ACIT, Tuticorin V. M/s. D.A.Enterprises, Tuticorin

ITA 1376/CHNY/2011

• Counselvise Citation: 137621714 RSA 2011
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 01-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K GOPALAKRISHNAN
• Assessee Lawyers: S VENUGOPALAN
• Keywords: Rejection of books of accounts

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL CHENNAI B BENCH, CHENNAI. BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER I.T.A. NO. 1376/MDS/2011 ASSESSMENT YEAR: 2008-09 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE I, TUTICORIN. VS. M/S. D.A. ENTERPRISES, 100, W.G.C. ROAD (UPSTAIRS), TUTICORIN 628 002. [PAN:AABFD0520F] (APPELLANT) (RESPONDENT) C.O. NO. 141/MDS/2011 [IN I.T.A. NO. 1376/MDS/2011] ASSESSMENT YEAR: 2008-09 M/S. D.A. ENTERPRISES, 100, W.G.C. ROAD (UPSTAIRS), TUTICORIN 628 002. VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE I, TUTICORIN. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI K. GOPALA KRISHNAN, SR. DR ASSESSEE BY : SHRI S. VENUGOPALAN, C.A. DATE OF HEARING : 17.10.2011 DATE OF PRONOUNCEMENT 18.10.2011 ORDER PER HARI OM MARATHA, J.M. THIS APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE, FOR THE ASSESSMENT YEAR 2008-09, ARE DIRECTED AGAINST T HE ORDER OF THE LD. CIT(A) I, MADURAI, DATED 18.05.2011. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FIRM DEALING IN SAREES. THE ASSESSING OFFICER HAS COMPUTED TOTAL TA XABLE INCOME OF THE ASSESSEE AT ` .19,58,330/- AS AGAINST NIL INCOME DECLARED BY THE ASSESSEE. THE ASSESSEE I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.1 11 137 3737 376 66 6/ // /MDS/ MDS/ MDS/ MDS/11 & 11 & 11 & 11 & C.O. NO. 141/MDS/11 C.O. NO. 141/MDS/11 C.O. NO. 141/MDS/11 C.O. NO. 141/MDS/11 2 HAS ADMITTED BOOK PROFIT OF ` .2,83,589/-. THE ASSESSING OFFICER HAS ADOPTED GP RATE OF ASSESSEES BUSINESS AT 25% OF THE SALES. 3. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A), WHO HAS REDUCED THE GP RATE TO 17%, AS AGAINST THE CLAIM BY THE ASSESSEE AT 15.94%. THE LD. CIT(A) HAS MENTIONED THAT THE GP RATE OF 17% ON TOTAL TURNOVER IS ALMOST EQUAL TO GP RATE OF 21% OF GOODS SOLD. HE HAS COMPARED TH E GP RATE IN ASSESSEES CASE FOR EARLIER YEARS I.E. 2006-07 AND 2007-08 IN WHICH THE GP RATE AT 17% ON SALES OF ` .1,83,28,673/-. 4. NOW THE REVENUE HAS AGGRIEVED AND HAS TAKEN FOL LOWING GROUNDS: 1. THE ORDER OF THE CIT(A) IS OPPOSED TO LAW ON T HE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 2. THE LD. CIT(A) HAS ERRED IN REDUCING THE PERCEN TAGE OF GP TO 17% FOR THE ENTIRE STOCK WHICH INCLUDES NEW STOCK WITHOUT G IVING ANY REASONS. THE CIT(A) OUGHT TO HAVE SEEN THAT THE NEW STOCK WOULD FETCH MORE PROFIT THAN THE OLD STOCK AND NEW SHOW ROOM WITH INCREASED FACI LITIES WOULD ATTRACT MORE CUSTOMERS. 3. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE AD DUCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE CIT(A) MAY BE REVERSED AND THAT OF THE ASSESSING OFFICER RESTORED. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE CAREFU LLY PERUSED THE ENTIRE RECORD. THE MAIN PLANK OF THE ARGUMENT OF THE LD. D R IS THAT THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE NEW STOCK, WHICH WOULD FETCH MO RE PROFIT THAN THE OLD STOCK AND THE ASSESSEE HAS GOT THE NEW SHOW ROOM WITH INC REASED FACILITIES AND THE SAME WOULD ATTRACT MORE CUSTOMERS. 6. ON THE OTHER HAND, THE LD. AR HAS RELIED ON THE APPELLATE ORDER. 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE HAV E FOUND THAT THE ASSESSEE HAS BEEN MAINTAINING DAY-TODAY BOOK AND LEDGER OF T HE BUSINESS ACTIVITIES. THE I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.1 11 137 3737 376 66 6/ // /MDS/ MDS/ MDS/ MDS/11 & 11 & 11 & 11 & C.O. NO. 141/MDS/11 C.O. NO. 141/MDS/11 C.O. NO. 141/MDS/11 C.O. NO. 141/MDS/11 3 BASIS ON WHICH, THE CLOSING STOCK IS VALUED TO BE A T THE YEAR-END INVENTORY OF STOCK TAKEN. THE STATEMENT ON BEHALF OF THE ASSESSEE WAS TAKEN ON 01.12.2007 FROM SHRI D.A. SHANKAR, IN WHICH HE HAS ADMITTED THAT ST OCKS RECEIVED FROM VARIOUS CONCERNS OF THIS GROUP ARE THERE. THE ASSESSEE HAD ADMITTING GROSS PROFIT OF ` .29,20,769/-, WHICH GIVES A GP RATE OF 15.94%. THE ASSESSING OFFICER HAS ADOPTED THIS FIGURE AT 25%, BUT HE HAS NOT GIVEN AN Y VALID REASON FOR THE SAME AND HE HAS ALSO NOT FOUND ANY MATERIAL DISCREPANCY OR I NFIRMITY IN THE BOOKS MAINTAINED BY THE ASSESSEE. HE HAS ALSO NOT REJECTED THE BOOKS OF ACCOUNTS, BUT STILL THE ASSESSEE HAS ACCEPTED THE GP RATE OF 17% AS AGAINST 15.94% DECLARED BY IT. 8. THE CROSS OBJECTION FILED BY THE ASSESSEE DOES NOT RAISE ANY MATERIAL GROUND, RATHER IT HAS SUPPORTED THE FINDING OF THE LD. CIT(A). IN THE GIVEN FACTS AND THE CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSID ERED OPINION THAT NO INTERFERENCE IN THE FINDING OF THE LD. CIT(A) IS WA RRANTED. ACCORDINGLY, WE CONFIRM THE ORDER OF THE LD. CIT(A) AND DISMISS THE APPEAL OF THE REVENUE AND SO ALSO THE CROSS OBJECTION OF THE ASSESSEE. 9. IN THE RESULT, BOTH THE APPEAL OF THE REVENUE A ND THE CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.10.2011. SD/- SD/- (ABRAHAM P. GEORGE) ACCOUNTANT MEMBER (HARI OM MARATHA) JUDICIAL MEMBER CHENNAI, DATED, THE 18.10.2011 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.