M/s S. Mohd Ayub & Sons, Kannauj V. Dy. C.I.T., Circle-2(1), Farrukhabad

CO 1/AGR/2012

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7309 (ITAT-AGRA)
• Duration Of Justice: 4 month(s) 22 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 07-06-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 07-06-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 16-01-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NAVIN GARH
• Assessee Lawyers: SUHAIL AKHTAR
• Keywords: Business income; Question of law; Tax effect
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 350/AGRA/2011 ASSTT. YEAR : 2003-04 D.C.I.T., CIRCLE 2(2), VS. M/S. MOHD. AYUB & SON S, FARRUKHABAD. PANSARIYAN, KANNAUJ. (PAN : AADFS 0890 H) C.O. NO. 01/AGRA/2012 (IN ITA NO. 350/AGRA/2011) ASSTT. YEAR : 2003-04 M/S. MOHD. AYUB & SONS, VS. D.C.I.T., CIRCLE 2(2) , PANSARIYAN, KANNAUJ. FARRUKHABAD. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SUHAIL AKHTAR, JR. D.R. RESPONDENT BY : SHRI NAVIN GARH, ADVOCATE. DATE OF HEARING : 07.06.2012 DATE OF PRONOUNCEMENT OF ORDER : 07.06.2012 ORDER PER BHAVNESH SAINI, J.M.: THE DEPARTMENTAL APPEAL AS WELL AS THE CROSS OBJEC TION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A), GHAZIABAD DATED 21.06.2011 FOR THE ASSESSMENT YEAR 2003-04. ITA NO. 350-AGRA/2011 & C.O. NO. 1/AGRA/2012 2 2. THE REVENUE CHALLENGED THE ORDER OF THE LD. CIT( A) IN REDUCING THE GROSS PROFIT RATE TO 28% INSTEAD OF 35% APPLIED BY THE AO IGNORING THE FACT THAT THE ASSESSEE HAS NOT MAINTAINED QUANTITATIVE DETAILS OF STOCK. IN THIS CASE, IN ASSESSMENT YEAR UNDER APPEAL, THE ASSESSEE HAS SHOWN G.P. RATE OF 26.80%. THE AO, HOWEVER, APPLIED THE G.P. RATE OF 35% ON THE TOTAL SALES AND COMPUTED THE BUSINESS INCOME ACCORDINGLY AND MADE THE ADDITION AGAINST THE ASSES SEE. THE AO ALSO GAVE 50% BENEFIT IN REDUCTION OF THE INCOME BY ALLOWING DEDU CTION U/S. 80HHC OF THE IT ACT. THE LD. CIT(A) CONSIDERING THE EXPLANATION OF THE ASSESSEE AND MATERIAL ON RECORD REDUCED THE ADDITION ON ACCOUNT OF G.P. RATE AND DIRECTED TO APPLY THE G.P. RATE OF 28% INSTEAD OF 35% APPLIED BY THE AO. 3. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET S UBMITTED THAT THE TAX EFFECT IN THE DEPARTMENTAL APPEAL IS LESS THAN RS.3,00,000/-, WHICH IS MONETARY LIMIT PRESCRIBED FOR FILING OF THE DEPARTMENTAL APPEAL AS PER CBDT INSTRUCTION NO. 3 OF 2011 DATED 09.02.2011. THE LD. COUNSEL FOR THE ASSE SSEE FURTHER SUBMITTED THAT AFTER REDUCING THE G.P AND CONSIDERING THE FACT THAT THE ASSESSEE IS A 100% EXPORT UNIT AND 50% DEDUCTION HAS ALREADY BEEN ALLOWED BY THE A O U/S. 80HHC OF THE IT ACT, THE TAX EFFECT IN THIS CASE WOULD BE LESS THAN RS.3 ,00,000/-. THE CALCULATION IS FILED ON RECORD TO WHICH THE LD. DR DID NOT OBJECT AND ST ATED THAT THE TAX EFFECT AS PER ITA NO. 350-AGRA/2011 & C.O. NO. 1/AGRA/2012 3 COMPUTATION OF AO AND GIVING DEDUCTION U/S. 80HHC, IS LESS THAN RS.3,00,000/- IN THE DEPARTMENTAL APPEAL. 4. ON CONSIDERATION OF THE ABOVE FACTS, WE FIND THA T THE PARTIES HAVE CORRECTLY STATED THAT THE TAX EFFECT IN THE DEPARTMENTAL APPE AL IS LESS THAN RS.3,00,000/-. THE DEPARTMENTAL APPEAL IS FILED ON 12.09.2011 AFTER CB DT INSTRUCTION NO. 03 OF 2011 BECAME OPERATIVE FROM 09.02.2011. THEREFORE, AS PER SECTION 268A OF THE IT ACT, THE DEPARTMENTAL APPEAL WOULD NOT BE MAINTAINABLE A ND AS SUCH, THE SAME IS LIABLE TO BE DISMISSED. NO SUBSTANTIAL QUESTION OF LAW ARI SES IN THE PRESENT APPEAL AND NO VALIDITY OF ANY CIRCULAR OR NOTIFICATION IS UNDER C HALLENGE. ACCORDINGLY, THE DEPARTMENTAL APPEAL IS DISMISSED BEING NOT MAINTAIN ABLE. ITA NO. 350/AGRA/2011 IS, ACCORDINGLY DISMISSED. 5. THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO TH E GROUNDS OF CROSS OBJECTION SUBMITTED THAT GROUND NO. 1 & 2 OF THE CROSS OBJECT ION DO NOT ARISE FROM THE ORDER OF THE LD. CIT(A) AND ARE MERELY IN SUPPORT OF THE ORDER OF LD. CIT(A) AND GROUND NO. 3 TO 6 ARE WITH REGARD TO THE DISALLOWANCE OF C ERTAIN EXPENSES, ON WHICH THE ASSESSEE DID NOT PRESS THE APPEAL BEFORE THE LD. CI T(A). HE, THEREFORE, SEEKS PERMISSION TO WITHDRAW THE CROSS OBJECTION. THE CRO SS OBJECTION OF THE ASSESSEE IS DISMISSED AS WITHDRAWN BEING INFRUCTUOUS. ITA NO. 350-AGRA/2011 & C.O. NO. 1/AGRA/2012 4 5. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED AND THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED AS WITHDRAWN. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY