Mahendra Kumar Poddar v. The Commissioner of Income-tax, Jaipur / The DCIT, Investigating Circle-3, Jaipur
[Citation -2017-LL-0425-101]

Citation 2017-LL-0425-101
Appellant Name Mahendra Kumar Poddar
Respondent Name The Commissioner of Income-tax, Jaipur / The DCIT, Investigating Circle-3, Jaipur
Court HIGH COURT OF RAJASTHAN
Relevant Act Income-tax
Date of Order 25/04/2017
Judgment View Judgment
Keyword Tags initial investment • regular assessment • unaccounted sales
Bot Summary: This Court while admitting the appeal has framed the following substantial question of law: Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in holding that when gross profit is applied on unaccounted sales of Rs. 4059186/-, no deduction for expenses is allowance Whether, gross profit on sales can be taxed directly without allowing deduction of expenses, while assessing the income under the Income Tax Act, 1961 as has been done by the Tribunal while reversing the order passed by the CIT ITA-77/2006 3. Counsel for the appellant mainly contended that the Tribunal while considering the case of the appellant has lost sight of the fact that the unaccounted amount which has not been disclosed which is incurred expenses for turnover. Counsel for the respondent Mr. Mathur has opposed the contention and supported the order of the Tribunal. The Id. CIT held at pages 5 of his order that there were more than 250 sales vouchers which were seized and no purchase vouchers were found during the course of search. The Id. AR submitted that the assessee was purchasing the goods on credit as per individual orders from the customers. The peak investment estimated in the order dated 2-3-1995 under section 132(5) was Rs. 2.00 lacs and the assessee had made investment out of the funds received during past two years. Thus, the order of the Id. CIT is sustained for the reasons mentioned in his order.


HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 77 / 2006 Shri Mahendra Kumar Poddar 11th Misha Market, Agra Road, Jaipur. ----Appellant Versus 1. Commissioner of Income Tax, NCRB, Building Statue Circle, Jaipur 2. DCIT, Investigating Circle-3, Jaipur ----Respondents For Appellant(s) : Mr. P.K. Kasliwal For Respondent(s) : Mr. R.B. Mathur HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS Judgment 25/04/2017 1. By way of this appeal, appellant has challenged judgment and order of Tribunal whereby Tribunal has allowed appeal of Department. 2. This Court while admitting appeal has framed following substantial question of law: (I) Whether, on facts and in circumstances of case, Income Tax Appellate Tribunal was justified in holding that when gross profit is applied on unaccounted sales of Rs. 4059186/-, no deduction for expenses is allowance? (ii) Whether, gross profit on sales can be taxed directly without allowing deduction of expenses, while assessing income under Income Tax Act, 1961 as has been done by Tribunal while reversing order passed by CIT (A)? (2 of 3) [ITA-77/2006] 3. Counsel for appellant mainly contended that Tribunal while considering case of appellant has lost sight of fact that unaccounted amount which has not been disclosed which is incurred expenses for turnover. In that view of matter, though in regular assessment, he has claimed 40% expenses deduction may be allowed. 4. Counsel for respondent Mr. Mathur has opposed contention and supported order of Tribunal. 4.1 Tribunal while considering case has observed as under: We have heard rival submissions and perused materials available on record. This was third year of assessees business in motor parts and initial investment should be considered to have been made in earlier years. AO made addition of Rs. 5.70 lacs only on estimate basis. Id. CIT (A) held at pages 5 of his order that there were more than 250 sales vouchers which were seized and no purchase vouchers were found during course of search. seized computer floppy were indicating only investment of Rs. 1.70 lacs against which assessee surrendered income for assessment year 1994-95 at Rs. 2,09,250/-. Id. AR submitted that assessee was purchasing goods on credit as per individual orders from customers. No stock of motor parts were kept or found during course of search. peak investment estimated in order dated 2-3-1995 under section 132(5) was Rs. 2.00 lacs and assessee had made investment out of funds received during past two years. Therefore, we are of opinion that Id. CIT (A) had rightly held that no investment was required during year under appeal. Thus, order of Id. CIT (A) is sustained for reasons mentioned in his order. 5. We have heard learned counsel for parties. 6. Taking into consideration that when amount is unaccounted sales, corresponding expenses will require to be only 25%. 7. In that view of matter, in interest of justice, (3 of 3) [ITA-77/2006] expenses will be required to be allowed only 25%. 8. issue is answered in favour of assessee and against Department. appeal stands allowed. (VIJAY KUMAR VYAS),J. (K.S. JHAVERI),J. /bm gandhi 173 Mahendra Kumar Poddar v. Commissioner of Income-tax, Jaipur / DCIT, Investigating Circle-3, Jaipur
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