M/s. Sadabahar Prints Pvt.Ltd., V. The Addl.CIT.,Range-4, Surat

ITA 1365/AHD/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9256 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2009
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 20-08-2009
• Assessment Year: 2004-2005
• Appeal Filed On: 15-04-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Keywords: Bogus purchase; Gross profit estimation

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, D-BENCH,AHMED ABAD. BEFORE :SHRI MAHAVIR SINGH, JUDICIAL MEM BER, AND SHRI D.C.AGRAWAL, ACCOUNTANT MEMBER. ITA NO.1365/AHD/2008 (ASSESSMENT YEAR 2004-2005) M/S. SADABAHAR PRINTS PVT. LTD., BLOCK NO. 104/105 PLOTS NO. 190 TO 193 SHIVANAND IND. ESTATE, KADODARA, VILLAGE TATITHAIYA, DIST. SURAT VERSUS ADDL. CIT, RANGE-4, SURAT. (APPELLANT) (RESPONDENT) PAN: AADCS 3802 N FOR THE APPELLANT: SHRI SAKAR SHARMA, AR FOR THE RESPONDENT SHRI C.K. MISHRA, DR ORDER PER SHRI D.C. AGRAWAL: THIS IS AN APPEAL FILED BY THE ASSESSEE RAISING FOLLOWING GROUNDS. 1.THE LEARNED CIT(A) HAS ERRED IN LAW AND AN FACTS OF THE CASE IN UPHOLDING THE ADDITION OF RS. 7,36,750/- MADE BY TH E ASSESSING OFFICER AS BOGUS PURCHASES. THE PAYMENT WAS MADE BY CHEQUE S AND THERE IS NO SCOPE OF BOGUS PURCHASES. 2.THE LEARNED CIT(A) HAS ALSO ERRED IN LAW AND ON F ACTS OF THE CASE IN UPHOLDING THE ADDITION OF RS.4,61,523/- ON ACCOUNT OF LOW GROSS PROFIT. 3.THE LEARNED CIT(A) HAS ALSO OVERLOOKED THE FACTS THAT EVEN IF ADDITION OF RS.7,36,750/- MADE THEN THE GROSS PROFIT IS INCR EASED TO THAT EXTENT AND THERE IS NO POINT OF ADDITION FOR LOW GROSS PRO FIT. 4.BOTH THE LOWER AUTHORITIES HAVE SERIOUSLY ERRED I N LAW IN NOT OBSERVING VARIOUS FACTS, SUBMISSIONS, EXPLANATIONS AND CLASSI FICATION AS GIVEN BY THE APPELLANT. 5.THE ASSESSEE CRAVES LEAVE TO ADD, DELETE, ALTER O R MODIFY ANY OF THE GROUNDS OF APPEAL ON OR AT THE TIME OF HEARING OF A PPEAL. 2. AT THE OUTSET, LD. A.R. FOR THE ASSESSEE SUBMITT ED THAT GROUND NO. 2 RELATING TO ADDITION ON ACCOUNT OF LOW GROSS PROFIT SHOULD BE DEEM TO BE 2 ITA NO.1365/AHD/2008 (ASSESSMENT YEAR 2004-05) COVERED IN THE ADDITION MADE ON ACCOUNT OF BOGUS PU RCHASES, BEING THE ISSUE RAISED IN GROUND NO. 1. IN OTHER WORDS, LEARNED AR PRAYED FOR ALLOWING THE BENEFIT OF TELESCOPING. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS E NGAGED IN THE BUSINESS OF PROCESSING ART SILK CLOTH ON JOB WORK BASIS. THE A SSESSING OFFICER FOUND CERTAIN PURCHASES FROM M/S. LACKY TRADERS, SURAT, A MOUNTING TO RS. 7,36,750/- AS BOGUS. HE ACCORDINGLY MADE THE ADDITION. THE A SSESSING OFFICER FURTHER MADE AN ADDITION ON ACCOUNT OF LOW GROSS PROFIT. H E INCREASE THE GROSS-PROFIT BY 1% AND MADE THE ADDITION AMOUNTING TO RS.4,61,52 3/-. 4. THE LD. CIT(A) CONFIRMED BOTH THE ADDITIONS. 5. WE HAVE HEARD LEARNED A.R. AND LEARNED D.R. 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND CARE FULLY PERUSING THE MATERIAL ON RECORD, WE ALLOW THE ASSESSEE THE BENEF IT OF TELESCOPING. THE ADDITION OF BOGUS PURCHASE WILL ONLY ENHANCE THE GR OSS PROFIT. THE ADDITION IS MORE THAN 1% AND ASSESSING OFFICER HAS CHOSEN TO MA KE ENHANCEMENT IN G.P. RATE BY 1%. THEREFORE FURTHER ADDITION OF RS. 4,61 ,523/- IS NOT REQUIRED WITH THE ADDITION OF RS.7,36,750/- ENHANCING THE GP RATE BY MORE THAN 1%. AS A RESULT, ADDITION IN RESPECT OF GROUND NO. 1 IS CONF IRMED, WHILE ADDITION IN RESPECT OF GROUND NO. 2 IS DELETED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DATED 28 TH AUGUST, 2009. SD/- SD/- (MAHAVIR SINGH) (D .C. AGRAWAL) JUDICIAL MEMBER ACCOUN TANT MEMBER AHMEDABAD; DATED:28/08/2009 ANKIT* COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 3 ITA NO.1365/AHD/2008 (ASSESSMENT YEAR 2004-05) 2. THE RESPONDENT 3. THE CIT(A) CONCERNED 4. THE CIT, 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, ASSTT. REGISTRAR/ DEPUTY REGISTRAR ITAT, AHMEDABAD BENCHES, AHMEDABAD.