M/s. Barmer Agro Gum Industries, JODHPUR V. ACIT, BARMER

CO 9/JODH/2011

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7675 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 13 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 18-09-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 11-09-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 05-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: U C JAIN
• Assessee Lawyers: G R KOKANI
• Keywords: Gross profit estimation; Depreciation; Loose papers

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NO. 39/JU/2011 ASSESSMENT YEAR : 2007-08 THE ACIT, VS M/S BARMER AGRO GUM INDUSTRIES, CIRCLE BARMER BARMER PAN NO. AAFFB 3172 K & C.O. NO. 9/JU/2011 (IN ITA NO. 39/JU/2011) ASSESSMENT YEAR : 2007-08 M/S BARMER AGRO GUM INDUSTRIES, VS THE ACIT, CIRCLE , BARMER BARMER PAN NO. AAFFB 3172 K ITA NO. 38/JU/2011 ASSESSMENT YEAR : 2007-08 THE ACIT, VS M/S WESTERN GUM UDHYOG, CIRCLE, BARMER BARMER PAN NO. AAAFW 3002 E & C.O. NO. 10/JU/2011 (ITA NO. 38/JU/2011) ASSESSMENT YEAR : 2007-08 M/S BARMER AGRO GUM INDUSTRIES, VS THE ACIT, BARMER CIRCLE, BARMER PAN NO. AAAFW 3002 E (APPELLANT) (RESPONDENT) 2 APPELLANT BY : SHRI G.R. KOKANI RESPONDENT BY : SHRI U.C.JAIN & SHRI RAJENDRA JAI N DATE OF HEARING : 11.09.2012 DATE OF PRONOUNCEMENT : 18.09.2012 ORDER PER N.K.SAINI, A.M. THE APPEALS BY THE DEPARTMENT AND CROSS OBJECTIONS BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDER EACH DATED 1.12.2010 OF CIT(A), JODHPUR PASSED IN RESPECT OF EACH ASSESSEE. SINCE THE APPEALS ALONG WITH CROSS OBJECTIONS WERE HEARD TOGETHER, SO THESE ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST, WE WILL DEAL WITH THE CASE OF M/S BARMER AGRO GUM INDUSTRIES, BARMER IN ITA NO. 39/JU/2011 OF THE DEPARTMENTAL AP PEAL. THE ONLY EFFECTIVE GROUND RAISED IN THIS APPEAL READS AS UND ER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN DELETING THE TRADING ADDITION OF RS. 30,99,931/- WITHOUT APPRECIATING TH E FACTS MENTIONED BY ASSESSING OFFICER IN HIS ASSESSMENT ORDER. 3. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSE SSEE FILED ITS RETURN OF INCOME ON 29.10.2007 DECLARING A LOSS OF RS. 21,55, 390/-. THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF MANUFACTURING AND EXPORT OF GWAR, GUM, CHHURI, KORMA & ALLIED PRODUCTS. IN THIS CASE, SURVEY WAS CONDUCTED ON 14.3.2007 3 AND THE CASE WAS SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD SHOWN VKUY (VISHESH KRISHI UPAJ YOGNA) INCENTIVE IN THE T RADING ACCOUNT, DUE TO WHICH THE ENTRY OF THE GP CAME TO HIGHER SIDE. THE ASSESSING OFFICER WORKED OUT THE GP RATE AND NP RATE FOR THE YEAR UND ER CONSIDERATION AND FOR THE PRECEDING ASSESSMENT YEAR IN THE FOLLOWING MANN ER. ASSESSMENT YEAR SALES GROSS PROFIT GP RATE (%) NP RATE (%) 2005-06 109928211 8360491 7.60 6.01 2006-07 123800657 3664877 2.96 0.41 2007-08 111707882 5843780 5.23 0.55 WITHOUT VKUY IN PROIFT AND LOSS ACCOUNT 2006-07 123800657 -3596534 2.96 0.41 2007-08 111707882 1503966 1.34 0.55 4. THE ASSESSING OFFICER ALSO POINTED OUT THAT THE ASSESSEE HAD PREPARED TRADING ACCOUNT ON 27.2.2007 BUT THERE WAS DIFFEREN CE IN STOCK TAKEN ON 28.2.2007 IN COMPARISON TO ACTUAL INVENTORY PREPARE D. THE ASSESSEE EXPLAINED THAT THE STOCK TAKEN AT THE TIME OF SURVE Y ON 28.2.2007 WAS AT RS. 48,63,250/- IN COMPARISON TO THE STOCK SHOWN BY THE ASSESSEE AT RS. 48,44,170/-. AS SUCH, THERE WAS DIFFERENCE OF RS. 19,080/- ONLY. THE ASSESSEE SUBMITTED THE STOCK POSITION AS UNDER:- 4 S.NO. STOCK TAKEN BY DEPARTMENT AMOUNT STOCK SUBMIT BY ASSESSEE AMOUNT 1 GWAR BORI 1822 X 100 KG @ 1810 3297820 GWAR BORI 1890 X 100 KG @ 1810 3420900 2 CHURA 74 KG 286 + 239= 525 @ 620 325500 CHURA 286 + 204 = 490 @ 620 303800 3 CHURA 34.5 KG 1475 @ 290 427750 CHURA 34.5 KG 1483 @ 290 430070 4 LAKDI 40 TONES @ 127 50800 LAKDI 40 TONES @ 126 50400 5 BAAR DANA 11500 BAGS @ 15 172500 BAAR DANA 11500 BAGS @ 15 172500 6 KACHRA GWAR DAL 200 BAG 50 KG @ 4500 450000 KACHRA GWAR DAL 200 BAG 50 KG @ 4665 466500 4863250 4844177 5. IT WAS ALSO POINTED OUT THAT IN THE CHURI (74 KG ), THE DIFFERENCE WAS OF 35 BAGS VALUING AT RS. 21,700/- AND THE