ITO, Meerut V. M/s. Jai Shree Food Products, Meerut

ITA 1382/DEL/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91451 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC 1
• Next Hearing Date: 22-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 09-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER ITA NO. 1382/DEL/2015 ASSTT. YRS: 2009-10 INCOME-TAX OFFICER, VS. M/S JAI SHREE FOOD PRODUCTS , WARD-1(3), MEERUT. 16, GEETA COLONY, MEERUT. (NEW ADD: 107, ANASARPURA, HAPUR ROAD, MEERUT) ( APPELLANT ) (RESPONDENT) APPELLANT BY : SHRI S.K. JAIN ADDL. CIT(DR) RESPONDENT BY : SHRI RAJEEV AHUJA CA DATE OF HEARING : 22/07/2015. DATE OF ORDER : 28/07/2015. O R D E R PER S.V. MEHROTRA, A.M.. : THIS APPEAL, FILED BY THE REVENUE, IS DIRECTED A GAINST CIT(A)S ORDER DATED 19-12-2014, PASSED IN APPEAL NO. 433/11-12, RELATIN G TO A.Y. 2011-12. 2. THE ASSESSEE FIRM, IN THE RELEVANT ASSESSMENT YE AR, WAS ENGAGED IN TRADING OF AMUL PRODUCTS. IT HAD FILED ITS RETURN O F INCOME DECLARING TOTAL INCOME OF RS. 52,657/-. ASSESSMENT WAS COMPLETED AT A TOTAL INCOME OF RS. 14,73,644/- , BEING 5% OF TOTAL PURCHASES OF RS. 3, 04,72,875/- U/S 44AF OF THE INCOME-TAX ACT, AFTER REJECTING THE ASSESSEES BOOKS OF ACCOUNT FOR THE FOLLOWING REASONS: (I) THE ASSESSEE FIRM HAD NOT FILED ANY EVIDENCE FOR CL AIMING INSURANCE AGAINST THE LOSS ON GOODS AND ITEMS I.E. FURNITURE AND FIXTURE; 2 (II) ASSESSEE FIRM HAD NOT PRODUCED ANY EVIDENCE FOR MAK ING PAYMENT TO M/S GUJARAT CO-OPERATIVE MILK MARKETING FEDERATI ON LTD., THROUGH DD WHICH WERE PURCHASED FROM ICICI BANK. (III) THE ASSESSEE FIRM COULD NOT EXPLAIN THE DIFFERENCE IN THE PURCHASES MADE FROM M/S GUJARAT CO-OPERATIVE MILK MARKETING F EDERATION LTD., AT RS. 3,24,63,921/- AND DISCLOSED IN ITS P& L A/C AT RS. 3,04,94,690/-. (IV) THE RETURN FILED BY THE ASSESSEE FIRM BEFORE THE TR ADE TAX DEPARTMENT WAS NOT RELIABLE AS IT WAS ASSESSEES OW N DATA AND THE SAME HAD NOT STILL BEEN ASSESSED BY THE TRADE TAX D EPARTMENT. 3. BEFORE LD. CIT(A), THE ASSESSEE HAD FILED SALES- TAX ASSESSMENT ORDER FOR THE YEAR UNDER CONSIDERATION AND REQUESTED FOR ADMISSION OF DOCUMENTS UNDER RULE 46A OF THE INCOME-TAX RULES. 3.1. LD. CIT(A) CALLED FOR A REMAND REPORT FROM THE AO WHO IN HIS REMAND REPORT DID NOT OFFER ANY COMMENTS ON MERITS OF ADDI TIONAL EVIDENCE AND ONLY REITERATED THE POINTS MENTIONED IN THE ASSESSMENT O RDER. 3.2. LD. CIT(A) ALLOWED THE ASSESSEES APPEAL FOR T HE FOLLOWING REASONS: (I) IF THE ASSESSEES TURNOVER WAS RS. 3,04,72,875/-, T HEN THE PROVISIONS OF SECTION 44AF COULD NOT BE MADE APPLIC ATION AND, THEREFORE, MECHANICAL COMPUTATION BY TAKING THE RAT E AT 5% OF TOTAL TURNOVER COULD NOT BE ACCEPTED. (II) AS REGARDS THE REJECTION OF BOOKS OF A/C ON DISCREP ANCY IN PURCHASES NOTED EARLIER, LD. CIT(A) POINTED OUT THA T THE AO DID NOT CONSIDER THE ASSESSEES SUBMISSION THAT THE PURCHAS ES MADE BY THE ASSESSEE HAD BEEN CORRECTLY RECORDED AT RS. 3,04,94 ,690/- AND THE SO CALLED DISCREPANCY OF RS. 19,59,231/- WAS ACTUAL LY THE AMOUNT 3 OF VAT FOR SUCH PURCHASES, WHICH HAD BEEN SHOWN SEP ARATELY IN THE ACCOUNTS OF THE ASSESSEE. THE FIGURE OF VAT IS VERIFIABLE FROM THE SALES-TAX ORDER PASSED BY THE DY. COMMISSIONER OF TRADE TAX. HE FURTHER OBSERVED THAT THIS ASSESSMENT HAS NOT BE EN CONTROVERTED BY AO IN HIS REMAND REPORT. HE, ACCORDINGLY, RELYIN G ON THE SALES- TAX ASSESSMENT ORDER DELETED THE ADDITION. 4. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A ), BECAUSE THE MAIN REASON FOR REJECTING THE BOOKS OF A/C WAS THAT THE ASSESSE E COULD NOT RECONCILE THE FIGURE OF PURCHASES. THE AO FAILED TO TAKE NOTE OF THE SEPARATE FIGURES MENTIONED BY THE ASSESSEE IN REGARD TO PURCHASES AN D VAT AND REJECTED THE BOOKS OF A/C. THE SALES-TAX ASSESSMENT, WHICH WAS N OT AVAILABLE AT THE TIME OF ASSESSMENT, HAD BEEN FILED BEFORE THE LD. CIT(A) ON WHICH REMAND REPORT HAD BEEN CALLED FOR. 5. BEFORE AO THE ASSESSEE HAD ALSO EXPLAINED HOW TH E PAYMENTS WERE MADE BY IT FOR MAKING PURCHASES AS UNDER: YOUR HONOUR HAS RIGHTLY QUOTED THAT THERE IS TURNO VER ACCORDING TO THE PROPER SUBMITTED OF VENDOR IS RS. 3,24,84,582/- AND AS PER THE BANK ACCOUNT ONLY 89,41,205/-. YOUR HONOR MIGHT HAVE ALSO SEEN THAT IN THE BOOKS PRESENT THROUGH VE NDORS IT IS ALSO CLEARED NO ONE SINGLE ENTRY OF CASH IS BEING S UBMITTED TO THEM. ENTIRE AMOUNT IS BEING DEPOSITED TO THE COMPA NY EITHER WAY OF DD OR THROUGH THAT TIME WE WERE FIGHTING WI TH OUR BANKER ON THE HEAVY CHARGES LEVIED BY THEM ON THE I SSUE OF DD AND IN THE MEAN TIME THE OTHER BANK LIKE ICICI ETC WERE GIVING FACILITY BY PREPARING OUR DD BY TAKING A LITTLE AMO UNT AND WERE ARGUING TO OPEN THE ACCOUNT WITH THEM AS WELL. BUT AS WE HAVE TAKEN THE CC LIMIT FROM OUR BANK WE CANNOT OPERATE TWO ACCOUNTS SIMULTANEOUSLY AND SO WE WERE GIVING ON MA KING DD FOR THE COMPANY FROM OTHER BANK AND AS WERE NOT AUT HORIZED TO 4 MAINTAIN TWO ACCOUNTS (AS PER EXISTING BANKER GUIDE LINES) HENCE WE WERE PREPARING THE DD THROUGH OTHER BANKS JUST T O SAVE A LITTLE IN TERMS OF BANK CHARGES. 6. THE DEPARTMENT HAS NOT CONTROVERTED THE FINDINGS OF LD. CIT(A) AND, THEREFORE, I DO NOT FIND ANY REASON TO INTERFERE W ITH THE SAME. THE ORDER OF LD. CIT(A) IS UPHELD. 7. IN THE RESULT, DEPARTMENTAL APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 28/07/2015. SD/- (S.V. MEHROTRA) ACCOUNTANT MEMBER DATED: 28/07/2015. *MP* COPY OF ORDER TO: 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI.