2012 (2) TMI 233 - AT - Income Tax

Estimation of profit on cash portion - 15% on cheque and 10% on cash margin - Held That - Assessee only pressed for one issue of application of profit rate on the cash portion during the course of arguments which have been considered and decided on merit, therefore, both the Misc. Applications of the assessee are not maintainable.

Summary

Issues:
1. Application of profit rate on cash portion for assessment years 1985-86 and 1987-88.
2. Consideration of grounds not argued during the appeal.
3. Maintenance of Misc. Applications by the assessee.
4. Imposition of costs for filing false and frivolous Misc. Applications.

Analysis:

1. Application of profit rate on cash portion:
The Tribunal considered the case where the assessee received cash and cheques while selling properties. The AO taxed the entire cash amount as unaccounted income. The CIT(A) upheld the assessment, taxing the entire sum received in cash. However, the Tribunal directed the AO to apply a net profit rate of 15% on the cash amount instead of taxing the entire sum as on money. The Tribunal allowed the appeals partly based on the submission that the same profit rate applied to cheques should be applied to cash considering possible expenses incurred by the assessee.

2. Consideration of unargued grounds:
The assessee contended that certain grounds were not considered by the Tribunal regarding the assessment based on months instead of the financial year. The Tribunal noted that the assessee did not dispute the application of the 15% profit rate on the cash amount, which was considered and decided during the proceedings.

3. Maintenance of Misc. Applications:
The Tribunal found that the assessee's Misc. Applications were not maintainable as the grounds not argued or pressed by the Counsel during the main appeals were not considered. The change in Counsel led to a contrary stand taken by the assessee, which was deemed frivolous. The Tribunal dismissed the Misc. Applications with costs, emphasizing that the assessee received substantial relief earlier, and cited various legal precedents supporting the dismissal.

4. Imposition of costs for frivolous applications:
The Tribunal issued a cost of Rs.5,000/- each on the assessee for filing false and frivolous Misc. Applications. The Tribunal deemed the applications as without just cause and stated that failure to pay the costs within one month would result in recovery by the AO as arrears of taxes.

In conclusion, the Tribunal dismissed the Misc. Applications of the assessee with costs, emphasizing the importance of maintaining consistency in arguments and decisions, and penalizing frivolous filings.