DIFFERENCE IN CHURI (34.5 KG) WAS OF 8 BAGS AMOUNTING TO RS. 2,326/-. IT WAS ALSO STATED THAT THE GP RATE FOR THE YEAR UNDER CONSIDERATION WAS BETTER AT 5.23% IN COM PARISON TO THE EARLIER YEAR AT 2.96%. HOWEVER, THE ASSESSING OFFICER DID NOT FIND FORCE IN THE SUBMISSIONS OF THE ASSESSEE BY OBSERVING THAT THE A SSESSEE WAS NOT MAINTAINING PROPER STOCK REGISTER YIELD WISE REGARD ING PROCESSING YIELD WISE. THEREFORE, IT WAS SELF-PROVED THAT THERE MIGHT HAVE BEEN SHORTAGE OF STOCK AND THE ASSESSEE MIGHT HAVE GOT MORE YIELD. HE ALS O OBSERVED THAT A SURVEY PARTY POINTED OUT THAT THERE WAS SHORTAGE OF STOCK AMOUNTING TO RS. 5 43,73,324/-. THE ASSESSING OFFICER WORKED OUT THE AVERAGE GP RATE BY CONSIDERING THE GP RATE OF LAST THREE YEARS AT 3.96 % (7.60 + 2.96 + 1.34 / 3) THE ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNT S U/S 145(3) OF THE ACT AND APPLIED THE SAID GP RATE OF 3.96% ON THE GROSS SALES DECLARED BY THE ASSESSEE AT RS. 11,17,07,882/-. IN THIS MANNER, TH E GP WAS WORKED OUT AT RS. 44,23,632/-. 6. THE ASSESSING OFFICER ALSO OBSERVED THAT THE ASS ESSEE HAD DECALED GP @ 1.34%, HENCE THERE WAS DIFFERENCE IN THE GP DECLA RED BY THE ASSESSEE AND WORKED OUT THE DIFFERENCE IN GROSS PROFIT BY APPLYI NG THE GP RATE @ 2.62% (3.96% - 1.34%) ON THE GROSS SALE DECLARED BY THE A SSESSEE, WHICH CAME TO RS. 29,26,747/-. THE ASSESSING OFFICER ALSO APPLIED THE GP RATE AT 3.96% ON ALLEGED SHORTAGE OF STOCK OF RS. 43,73,324/- AND WO RKED OUT THE GP AT RS. 1,73,184/-. ACCORDINGLY, TRADING ADDITION OF RS. 30 ,99,931/- (RS. 29,26,747 + RS. 1,73,184/-) WAS MADE TO THE INCOME OF THE ASSES SEE. THE ASSESSEE CARRIED THE MATTER TO THE LD CIT(A) AND THE SUBMISSIONS MAD E BEFORE HIM AS MENTIONED IN PARA 5.2 TO 5.4 OF THE IMPUGNED ORDER ARE REPRODUCED PER VERBATIM AS UNDER:- 5.2 DURING THE COURSE OF APPELLATE PROCEEDINGS, TH E APPELLANTS AUTHORIZED REPRESENTATIVE SUBMITTED THAT:- A. THE ASSESSEE FIRM MAINTAINED DAY TO DAY BOOKS O F ACCOUNTS. THE ENTIRE SALES AND PURCHASES ARE FULLY AND PROPERLY VOUCHED AND VERIFIABLE FROM THE BILLS. TH E BOOKS OF ACCOUNT ARE SUBJECT TO AUDIT. THE ASSESSEE FIRM ALSO MAINTAINED DAY TO DAY STOCK REGISTER IN QUANTITY AN D WEIGHT. THE STOCK REGISTER SO MAINTAINED WAS FOUND DURING THE COURSE OF SURVEY CONDUCTED ON 28.2.2007 AND 6 THE SAME WAS PRODUCED BEFORE THE ASSESSING OFFICER FROM TIME TO TIME DURING THE ASSESSMENT PROCEEDINGS. B. CASH FOUND AT THE TIME OF SURVEY WAS AS PER BOOKS O F ACCOUNT. NO INCRIMINATORY PAPERS WERE FUND AT THE T IME OF SURVEY WHICH SUGGESTS NO PURCHASES, SALES OR EXPEND ITURE ARE OUTSIDE THE BOOKS OF ACCOUNT. C. IT IS FURTHER SUBMITTED THAT THE AUTHORIZED OFFICER AT THE TIME OF CONDUCTING THE SURVEY RATHER COMPARING THE QUANTITY OF STOCK FOUND AT THE TIME OF SURVEY WITH REFERENCE TO THE QUANTITY RECORDED IN THE STOCK REGISTER MAIN TAINED BY THE ASSESSEE, HE PREPARED A TRADING ACCOUNT IN T ERMS OF VALUE BY ADOPTING GROSS PROFIT RATE AS DISCLOSED IN THE PRECEDING YEAR AND ERRONEOUSLY WORKED OUT THE SHORT AGE IN STOCK AS PER THEIR CALCULATION. D. THE ASSESSEE MAINTAINS DAY TO DAY STOCK REGISTER AS PRESCRIBED UNDER THE ESSENTIAL COMMODITIES ACT AND AS SUCH THERE IS NO NECESSITY TO MAINTAIN A SEPARATE S TOCK REGISTER AS ALL THE ESSENTIAL REQUIREMENT IS FOUND RECORDED IN THE STOCK REGISTER MAINTAINED BY THE FIRM. E. QUANTITY TALLY STATEMENT IS GIVEN IN AUDIT REPORT. NO ADVERSE COMMENT OF ASSESSING OFFICER ON SUCH REPORT . IN THE IMMEDIATE PRECEDING YEAR THE ASSESSING OFFICER HIMSELF ACCEPTED ASSESSEES BOOK VERSION AND TREATE D THE SAME AS TRUE AND CORRECT. NO DEFECT IN THE BOOKS O F ACCOUNT, BILLS, VOUCHERS OR STOCK REGISTER WAS NOTE D BY THE ASSESSING OFFICER WHICH WERE PRODUCED BEFORE HIM DU RING THE ASSESSMENT PROCEEDINGS AND THE ASSESSING OFFICE R WITHOUT POINTING OUT ANY DEFECTS IN THE BOOKS OF AC COUNT OR STOCK REGISTER REGULARLY MAINTAINED, REJECTED THE S AME FOR INSIGNIFICANT REASONS AND AS SUCH REJECTION OF BOOK S OF ACCOUNT ARE NOT JUSTIFIED. IT IS FURTHER SUBMITTED THAT IN 7 THIS LINE OF BUSINESS THE GP RATE CANNOT REMAIN UNI FORM AS THE RATES OF RAW MATERIAL AND FINISHED GOODS ARE H IGHLY FLUCTUATING. THE FOREIGN BUYER MAKES CONTRACT OF PU RCHASES OF GUM (DAL) IN ADVANCE AND GOODS ARE SUPPLIED ACCORDING TO RATE SETTLED. THE RATES OF GUAR WHICH IS THE ONLY RAW MATERIAL IS HIGHLY FLUCTUATING AND THE GP WILL DEPEND ON THE PURCHASE PRICE OF RAW MATERIAL IN TIM E, KEEPING IN VIEW RATES QUOTED FOR SALE OF FOREIGN BU YER. 5.3 IT IS FURTHER SUBMITTED THAT VKUY IS PART OF TRADIN G ACCOUNT AS THE SAME DOES NOT HAVE ANY INDEPENDENT SOURCE OF IN COME. THE VKUY IS PROVIDED TO NEUTRALIZING THE INCIDENCE OF C USTOMS DUTY ON THE IMPORT CONTENT OF THE EXPORT PRODUCT. THE N EUTRALIZATION SHALL BE PROVIDED BY WAY OF GRANT OF DUTY CREDIT AG AINST THE EXPORT PRODUCT. THEREFORE, THE SAME IS PART OF TRAD ING ACCOUNT AND THE ASSESSING OFFICER ERRED IN EXCLUDING THE SA ME WITHOUT CALCULATING THE GP RATE. 5.4 THE ABOVE SUBMISSIONS GET SUPPORT FROM VARIOUS COUR TS DECISION OF RAJASTHAN HON'BLE HIGH COURT AND ITAT, JODHPUR B ENCH MAINLY FOLLOWING ARE:- (I) MALANI RAMJIVAN JAGANNATH VS ACIT 207 CTR 19 (R AJ) ACCOUNTS-REJECTION-ESTIMATION OF GP RATE- QUANTUM AND VALUE OF PURCHASES AND SALES WERE NOT DISPUTED IN AS MUCH AS THEY WERE FOUND TO BE FULLY VOUCHED- VALUE OF OPENING STOCK ALSO CANNOT BE DISPUTED AS IT IS THE CLOSING STOCK OF THE PREVIOUS YEAR-INVENTORY OF CLOSING STOCK WAS ALSO NOT FOUND TO BE INCORRECT-THUS, THERE BEING NO DISPUTE REGARDING PURCHASES AND SALES, NON- MAINTENANCE OF STOCK REGISTER LOSES SIGNIFICANCE SO FAR AS DETERMINATION OF GP IS CONCERNED. ALL THE LOWER AUTHORITIES HAVE ACCEPTED THE REASON FOR 8 FALL IN GP RATE NAMELY, STIFF COMPETITION IN THE MARKET AND THE HUGE LOSS INCURRED BY ASSESSEE IN A PARTICULAR TRANSACTION-THEREFORE, NEITHER THE REJECTION OF BOOKS OF ACCOUNT FOR ESTIMATION OF GP BY APPLICATION OF RULE OF THUMB WAS JUSTIFIED WHEN NONE OF THE DATE AND ENTRIES IN THE TRADING ACCOUNT HAS BEEN FOUND TO BE INCORRECT IN ANY MANNER, THE RESULT SHOWN BY THE ASSESSEE IN THE BOOKS OF ACCOUNT HAS TO BE TAKEN AS TRUE. II) M/S DWARAKA DASS DOSHI IN ITA NO. 477/JDPR /06 DATED 30.10.2007 OF ITAT JODHPUR. WE FIND THAT THE BOOKS OF ACCOUNT WERE REJECTED ONLY BECAUSE OF LOW GROSS PROFIT WAS SHOWN DURING THE YEAR. WE ARE AWARE THAT THE NON MAINTENANCE OF MUSTER ROLL OR DAY TO DAY STOCK CONSUMPTION REGISTER CANNOT BE CONSIDERED AS A GOOD GROUND FOR REJECTION OF BOOKS OF ACCOUNT. THE ASSESSING OFFICER DID NOT PINPOINT ANY MATERIAL DEFECT IN THE BOOKS OF ACCOUNT. HE REJECTED THE BOOKS MAINLY BECAUSE HE CONSIDERED THE RATE OF PROFIT AS LOW. THE REASON THAT THERE WAS LOW RATE OF PROFIT CANNOT BE MADE SOLD GROUND FOR REJECTION OF BOOKS OF ACCOUNT. 7. THE LD CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE ASSESSEE HAD MAINTAINED QUANTITY WISE STOCK REGISTER WHICH PROVIDED ALL PARTICULARS SUCH AS DATE, BILL NO. QUA NTITY RECEIVED, QUANTITY ISSUED FOR PRODUCTION AND BALANCE AT THE END OF THE DAY. THE STOCK REGISTER SO MAINTAINED WAS FOUND DURING THE COURSE OF SURVEY AN D QUANTITY OF THE MAIN PRODUCTS WERE TALLIED WITH THE PHYSICAL STOCK TAKEN BY THE AUTHORIZED OFFICER IN THE COURSE OF SURVEY EXCEPT MINNER DIFFERENCE WH ICH HAD BEEN EXPLAINED BY 9 THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDING S. HE, HOWEVER, OBSERVED THAT ON THE SAME SET OF FACTS IN THE PRECEDING YEAR , THE ASSESSING OFFICER HAS ACCEPTED BOOK RESULTS AND BY FOLLOWING RULE OF CONS ISTENCY, THE BOOKS OF ACCOUNT COULD NOT BE REJECTED MERELY BY ADOPTING DI FFERENT METHOD FOR WORKING OF GP RATE AT THE TIME OF SURVEY. HE ALSO POINTED OUT THAT IN THE CASE OF AN ASSESSEE WHO MAINTAINED QUANTITY WISE STOCK R EGISTER, SHORTAGE OR EXCESS OF STOCK COULD HAVE BEEN WORKED OUT ONLY BY COMPARING QUANTITY REFLECTED IN THE STOCK REGISTER WITH ACTUAL QUANTIT Y FOUND IN THE COURSE OF SURVEY. SINCE IN THE ASSESSEES CASE THE QUANTITY OF STOCK WAS TALLIED WITH THE PHYSICAL INVENTORY FOUND IN THE COURSE OF SURVEY, T HEREFORE, THE AUTHORIZED OFFICER ADOPTED A DIFFERENT METHOD TO WORK OUT SHOR TAGE OR EXCESS OF STOCK BY APPLYING GP RATE OF LAST YEAR WHICH COULD HAVE BEEN APPLIED IN THOSE CASES WHERE DAY TO DAY STOCK REGISTER WAS NOT MAINTAINED BUT NOT IN THE CASE WHERE THE QUANTITATIVE STOCK REGISTER WAS PROPERLY MAINTA INED. THE LD CIT(A) FURTHER OBSERVED THAT THE ASSESSING OFFICER HAD NOT POINTED OUT ANY DEFECT IN THE YIELD SHOWN BY THE ASSESSEE AND IF THE YIELD SH OWN BY THE ASSESSEE WAS CORRECT, THEN NO BOOKS OF ACCOUNT OR BOOK RESULTS C OULD HAVE BEEN REJECTED. THE LD CIT(A) WAS OF THE VIEW THAT IN CASE OF REJEC TION OF BOOKS OF ACCOUNT, THE ASSESSING OFFICER HAS TO FIND OUT THE DEFECTS E ITHER IN SUPPRESSION OF PRODUCTION OR UNRELIABLE YIELD AND SUPPRESSION OF S ALE OR INFLATION OF THE EXPENDITURE ON THE BASIS OF THE DOCUMENTS OR LOOSE PAPERS FOUND IN THE COURSE OF SURVEY. HOWEVER, IN THE PRESENT CASE NEITHER AU THORIZED OFFICER HAD FOUND LOOSE PAPERS OR DOCUMENTS WHICH SUGGESTED SUPPRESSI ON OF SALES OR INFLATION OF EXPENDITURE AND THE ASSESSING OFFICER HAS ALSO F OUND YIELD PRODUCTION AS CORRECT AND RELIABLE, UNDER THOSE CIRCUMSTANCES, BY SIMPLY ADOPTING A DIFFERENT METHOD OF PREPARATION OF TRADING ACCOUNT AT THE TIME OF SURVEY BY 10 APPLYING GP RATE INSTEAD OF COMPARING QUANTITY OF S TOCK, THE ASSESSING OFFICER COULD NOT HAVE REJECTED THE BOOKS OF ACCOUN T AND MADE ADDITION TO THE TRADING RESULT. THE LD CIT(A) MENTIONED THAT THE AS SESSEE SUBMITTED STATEMENT SHOWING COMPARATIVE POSITION OF THE YIELD PERCENTAG E AND PRODUCTION OF THREE YEARS, WHICH READS AS UNDER:- 2005-06 2006-07 2007-08 QUANTITY WEIGHT (IN QTLS) % OF YIELD WEIGHT (IN QTLS) % OF YIELD WEIGHT (IN QTLS) % OF YIELD GWAR DALI 15086.20 28.95% 10405.00 29.24 % 12469.00 29.22% CHURI & KORMA 14915.98 67.02% 29931.80 67.26% 28742.34 67.34% TUKRI 100.00 0.19% 76.80 0.21% 33.60 0.08% SHORTAGE 1994.82 3.84% 0.19 3.29% 1432.59 3.36% 52097.00 100.00% 3.84 100.00% 42677.53 100.00% 8. ON THE BASIS OF THE ABOVE CHART, THE LD CIT(A) C AME TO THE CONCLUSION THAT THE YIELD OF FINISHED GOODS FOR THE YEAR UNDER CONSIDERATION WAS BETTER THAN THE ASSESSMENT YEAR 2005-06 AND WAS ALMOST COM PARABLE WITH THE IMMEDIATELY PRECEDING YEAR, WHICH CLEARLY SHOWED TH AT THERE WAS NO SUPPRESSION OF PRODUCTION AND, THEREFORE, STOCK AVA ILABLE AT THE TIME OF SURVEY WAS CORRECT AND THERE WAS NO SHORTAGE. THE LD CIT(A) ALSO POINTED OUT THAT DURING THE YEAR UNDER CONSIDERATION, THE A SSESSEE HAD RECEIVED VKUY LICENSE OF RS. 43,73,324/- BEING 5% OF EXPORT OF GW AR TO THE TUNE OF RS. 8,72,15,046/-. THE LD CIT(A) ACCEPTED THIS CONTENT ION OF THE ASSESSEE THAT AT THE TIME OF FIXING SELLING PRICE WITH THE FOREIGN B UYERS, THE ASSESSEE KEPT IN MIND 5% BENEFIT WHICH WAS GOING TO BE RECEIVED FROM THE STATE GOVERNMENT 11 AND ACCORDINGLY SELLING PRICE WAS QUOTED AT LESSER RATE SINCE THE BENEFIT RECEIVED RELATED TO PROCESS OF EXPORT OF GOODS AND SELLING PRICE WAS ALSO CONSIDERED KEEPING IN VIEW THE BENEFIT, THEREFORE, SALE VALUE OF VKUY LICENSE WAS NOTHING BUT PART OF TRADING ACCOUNT FOR THE PURPOSE OF WORKING OUT GP RATE. THE LD CIT(A) POINTED OUT THAT IN WOR KING OF GP RATE OF LAST YEAR, THE VKUY BENEFIT OF RS. 36,96,584/- HAD BEEN CONSIDERED AND THE TRADING RESULTS I.E. G.P. RATE OF THE ASSESSEE WORK ED OUT TO 5.23% AS AGAINST 2.96% IN THE LAST YEAR. THEREFORE, THE GP RATE IN THE YEAR UNDER CONSIDERATION WAS BETTER IN COMPARISON TO THE IMMEDIATELY PRECEDI NG YEAR. SO THERE WAS NO QUESTION OF REJECTING THE TRADING RESULTS. THE LD CIT(A) ALSO POINTED OUT THAT THERE WAS A MINOR DIFFERENCE IN RESPECT OF QUANTITY OF GWAR BECAUSE AGAINST 1,82,200 KGS FOUND, DURING THE COURSE OF SURVEY, TH E ASSESSEES STOCK REGISTER DISCLOSED IT AT 1,89,000 KGS WHICH REVEALED THAT ST OCK OF GWAR WAS FOUND EXCESS BY 6200 KGS. SIMILARLY, IN THE CHURI ACCOUNT , THERE WAS A SHORTAGE OF 35 BAGS OF 74 KGS EACH AND THERE WERE EXCESS OF 8 B AGS OF 34.5 KGS EACH, SO IN CHURI ACCOUNT IN RESPECT OF 74 KGS OF BAGS, THER E WAS SHORTAGE AND IN RESPECT OF 34.5 KGS BAGS, THERE WAS EXCESS. THE LD CIT(A) ALSO POINTED OUT THAT THE TOTAL VALUE FOUND AT THE TIME OF SURVEY AS PER THE ASSESSING OFFICER WAS AT RS. 48,63,250/- WHEREAS, AS PER THE ASSESSEE , IT WORKED OUT AT 48,44,170/-, SO THERE WAS A DIFFERENCE OF RS. 19,08 0/- ONLY, AS SUCH THE ASSESSING OFFICER WAS INCORRECT IN HOLDING THAT THE RE WAS SHORTAGE OF STOCK AMOUNTING TO RS. 43,73,324/-. THE LD CIT(A) OBSERV ED THAT IN DAY TO DAY STOCK REGISTER MAINTAINED BY THE ASSESSEE NO DIFFER ENCE WAS FOUND IN THE QUANTITY OF STOCK COMPARED TO THE PHYSICAL INVENTOR Y, SO, IT WAS TO BE HELD THAT ASSESSING OFFICER WAS NOT RIGHT IN REJECTING T HE BOOKS OF ACCOUNT WITHOUT POINTING OUT SPECIFIC DEFECT IN THE PRODUCTION OF F INISHED GOODS, SUPPRESSION 12 OF SALES OR INFLATION OF EXPENDITURE AND WITHOUT PO INTING OUT ANY MISTAKE IN THE CLOSING INVENTORY PREPARED AT THE END OF THE AC COUNTING YEAR BY THE ASSESSEE. THE LD CIT(A) ALSO HELD THAT THE SALES VALUE OF VKUY WAS PART OF THE TRADING ACCOUNT FOR THE PURPOSE OF WORKING OUT THE GP RATE AND ACCORDINGLY THE GP RATE IN THE ASSESSEES CASE FOR THE YEAR UNDER CONSIDERATION WAS BETTER WHICH WORKED OUT TO 5.23% AS AGAINST 2.96% IN THE IMMEDIATE PRECEDING YEAR. HE ACCORDINGLY DELETED T HE ADDITION MADE BY THE ASSESSING OFFICER. RELIANCE WAS PLACED ON THE FOLL OWING CASE LAWS:- I) MALANI RAMJIVAN JAGANNATH VS ACIT 207 CTR 19 ( RAJ) AND; II) CIT VS MODI ENTERPRISES (2 DTR 47) 9. THE LD CIT(A) WHILE DELETING THE IMPUGNED ADDITI ON ALSO HELD THAT THE ASSESSING OFFICER HAD NOT POINTED OUT ANY DEFECT IN ANY ACCOUNT OF THE ASSESSEE WHICH SUGGESTED INFLATION OF EXPENSES OR S UPPRESSION OF YIELD OR SALE, THE BOOKS OF ACCOUNT OF THE ASSESSEE WERE AUD ITED AND NO ADVERSE COMMENTS WERE GIVEN BY THE AUDITOR WHO HAD GIVEN QU ANTITATIVE DETAILS IN THE AUDIT REPORT. THE LD CIT(A) ALSO HELD THAT TH E ASSESSING OFFICER HAD NOT POINTED OUT ANY CASE OF SIMILAR BUSINESS WHERE YIEL D WAS BETTER THAN THE YIELD SHOWN BY THE ASSESSEE, THEREFORE, THE ASSESSING OFF ICER WAS WRONG IN APPLYING THE PROVISIONS OF SECTION 145(3) OF THE I NCOME-TAX ACT, 1961. NOW, THE DEPARTMENT IS IN APPEAL. 10. THE LD DR STRONGLY SUPPORTED THE ORDER OF THE A SSESSING OFFICER AND FURTHER SUBMITTED THAT THERE WAS A DIFFERENCE IN TH E STOCK FOUND AT THE TIME OF SURVEY AND DECLARED BY THE ASSESSEE IN THE STOCK RE GISTER, THEREFORE, THE BOOKS 13 OF ACCOUNT WERE RIGHTLY REJECTED BY THE ASSESSING O FFICER. IT WAS CONTENDED THAT THE GP RATE APPLIED BY THE ASSESSING OFFICER O N THE BASIS OF AVERAGE OF THREE YEARS WAS JUSTIFIED, THEREFORE, LD CIT(A) WRO NGLY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS:- I) CIT VS. BRITISH PAINTS INDIA LTD. 188 ITR 44 (SC ) II) S.N. NAMASIVAYAM CHETTIAR VS. CIT 38 ITR 579 ( SC) 11. IN HIS RIVAL SUBMISSIONS, THE LD COUNSEL FOR TH E ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND F URTHER SUBMITTED THAT THE ASSESSEE MAINTAINED PROPER STOCK REGISTER WHICH WAS DULY SIGNED BY THE AUTHORIZED OFFICER AT THE TIME OF SURVEY PROCEEDING S AND NO DIFFERENCE IN THE QUANTITY WAS FOUND DURING THE COURSE OF SURVEY AND RECORDED IN THE STOCK REGISTER WAS POINTED OUT. THE ONLY MINOR DIFFERENCE WHICH WAS POINTED OUT THAT WAS FULLY EXPLAINED BY THE ASSESSEE, THEREFORE , THE LD CIT(A) RIGHTLY HELD THAT THE ASSESSING OFFICER WRONGLY REJECTED THE BOO KS OF ACCOUNT BY INVOKING THE PROVISIONS OF SECTION 145(3) OF THE INCOME TAX ACT AND SAID OBSERVATION OF THE LD CIT(A) HAS NOT BEEN CHALLENGED BY THE DEP ARTMENT, AS SUCH, THE BOOKS OF ACCOUNT HAS BEEN ACCEPTED, SO, THERE WAS N O OCCASION FOR MAKING THE TRADING ADDITION, THEREFORE, THE LD CIT(A) WAS FUL LY JUSTIFIED IN DELETING THE ARBITRARY ADDITION MADE BY THE ASSESSING OFFICER. IT WAS ALSO STATED THAT THE GP RATE SHOWN BY THE ASSESSEE FOR THE YEAR UNDER CO NSIDERATION WAS BETTER IN COMPARISON TO THE PRECEDING YEAR AND THE ASSESSING OFFICER WAS NOT JUSTIFIED IN WORKING OUT THE GP RATE BY EXCLUDING THE VKUY WH ICH WAS PART OF SALE BECAUSE THE INCENTIVE GIVEN TO THE ASSESSEE BY THE GOVERNMENT @ 5% WAS CONSIDERED WHILE DETERMINING THE SALE RATE FOR EXPO RT SALE. IT WAS 14 ACCORDINGLY SUBMITTED THAT THE LD CIT(A) HAS RIGHTL Y DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. RELIANCE WAS PLACED ON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF SARGAM CINEMA VS CIT (328 ITR 513 (SC). 12. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND HAVE CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE INSTANT CASE, IT APPEARS THAT SOME MINOR DIFFERENCES WERE FOUND I N THE INVENTORY PREPARED AT THE TIME OF SURVEY AND QUANTITATIVE DETAILS MENT IONED IN STOCK REGISTER AND THE ASSESSEE EXPLAINED THE MINOR DIFFERENCES TO THE ASSESSING OFFICER. THE ASSESSEE MAINTAINED PROPER STOCK REGISTER WHICH WAS FOUND DURING THE COURSE OF SURVEY AND WAS ALSO SIGNED BY AUTHORIZED OFFICER , SO, IT CANNOT BE SAID THAT THE ASSESSEE WAS NOT MAINTAINING PROPER STOCK REGIS TER AND QUANTITY SHOWN BY THE ASSESSEE WAS NOT VERIFIABLE. IN THE PRESENT CA SE, THE ASSESSING OFFICER WHILE REJECTING THE BOOKS OF ACCOUNT OBSERVED THAT THE YIELD SHOWN BY THE ASSESSEE WAS ON LOWER SIDE. HOWEVER, NO COMPARATIV E CASE WAS POINTED OUT WHEREIN THE YIELD SHOWN WAS HIGHER THAN THE YIELD S HOWN BY THE ASSESSEE. IN THE INSTANT CASE, THE ASSESSING OFFICER AFTER EXCLU DING THE VKUY (VISHESH KRISHI UPAJ YOJNA) INCENTIVE FROM THE TRADING RESUL TS WORKED OUT THE GP AT 1.34%. HOWEVER, NO REASONS HAS BEEN GIVEN WHILE EX CLUDING THE VKUY BENEFIT FROM THE ASSESSEES TRADING ACCOUNT PARTICU LARLY WHEN THIS BENEFIT WAS DIRECTLY RELATED TO THE EXPORT SALES FOR THE YEAR U NDER CONSIDERATION AND IF THE VKUY BENEFIT WAS NOT EXCLUDED FROM THE TRADING RESU LTS THAN THE GP RATE OF THE ASSESSEE WAS AT 5.23% AS AGAINST 2.96% IN THE I MMEDIATE PRECEDING YEAR, AS SUCH, THE GP RATE SHOWN BY THE ASSESSEE WAS BETT ER IN COMPARISON TO THE PRECEDING YEAR. IN THE PRESENT CASE, THE ASSESSING OFFICER DID NOT POINT OUT 15 ANY SUPPRESSED SALES OR INFLATED PURCHASES, IT IS A LSO NOT THE CASE OF THE ASSESSING OFFICER THAT THE VARIOUS EXPENSES INCURR ED BY THE ASSESSEE WERE INFLATED OR NOT RELATED TO THE BUSINESS. IT IS ALS O NOT BROUGHT ON RECORD THAT THE ASSESSEE WAS NOT FOLLOWING A CONSISTENT METHOD OF ACCOUNTING, THEREFORE, WE ARE OF THE VIEW THAT THE LD CIT(A) WAS FULLY JUS TIFIED IN HOLDING THAT THE ASSESSING OFFICER WAS WRONG IN APPLYING THE PROVISI ONS OF SECTION 145(3) OF THE INCOME TAX ACT AND IN MAKING THE TRADE ADDITION S. MOREOVER, THIS FINDING OF THE LD CIT(A) THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN REJECTING THE BOOKS OF ACCOUNT BY INVOKING THE PROVISIONS OF SECT ION 145(3) OF THE ACT HAS NOT BEEN CHALLENGED BY THE DEPARTMENT. ON THIS SCO RE ALSO, THERE IS NO MERIT IN THIS APPEAL OF THE DEPARTMENT. FOR THE PRESENT VIEW, WE ARE ALSO FORTIFIED BY THE DECISION OF THE ITAT JODHPUR, DATED 11.8.200 6 IN ITA NO. 225/JU/2003 FOR ASSESSMENT YEAR 1999-2000 IN THE CA SE OF ITO VS M/S MAHALAXMI GUM INDUSTRIES, BARMER AND IN THE CASE OF ASSESSEE ITSELF IN ITA NO. 528/JU/2009 ORDER DATED 9.12.2011. 13. NOW WE WILL DEAL WITH THE CROSS OBJECTION OF TH E ASSESSEE IN C.O. NO.9/JU/2011. IN THIS CROSS OBJECTION, THE ASSESSE E HAS RAISED THE FOLLOWING GROUNDS:- 1) THAT ON THE FACT AN DIN THE CIRCUMSTANCES OF THE CA SE THE LD CIT(A) OUGHT TO HAVE ALLOWED DEPRECIATION ON WIN D MILL CONSIDERING THE SAME AS ONE UNIT. 2) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD CIT(A) ERRED IN SUSTAINING THE DISALLOWANCE OF RS. 25,000/- OUT OF CLAIM OF LABOUR, FUEL AND POWER EXP . 16 3) THAT THE PETITIONER MAY KINDLY BE PERMITTED TO RAIS E ANY ADDITIONAL OR ALTERNATIVE GROUND AT OR BEFORE THE H EARING OF THE APPEAL. 4) THE PETITIONER PRAYS FOR JUSTICE AND RELIEF . 14. GROUND NOS.3 & 4 OF THE CROSS OBJECTION ARE GEN ERAL IN NATURE, SO, DO NOT REQUIRE COMMENTS ON OUR PART. 15. VIDE GROUND NO.1, THE GRIEVANCE OF THE ASSESSEE RELATES TO DEPRECIATION ON WINDMILL. AS REGARDS THIS ISSUE, THE LD. COUNSE L FOR THE ASSESSEE, AT THE VERY OUTSET STATED, THAT IT IS COVERED BY THE DECI SION DATED 9.12.2011 OF THIS BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.528/JU/2009 FOR THE ASSESSMENT YEAR 2006-07. THE AFORESAID CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE WAS NOT CONTROVERTED BY THE LD. DR. 16. AFTER HEARING THE SUBMISSION OF BOTH THE PARTIE S, IT IS NOTED THAT AN IDENTICAL ISSUE WAS A SUBJECT MATTER OF ADJUDICATIO N IN ASSESSEES OWN CASE IN THE PRECEDING YEAR IN ITA NO. 528/JU/2009 WHEREIN B Y FOLLOWING THE EARLIER DECISION OF THE ITAT JODHPUR BENCH, THE MATTER WAS RESTORED TO THE ASSESSING OFFICER AND THE RELEVANT FINDINGS ARE GIVEN IN PARA 3.4 TO 3.6 OF THE AFORESAID ORDER DATED 9.12.2011 IN ASSESSEES OWN CASE, WHICH READ AS UNDER:- 3.4 WE HAVE HEARD BOTH THE PARTIES. BEFORE US, THE ISSU ES STAND COVERED BY THE ORDERS OF ITAT JODHPUR BENCH AS WELL AS ITAT JA IPUR BENCH. THE ITAT JODHPUR BENCH HAS HELD THAT SO FAR AS THE EXPENDITU RE ON FOUNDATION IS CONCERNED, THE ASSESSEE IS ENTITLED TO HIGHER DEPRE CIATION. HOWEVER, FOR CIVIL WORK, THE MATTER WAS RESTORED BACK ON THE FILE OF T HE AO. IT WILL BE USEFUL TO REPRODUCE FOLLOWING PARAGRAPHS FROM THE ORDER OF TH E TRIBUNAL IN ITA NO. 195/JU/2010 DATED 11-02-2011. 17 ''12. THE ASSESSEE HAS CLAIMED DEPRECIATION @ 80% O N FOUNDATION AS WELL AS OTHER CIVIL WORKS. BOTH THE AO AND THE L D.CIT(A) DENIED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THEY A RE NOT INTEGRAL PART OF THE WIND MILL. THE DEPRECIATION IN RESPECT OF FOUNDATION IS CONCERNED THE FOUNDATION FOR THE PURPOSE OF THE WIN D MILL IS DIFFERENT FROM THE OTHER CIVIL WORKS. WIND MILL IS A HEAVY MACHINE AND A SPECIALLY DESIGNED FOUNDATION IS REQUIED, THE REFORE, THE AO HAS NOT JUSTIFIED IN COMPARING THE FOUNDATION OF TH E WIND MILL FROM OTHER CIVIL WORKS IN THE CASE OF CIT VS HERDILLIA C HEMICALS LTD. 216 ITR 742 (BOM) WHEREIN THE HON'BLE HIGH COURT OF MUMBAI HAS HELD THE EXPENDITURE INCURRED ON FOUNDATION FIX ING THE PLANT AND MACHINERY WOULD FORM PART OF THE COST OF PLANT AND MACHINERY AND THE ASSESSEE WOULD BE ENTITLED TO DEPRECIATION AT THE SAME RATE AS APPLICABLE TO THAT PLANT AND MACHINERY. IN THE C ASE OF ACIT VS MADRAS CEMENTS LTD. , 110 ITR 281 (MAD.), HAS HELD THAT THE FOUNDATION WORK DONE FOR FIXING MACHINERY IS TO BE TREATED AS PART OF THE PLANT AND MACHINERY. IN THE CASE OF CIT VS R .G. ISPAT LTD. 123 CTR (RAJ.) WHERE THE JURISDICTIONAL HIGH COURT CATEGORICALLY HELD THAT THE MASSIVE REINFORCED CONCRETE STRUCTURE , ESPECIALLY DESIGNED TO TAKE UP LOADS, CONSTITUTED 'PLANT' WITH IN THE MEANING OF SECTION 43(3) OF THE INCOME TAX ACT, 1961 13. WE THEREFORE, TAKING INTO CONSIDERATION THE FAC TS AND CIRCUMSTANCES OF THE CASE AND ALSO FOLLOWING THE AB OVE CASE LAWS, WE CAME TO CONCLUSION THAT THE FOUNDATION OF THE WI NDMILL IS AMOUNTING TO PART AND PARCEL OF THE WIND MILL AND I T IS PLANT AND MACHINERY AND ACCORDINGLY THE ASSESSEE IS ELIGIBLE FOR HIGHER RATE OF DEPRECIATION WHICH WAS CLAIMED. AS FAR AS CIVIL WORK IS CONCERNED, WE FIND THAT IT IS NOT AN INTEGRAL PART OF THE WINDMILL AND HE IS NOT ELIGIBLE FOR HIGHER DEPRECIATION. 14. IN VIEW OF THE ABOVE OBSERVATIONS, WE SET ASIDE THE ORDER PASSED BY THE LD.CIT(A) AND REMIT THE ISSUE MATTER BACK TO THE FILE OF THE AO AND DIRECT THE AO TO ALLOW HIGHER DEPRECI ATION CLAIM OF THE ASSESSEE IN RESPECT OF FOUNDATION OF THE WINDMI LL. IN SO FAR AS OTHER ALLIED WORKS ARE CONCERNED NORMAL RATE HAS TO BE APPLIED 18 AND THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 3.5 THE JAIPUR BENCH VIDE ITS ORDER IN ITA NO. 745 /JP/07 AND 731/JP/07 DATED 18-07-2008 IN THE CASE OF M/S. VIJAY INDUSTRI ES VS ITO HELD THAT DEPRECIATION IS TO BE ALLOWED OF THE ROOM ALSO. IT WILL BE USEFUL TO REPRODUCE PARA 6 OF ITAT JAIPUR ORDER AS UNDER:- ''6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE FACTS OF THE CASE. THE PROVISIONS OF ALLOWING DEPRE CIATION ON THE WIND MILL IS GOVERNED BY APPENDIX I PARA (XIII) (1) WHICH READS AS UNDER:- ''(XIII) RENEWABLE ENERGY DEVICES BEING (A) TO (K) ................. (L) WIND MILLS AND ANY SPECIALLY DESIGNED DEVICES W HICH RUN ON WIND MILLS 80%'' IT IS EVIDENT FROM THE AFOREMENTIONED PROVISIONS TH AT THE DEPRECIATION @ 80% HAS TO BE CHARGED ON THE COMPLET E WIND MILL. THEREFORE, THE LD. CIT(A) IS NOT JUSTIFIED IN SEGREGATING THE COST OF THE CONSTRUCTION OF THE ROOM FROM THE S AID WIND MILL. THE SAID CONSTRUCTION OF THE ROOM , AS ARGUE D HAS BEEN SPECIALLY DESIGNED FOR THE PURPOSE OF THE WIND MILL AND THEREFORE, THE LD. CIT(A) IS DIRECTED TO ALLOW THE DEPRECIATION AS PER THE RULES APPLICABLE ON THE WIND MILLS. THUS GROUND NO. 6 OF THE ASSESSEE IS ALLOWED. 3.6 FOLLOWING THAT ORDERS, WE HOLD THAT THAT DEPRECIAT ION @ 80% WILL BE ADMISSIBLE ON THE EARTH WORK, FOUNDATION AND CONTRO L ROOM OF THE WINDMILL. THE ISSUE OF APPROACH ROAD IS RESTORED BA CK ON THE FILE OF THE AO IN ACCORDANCE WITH THE ORDER OF THE ITAT JODHPUR BE NCH. 17. SO, RESPECTFULLY FOLLOWING THE AFORESAID REFERR ED TO ORDER IN ITA NO. 528/JU/2009 FOR THE ASSESSMENT YEAR 2006-07 IN ASSE SSEES OWN CASE, THIS 19 ISSUE IS RESTORED BACK TO THE ASSESSING OFFICER TO BE DECIDED AS DIRECTED FOR THE PRECEDING ASSESSMENT YEAR VIDE ORDER DATED 9.12 .2011. 18. ANOTHER ISSUE RAISED BY THE ASSESSEE IN THE CRO SS OBJECTION VIDE GROUND NO.2 RELATES TO THE SUSTENANCE OF DISALLOWANCE OF RS. 25,000/- OUT OF CLAIM OF LABOUR, FUEL AND POWER EXPENSES. 19. THE FACTS RELATING TO THIS ISSUE IN BRIEF ARE T HAT THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT THE ASSESSEE HAD CLAIMED A SUM OF RS. 18,40,272/- FOR LABOUR, FUEL AND POWER EXPENSES. ACCORDING TO THE ASSESSING OFFICER, THE ASSESSEE WA S NOT MAINTAINING PROPER VOUCHERS, JOB REGISTER / JOB CARD REGARDING LABOUR EMPLOYED AND THAT HOW MUCH RAW MATERIAL WAS GIVEN AND HOW MUCH FINISHED B Y-PRODUCTS WERE RECEIVED DURING THE PROCESSING WAS NOT MAINTAINED. THE ASSESSING OFFICER DISALLOWED A LUMP SUM OF RS. 1 LAC ON ESTIMATE BASI S. 20. THE ASSESSEE CARRIED THE MATTER TO THE LD CIT(A ) AND SUBMITTED THAT THE DISALLOWANCE WAS MADE WITHOUT ANY BASIS AND ASSIGNI NG ANY REASON. THE LD CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASS ESSEE AND CONSIDERING THE NATURE OF THE BUSINESS SUSTAINED THE DISALLOWANCE OF RS. 25,000/-. NOW THE ASSESSEE HAS FILED THE CROSS OBJECTION. 21. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE EXPENSES WERE INCURRED FOR THE BUSINESS AND THE ASSESSING OFFICER WHILE ESTIMATING THE DISALLOWANCE HAD NOT ASSIGNED ANY REASON. HE ALSO S UBMITTED THAT THE LD CIT(A) HAS ALSO NOT GIVEN ANY REASONS FOR SUSTAININ G THE DISALLOWANCE OF RS. 20 25,000/-. ALTERNATIVELY, IT WAS SUBMITTED THAT THE DISALLOWANCE SUSTAINED BY THE LD CIT(A) IS ON THE HIGHER SIDE. 22. IN HIS RIVAL SUBMISSIONS, THE LD. DR SUPPORTED THE ORDERS OF THE LD CIT(A). 23. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE P ARTIES AND THE MATERIAL ON RECORD, IT IS NOTICED THAT THE ASSESSING OFFICER WHILE MAKING THE DISALLOWANCE ALTHOUGH HAD NOT GIVEN ANY COGENT REAS ON, HOWEVER, HIS OBSERVATION THAT THE ASSESSEE WAS NOT MAINTAINING P ROPER VOUCHERS HAS NOT BEEN REBUTTED FORCEFULLY. THE LD CIT(A) WHILE SUSTA INING THE DISALLOWANCE OF RS. 25,000/- HAD ALSO NOT GIVEN ANY BASIS AND COGEN T REASONS, WE, THEREFORE, TO MEET THE ENDS OF JUSTICE BY CONSIDERING THE NATU RE OF EXPENSES, DEEM IT APPROPRIATE TO SUSTAIN THE DISALLOWANCE OF RS. 10 ,000/-. THUS, THE ASSESSEE WOULD GET FURTHER RELIEF OF RS. 15,000/-. 24. NOW WE WILL TAKE THE CASE OF M/S WESTRAJ GUM UD YOG, BARMER I.E. ITA NO. 38/JU/2011 BY THE DEPARTMENT AND C.O. NO. 1 0/JU/2011 BY THE ASSESSEE. 25. AS REGARDS THE ISSUE RAISED IN THE DEPARTMENTAL APPEAL RELATING TO DELETION OF TRADING ADDITION OF RS. 16,55,137/ IS C ONCERNED, IT WAS THE COMMON CONTENTION OF BOTH THE PARTIES THAT THE FACT S ARE IDENTICAL AS WERE INVOLVED IN THE CASE OF M/S BARMER AGRO GUM INDUSTR IES IN ITA NO. 39/JU/2011. 21 26. SINCE WE HAVE ALREADY ADJUDICATED THIS ISSUE IN THE CASE OF BARMER AGRO GUM INDUSTRIES, BARMER IN ITA NO. 39/JU/2011, IN THE FORMER PART OF THIS ORDER, THEREFORE, OUR FINDINGS GIVEN THEREIN S HALL APPLY MUTATIS-MUTANDIS FOR THIS ASSESSEE ALSO. IN THAT VIEW OF THE MATTER WE DO NOT SEE ANY MERIT IN THE APPEAL OF THE DEPARTMENT. 27. AS REGARDS TO THE CROSS OBJECTION NO.10/JU/2011 FILED BY THE ASSESSEE, THE LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT HE HAS INSTRUCTIONS NOT TO PRESS THE SAME AND GAVE IN WRIT ING C.O. NOT PRESSED. THEREFORE, THE CROSS OBJECTION FILED BY THE ASSESSE E IS DISMISSED AS NOT PRESSED. 28. IN THE RESULT, THE APPEALS OF THE DEPARTMENT IN ITA NOS. 38 & 39/JU/2011 ARE DISMISSED WHILE C.O. NO. 10/JU/2011 IS PARTLY ALLOWED AND PARTLY FOR STATISTICAL PURPOSES. THE C.O. NO.9/JU/ 2011 IS DISMISSED AS NOT PRESSED. (ORDER PRONOUNCED IN THE OPEN COURT ON THIS 18.09. 2012) SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMER DATED : 18 TH SEPTEMBER, 2012 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR BY ORDER ASSISTANT REGISTRAR ITAT, JODHPUR 22