M/s. Rasranjan Food Products Pvt. Ltd., Ahmedabad V. The Dy.CIT.,Circle-5, Ahmedabad

CO 43/AHD/2012

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2291 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 24 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 04-05-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 29-04-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 10-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GYAN PIPARA
• Assessee Lawyers: A R REWOR
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NO: 3314AHD/2011 & C.O. NO. 43/AHD/12 (ASSESSMENT YEAR: 2008-09) JT. COMMISSIONER OF INCOME TAX (OSD), CIRCLE- 5, AHMEDABAD RASRANJAN FOOD PRODUCTS P.LTD. RASRANJANCOMPLEX, NR. VIJAY CHAR RASTA, AHMEDABAD-380009 V/S V/S RASRANJAN FOOD PRODUCTS P. LTD. RASRANJANCOMPLEX, NR. VIJAY CHAR RASTA, AHMEDABAD-380009 THE D.C.I.T., CIRCLE-5, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AABCR8986Q APPELLANT BY : SHRI A.R. REWOR, SR. D.R RESPONDENT BY : SHRI GYAN PIPARA, A.R. ( )/ ORDER DATE OF HEARING : 29-04-201 6 DATE OF PRONOUNCEMENT : 04 -05-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: ITA NO. 3314/AHD -11 & C.O. NO. 43/A-12 . A.Y. 2008-09 2 1. ITA NO. 3314/AHD/2011 & C.O. NO. 43/AHD/2012 ARE AP PEALS AND CROSS OBJECTION BY THE REVENUE AND THE ASSESSEE DIR ECTED AGAINST THE VERY SAME ORDER OF THE LD. CIT(A)-XI, AHMEDABAD DAT ED 21.10.2011 PERTAINING TO A.Y. 2008-09. 2. THE GRIEVANCE OF THE REVENUE READ AS UNDER:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE ASSESSING OFFICER (A.O) TO WORK OUT THE GROSS PROFIT (G.P) ADDITION B Y ADOPTING THE TURNOVER AT RS. 4.6 CRORES AND THE G.P. RATE AT 30% AS AGAINST THE SALES OF RS. 5 CRORES AND G.P. RATE OF 32% ESTIMATED BY THE A.O. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 3. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. CIT(A) MAY BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE AD DITION ON ACCOUNT OF SALES ESTIMATION AS WELL AS G.P. ESTIMATION WAS MADE AT RS. 2861560/-. CONSIDERING THE GRIEVANCE OF THE REVENUE QUA THE ENTIRE ADDITION MADE ON THIS ISSUE , THIS APPEAL OF THE RE VENUE DESERVES TO BE DISMISSED IN THE LIGHT OF THE CIRCULAR NO. 21/20 15 DATED 10.12.2015 BY WHICH THE CBDT HAS DIRECTED THE REVENUE NOT TO F ILE APPEAL IN CASES WHETHER THE TAX EFFECT DOES NOT EXCEED RS. 10 LACS. 4. DRAWING SUPPORT FROM THE AFOREMENTIONED CIRCULAR, T HE APPEAL BY THE REVENUE IS DISMISSED. 5. NEEDLESS TO MENTION THAT IF THE REVENUE FEELS THAT ITS APPEAL IS NOT HIT BY THE AFOREMENTIONED CIRCULAR OF THE CBDT, IT MAY APPROACH THE TRIBUNAL AS PER THE PROVISIONS OF THE LAW. ITA NO. 3314/AHD -11 & C.O. NO. 43/A-12 . A.Y. 2008-09 3 C.O. N0. 43/AHD/2012 FOR A.Y. 2 008-09 6. THE GROUNDS OF CROSS OBJECTION READ AS UNDER:- 1. THE LEARNED CIT(A) HAS ERRED IN PARTLY CONFIRMING THE ESTIMATION OF SALES FROM RS. 5 CRORES MADE BY THE A.O. TO RS.4.60 CRORES AS AGAINST THE ACTUAL SALES OF RS.4.54 CRORES RECORDED IN THE BOOKS OF ACCOUNT. IN VIEW OF ELABORATE SUBMISSIONS FILED AND MORE PARTICULARLY KEEPING IN VIEW THE FACT THAT THE APPELLANT HAD DECLARED SUBSTANTIALLY HIGHER TURNOVE R DURING THE YEAR COMPARED TO PREVIOUS YEAR AS CATEGORICALLY ADMITTED BY THE ID. CIT(A), THERE WAS NO REASON TO MARGINALLY INCREASE THE DECLARED T URNOVER TO THE EXTENT OF RS.6 LAKHS WITHOUT ANY BASIS OR EVIDENCE. THE APPEL LANT THUS CONTENDS THAT THE SALE SHOWN IN THE BOOKS OF ACCOUNTS REQUIRES TO BE ACCEPTED. 