Shri Mohamadkassim Abubakar Bhornia, Surat V. The Income tax Officer,Ward-2(3), Surat

ITA 1265/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89481 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 24-04-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 29-04-2011
• Court: TRIBUNAL
• Department Lawyers: ROOP CHAND

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD BEFORE S/SHRI G. D. AGRAWAL, VP & RAJPAL YADAV, JM ITA NO.1265/AHD/2011 ASST. YEAR 2007-08 .MOHAMMADKASSIM ABUBAKAR BHORANIA, 4/2352, DORIAWAD, SALABATPURA, SURAT. VS INCOME-TAX OFFICER, WARD 2(3), SURAT. (APPELLANT) (RESPONDENT) PA NO. AAMPB 8635L APPELLANT BY SHRI RAJESH UPADHYAY, AR RESPONDENT BY SHRI ROOP CHAND, SR.DR DATE OF HEARING: 24/4/2015 DATE OF PRONOUNCEMENT: 22/5/2015 O R D E R PER SHRI RAJPAL YADAV, JUDICIAL MEMBER. THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF LD. CIT(A) DATED 18.2.2011 PASSED FOR AY 2007-08. THOUG H THE ASSESSEE HAS TAKEN THREE GROUNDS OF APPEAL, BUT HIS GRIEVANCE REVOLVES AROUND A SINGLE ISSUE, WHEREBY HE HAS PLEA DED THAT LD. CIT(A) HAS ERRED IN CONFIRMING THE GP ADDITION OF R S.18,48,618/- AFTER UPHOLDING THE ACTION OF AO OF REJECTING BOOK RESULT S OF THE ASSESSEE. ITA NO. 1265/AHD/2011 ASST. YEAR 2007-08 2 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HAS FI LED HIS RETURN OF INCOME ON 31.10.2007 DECLARING TOTAL INCOME OF RS.2 ,97,922/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSE SSMENT AND A NOTICE UNDER SECTION 143(2) WAS ISSUED AND SERVED U PON THE ASSESSEE. ON SCRUTINY OF THE ACCOUNTS IT REVEALED T HAT ASSESSEE HAD SHOWN G.P. AT 0.90% FROM A TOTAL TURNOVER OF RS.4,2 4,44,871/- WHEREAS IN THE IMMEDIATELY PRECEDING YEAR, HE HAS S HOWN GP AT 11.45% FROM A TOTAL TURNOVER OF RS.38,11,227/-. ACC ORDING TO THE AO THERE IS A SHARP FALL IN GP BY 10.55% IN COMPARISON TO LAST YEAR. THE AO REJECTED THE BOOK RESULT OF THE ASSESSEE. HE EST IMATED THE INCOME BY ADOPTING AVERAGE GP OF LAST THREE YEARS. THE AVERAGE GP OF LAST THREE YEARS IS 5.29% OF THE TOTAL TURNOVER. IT WORKED OUT TO 4.39% AND ACCORDINGLY HE MADE AN ADDITION OF RS.18, 63,330/-. 3. ON APPEAL, THE CIT(A) HAS PARTLY GRANTED THE REL IEF. THE LD. FIRST APPELLATE AUTHORITY HAS CONFIRMED THE ADDITION TO T HE EXTENT OF RS.18,48,618/- AS AGAINST RS.18,63,330/- MADE BY TH E AO. 4. WITH THE ASSISTANCE OF LD. REPRESENTATIVES, WE H AVE GONE THROUGH THE RECORD CAREFULLY. THE LD. AO HAS REJECT ED THE BOOK RESULT ITA NO. 1265/AHD/2011 ASST. YEAR 2007-08 3 OF THE ASSESSEE SIMPLY FOR TWO REASONS NAMELY (A) THE ASSESSEE DID NOT MAINTAIN DAY TO DAY STOCK REGISTER & (B) THE AS SESSEE FAILED TO PRODUCE PURCHASE AND SALES BILLS. THE LD. COUNSEL F OR THE ASSESSEE CONTENDED THAT PURCHASE AND SALES BILLS WERE IMPOUN DED BY THE DIRECTOR GENERAL, CENTRAL EXCISE INTELLIGENCE, REGI ONAL UNIT, BARODA. THE AO WOULD HAVE CALLED FOR THE BILLS FROM THAT AU THORITY BUT HE DID NOT TAKE ANY STEP IN THIS CONNECTION. THE ASSESSEE IS UNABLE TO LAY HIS HANDS ON THESE BILLS. THE LD. COUNSEL FOR THE A SSESSEE SUBMITTED THAT PHOTO COPIES OF THE BILLS CAN BE PRODUCED IF A N OPPORTUNITY IS PROVIDED TO THE ASSESSEE. 5. THE LD. DR ON THE OTHER HAND, RELIED ON THE ORDE RS OF REVENUE AUTHORITIES BELOW. 6. ON DUE CONSIDERATION OF THE FACTS AND CIRCUMSTAN CES WE FIND THAT THIS PLEA WAS TAKEN UP BEFORE THE LD. CIT(A) A LSO. THE LD. FIRST APPELLATE AUTHORITY HAS SIMPLY REJECTED THIS PLEA O N THE GROUND THAT IT IS NOT A PROPER JUSTIFICATION FOR NOT PRODUCING THE PURCHASE AND SALES BILLS. WE FAIL TO UNDERSTAND, HOW IT CANNOT BE THE JUSTIFICATION. ONCE THE PURCHASE AND SALES BILLS ARE IMPOUNDED BY AN AU THORITY, UNLESS THEY ARE HANDED OVER, HOW THE ASSESSEE CAN BE EXPEC TED TO PRODUCE ITA NO. 1265/AHD/2011 ASST. YEAR 2007-08 4 THOSE BILLS. THE LD. CIT(A) INSTEAD OF CALLING THOS E BILLS FROM THE CENTRAL EXCISE AUTHORITIES, DREW AN ADVERSE INFEREN CE AGAINST THE ASSESSEE. IT IS NOT EXPECTED FROM THE QUASHI JUDICI AL AUTHORITY. IF THE BILLS HAVE BEEN GONE THROUGH AND THEREAFTER SOME DE FECTS WERE POINTED OUT BY THE AO THEN THE STAND OF THE AO CAN BE APPRECIATED ON THIS COUNT. TAKING INTO CONSIDERATION ALL THESE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT ENDS OF JUST ICE WOULD MEET IF WE SET ASIDE THE IMPUGNED ORDERS AND RESTORE THIS I SSUE TO THE FILE OF AO FOR READJUDICATION. THE ASSESSEE WILL BE AT LIBE RTY TO PRODUCE THE COPIES OF THE PURCHASE AND SALES BILLS. THE AO SHAL L HAVE A FRESH LOOK ON THE DISPUTE AND ON ALL THE MATERIALS. HE SHALL P ROVIDE DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE OBSERVA TIONS MADE BY US WILL NOT IMPAIR OR INJURE THE CASE OF AO AND WILL N OT CAUSE ANY PREJUDICE TO THE DEFENCE/EXPLANATION OF THE ASSESSE E. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22/5/2015 SD/- SD/- (G. D. AGARWAL) VICE PRESIDENT (RAJPAL YADAV) JUDICIAL MEMBER ITA NO. 1265/AHD/2011 ASST. YEAR 2007-08 5 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 18/5/2015 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 19/5/2015 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: