SUPER IMPEX LTD., Jaipur V. DCIT, Jaipur

ITA 163/JPR/2011

• Counselvise Citation: 16323114 RSA 2011
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 24-02-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K MEENA

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR (BEFORE SHRI R.K.GUPTA AND SHRI N.L.KALRA) ITA NO.163, 164 & 165 JP/2011 ASSESSMENT YEAR 2006-07 TO 2008-09 PAN: AARFS 3054 M M/S. SUPER IMPEX LTD. VS. THE DCIT NEAR JAIN MANDIR, CENTRAL CIRCLE- 3 RAMGANJMANDI, KOTA KOTA (APPELLANT ) (RESPONDENT) ASSESSEE BY : SHRI P.C. PARWAL DEPARTMENT BY : SHRI D.K. MEENA ORDER PER N.L. KALRA, AM:- THE ASSESSEE HAS FILED THE APPEALS AGAINST DIFFERE NT ORDERS OF THE LD. CIT(A)-CENTRAL, JAIPUR DATED 11-01-2011 FOR THE ASS ESSMENT YEAR 2006-07 TO 2008-09. 2.1 THE GROUNDS OF APPEAL FOR ALL THE THREE ASSESSM ENT YEARS ARE SIMILAR. THEREFORE, WE WILL FIRST TAKE UP THE APPEAL FOR THE ASSESSMENT YEAR 2006-07. 3.1 THE FIRST GROUND OF THE ASSESSEE IS THAT THE LD . CIT(A) HAS ERRED IN CONFIRMING THE REJECTION OF BOOKS OF ACCOUNT BY APP LICATION OF SECTION 145(3) OF THE ACT. 3.2 THE ASSESSEE IS DEALING IN TRADING OF KOTA STON E AND HIRE CHARGES. THE AO HAS REFERRED TO THE CHART FOR THE ASSESSMENT YEA R 2002-2003 TO 2008-09 IN WHICH THE AO HAS REPRODUCED THE G.P.RATE IN VARI OUS ASSESSMENT YEARS 2 INCLUDING THE TURNOVER AND ALSO HIRE CHARGES AND TH E ASSESSEE HAS ALSO GIVEN THE PERCENTAGE OF BREAKAGE. THE G.P.RATE HAS BEEN VARIED FROM 9.52% TO 14.79% AND THE BREAKAGE HAS VARIED FROM 0.69% TO 2 .01%. THE AO REQUIRED THE ASSESSEE TO EXPLAIN THE VARIATION IN G .P.RATE. THE ASSESSEE STATED THAT SALES AND PURCHASES ARE FULLY VOUCHED. SALES HAVE BEEN ACCEPTED BY THE SALES TAX DEPARTMENT. THE OPENING AND CLOSIN G STOCK IS ALSO VERIFIABLE. EVEN DURING THE SEARCH, NOTHING INCRIMI NATING DOCUMENT WAS FOUND. THERE HAS BEEN NO SEIZURE. IT WAS THEREFORE, SUBMITTED THAT TRADING RESULTS SHOULD BE ACCEPTED. 3.3 THE AO OBSERVED THAT THE ASSESSEE IS NOT HAVING SEPARATE DAY TO DAY QUANTITATIVE TALLY IN RESPECT OF KOTA STONE AND MAN DANA STONE I.E. RED STONES. KOTA STONE IS ALSO OF TWO QUALITIES I.E. T HICK AND THIN. THE AO FURTHER OBSERVED THAT THE BUSINESS OF THE ASSESSEE IS SIMILAR TO THE BUSINESS OF M/S. SETHI STONE & POLISHING FACTORY, A SISTER CONC ERN OF THE ASSESSEE. IN THAT CASE THE INCRIMINATING DOCUMENTS WERE FOUND IN WHICH IT WAS NOTICED THAT THE CONCERN M/S. SETHI STONE & POLISHING FACTO RY WAS INDULGED IN SUPPRESSION OF PRICES. DURING THE COURSE OF SEARCH AND SURVEY, CASH AND STOCK WAS FOUND SHORT. LABOURERS PAYMENTS WERE NOT FULLY RECORDED. THEREFORE, THERE WAS SURRENDER BY THE ASSESSEE GROU P. THE AO THEREFORE, REJECTED THE BOOKS OF ACCOUNT AND INVOKED THE PROVI SIONS OF SECTION 145(3) OF THE ACT. 3 3.4 THE LD. CIT(A) UPHELD THE REJECTION OF BOOKS OF ACCOUNT. 3.5 WE HAVE HEARD BOTH THE PARTIES. BEFORE US, THE LD. AR HAS REITERATED THE SUBMISSIONS WHICH HAVE BEEN RAISED BEFORE THE L OWER AUTHORITIES. THE LD. AR HAS ALSO FILED THE PAPER BOOK CONTAINING 150 PAG ES. THE LD. DR DREW OUR ATTENTION TO PAGE 120 OF THE PAPER BOOK. IN THE REC ASTED TRADING ACCOUNT, THE ASSESSEE HAS MADE ADJUSTMENT. THERE WERE LABOUR EX PENSES OF RS. 2,04,391/- AS PER TRADING ACCOUNT SEIZED BY THE SEA RCH PARTY WHILE THERE ARE FURTHER ADJUSTMENT OF RS. 1,50,024/-. THUS SIMILAR ADJUSTMENTS ARE THERE IN RESPECT OF OTHER EXPENSES. THUS ON THE SPOT INSPECT ION SHOWED THAT BOOKS OF ACCOUNT WERE NOT CORRECT AND COMPLETE. THE ASSESSEE IS ALSO NOT HAVING QUALTYWISE DETAILS OF KOTA STONE. THE BREAKAGE IS A LSO NOT BEING RECORDED ON DAY TO DAY BASIS AND HENCE WE FEEL THAT THE LD. CIT (A) WAS JUSTIFIED IN UPHOLDING THE REJECTION OF BOOKS OF ACCOUNT. 4.1 THE SECOND GROUND OF THE ASSESSEE IS THAT THE L D. CIT(A) HAS ERRED IN CONFIRMING THE TRADING ADDITION BY APPLYING THE G.P .RATE OF 11.5%. 4.2 THE ASSESSEE HAS SHOWN THE G.P.RATE FOR THE THR EE ASSESSMENT YEARS AS UNDER:- A.Y. G.P.RATE TURNOVER 2006-07 9.52 1.90 CRORES 2007-08 9.96% 2.52 CRORES 2008-09 10.07% 2.42 CRORES 4 4.3 THE LD. CIT(A) NOTICED THAT THE TURNOVER OF THE ASSESSEE WAS LESS THAN RS. 1.00 CRORE DURING THE ASSESSMENT YEAR 2002-03 T O 2005-06. DURING THAT ASSESSMENT YEARS, THE G.P.RATE VARIED FROM 10.58% T O 14.79%.. THE G.P.RATE DURING THESE THREE ASSESSMENT YEARS IS LES S AS COMPARED TO THE G.P.RATE DURING THE ASSESSMENT YEARS 2002-03 TO 200 5-06. THE LD. CIT(A) THEREFORE, HELD THAT IT WILL BE REASONABLE IF THE G .P.RATE OF 11.5% IS APPLIED ON THE DECLARED TURNOVER. 4.4 WE HAVE HEARD BOTH THE PARTIES. IT HAS BEEN SUB MITTED BEFORE THE LOWER AUTHORITIES THAT ASSESSEE DURING THE ASSESSMENT YEA RS 2006-07 TO 2007-08 HAS SOLD METHI ON WHICH G.P.RATE WAS LESS AS COMPARED T O THE G.P.RATE ON SALE OF KOTA STONE. THE PRICE OF STONE DEPENDS UPON MANY THINGS LIKE SIZE, COLOUR, CUTTING, POLISHING, THICKNESS ETC. IT IS SE EN THAT THE G.P.RATE FOR ASSESSMENT YEAR 2008-09 IS 10.07% AND DURING THIS Y EAR THE REVENUE HAS CONDUCTED THE SEARCH. THE G.P.RATE SO DECLARED IS O N THE BASIS OF THE MATERIALS FOUND DURING THE COURSE OF SEARCH. WE THE REFORE, FEEL THAT IT WILL BE FAIR AND REASONABLE IF G.P.RATE OF 10.2% IS APPLIED FOR ALL THE ASSESSMENT YEARS AS STOCK AND CASH WAS ALSO FOUND SHORT . THUS THE AO WILL RECOMPUTE THE TRADING ADDITION AFTER APPLYING G.P.RATE OF 10. 2% FOR ALL THE THREE ASSESSMENT YEARS. 5.1 DURING THE COURSE OF PROCEEDINGS BEFORE US, THE LD. AR HAS NOT PRESSED THE GROUNDS OF APPEAL NO.1.2 THAT NO ADDITION CAN B E MADE IN CASE NO 5 INCRIMINATING DOCUMENTS HAVE BEEN FOUND DURING THE COURSE OF SEARCH. THUS THIS GROUNDS OF APPEAL IS DISMISSED. 6.1 THE LAST GRIEVANCE OF THE ASSESSEE IS IN RESPEC T OF DISALLOWANCE OF EXPENSES. 6.2 THE AO DISALLOWED 20% OF THE GENERAL EXPENSES W HILE THE LD. CIT(A) HAS RESTRICTED THE DISALLOWANCE TO 10%. 6.3 WE HAVE PERUSED THE ORDER OF THE LD. CIT(A) AND FOUND THAT LD. CIT(A) IS FAIR AND REASONABLE TO RESTRICT THE DISAL LOWANCE TO 10%. HENCE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. 7. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE P ARTLY ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30-06 -2011. SD/- SD/- (R.K. GUPTA) (N.L. KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR DATED; 30 /06/2011 *MISHRA COPY FORWARDED TO :- 1. M/S. SUPER IMPEX LTD., KOTA 2. THE DCIT, CENTRAL CIRCLE- 3, KOTA 3. THE LD. CIT BY ORDER 4. THE LD. CIT(A) 5. THE LD.DR 6. THE GUARD FILE (ITA NO.163/JP /11) A.R. , ITAT , JAIPUR 6 7