ITO WD 13(1)(4), MUMBAI V. OFFSHORE INTERNATIONAL, MUMBAI

ITA 1422/MUM/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0784 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 04-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 19-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PARIKH M SHAH
• Section: 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI N.K . BILLAIYA, A CCOUNTANT M EMBER / I .T.A. NO . 1422 /MUM/ 2013 ( / ASSESSMENT YEAR : 2009 - 10 THE ITO - 13(1)(4), AAYAKAR BHAVAN, NEW MARINE LINES, MUMBAI - 400 020 / VS. M/S.OFFSHORE INTERNATIONAL, 67,CUMMU JAFAR BLDG., ROOM NO. 33, MEMONWADA ROAD, MUMBAI - 400 003 ./ ./ PAN/GIR NO. : AAAFO 5248E ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI MANVENDRA GOYAL / RESPONDENT BY : SHRI PARIKH M. SHAH / DATE OF HEARING : 0 4 . 0 6 .2015 / DATE OF PRONOUNCEMENT : 0 4 .0 6 .2015 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) - 2 4, MUMBAI DT. 2 2 . 11 .2012 PERTAINING TO ASSESSMENT YEAR 2009 - 10. 2. THE FIRST GRIEVANCE OF THE REVENUE RELATE TO THE ESTIMATION OF GROSS PROFIT @ 6.5% AS AGAINST 10.54% ESTIMATED BY THE AO. ITA. NO. 1422/M/2013 2 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF EXPORTER IN GENERAL IT EM. THE RETURN FOR THE YEAR UNDER CONSIDERATION WAS TAKEN UP FOR SCRUTINY ASSESSMENT. ON PERUSAL OF THE AUDIT REPORT, THE ASSESSING OFFICER FOUND THAT GROSS TURNOVER FOR THE LAST YEAR I.E. 2008 - 09 WAS RS. 2.94 CRORES AND THE GROSS PROFIT WAS RS. 31 LAKHS WHICH WAS AROUND 10.54% WHEREAS FOR THE YEAR UNDER CONSIDERATION I.E. 2009 - 10 THE GROSS TURNOVER IS RS. 4.58 CRORES AND THE GROSS PROFIT SHOWN AT RS. 26.87 LAKHS WHICH COMES TO 5.86%. THE AO ASKED THE ASSESSEE TO JUSTIFY THE FALL IN THE G.P. RATIO. ON R ECEIVING NO PLAUSIBLE REPLY, THE AO ESTIMATED THE GROSS PROFIT ON THE BASIS OF THE PREVIOUS YEARS PROFIT @ 10.54% AND THE GROSS PROFIT WAS ARRIVED AT RS. 48.35 LAKHS. 4. AGGRIEVED BY THIS, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) AND STRONG LY CONTENDED THAT THE ASSESSEES BOOKS OF ACCOUNTS ARE DULY AUDITED. IT WAS FURTHER BROUGHT TO THE NOTICE OF THE LD. CIT(A) THAT IN A.Y. 2007 - 08, THE GP RATE WAS AT 8.73% AND IN A.Y. 2009 - 10, THE GP RATE IS 5.86%. IT WAS FURTHER EXPLAINED THAT THE FALL IN GP WAS DUE TO THE RECESSION IN THE MARKET. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, THE LD. CIT(A) OBSERVED THAT THE AO HAS NOT POINTED OUT ANY MISTAKE/DEFICIENCY IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE AND WITHOUT POINTING OUT ANY DEFECT, THE AO CANNOT REJECT THE BOOK RESULTS. THE LD. CIT(A) FURTHER OBSERVED THAT THE AO ADOPTED THE GP RATE IMMEDIATELY PRECEDING YEAR WHICH ACTION OF THE AO IS NOT SUPPORTED. THE AO SHOULD HAVE ADOPTED THE AVERAGE OF PAST YEARS GROSS PROFIT RATIO. THE LD. CIT(A) CONCLUDED BY ADOPTING THE GP RATE AT 6.5% AS REASONABLE. 5. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. ITA. NO. 1422/M/2013 3 6. THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT BRING ANYTHING IN ADDITION TO WHAT HAS ALREADY BEEN STATED BY THE AO. 7. THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN SUBMITTED BEFORE THE LOWER AUTHORITIES. 8. AFTER GIVING A THOUGHTFUL CONSIDERATION TO THE FACTS ON RECORD, WE FIND THE ESTIMATE MADE BY THE LD. CIT(A) QUITE REASONABLE CONSIDERING THE PAST HISTORY OF THE ASSESSEE. WE, THEREFORE, DECLINE TO INTERFERE. GROUND NO. 1 IS DISMISSED. 9. GROUND NO. 2 RELATES TO THE DELETION OF RS. 1,00,000/ - MADE BY THE AO U/S. 68 OF THE ACT. 10. ON GOING THROUGH THE CAPITAL ACCOUNT, THE AO NOTICED THAT PARTNERS SHRI MOHD. ARIF SUTARIWALA AND SMT. NAFISA AKBARKHAN HAVE INTRODUCED CAPITAL OF RS. 1,00,000/ - EACH. THE ASSESSEE WAS ASKED TO PRODUCE THE SOURCE OF CAPITAL INTRODUCED. ON RECEIVING NO PLAUSIBLE REPLY, THE AO TREATED THE AMOUNT OF RS. 2,00,000/ - AS UNEXPLAINED CAS H CREDIT AND ADDED THE SAME U/S. 68 OF THE ACT. 11. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A). IT WAS STRONGLY CONTENDED BEFORE THE LD. CIT(A) THAT THE CAPITAL HAVE BEEN INTRODUCED BY THE PARTNER THEREFORE NO ADDITION CAN BE MADE IN THE HANDS OF THE FIRM. THE ASSESSEE FURTHER SUPPL IED COPIES OF THE INCOME TAX RETURN OF SHRI MOHD. ARIF SUTARIWALA. HOWEVER, NO DETAILS WERE FURNISHED IN RESPECT OF SMT. NAFISA AKBARKHAN. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, THE LD. CIT(A) WAS CONVINCED WITH THE SOURCE OF SHRI MOHD. ARIF S UTARIWALA AND DIRECTED TO DELETE THE ADDITION OF RS. ITA. NO. 1422/M/2013 4 1,00,000/ - AND CONFIRMED THE ADDITION OF RS. 1,00,000/ - IN THE CASE OF SMT. NAFISA AKBARKHAN. 12. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. 13. THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ASSESSMENT ORDER. 14. THE LD. COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD. CIT(A). 15. WE FIND THAT THE LD. CIT(A) WAS CONVINCED WITH THE SOURCE OF SHRI MOHD. ARIF SUTARIWALA AS IT WAS FOUND THAT SHRI MOHD. ARIF SUTARIWALA IS FILING INCOME TA X RETURNS, THE DETAILS OF WHICH WERE PROVIDED TO THE LD. CIT(A). ON THE BASIS OF WHICH THE LD. CIT(A) DELETED THE ADDITION AND CONFIRMED IN THE CASE OF SMT. NAFISA AKBARKHAN. THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). 16. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. OR DER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON 4 TH JUNE , 2015 . SD/ - SD/ - ( JOGINDER SING H ) (N.K. BILLAIYA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 4 TH JUNE , 2015 . . ./ RJ , SR. PS ITA. NO. 1422/M/2013 5 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI