Allahabad High Court
Smt. Raman Mahajan vs The Commissioner Of Income Tax on 13 October, 2017
Bench: Abhinava Upadhya, Ashok Kumar
HIGH COURT OF JUDICATURE AT ALLAHABAD
A.F.R.
Reserved
Court No. - 4
Case :- INCOME TAX APPEAL No. - 194 of 2013
Appellant :- Smt. Raman Mahajan
Respondent :- The Commissioner Of Income Tax
Counsel for Appellant :- Ashish Bansal
Counsel for Respondent :- C.S.C.,Gaurav Mahajan,S.S.C. I.T.
Hon'ble Abhinava Upadhya, J.
Hon'ble Ashok Kumar,J.
(Per : Ashok Kumar, J.)
This is an Income Tax Appeal filed under Section 260(A) of the Income Tax Act, 1961 (in short 'the Act') for the assessment year 2006-07 by which the appellant assessee has challenged the order passed by the Income Tax Appellate Tribunal, Agra Bench, Agra in I.T.A. No. 395/Agra/2011 dated 15.2.2013.
The brief facts of the case are that the appellant is an individual by status and was carrying on the business of trading in foot-wear in a proprietary set up in the name and style of 'Binny Trading Company'. The 'Return' for the assessment year 2006-07 has been filed by the appellant on 31.7.2006 under Section 139(1) of the Act by which the appellant has disclosed an income of Rs.1,24,198/-.
In pursuance of the information which has been received by the Assessing Officer of the appellant from the Additional Director of Income Tax (investigation), Agra that during the course of survey in the case of 'Bajwa Rubber Industries, Agra' the investigating agency had found that the purchases made from M/s Binny Trading Company, the proprietary set up of the present appellant had not recorded by the firm namely M/s Bajwa Rubber Industries in its purchase account.
On receiving the aforesaid information from the investigating wing a show cause notice dated 27.10.2008 has been issued by the Assessing Authority of the appellant requiring to explain as to why the sales made to M/s Bajwa Rubber Industries be not treated as sales made by the appellant out side the books of account.
In response to the notice issued by the Assessing Authority the appellant has submitted reply vide letter dated 10.11.2008 denying the sales made to M/s Bajwa Rubber Industries. The Assessing Authority has considered the said letter issued by the assessee appellant and has proceeded to pass the assessment order after considering the material placed by the investigating agency which has been found during the course of survey which was held at the business premises of M/s Bajwa Rubber Industries. The Assessing Authority has passed the assessment order under Section 143 (3) of the Act dated 24.11.2008. The authorised representatives of the assessee appellant was confronted with the information and the papers etc. received from the investigating wing, which was found during the survey operation in the case of Bajwa Rubber Industries. The authorised representative has filed the details as also the explanation. It transpired from the record that the total sales shown as Rs.22,84,733.00 as against the Rs.25,28,097.00 of last year, discount credited is Rs.14,093.00 against Rs. 5,713.00 of last year. The Assessing Authority was not convinced with the reply filed by the assessee appellant as the survey record reveals that M/s Bajwa Rubber Industries affecting the purchases from the assessee at Rs.34,07,720/- which the appellant has denied. After due consideration of the material, the books of accounts maintained by the appellant assessee has been rejected by the Assessing Authority and based on the material the Assessing Authority has estimated the sales at Rs.75 lacs. applying the net profit rate of 7% and therefore, the total income is computed at Rs.5,39,093/- after adding the interest of Rs.1400/- and after allowing the deduction of Rs.32,816/- under Section 80-C of the Act. The Assessing Authority has determined the total income of Rs.5,07,680/- as against the disclosing total income of Rs.1,24,198/-.
The Assessing Authority has further added sum of Rs. 31,68,900/- on account of investment in sales amounting to Rs.34,07,420/- which have been made by the assessee to M/s Bajwa Rubber Industries.
Aggrieved by the assessment order dated 24.11.2008 an appeal has been filed before the Commissioner of Income Tax (Appeals) - 1, Agra (in short 'CIT'). The CIT (A), Agra allowed the appeal in part by fixing the taxable income of the appellant to the tune of Rs.10,85,923/- as against the assessed income of the assessee by the Assessing Officer as Rs.36,76,580/-. The CIT (A) however, has directed that with regard to the unaccounted sale of Rs.13,37,250/- found on the basis of impounded documents pertaining to the previous assessment year 2005-06 the Assessing Authority should take appropriate action for the assessment year 2005-06, while passing the appellate order dated 31.3.2011.