2. THE LEARNED CIT(A) HAS ERRED IN PARTLY CONFIRMING T HE ADDITION ON ACCOUNT OF ESTIMATION OF GROSS PROFIT RATE AT 32% MADE BY THE A.O. BY REDUCING IT TO 30% AS AGAINST ACTUAL GROSS PROFIT RATE OF 28.92% DECLA RED BY THE APPELLANT COMPANY WHILE FOLLOWING THE STAND TAKEN BY THE HON' BLE ITAT IN CASE OF THE APPELLANT IN EARLIER YEARS. THAT SINCE THE G.P. DEC LARED DURING THE YEAR I.E. 29% BEING MARGINALLY LOWER THAN THE G.P. OF 30% EST IMATED BY THE HON'BLE ITAT AND SINCE THE G.P. OF 29.65% OF IMMEDIATE PREV IOUS YEAR HAVING BEEN ACCEPTED BY THE ID. CIT(A), THE G.P. RATIO OF 28.92 % AS PER BOOKS OF ACCOUNTS OUGHT TO HAVE BEEN ACCEPTED BY THE LEARNED CIT(A). 7. THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY STATED THAT IN SUBSEQUENT YEARS I.E. A.Y. 2009-10 & 2010-11, THE ADDITIONS MA DE ON THIS COUNT HAVE BEEN DELETED BY THE LD. CIT(A) AND THE REVENUE DID NOT PREFER ANY APPEAL. THE LD. COUNSEL FURTHER STATED THAT IN A.Y. 2011-12 & 2012-13, NO ADDITION/DISALLOWANCE HAS BEEN MADE ON THIS ACCOUNT. ITA NO. 3314/AHD -11 & C.O. NO. 43/A-12 . A.Y. 2008-09 4 THEREFORE, FOR THE YEAR UNDER CONSIDERATION ALSO SI MILAR VIEW SHOULD BE TAKEN. THE RELEVANT FINDINGS OF THE COMMISSIONER R EAD AS UNDER:- 3.3 DURING THE YEAR UNDER CONSIDERATION, APPELLANT HAD DECLARED TURNOVER OF RS.4.54 CRORES WHICH IS SUBSTANTIALLY HIGHER AS COM PARED TO THE TURNOVER DECLARED BY THE APPELLANT IN THE IMMEDIATELY PRECED ING YEAR. (TURNOVER FOR THE A.Y. 2007-08 WAS DECLARED AT RS.3.45 CRORES) TH IS TURNOVER IS ALMOST 32% HIGHER AS COMPARED TO THE TURNOVER OF IMMEDIATE LY PRECEDING YEAR. IN MY CONSIDERED VIEW, APPELLANT HAD DECLARED SUBSTANT IALLY HIGHER TURNOVER IN SPITE OF STIFF COMPETITION IN THE MARKET. IN VIEW O F THESE FACTS, I AM OF THE CONSIDERED OPINION THAT IT WILL BE REASONABLE IF TU RNOVER OF THE APPELLANT BE ASSESSED AT RS.4.6 CRORES. AS FAR AS ESTIMATION OF GROSS PROFIT RATE IS CONCERNED, I FEEL THAT A.O.'S ESTIMATION IS ON HIGH ER SIDE. IT IS SEEN THAT MY PREDECESSOR HAD ACCEPTED DECLARED GROSS PROFIT RATE OF 29.65% IN THE A.Y. 2007-08. HOWEVER, I AM OF THE CONSIDERED VIEW THAT IT WILL BE REASONABLE TO FOLLOW ESTIMATION OF GROSS PROFIT MADE BY HONBLE I TAT. SINCE HONBLE ITATTHAD ESTIMATED GROSS PROFIT RATE IN THE CASE OF APPELLANT FROM A.Y. 2001- 02 TO A.Y. 2005-06 @ 30%, I AM ALSO INCLINED TO AGR EE WITH THE ESTIMATE GROSS PROFIT RATE @ 30%. 3.4 TO SUM IT UP TURNOVER OF THE APPELLANT IS ESTIMATED AT RS. 4.6 CRORES AND THE RATE OF GROSS PROFIT AT 30%. IN VIEW OF THE ABOVE E STIMATION, GROSS PROFIT OF THE APPELLANT WILL BE RS. 1.38 CRORES ( 4.6 X 0.3). THI S WAY, APPELLANT WILL GET RELIEF OF RS. 22,00,000/- (1,60,000- 1,38,00,000). AS A RE SULT, ADDITION TO THE EXTENT OF RS. 6,61,560/- IS CONFIRMED. THE SECOND AND THIR D GROUNDS OF APPEAL ARE PARTLY ALLOWED. 8. WE HAVE CONSIDERED THE SUBMISSION OF THE LD. COUNSE L QUA THE FINDINGS OF THE LD. CIT(A). THE FINDINGS OF THE LD. CIT(A) A RE BASED UPON THE ITA NO. 3314/AHD -11 & C.O. NO. 43/A-12 . A.Y. 2008-09 5 PAST DECISIONS INCLUDING THE DECISION OF THE CO-ORD INATE BENCH. WE, THEREFORE, DECLINE TO INTERFERE CROSS OBJECTION IS ALSO DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 04- 05 - 2016. SD/- SD/- (RAJPAL YADAV) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD