The ACIT, Circle-9, Ahmedabad V. M/s. Shyam Organisors, Ahmedabad

ITA 1601/AHD/2006

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0520 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 11-09-2009
• Assessment Year: 1996-1997
• Appeal Filed On: 21-06-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEETA SHAH
• Assessee Lawyers: A L THAKKAR
• Keywords: Business income; Business expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE SHRI P.K.BANSAL, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER ITA NO.1601/AHD/2006 ASSESSMENT YEAR: 1996-97 DATE OF HEARING:11.9.09 DRAFTED:15.10.09 ACIT CIR-9, AHMEDABAD V/S . M/S. SHYAM ORGANISORS, 57, MAYUR PARK, BAPUNAGAR, AHMEDABAD PAN NO. NOT FOUND. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SMT. NEETA SHAH, SR. DR RESPONDENT BY:- SHRI A.L. THAKKAR, AR O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THIS APPEAL BY THE REVENUE IS ARISING OUT OF THE O RDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-XV AHMEDABAD IN APPEAL NO. CIT (A) XC/DCIT CIR.9/28/05-06 DATED 01-03-2006. THE ASSESSMENT WAS FRAMED BY THE DCIT, CIRCLE-9, AHMEDABAD U/S. 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTE R REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 28-03-2002 FOR ASSESSMENT YEAR 1996-97. 2. THE ONLY ISSUE IN THIS APPEAL OF THE REVENUE IS AGAINST THE ORDER OF CIT(A) IN DELETING THE ADDITION OF RS.5,22,400/- MADE BY THE ASSESSING OFFICER BY ESTIMATING THE NET PROFIT @ 8% AS AGAINST THE DISCLOSED NET PR OFIT BY THE ASSESSEE @ 4.4%. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE HAVE ALSO PERUSED TH E CASE RECORDS INCLUDING THE ASSESSMENT ORDER, ORDER OF CIT(A) AS WELL AS THE AS SESSEES PAPER BOOK PAGES 1 TO 42. THE BRIEF FACTS ARE THAT THE ASSESSEE-FIRM HAD FILED THE ORIGINAL RETURN OF INCOME DECLARING A TOTAL INCOME OF RS.2,83,920/- AND THE A SSESSMENT WAS COMPLETED ITA NO.1601/AHD/2006 A.Y. 1996-97 ACIT CIR-9 ABD V. M/S. SHYAM ORGANISORS PAGE 2 DETERMINING THE TOTAL INCOME AT RS.7,61,051/-. BUT THE ASSESSING OFFICER ADOPTED NET PROFIT AT 8% ON THE SALE OF RS.1,44,94,140/- BEFORE INTEREST AND REMUNERATION TO THE PARTNERS. AS A RESULT OF THIS THE ASSESSEES PROFIT BEFORE INTEREST AND REMUNERATION WAS ESTIMATED AT RS.11,59,531/- AGAINST RS.6,37,130 /- DECLARED BY THE ASSESSEE- FIRM RESULTING THE NET ADDITION OF RS.5,22,401/-. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE CIT(A). THE CIT(A) DELETED THE ADDIT ION VIDE PARA-4.3 OF HIS APPELLATE ORDER AS UNDER:- 4.3I HAVE CONSIDERED THE SUBMISSIONS OF THE AUTHOR IZED REPRESENTATIVE CAREFULLY AND HAVE ALSO CONSIDERED THE OBSERVATIONS MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. IT IS NOT DISPUTED THAT THE VARIOUS DETAILS CALLED FOR BY THE ASSESSING OFFICER AT THE TIME OF ORIGINAL ASSESSMENT PROCEEDINGS HAVE DULY BEEN FURNISHED BY THE APPELLA NT. IT HAS ALSO NOT BEEN DISPUTED THAT THE SPECIAL AUDIT REPORT WAS AVAILABL E WITH THE ASSESSING OFFICER WHEN THE REMAND REPORT DATED 16.02.2001 WAS FILED B EFORE THE COMMISSIONER OF INCOME TAX (APPEALS)VI, AHMEDABAD AGAINST THE OR IGINAL ASSESSMENT PROCEEDINGS. EVEN IN THE RE-ASSESSMENT PROCEEDINGS, THE ORDER SUBJECT TO THE PRESENT APPEAL, THE ASSESSING OFFICER HAS NOT MADE ANY SEPARATE ADDITION ON THE BASIS OF THE REPORT OF THE SPECIAL AUDIT U/S.14 2(2A) OTHER THAN ADOPTING THE INCOME ESTIMATED IN THE ORIGINAL ASSESSMENT ORDER D ATED 24.9.1999, IT IS ALSO OBSERVED THAT THE VARIOUS ISSUES RAISED IN THE SPEC IAL AUDIT REPORT HAVE DULY BEEN CONSIDERED WHILE COMPLETING THE IMPUGNED ASSES SMENT U/S.147. ALL THESE ARE VERIFIABLE FROM THE SPECIAL AUDIT REPORT CONTAINED IN THE PAPER BOOK FILED DURING APPELLATE PROCEEDINGS. THE APPELLANT H AS ALSO REFERRED TO THE APPELLATE ORDER DATED 22.2.2001 PASSED BY CIT(A)-VI IN THE CASE OF M/S. SHYAM BUILDERS A GROUP CONCERN FOR A.Y. 1996-97 WHE REIN SIMILAR ADDITION MADE BY ESTIMATING PROFIT @ 8% OF THE SALES HAS BEE N DELETED ON THE GROUND THAT THE ASSESSING OFFICER HAD NOT BROUGHT ANY MATE RIAL TO SHOW ANY SPECIAL DEFICIT IN THE BOOKS OF ACCOUNT OF THE APPELLANT. I N THAT CASE THE ASSESSEE HAD DISCLOSED PROFIT OF 3.8% ON SALES WHICH WAS ACCEPTE D. FROM THE PERSONAL OF THE ASSESSMENT ORDER SUBJECT TO THE PRESENT APPEAL, IT IS NOTICED THAT NO ADVERSE INFERENCE HAS BEEN DRAWN ON THE BASIS OF TH E SPECIAL AUDIT REPORT. I, THEREFORE, AGREE WITH THE APPELLANT THAT THE ADDITI ON OF RS.5,22,401/- BY ADOPTING THE RATE OF PROFIT ON TOTAL SALES AT 8% IN STEAD OF @ 4.4% DISCLOSED BY THE APPELLANT IS NOT IN ORDER. ACCORDINGLY, THE ADD ITION MADE OF RS.5,22,401/- IS DELETED. NOW, AGGRIEVED REVENUE CAME IN APPEAL BEFORE US. W E FIND THAT THE ASSESSEE HAS FILED COMPLETE DETAILS LIKE BASIC DETAILS OF THE SC HEME, DETAILS OF PURCHASE OF LAND, CREDITS APPEARING IN THE CAPITAL ACCOUNTS OF THE PA RTNERS, DETAILS OF VARIOUS BUSINESS EXPENSES, DETAIL OF THE ACCOUNTS OF THE ASSETS INCL UDING ADDITION MADE THERETO AND DETAIL OF VARIOUS EXPENSES RELATED TO TRADING ACCOU NT, I.E. PURCHASES, TRANSPORTATION CHARGES, LABOUR CHARGES ETC. AND ALSO THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE SUBJECTED TO TAX AUDIT U/S.44AB OF THE ACT. WE ALS O FIND THAT ASSESSING OFFICER HAS ITA NO.1601/AHD/2006 A.Y. 1996-97 ACIT CIR-9 ABD V. M/S. SHYAM ORGANISORS PAGE 3 NOT POINTED OUT ANY DEFECT IN THE BOOKS OF ACCOUNT AND THERE WAS NO INSTANCE OF INFLATION IN PURCHASE CONSIDERATION OR IN RECEIPTS BY THE ASSESSING OFFICER. EVEN THE AO HAS NOT DOUBTED THE CORRECTNESS OF THE CLOSING S TOCK AND THE SAME IS DULY ACCOUNTED FOR AND VOUCHED. THE ONLY DEFECT WAS THA T THE QUANTITATIVE RECORD WAS NOT MAINTAINED BUT THE AO HAS NOT BROUGHT OUT ANY R EASON AS TO HOW HE IS UNABLE TO ADDUCE THE TRUE & CORRECT PROFITS FROM THE BOOKS OF ACCOUNT. WE ARE IN FULL AGREEMENT WITH THE FINDING OF CIT(A) THAT THE ASSES SEE HAS RIGHTLY DECLARED THE GROSS PROFIT RATE @ 4.4% AND IN THE ABSENCE OF ANY DEFECT OF THE BOOKS OF ACCOUNT, THE AO CANNOT ESTIMATE THE NET PROFIT. ACCORDINGLY , WE CONFIRM THE ORDER OF CIT(A) AND THIS ISSUE OF THE REVENUES APPEAL IS DISMISSED . 4. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 06/11/2009 SD/- SD/- (P.K.BANSAL) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD, DATED : 06/11/2009 *DKP COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-XV, AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD