Shri Pradeep Anandji Khona, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-1, GANDHIDHAM

ITA 1205/RJT/2010

• Counselvise Citation: 120524914 RSA 2010
• Duration Of Justice: 1 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-05-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 04-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VILAS V SHINDE
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI T.K. SHARMA (JM) AND SHRI A.L. GEHLOT ( AM) I.T.A. NO1205/RJT/2010 (ASSESSMENT YEAR 2006-07) SHRI PRADEEP ANANDJI KHONA VS ITO, WD.1 C/O KALPESH S DOSHI & CO, CAS GANDHIDHAM 411, COSMO COMPLEX MAHILA COLLEGE CIRCLE RAJKOT 360 001 PAN : ABHPK6704F (APPELLANT) (RESPONDENT) DATE OF HEARING : 11-11-2011 DATE OF PRONOUNCEMENT : 11-11-2011 APPELLANT BY : SHRI KALPESH DOSHI RESPONDENT BY: SHRI VILAS V SHINDE O R D E R PER T.K. SHARMA (JM) THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER D ATED 14-07-2010 PASSED BY THE CIT(A)-II, RAJKOT FOR THE ASSESSMENT YEAR 2006-07. 2. THE BRIEF FACTS LEADING TO CONTROVERSY INVOLVED IN THE AFORESAID APPEAL ARE THAT IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMEN T YEA UNDER APPEAL THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF TRANSPORT, EXPORT, CLEARING AND FORWARDING OF SHIPPING. HE FILED THE RETURN OF INC OME DECLARING TOTAL INCOME AT RS.38,019. ASSESSING OFFICER FRAMED THE ASSESSMENT U/S 143(3) ON 10-12-2008 WHEREIN HE ESTIMATED THE INCOME OF THE ASSESSEE @5% OF HANDLING RECEIPT OF RS.91,88,138 AND MADE AN ADDITION OF RS.4,59,406. ON APPEAL, IN THE IMPUGNED ITA NO.1205/RJT/2010 2 ORDER THE LD.CIT(A) CONFIRMED THE ADDITION FOR THE DETAILED REASON GIVEN AT PARAGRAPH 2(CA) WHICH READS AS UNDER: (CA) I FOUND THAT AO DID NOT POINT OUT ANY SPECIFI C DEFECT IN THE BOOKS OF ACCOUNTS OR IN THE BILLS AND VOUCHERS. TH E SO CALLED DEFECTS THE AO POINTED OUT COULD NOT BE TAKEN AS SE RIOUS ONES SO AS TO REJECT THE BOOKS OF ACCOUNTS, THAT TOO WHEN T HE BOOKS OF ACCOUNTS WERE AUDITED UNDER THE COMPANIES ACT AND T AX AUDIT REPORT WAS ALSO FURNISHED. THERE ARE NO QUALIFICAT IONS IN THE AUDITORS REPORT. THE AUDITORS HAVE REPORTED THAT THE P&L ACCOUNT GAVE A TRUE AND FAIR VIEW OF THE PROFIT. THE APPEL LANT ALSO MAINTAINED PROPER BOOKS OF ACCOUNTS. KEEPING IN VI EW THE FACTS OF THE CASE VIS--VIS GP DETERMINED IN THE APPELLANTS CITATIONS, I DIRECT THE A.O. TO RESTRICT THE ADDITION BY TAKING GP AT 3% INSTEAD OF 5% ADOPTED BY HIM IN THE ASSESSMENT ORDER. THE ADD ITION IS THUS RESTRICTED TO RS.3,21,585/-. THE APPELLANT GETS A RELIEF OF RS.1,37,821. AGGRIEVED BY THE ORDER OF LD.CIT(A) THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING ON BEHALF OF THE ASSESSEE , SHI KALPESH DOSHI APPEARED AND POINTED OUT THAT NET PROFIT DECLARED B Y THE ASSESSEE BEFORE DEPRECIATION IN TRANSPORTATION BUSINESS IS 39.54%. THIS GROSS PROFIT IS FAIR AND REASONABLE LOOKING INTO THE GROSS PROFIT DECLARED B Y OTHER TRANSPORTS WHICH IS CONSIDERED AS FAIR AND REASONABLE BY THE TRIBUNAL A S UNDER: M/S KANDLA BULK CARGO CARRIERS - 8% ITA NO.178/RJT/2001 M/S CARGO CONVEYORS PVT LTD - 15% ITA NO.958/RJT/2004 ITA NO.1205/RJT/2010 3 THE COUNSEL OF THE ASSESSEE FURTHER POINTED OUT THA T IN THE IMPUGNED ORDER, THE LD.CIT(A) HAS ACCEPTED THE CONTENTIONS OF THE ASSES SEE THAT THE ASSESSING OFFICER HAS NOT POINTED OUT ANY SPECIFIC DEFECT IN THE BOOK S OF ACCOUNT OR IN THE BILLS AND VOUCHERS. THE SMALL DISCREPANCY POINTED OUT ARE NO T SIGNIFICANT TO REJECT THE BOOKS OF ACCOUNT. HE FURTHER POINTED OUT THAT LOSS IN THE TRANSPORTATION BUSINESS IS ON ACCOUNT OF DEPRECIATION ADMISSIBLE AS PER RUL ES ON TUCKS PURCHASED IN THE ASSESSMENT YEAR UNDER APPEAL. THIS IS THE FIRST YE AR OF BUSINESS OF THE ASSESSEE. ON THIS BASIS, HE POINTED OUT THAT SINCE NO SIGNIFICANT DEFECT IN THE BOOKS OF ACCOUNT HAS BEEN POINTED, THE GROSS PROFIT DECLARED BY THE ASSESSEE IS MORE THAN GROSS PROFIT ACCEPTED BY THE TRIBUNAL IN THE CASE OF OTHER TRANSPORTERS, THE ADDITION OF 3,21,586 CONFIRMED BY THE LD.CIT(A) BY DELETED. 5. SHRI VILAS V SHINDE, APPEARED ON BEHALF OF THE A SSESSEE AND POINTED OUT THAT FEW DEFECTS HAVE BEEN POINTED OUT BY THE ASSES SING OFFICER IN THE VOUCHERS, I.E.. THESE ARE UNSIGNED AND ARE OF SMALL AMOUNTS. HE POINTED OUT THAT THESE DEFECTS ARE ENOUGH TO REJECT THE BOOKS OF ACCOUNT. 6. IN THE REJOINDERS, THE COUNSEL OF THE ASSESSEE E XPLAINED THAT EVEN IF THE BOOKS OF ACCOUNT ARE REJECTED, NO ADDITION CAN BE M ADE AS GROSS PROFIT DECLARED BY THE ASSESSE IS HIGHER AS COMPARED TO THAT DECLAR ED BY OTHER TRANSPORTERS IN THIS LINE OF BUSINESS. ITA NO.1205/RJT/2010 4 7. HAVING HEARD BOTH SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. LOOKING TO THE NATURE OF DEFECT POINTED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER, WE ARE OF THE VIEW THAT THESE ARE NOT SIGNIFICANT DEFECT TO REJECT THE BOOKS OF ACCOUNT PARTICULARS W HEN THE GROSS PROFIT DECLARED BY THE ASSESSEE IS BETTER THAN WHAT IS CONSIDERED BY T HE TRIBUNAL AS FAIR AND REASONABLE IN OTHER CASE OF TRANSPORTERS IN THE SIM ILAR LINE OF BUSINESS. IN VIEW OF THIS WE ARE OF THE VIEW THAT THERE IS NO JUSTIFICAT ION WHATSOEVER FOR REJECTING THE BOOKS OF ACCOUNT AND SUSTAINING THE ADDITION OF RS. 3,21,586. WE ACCORDINGLY DELETE THE ADDITION OF RS.3,21,585 SUSTAINED BY THE CIT(A). 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING. SD/- SD/- (A.L. GEHLOT) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT, DT : 11 TH NOVEMBER, 2011 PK/- COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A)-II, RAJKOT 4. THE CIT-I, RAJKOT 5. THE DR, I.T.A.T., RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT