Ita/247/2015 Of Principal Commissioner Of Income Tax Faridabad v. M/S Patram Lease Holder

--I TA 247 2015 ( O&M) -Dat e of deci si on: 03. 08. 2016 Pr . Commi ssi oner of I ncome Tax, Far i dabad. . . . Appel l antVer sus M/ s Pat r am Lease Hol der . . . Respondent CORAM: HON’ BLE MR. JUSTI CE S. J. VAZI FDAR, ACTI NG CHI EF JUSTI CEHON’ BLE MR. JUSTI CE DEEPAK SI BAL Pr esent : -Mr . Taj ender K. Joshi , Advocat e,f or t he appel l ant . Mr . Avneesh Jhi ngan, Advocat e,f or t he r espondent . * * * * S. J. VAZI FDAR, A. C. J. ( ORAL) Thi s i s an appeal agai nst t he or der of t he Tr i bunalaf f i r mi ng t he or der of t he CI T ( Appeal s) . The CI T ( Appeal s)est i mat ed t he r espondent - assessee’ s i ncome by t aki ng GP r at e of11. 22%, wher eas t he Assessi ng Of f i cer had added 50% of t heexpenses cl ai med i n t he t r adi ng and pr of i t& l oss account . Themat t er per t ai ns t o t he assessment year 1997- 1998.2.The pr oceedi ngs wer e i ni t i at ed under Sect i on 263 oft he I ncome Tax Act , 1961 ( i n shor t t he Act ) . I t i s notnecessar y t o consi der t he val i di t y of t he pr oceedi ngs underSect i on 263 of t he Actas t hey have not been chal l enged andt hi s i s t he r evenue’ s appeal . 3.The appel l ant cont ends t hat t he f ol l owi ng subst ant i alquest i ons of l aw ar i se: - “ 1. Whet her t he Hon’ bl e Member of I TATer r ed i n l aw i n agr eei ng wi t h t heobser vat i ons of CI T( A) i n r est r i ct i ngt he di sal l owance at Rs. 10, 99, 631/ -agai nst t he addi t i on ofRs. 2, 15, 78, 511/ - made on account ofdi sal l owance of expenses cl ai med i n t r adi ng account and Rs. 20, 96, 430/ - i nP&L a/ c by t he AO, i nspi t e of t he f actt hat t he l d. CI T( A)has hi msel faccept ed t he deci si on of AO i nr ej ect i ng t he books of account s of t heassessee i n t er ms of pr ovi si ons ofsect i on 145( 3) of t he Act , 1961.2.Whet her t he Hon’ bl e Member of I TATer r ed i n l aw i n del et i ng t he AO t or educe t he di sal l owance when t heassesee coul d not pr oduce suppor t i ngbi l l s/ voucher s/ books of account s andot her suppor t i ng evi dences f orexami nat i on and ver i f i cat i on bef or et he AO as wel l as bef or e t heLd. CI T( A) so as t o enabl e t hem t over i f y t he genui neness andaut hent i ci t y of expenses cl ai med i nTr adi ng & Pr of i t and Loss account andsubst ant i at e t he t axabl e i ncomecomput ed t her ef r om. ” 4.I n our opi ni on, t he appeal does not r ai se anysubst ant i al quest i on of l aw. I t onl y i nvol ves an assessment oft he f act s and t he exer ci se of di scr et i on i n comput i ng t hei ncome. The Assessi ng Of f i cer made an addi t i on of about` 2. 16 cr or es on account of di sal l owance of 50% of t he expensescl ai med i n t he t r adi ng account and made f ur t her addi t i on of anaggr egat e amount of about` 21 l acs on account of 50% of t hedi sal l owance out of t he expenses cl ai med i n t he pr of i t and l ossaccount .The Assessi ng Of f i cer di d so af t er r ej ect i ng t heassessee’ s books of account . The r ej ect i on of t he books ofaccount has not been chal l enged.5.The CI T ( Appeal s) and t he Tr i bunal , however ,di sagr eed wi t h t hese addi t i ons. The appel l at e aut hor i t i es not edt hat i n t he pr ecedi ng assessment year i . e. 1996- 1997, t heappel l ant had decl ar ed a net pr of i t of` 24, 85, 527/ - on t het ur nover of` 2, 21, 51, 608/ - r esul t i ng i nt o a GP r at e of 11. 22%.The pr oceedi ngs i n r espect of t hat assessment year , 1996- 1997have at t ai ned f i nal i t y.The deci si on, t her ef or e, t o pr oceed on t he basi s of t he t ur nover and t he decl ar ed pr of i t f or t hatassessment year cannot be sai d t o be unr easonabl e. t he basi s of t he t ur nover and t he decl ar ed pr of i t f or t hatassessment year cannot be sai d t o be unr easonabl e. 6.I n addi t i on t her et o, t he depar t ment had not soughtany compar abl e case f or est i mat i on of i ncome.The depar t menthad not br ought any mat er i al on r ecor d i ndi cat i ng t hat 50% oft he expenses wer e not suppor t ed by voucher s or wer e suppor t edby bogus voucher s. The deci si on, t her ef or e, t o assess t hei ncome af t er adopt i ng a GP r at e i s nei t her per ver se nori l l ogi cal .The exer ci se of di scr et i on i n t hi s r egar d cannot bef aul t ed. 7.No subst ant i al quest i on of l aw ar i ses i n t hi s appeal .8.The appeal i s, t her ef or e, di smi ssed.8.The appeal i s, t her ef or e, di smi ssed. ( S. J. VAZI FDAR)ACTI NG CHI EF JUSTI CE 03. 08. 2016 Amodh Whet her speaki ng/ r easonedYes/ NoWhet her r epor t abl eYes/ No ( DEEPAK SI BAL)JUDGE