Shree Keshav Oil Mills, Baroda V. The ACIT.,Circle-2(2), Baroda

ITA 1020/AHD/2011

• Counselvise Citation: 102020514 RSA 2011
• Duration Of Justice: 4 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-04-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 07-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P L KUREEL
• Keywords: Gross profit estimation; Business income
• Section: 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD (BEFORE SHRI PRAMOD KUMAR, A.M. AND SHRI S.S. GODARA, J.M.) ITA NO. 1020 / A HD/2011 A . Y. 200 4 - 0 5 SHRI KESHAV OIL MILLS VS. ACIT, BAORDA. 10, SHAKUNTALA PARK SOCIETY BEHIND SHREYAS HIGH SCHOOL, MANJALPUR, BARODA (PAN: AAMFS 4225K) (APPELLANT) (RESPONDENT) ASSESSEE/APPELLANT BY : SHRI P.L. KUREEL, SR. D.R. REVENUE/RESPONDENT BY : SHRI MUKUND BAKSHI , A.R. DATE OF HEARING : 2 2 .04.2015 DATE OF PRONOUNCEMENT : 3 0 . 04.2015 PER S.S. GODARA, JUDICIAL MEMBER: TH IS ASSESSEE S APPEAL FOR A . Y . 200 4 - 0 5 ARISES FROM O R DER OF THE CIT(A) - II , BARODA DATED 5.1 .2011 PASSED IN CASE NO. 554/2006 - 07 CONFIRMING THE ASSESSING OFFICER S ACTION ADDING A SUM OF RS.18,39,976/ - ON ACCOUNT OF LOW GROSS PROFITS THEREBY APPROXIMATING THE FIGURE OF SALES @ 1.0555 X (CONSUMPTION + EXPENSES), IN PROCEEDINGS U/S 143(3) OF T HE INCOME T AX ACT, 1961 (IN SHORT THE AC T ) 2 2. THE ASSESSEE FIRM MANUFACTURES OIL AND OIL CAKES. IT FILE D ITS RETURN ON 1.11.2004 DECLARING LOSS OF RS.19,78,358/ - . THE SAME WAS SUMMARILY PROCESSED. THE ASSESSING OFFICER TOOK UP SCRUTINY. HE NOTICED THE ASSESSEE S GROSS PROFIT OF RS.2,02,377/ - F ROM TOTAL SALES AMOUNTING TO RS.4,06,47,972/ - @ 0.45% THEREOF. S IMILAR GP IN THE PRECEDING ASSESSMENT YEAR HAD BEEN SHOWN @ 4.34%. THE ASSESSEE ATTRIBUTE D THIS FALL IN GROSS PROFITS TO VARIATION ON ACCOUNT OF EXTERNAL FACTORS SUCH AS QUALITY OF INPUTS AND AVAILABILITY ON CONSISTENT BASIS. THE ASSESSING OFFICER IN ASSESSMENT ORDER ON 19.12.2006 APPEARS TO HAVE COMPARED SALES, EXPENSES, GROSS PROFIT AND ITS RATES OPENING STOCK, PURCHASES, CLOSING STOCK OF FINANCIAL YEAR S 2002 - 2003 AND 2003 - 04 TO HOLD THAT TH ERE WERE NO COGENT AND LOGICAL REASONS FORTHCOMING FROM THE ASSESSEE S CLARIFICATION JUSTIFYING THE IMPUGNED LOW GROSS PROFITS. IT ALSO APPEARS TO HAVE NOT PRODUCED ITS BOOK OF ACCOUNTS AND OTHER RELEVANT DOCUMENTS VERIFYING PURCHASES, CONSUMPTION AND PROD UCTION OF ITS BU SINESS PRODUCE. THEREFORE, THE ASSESSING O FFICER FOLLOWED THE GP RATE OF 1.0555% IN THE PRECEDING ASSESSMENT YEAR AND ARRIVED AT RELEVANT GROSS PROFIT OF RS.20,42,353/ - AS AGAINST RS.2,02,377/ - ALREADY DECLARED. THE DIFFERENTIAL AMOUNT OF R S.18,39,979/ - STOOD ADDED IN THE ASSESSEE S TAXABLE INCOME RE - COMPUTING THE LOSS DECLARED TO RS.1,38,382/ - . 3. THE ASSESSEE PREFERRED AN APPEAL. THE CIT(A) HAS ALSO AFFIRMED THE ASSESSING OFFICER S ACTION QUOTING ITS FAILURE IN PRODUCING RELEVANT BOOKS AN D OTHER DOCUMENTS IN THE COURSE OF ASSESSMENT. THE STEEP FALL IN THE IMPUGNED GROSS PROFIT S HAS BEEN HELD TO BE NOWHERE SUPPORTED BY WAY OF COGENT MATERIAL ON RECORD. THE ASSESSEE HAS LOST IN THE LOWER APPELLATE PROCEEDINGS AS WELL. 4. WE HAVE HEARD BOTH SIDES AND PERUSED THE CASE FILES. THE ASSESSEE IN THE TRIBUNAL S PROCEEDINGS HAS FILED COPY OF ITS BALANCE SHEET ALONG WITH TAX AUDIT REPORT 3 JUSTIFYING THE LOW GROSS PROFIT IN THE IMPUGNED ASSESSMENT YEAR. IT HAS COME ON RECORD THAT THE SAME WERE NOT FILED EITHER IN THE COURSE OF SCRUTINY OR BEFORE THE LOWER APPELLATE AUTHORITY. THE REVENUE OBJECTS ADMISSIBILITY OF THESE DOCUMENTS AT THIS BELATED STAGE. AT THE SAME TIME, IT FAILS TO VERIFY CONTENTS THEREOF . IN THESE CIRCUMSTANCES, WE FEEL THAT INTEREST OF S UBSTANTIAL JUSTICE WOULD BE MET IN CASE THE REVENUE S TECHNICAL OBJECTION IS REJECTED AND ASSESSEE S BALANCE SHEET AND AUDITED REPORT ALONG WITH OTHER DETAILS ARE TAKEN ON RECORD. WE PROCEED ACCORDINGLY. HOWEVER, SINCE IT HAS FILED THIS MATERIAL WITHOUT AN Y VERIFICATION, WE REMIT THE ISSUE BACK TO THE ASSESSING OFFICER FOR AFRESH DECISION AS PER LAW. THE ASSESSEE WOULD BE ENTITLED TO PRODUCE ON RECORD ALL ITS MATERIAL SUPPORTING ITS LOW GROSS PROFITS IN THE IMPUGNED ASSESSMENT YEAR. WE REITERATE THAT THE IM PUGNED ASSESSMENT YEAR IS 2004 - 05. THEREFORE IT WOULD BE APPRECIATED IF THE LD. ASSESSING OFFICER REFRAMES THE ASSESSMENT WITHIN A PERIOD OF SIX MONTHS OF RECEIVING THIS ORDER. THE ASSESSEE S GROUND S ARE ALLOWED FOR STATISTICAL PURPOSE. 5. THE ASSESSEE S APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON THIS DAY THE 3 0 T H A PRIL, 2015 IN AHMEDABAD. S D / - S D / - (PRAMOD KUMAR) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED : 3 0 APRIL, 2015 PRABHAT KUMAR KESARWANI COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. CONCERNED CIT 4. CIT(A) 5. D.R., ITAT, AHMEDABAD 6. GUARD FILE 4 BY ORDER, DY./ASSTT. REGISTRAR ITAT, AHMEDABAD