The CIT (A) has recorded his findings in this regard which is quoted hereinbelow :
"Looking to the details available on the pages 9, it is very clear that sales for the period from 26.5.2005 to 6.8.2005 are only Rs.5,74,965/-. From page no.10 to11 sales made during the period from 12.9.2005 to 29.10.2005 are given which comes to Rs.3,19,440/-
5.7 After analyzing all the above impounded documents, I find that the various sales recorded to have been made to the appellant by M/s Shoe World (Bajwa) Exports as the unaccounted sales during different period are as under :-
AY 2005-06 (FY 2004-05)
1. for the period 20.7.2004 to 30.10.2004 Rs.7,46,490/-
2. for the period 15.10.2004 to 5.2.2005 Rs.5,90,760/-
Total sales Rs. 13,37,250/-
AY 2006-07 (FY 2005-06)
1. for the period 26.5.2005 to 6.8.2005 Rs.5,74,965/-
2. for the period 12.9.2005 to 29.10.2005 Rs.3,19,940/-
Total sales Rs.8,94,405/-
5.10. As regards to computation of unaccounted profit earned by the appellant, it has been found that unaccounted purchases made by the appellant as computed above was not shown anywhere in the books of account in the closing stock and therefore, the natural presumption would be that these unaccounted purchases were sold in the market. In the assessment order net profit rate on unaccounted sale has been taken by the AO at 7%. The same rate can be taken for computing the unaccounted profit earned by the appellant on sale of shoes which were purchased by her for Rs.8,94,405/- out of books."
Aggrieved by the order of the C.I.T. (Appeal) the assessee has filed the appeal before the Income Tax Appellate Tribunal which is heard and decided by the impugned judgment of the Tribunal dated 15.2.2013. The Tribunal after due consideration of the evidence and particularly the material provided by the investigating wing which was duly considered by the CIT (A) has affirmed the order of the CIT (A) by holding that the assessee has failed to furnish any supporting evidence regarding purchase and sales.
The ITAT in its order has categorically recorded the following finding :
"We have heard the ld. Representatives of the parties and records perused. We find that the CIT (A) has considering all aspect of the matter including the grievance of the assessee of non-considering of affidavits and non-providing of impounded material and the assessee was also not provided opportunity of hearing. The CIT (A) in paragraph no.5.2 made detailed discussion regarding the profit material of the assessee. CIT (A) called for the remand report from the A.O. and finally the A.O. found that on the basis of impounded material found during course of survey in the case of M/s. Shoe World (Bajwa) Exports that the assessee has made purchases from M/s. Shoe World (Bajwa) Exports. On the basis of impounded material, the assessee herself has calculated unaccounted purchases on the basis of loos paper of Rs.8,94,905/- and the same working has been given by the assessee to the CIT (A) vide letter dated 31.3.2011. In the same letter maximum profit was also calculated which was Rs.62,608/- being 7% of profit rate. The finding of CIT (A) is based on loose paper found at the time of survey in the premises sister concern of M/s Shoe World (Bajwa) Export and on the basis of these documents and statement of the concerned parties in the impounded document, it was clearly mentioned the name of the assessee. The CIT (A) did not accept the affidavit filed by the assessee observing as under :-
"In the statement, Shri Kunal Bajwa also accepted that the unaccounted sales were made to the appellant as recorded in these documents. Considering all these facts that Shri Kunal Bajwa of Shoe World (Bajwa) Export has clearly stated that he made unaccounted sale to M/s. Bunny Trading Co. and in the impounded documents also name of M/s. Bunny Trading Co. is clearly mentioned, the affidavit filed on behalf of the appellant stating that the appellant has not made any purchase from Shoe World (Bajwa) Exports which is not recorded in her books of account cannot accepted because it was not signed by the appellant but by some one Shri Mukesh Mahajan. Therefore, I am of considered opinion after considering over all facts of this case that the appellant has made unaccounted purchases from M/s. Shoe World (Bajwa) Export. Since after scrutiny of the seized documents, Ld. AR has also disputed the amount of Rs.34,07,420/- computed in the assessment order on the basis of the impounded documents and he has also worked out the relevant amount as to be only Rs.8,94,405/- in his written submission pertaining to FY 2005-06 relevant to AY 2006-07 under consideration."
The Tribunal has further held that the CIT (A) after due consideration and after considering the totality of the facts of the case has correctly passed the order by partly allowed the appeal which need no interference by the ITAT.
We have heard the learned counsel for the appellant Sri Ashish Bansal and counsel for the Revenue Sri Gaurav Mahajan.
We find that there is no illegality in the judgment of the ITAT and in fact the ITAT has recorded the material finding of fact which need no interference by this Court. The Tribunal's order is concluded by findings of fact and in our opinion, no question of law arises.
The appeal is hereby dismissed.
Order Date :- 13.10.2017
S.S.
.
(Ashok Kumar, J.) (Abhinava Upadhya, J.)
