Shantilal Dassani Prop. Jain Woolprocessors, BIKANER V. ITO, BIKANER

ITA 159/JODH/2013

• Counselvise Citation: 15923314 RSA 2013
• Duration Of Justice: 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 19-08-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 14-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G R KOKANI
• Assessee Lawyers: VIRENDRA JAIN
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 159/JODH/2013 (A.Y. 2009-10) SHANTILAL DASSANI P/O JAIN WOOL PROCESSORS VS ITO, WARD-1(4), C/O. SHRI VIRENDRA JAIN (ADVOCATE) BIKANER. C/O. JAI KUMAR PUGALIA, SETHIA MAROTHI GUWAD, BIKANER. PAN NO. ABHPD6433C (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. VIRENDRA JAIN. DEPARTMENT BY : SH. G.R. KOKANI- DR. DATE OF HEARING : 19/08/2013. DATE OF PRONOUNCEMENT : 30/08/2013. O R D E R PER HARI OM MARATHA, J.M. : THIS APPEAL OF THE ASSESSEE FOR A.Y. 2009-10 IS DI RECTED AGAINST THE ORDER OF LD. CIT(A), BIKANER DATED 21/02/2013. 2. THE FIRST GROUND WAS NOT PRESSED BY LD. A.R. AT THE TIME OF THE HEARING, THEREFORE, IT STANDS DISMISSED. 2 2.1 THE FACTS OF GROUND NO. (2) WHICH RELATES TO TR ADING ADDITION OF RS. 6,53,443/- ARE THAT THE ASSESSEE DERIVED HIS IN COME FROM MANUFACTURING AND TRADING IN CARPET WOOL YARN. DUE TO SOME DEFECT FOUND IN THE BOOKS OF ACCOUNTS THESE WERE REJECTED U/S 145(3) AND TRADING ADDITION WAS MADE. THE ADDITION OF RS. 6,53 ,443/- IS MADE BECAUSE IN THIS YEAR SHORTAGE IS CLAIMED AT 40% AS AGAINST 36.52% CLAIMED IN A.YS. 2008-09. 2.2 BEFORE LD. CIT(A), SIMILAR ARGUMENTS WERE MADE HE REDUCED THIS ADDITION BY ADOPTING SHORTAGE AT 38%. 2.3 THE ASSESSEE IS FURTHER AGGRIEVED. BEFORE US EA RLIER ARGUMENTS WERE REITERATED BY BOTH THE PARTIES. WE HAVE CONSID ERED RIVAL SUBMISSIONS IN THE LIGHT OF THE AVAILABLE EVIDENCE. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS DISCLOSED BETTER TRADING RESULTS IN THIS YEAR AS COMPARED TO THE LAST YEAR. THE BOOKS ARE REGULAR LY AUDITED. ALL THE PURCHASES AND THE SALES ARE VOUCHED. OPENING AND CL OSING STOCK, QUANTITY-WISE, HAVE BEEN PRODUCED. ALL THE PAYMENTS WERE MADE THROUGH DD/OR THROUGH BANKING CHANNELS. ALL THE EXP ENSES ARE FOUND TO BE VOUCHED. THUS, EVEN AFTER REJECTION OF THE BO OKS OF ACCOUNTS WHEN THE G.P. RATE IS FOUND TO BE BETTER THAN THE L AST YEAR, LEGALLY, NO 3 FURTHER TRADING ADDITION CAN BE MADE. IN THIS YEAR G.P. RATE IS AT 6.46% AS COMPARED TO THE LAST YEAR WHEN G.P. RATE WAS 5.5 9%. 3. THE GROUND NO. (3) IS REGARDING SUSTAINED ADDITI ON OF RS. 15,000/- AS AGAINST RS. 25,000/- MADE BY THE A.O. THE FACTS OF THIS GROUND ARE THAT THE ASSESSEE HAS SHOWN HOUSEHOLD WITHDRAWALS, DURING THE YEAR, AT RS. 93,000/-. BY CONSIDERING THE SIZE OF THE FAM ILY AND THEIR LIVING STANDARD THE A.O. HAS ESTIMATED IT AT RS. 1,18,000/ - AND MADE THE ADDITION OF RS. 25,000/- WHICH HAS BEEN REDUCED BY RS. 10,000/-. 3.1 AFTER HEARING BOTH SIDES WE HAVE FOUND THAT THE ADDITION OF RS. 25,000/- WAS MADE IN THIS ACCOUNT (RS. 1,18,000/- ( ESTIMATED BY THE AO) RS. 93,000/- DECLARED BY THE ASSESSEE). THIS ADDITION HAS BEEN REDUCED TO RS. 15,000/- BY LD. CIT(A). HOWEVER, THE RE IS NO REASONABLE BASIS TO MADE ADDITION OF ENTIRE RS. 25,000/- IN TH IS ACCOUNT. THE ABSTRACT AND SUBJECTIVE REASONS LIKE THE SIZE OF TH E FAMILY AND THE LIVING STANDARD MAY DIFFER FROM PERSON TO PERSON, T HEREFORE, IT CANNOT BE A REASONABLE BASIS FOR MAKING ADDITION. ACCORDIN GLY, WE DELETE THE ENTIRE ADDITION OF RS. 25,000/- BY TREATING IT AS B ASELESS AND ALLOW GROUND NO. (3) OF ASSESSEES APPEAL. 4 4 THE GROUND NO. (4) OF THIS APPEAL RELATES TO ADDI TION OF RS. 73,393/- MADE ON ACCOUNT OF INCOME FROM OTHER SOURC ES. THE FACTS OF THIS GROUND ARE THAT THE ASSESSEE HAD RECEIVED INTE REST FROM N.S.C.S. AND FDRS TOTALING TO RS. 73,393/-. BUT, THE ASSESSE E HAS NOT INCLUDED THIS INCOME AS HIS INCOME FROM OTHER SOURCES. THE A SSESSEE EXPLAINED THAT THE ASSESSEE DID NOT INVEST THIS MONEY IN HIS INDIVIDUAL CAPACITY BUT IT WAS IN THE BUSINESS ACCOUNT SO THE SAME IS I NCLUDIBLE IN THE BUSINESS INCOME. THE A.O. HAS ADDED ENTIRE INTEREST OF RS. 73,393/- SHOWN AS ACCRUED IN THE BALANCE SHEET. THE ASSESSEE HAS SHOWN NSC INTEREST OF RS. 16,789/- AND FDR INTEREST OF RS. 16 48/- AND HAS CREDITED THEM TO THE CREDIT SIDE IN THE P&L ACCOUNT . AS PER THE ASSESSEE HE PURCHASED NSCS AND FDRS FROM THE FUNDS OF THE BUSINESS. 4.1 BEFORE US SIMILAR REASONINGS WERE GIVEN. IN FAC T THE INTEREST INCOME HAS TO BE ASSESSED AS INCOME FROM OTHER SOUR CES. THEREFORE, WE CANNOT ACCEPT AND ALLOW THIS GROUND OF ASSESSEE S APPEAL AND HENCE DISMISS GROUND NO. (4). 5 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH AUGUST, 2013. SD/- SD/- [N.K. SAINI] [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30 TH AUGUST, 2013. VL/ COPY TO : 1. THE APPELLANT 2. THE RESPONDENT BY ORDER 3. THE CIT 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR ITAT, JODHPUR