ITO, Ward - 36(2), Kolkata, Kolkata V. Shri Subhash Kr. Kheria, Kolkata

ITA 1062/KOL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54765 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 03-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K PARAMANIK
• Assessee Lawyers: S M SURANA
• Keywords: Corroborative evidences

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE . . , ! '# '# '# '# /AND ' # , ! ) [BEFORE SHRI S. V. MEHROTRA, AM & SRI MAHAVIR SINGH , JM] #$ #$ #$ #$ / I.T.A NO. 1062/KOL/2011 %& ''( %& ''( %& ''( %& ''(/ // / ASSESSMENT YEAR: 2008-09 INCOME-TAX OFFICER, WD-36(2), KOLKATA VS. SUBHASH KR. KHERIA (PAN: AFAPK 1161 R) (*+ /APPELLANT ) (,-*+/ RESPONDENT ) DATE OF HEARING: 26.12.2011 DATE OF PRONOUNCEMENT: 29.12.2011 FOR THE APPELLANT: SHRI A. K. PARAMANIK FOR THE RESPONDENT: SHRI S. M. SURANA . / ORDER PER MAHAVIR SINGH, JM ( ' # ' # ' # ' #, , , , ! ! ! ! ) THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-XX, KOLKATA IN APPEAL NO.142/CIT(A)-XX//WD.36(2)/10-11/KOL DATED 09.05.20 11. ASSESSMENT WAS FRAMED BY ITO, WD-36(2), KOLKATA U/S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2008-09 VIDE HIS ORDER DA TED 30.12.2010. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) DELETING THE ADDITION OF G. P. RATE. FOR THIS, REVENUE HAS RAIS ED FOLLOWING TWO GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN IGNORING THE SHORTCOMINGS HIGHLIGHTED BY THE A.O. REGARDING ANOM ALY IN G. P. RATE SHOWN BY THE ASSESSEE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN IGNORING THE DIFFERENT STAND TAKEN BY ASSESSEE IN ASSESSMENT AND APPELLATE STAGE WITHOUT ANY SUPPORTING EVIDENCES. 3. THE BRIEF FACTS ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN IRON AND STEEL ON WHOLESALE BASIS AND IN ITS BOOKS OF ACCOUN T IT HAS DISCLOSED G.P. RATE AT 1.15%. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE PROD UCED COMPLETE BOOKS OF ACCOUNT, PURCHASES AND SALES LEDGER ALONG WITH PURCHASE AND SALES BILL S AND STOCK REGISTERS. THE ASSESSING OFFICER PICKED UP FEW OF ITEMS OF PURCHASES ON FEW OF DATES AS PER CHART GIVEN IN PAGES 2 AND 3 OF ASSESSMENT ORDER AND THAT TOO VALUING ABOUT RS.10 L ACS, WHEREBY GROSS PROFIT OF THE ASSESSEE IS AT 4.23%. IT SEEMS THAT ON THE TURNOVER OF RS. 10 LACS THERE IS A G.P. OF 4.23% AS AGAINST THE 2 ITA 1062/K/2011 SUBHASH KR. KHERIA. A.Y.08-09 TOTAL TURNOVER DECLARED BY THE ASSESSEE AT RS.10,93 ,96,523/-. THE ASSESSEE WAS REQUIRED TO EXPLAIN THE GP RATE DECLARED BY THE ASSESSEE AT RS. 1.15% AS AGAINST 4.23% ON SOME OF THE ITEMS. THE ASSESSEE REPLIED THAT IT HAS MAINTAINED COMPLETE BOOKS OF ACCOUNT, PURCHASE AND SALES LEDGER, PURCHASES AND SALES BILLS, EXPENSES V OUCHERS, STOCK REGISTERS AND PRODUCED THE SAME BEFORE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER COULD NOT POINT OUT ANY DEFECT IN THE BOOKS OF ACCOUNT BUT EVEN THOUGH REJECTED THE BOOKS OF ACCOUNT AND MADE ADDITION BY APPLYING GP R ATE TO THE ENTIRE SALES AT 4.23% AND MADE ADDITION OF RS.33.71 LACS. AGGRIEVED, ASSESSEE PRE FERRED APPEAL BEFORE CIT(A), WHO DELETED THE ADDITION BY GIVING FOLLOWING FINDING IN PARA 5 OF HIS APPELLATE ORDER: 5. I HAVE PERUSED THE ASSESSMENT ORDER. I FIND SU BSTANCE IN THE SUBMISSIONS OF THE APPELLANT. THE BOOKS OF ACCOUNT, PURCHASE AND SALE S LEDGER ALONG WITH PURCHASE AND SALE BILLS, AND RELEVANT DOCUMENTS WERE PRODUCED AT THE ASSESSMENT STAGE WHICH HAS BEEN ACKNOWLEDGED IN THE ASSESSMENT ORDER. THE A.O . HAS FAILED TO FIND ANY DEFECTS IN THE BOOKS OF ACCOUNT. BY CALCULATING THE GROSS PRO FIT ON CERTAIN ITEMS OF SALES ON CERTAIN DATES, THE A.O. CANNOT CONCLUDE THAT THE GROSS PROF IT FOR THE YEAR HAS BEEN SUPPRESSED. THE OBSERVATION OF THEN A.O. THAT THE APPELLANT HAS MANIPULATED THE SALE PRICE TO REDUCE THE PROFIT IS BASED PURELY ON PRESUMPTION, AND, IS NOT SUPPORTED BY ANY MATERIAL ON RECORD. THERE IS NOTHING ON RECORD TO SUGGEST THAT SALE PRICES WERE MANIPULATED. IN VIEW OF THE ABOVE, THERE WAS NO REASON OR JUSTIFICA TION FOR THE A.O. TO REJECT THE TRADING RESULTS. THE ESTIMATION MADE BY THE A.O. IS ARBITR ARY AND WITHOUT ANY BASIS; AND, IS ALSO NOT SUPPORTED BY ANY MATERIAL ON RECORD. SUCH ESTI MATION IS NOT SUSTAINABLE. THE ADDITION OF RS.33,71,386/- IS DIRECTED TO BE DELETE D. GROUND NO. 2 & 3 ARE ALLOWED. 4. WE FIND THAT THE ASSESSEE HAS PRODUCED COMPLETE BOOKS OF ACCOUNT, PURCHASE AND SALE LEDGERS/REGISTERS, PURCHASE AND SALE BILLS, EXPENSE S VOUCHERS AND STOCK REGISTERS BEFORE THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT PROCEED INGS. THE ASSESSING OFFICER FAILED TO FIND OUT ANY DEFECT IN THE BOOKS OF ACCOUNT AND REJECTED THE SAME ONLY ON THE BASIS THAT G.P. RATE OF THE ASSESSEE IS LOWER AS COMPARED TO G.P HIGHER IN SOME OF THE ITEMS AT 4.23% AS AGAINST GROSS G.P. DECLARED BY ASSESSEE AT 1.15%. APART FROM THI S OBSERVATION, THERE IS NOTHING COMING OUT FROM THE ASSESSMENT ORDER, WHICH PROVES THAT THE BO OKS REJECTED BY THE ASSESSING OFFICER ARE ON ANY BASIS. HENCE, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) AND WE CONFIRM THE SAME. APPEAL OF THE REVENUE IS DISMISSED. 5. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED 6. ORDER PRONOUNCED IN OPEN COURT ON 29.12.2011 . SD/- SD/- . . ! ' '' ' # # # # , ! (S. V. MEHROTRA) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( / / / /) )) ) DATED : 29 TH DECEMBER, 2011 '01 %23 4' JD.(SR.P.S.) 3 ITA 1062/K/2011 SUBHASH KR. KHERIA. A.Y.08-09 . 5 ,6 76'8- COPY OF THE ORDER FORWARDED TO: 1 . *+ / APPELLANT ITO, WD-36(2), KOLKATA 2 ,-*+ / RESPONDENT, SHRI SUBHASH KR. KHERIA, 1 ST FLOOR, R. NO. 10, 23, N. S. ROPAD, KOLKATA-700 001. 3 . .% ( )/ THE CIT(A), KOLKATA 4. .% / CIT, KOLKATA 5 . '> ,% / DR, KOLKATA BENCHES, KOLKATA -6 ,/ TRUE COPY, .%?/ BY ORDER, #3 /ASSTT. REGISTRAR .