Praveen Kumar Jain, Mumbai vs Assessee
- CitationI.T.A. No.5560/Mum/2013
Ratio decidendi
The rule this decision rests on
The delay in filing the appeal was condoned where the assessee's documented mental disorder, supported by a qualified medical certificate, supplied reasonable cause for the belated filing, and condonation was granted in the interest of natural justice. Where the gross profit rate declared for a distinct line of business is not shown to govern a different transaction type, that rate cannot be adopted to estimate income from the latter; the estimate must reflect the nature of the transaction actually involved. Where the assessee's own contention on the estimated rate is not accepted but the earlier estimate is found excessive, the tribunal may fix a rate of its own that is reasonable on the facts, and direct the assessing officer to compute income accordingly.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
BEFORE HON'BLE S/SHRI H.L. KARWA, PRESIDENT AND B.R.BASKARAN (AM) सव ी एच.एल. कावा, अ य एवं बी.आर.बा करन, लेखा सद य आयकर अपील सं./I.T.A. No.5560/Mum/2013 ( नधारण वष / Assessment Year :2007-08)
Pravin Kumar Jain, बनाम/ Income Tax Officer, th Mercury A-201A,4 Cross-Road, Vs. Ward 20(2)(3), Lokhandwala Complex, Mumbai. Andheri (W), Mumbai-400053 (अपीलाथ /Appellant) .. ( यथ / Respondent)
थायी ले ख ा सं . /जीआइआर सं . /PAN/GIRNo. :AABPJ5428Q
अपीलाथ ओर से / Assessee by : Shri Rahul Jain, Son of assessee यथ क ओर से/Respondent by : Shri Neil Phlip.
सन ु वाई क तार ख / Date of Hearing : 31.12.2014 घोषणा क तार ख /Date of Pronouncement : 07 .01.2015
आदे श / O R D E R Per B.R.BASKARAN, Accountant Member:
The appeal of the assessee is directed against the order dated 09.01.2012 passed by Ld CIT(A)-31, Mumbai and it relates to the assessment year 2007-08. The assessee is aggrieved by the decision of Ld CIT(A) in confirming the estimation of income made by the assessing officer.
2. The appeal is barred by limitation by 477 days. The assessee has moved a petition requesting the bench to condone the delay. We heard the parties on this preliminary issue. It is stated in the petition that the assessee is suffering from a kind of mental disorder named Schizophrenia, which leads to loss of memory. The assessee has also attached a certificate obtained from a qualified doctor. The assessee's son who appeared before us that the assessee forgot to prefer appeal against the order of Ld CIT(A) due to the medical problem stated above. He submitted that he took step to file the present appeal, when the order 2 ITA No.5560/M/13
of Ld CIT(A) came to his notice subsequently. Having regard to the submissions made in the petition, we are of the view that there was reasonable cause for filing the appeal belatedly. Accordingly, in the interest of natural justice, we condone the delay and admit the appeal for hearing.
3. We heard the parties and perused the record. The facts relating to the issue under consideration are stated in brief. It came to the notice of the assessing officer that the assessee has been providing bogus bills and charging commission thereon. The bank account of the assessee revealed that the aggregate amount of deposits made during the year under consideration was Rs.2,07,73,671/-. In the return of income, the assessee had declared gross profit at 5.19%. By adopting the same rate, the assessing officer estimated the commission income on the above said sum of Rs.2,07,73,671/- at Rs.10,78,153/- and assessed the same. The Ld CIT(A) also confirmed the same.
4. At the time of hearing, the assessee's son appeared before us and he submitted that the commission income was earned @ 0.25% only on providing accommodation bills. He further submitted that the gross profit rate of 5.19% declared by the assessee in the return of income pertained to Steel business actually carried on and accordingly submitted that the tax authorities are not justified in adopting the said rate for estimating income from accommodation bills. On the contrary, the Ld D.R strongly defended the order of Ld CIT(A).
5. We agree with the contentions of the assessee's son that the gross profit rate declared in the Steel business cannot be adopted for estimating the commission income for providing accommodation bills, since the nature of the said transaction is altogether different from the steel business. Hence, we find merit in the submissions of the assessee that the commission income should be estimated at a lower figure. At the same time, we are unable to agree with the submissions of the assessee's son that the commission income was 0.25% only. Hence, in order to put this issue at rest, we direct the assessing officer to estimate the commission income @ 3% of the aggregate amount of bank deposits referred supra. At the time of hearing, the assessee's son also agreed to the said rate proposed by us. Accordingly, we modify the order of Ld CIT(A) 3 ITA No.5560/M/13
on this issue and direct the assessing officer to determine the income as discussed above.
6. In the result, the appeal of the assessee is partly allowed.
The above order was pronounced in the open court on 7th Jan,2015. घोषणा खुले यायालय म दनांकः 7th Jan 2015 को क गई ।
sd sd
(एच.एल. कावा/ H.L. KARWA) (बी.आर. बा करन,/ B.R. BASKARAN) अ य / PRESIDENT लेखा सद य/Accountant Member मब ुं ई Mumbai: 7th Jan, 2015.
व. न.स./ SRL , Sr. PS
आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. आयकर आयु त(अपील) / The CIT(A)- concerned
4. आयकर आयु त / CIT concerned
5. वभागीय त न ध, आयकर अपील य अ धकरण, मब ुं ई / DR, ITAT, Mumbai concerned
6. गाड फाईल / Guard file.
आदे शानस ु ार/ BY ORDER, true copy सहायक पंजीकार (Asstt. Registrar) आयकर अपील य अ धकरण, मंब ु ई /ITAT, Mumbai
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