) where substantial relief was granted to the Assessee. Against the order of ld. CIT(A), Revenue carried the matter before Tribunal. Tribunal vide order dated 13.05.2008 set aside the issue to the file of A.O. Pursuant to the order of ITAT, A.O vide order dated 18.12.2009 .....

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g G.P. rate instead of N.P. rate and accordingly erred in making addition of ₹ 2,29,834/- as undisclosed income for the block period. 2. Ld. CIT(A) has erred in law and on the facts of the case in confirming the action of Id. AO in not following directions of the Hon ble ITAT in true spirit and accordingly erred in making GP addition. 3. Ld.CIT(A) has erred in law and on the facts of the case in confirming the action of ld.AO in treating income for the assessment years where return of inco .....

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ld. CIT(A) were not challenged by the Department in the first round of appeal, the same have become final and ought to have been followed by the CIT(A) while passing the impugned order. 5. Ld.CIT(A) has accordingly erred in law in reviewing his predecessor's order and confirming the action of ld. AO in making addition in those assessment years wherein the return of income was not filed on account of income being below the taxable limit, which in any case was settled before the final fact fi .....

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the impugned order. This action of both the authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed. 7. The learned CIT(A) has erred in law and on facts of the case in confirming action of the ld. AO in levying interest u/s 158BFA(1) of the Act. 8. The learned CIT(A) has erred in law and on facts of the case in confirming the initiation of penalty proceedings u/s 158BFA(2)of the Act. 4. Before us, at the outset, ld. A.R. submitted that though .....

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2,657/- as against the addition of ₹ 12,51,620/- by A.O. The matter was carried by Revenue before Tribunal. Hon ble Tribunal set aside the issue to the file of A.O with a direction to decide appropriate GP or NP rate in line of assessee s business. Ld. A.R. submitted that in the second round, Assessee placed on record the tax audit report of M/s. Omprakash & Co. for A.Y. 96-97 which was also engaged in the business of coal trading and it had declared GP rate at 6.19% and NP rate at 1.5 .....

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ee should be given deduction of expenditure in respect of transportation and loading and unloading expenses prior to estimation of income and accordingly the NP rate should be adopted as against the GP rate adopted by the A.O and for which he also placed reliance on the decisions in the case of CIT vs. President Industries 258 ITR 654 (Guj.) and CIT vs. Balchand Ajit Kumar (2003) 263 ITR 610 (MP). Ld. D.R. on the other hand supported the order of A.O and ld. CIT(A). 6. We have heard the rival su .....

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e of 1.5% to the Assessee as in the case of Omprakash & Co. to the Assessee s business but in the later part of the order, we find that A.O proceeded to adopt the GP rate at 6.19% and did not grant the deduction of expenses of transportation of loading and unloading charges only for the reason that Assessee could not prove the genuineness of expenses. It is an undisputed fact that Assessee is engaged in the business of coal trading and in the nature of business in which Assessee is engaged i .....

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