D.C.I.T.,Circle-36, Kolkata, Kolkata V. M/s. WELFIT EXPORTS, Kolkata

ITA 1203/KOL/2009

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3086 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2013
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2003-2004
• Appeal Filed On: 16-07-2009
• Court: TRIBUNAL
• Department Lawyers: SNEHOTPAL DATTA
• Assessee Lawyers: S L KOCHAR
• Section: 143(3)

Judgement Text

` , , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C , KOLKATA [ () . .. . . .. . , ,, , , !' #! $'# #! $'# #! $'# #! $'#, ,, , ] ]] ] [BEFORE HONBLE SRI K.K.GUPTA, AM & HONBLE SRI MAHAVIR SINGH, JM] '& '& '& '& /ITA NOS.1203-1206/KOL/2009 $'( !)*/ ASSESSMENT YEARS : 2003-04, 2004-05, 2005-06 & 2006-07 (,- / APPELLANT ) - !' - ( /0,- /RESPONDENT) D.C.I.T., CIRLCE-36, M/S. WELFIT EXPORTS KOLKATA . -VERSUS- KOLKATA (PAN:AAAFW 4441 K) ,- 1 2 / FOR THE DEPARTMENT SHRI SNEHOTPAL DATTA, SR DR /0,- 1 2 / FOR THE ASSESSEE SHRI S.L.KOCHAR, ADVOCATE '!3 1 4 /DATE OF HEARING : 12.04.2013 5) 1 4 /DATE OF PRONOUNCEMENT : 19.04.2013. 6 / ORDER PER SHRI K.K.GUPTA, AM THESE FOUR APPEALS BY THE REVENUE FOR THE RESPECTIV E ASSESSMENT YEARS BEGINNING FROM 2003-04 ARE ON THE ISSUE OF THE LD. CIT(A) HAVING CONSIDERED THE CASE OF THE ASSESSEE APPELLANT ON A.O.S INVOKING THE P ROVISION OF SECTION 147/144 OF THE I.T.ACT FOR A.YEAR 2003-04 WHEREAS FOR A.YEARS 2004 -05, 2005-06 AND 2006-07 ALONG WITH 2003-04 A COMMON GROUND HAS BEEN RAISED BY THE REVENUE WITH RESPECT TO THE REJECTION OF BOOKS OF ACCOUNT FOR ESTIMATION OF THE PROFIT IN THE HANDS OF THE ASSESSEE BY THE AO WAS HELD OTHERWISE BY THE LD.CIT(A). WE P ROPOSE TO TAKE UP ALL THE APPEALS TOGETHER FOR THE SAKE OF CONVENIENCE AND BREVITY. I N SO FAR AS, THE LD. DR HAS SUPPORTED THE ORDER OF THE LD. AO ON THE GROUNDS RAISED BY HI M, IN THIS APPEAL BEFORE THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE HAS SUP PORTED THE ORDER OF THE LD. CIT(A) FOR THE IMPUGNED ASSESSMENT YEARS INDICATING THAT T HE LD. CIT(A) HAS CONSIDERED THE FACTS WHICH HAVE BEEN UNDISPUTED BY THE AO, IN SO F AR AS, THE GROUNDS OF APPEAL BEFORE HIM ALONG WITH THE STATEMENT OF FACTS HAVE NOT BEEN CONTROVERTED BY THE LD. DR. ITA NOS.120 3-1206/KOL/2009 2 2. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE MATERIALS AVAILABLE ON RECORD. ON THE ISSUE WITH RESPECT TO H OLDING THE INITIATION OF PROCEEDINGS U/S 147/148, THE LD. CIT(A) HAS CATEGORICALLY NOTED THAT THERE WAS NO CASE FOR THE AO TO RECORD REASONS FOR INCOME HAVING ESCAPED ASSESSM ENT, IN SO FAR AS, THE BELIEF WAS RELIED ON THE ASSESSMENT OF INCOME PERTAINING TO AS SESSMENT YEAR 2004-05, AND IT WAS CATEGORICALLY FOUND BY THE LD. CIT(A) THAT THE ESTI MATION OF INCOME ON THE BASIS OF THE VARIABLE GROSS PROFIT RATE CANNOT BE A GROUND FOR R EOPENING OF THE IMMEDIATE PRECEDING ASSESSMENT YEAR, WAS NOT TO BE CONSIDERED AS A REAS ON TO BELIEVE. THE RATE OF GROSS PROFIT HAS BEEN ACCEPTED ALREADY IN ACCORDANCE WITH THE FACTS BROUGHT ON RECORD BY THE ASSESSEE ON THE ASSESSMENT BEING PASSED U/S 143(3) OF THE ACT. FOR THE REMAINING ASSESSMENT YEARS ALONG WITH A.Y. 2003-04 A COMMON I SSUE HAS BEEN RAISED IN ESTIMATION OF INCOME WHICH THE LD. CIT(A) HAS CONSI DERED THE RESPECTIVE ORDERS BY HOLDING A VIEW THAT WHEN THE AO HAD NOT POINTED OUT ANY SPECIFIC DEFECT IN THE BOOKS OF ACCOUNT OF THE ASSESSEE, HE HAD FAILED TO BRING ON RECORD ANY POSITIVE MATERIAL TO SHOW THAT THE BOOKS OF THE ASSESSEE ARE NOT RELIABL E AND THEREFORE THE INCOME OF THE APPELLANT CANNOT BE CORRECTLY DETERMINED FROM SUCH BOOKS. HE CATEGORICALLY HELD THAT THE AO DID NOT INVOKE THE PROVISION OF SECTION 145( 3) OF THE IT ACT TO COMPUTE THE CORRECT INCOME, AS IT WAS THE MATTER OF ENHANCING T HE GROSS MARGIN WHICH ONLY INDICATES THAT HE NEITHER CONTROVERTED THE PURCHASE S ACCOUNTED ON SALES MADE OR CLOSING STOCK VALUATION. THE ASSESSEE BEING AN EXPO RTER OF GARMENTS IT WAS NOT THE CASE OF THE ASSESSEE REQUIRING TAXATION ON ESTIMATION OF THE INCOME AS THE ASSESSEE HAD FURNISHED THE INCOME IN ACCORDANCE WITH THE PROVISI ON OF THE INCOME TAX ACT ENCLOSING THE FINANCIAL STATEMENTS DULY AUDITED UND ER THE PROVISION OF SECTION 44AB OF THE IT ACT. WE HAVE PERUSED THE MATERIALS AND THE S UBMISSIONS OF THE ASSESSEE BEFORE THE AO WHEN THE ENHANCEMENT IN THE GROSS PROFIT RAT E APPEARS TO BE ON PURE SURMISES AND CONJECTURES WITHOUT BRINING ON RECORD ANY MATER IAL WITH COMPARABLE CASES OR DEFECT IN THE BOOKS OF ACCOUNT AND FOR THAT MATTER ANY SPECIFIC DEVIATION IH THE METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE NOT QUALIFIE D BY THE CHARTERED ACCOUNTANT IN THEIR REPORT IN COMPLIANCE WITH PROVISIONS OF SECTI ON 44AB OF THE IT ACT. IN THIS VIEW ITA NOS.120 3-1206/KOL/2009 3 OF THE MATTER, WE HAVE NO HESITATION IN UPHOLDING T HE ORDERS OF THE LD. CIT(A) FOR THE IMPUGNED ASSESSMENT YEARS AND DISMISS THE APPEALS F ILED BY THE REVENUE. 3. IN THE RESULT THE APPEALS OF THE REVENUE ARE DIS MISSED. ORDER PRONOUNCED IN THE COURT ON 19.04.2013. SD/- SD/- [ .#! $'# , ] [ .., ,, , ] [MAHAVIR SINGH ] [K.K.GUPTA] JUDICIAL MEMBER ACCOUNTANT MEMBER ( (( (4 4 4 4) )) ) DATE: 19.04.2013. R.G.(.P.S.) 6 1 /$$7 87)9- COPY OF THE ORDER FORWARDED TO: 1. M/S.WELFIT EXPORTS, 114, C.R.AVENUE, 2 ND FLOOR, KOLKATA-700013. 2 D.C.I.T., CIRCLE-36, KOLKATA. 3 . CIT KOLKATA 4 . CIT(A)-XX, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 07 /$/ TRUE COPY, 6'/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES