Smt. Devangnaben Chetankumar Desai, Bilimora V. The Income Tax Officer, Ward-1, Navsari

ITA 1647/AHD/2014

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 2154 (ITAT-SURAT)
• Duration Of Justice: 4 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 26-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J K CHANDNANI
• Assessee Lawyers: RAJESH M UPADHAYAY
• Keywords: Corroborative evidences

Judgement Text

DEVANGNABEN CHETANKUMAR DESAI V. ITO WD-1 NAVSARI/I.T.A. NO.1647/AHD/2014/A.Y.:09-10 PAGE 1 OF 5 , , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT . . , . . , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . . ./ I.T.A NO.1647/AHD/2014/SRT / ASSESSMENT YEAR :2009-10 SMT. DEVANGNABEN CHETAN KUMAR DESAI PROPERTY. M/S. RIDHI SWAMI ENTERPRISE BILLI VANKER TEKRA, BILLIMOR PAN:AEOPD0780N V S . INCOME TAX OFFICER, WARD- 1 NAVSARI APPELLANT /RESPONDENT /ASSESSEE BY SHRI RAJESH M. UPADHAYAY, A.R. /REVENUE BY SHRI J. K. CHANDNANI, SR. D.R. / DATE OF HEARING: 21.06.2018 /PRONOUNCEMENT ON 0 6 . 07.2018 /O R D E R PER O. P. MEENA, ACCOUTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-VALSAD (IN SHORT THE CIT (A)) DATED 06.03.2014 PERTAINING TO ASSESSMENT YEAR 2009-10. 2. DURING THE CURRENCY OF APPEAL THE ASSESSEE HAS FILED CONCISE GROUNDS OF APPEAL, HENCE, THESE ARE BEING CONSIDERED. 3. GROUND NO. 1 RELATES TO CONFIRMATION OF ADDITION OF RS.1,58,614 BEING DIFFERENCE IN ACCOUNT OF DABUR INDIA LTD. DEVANGNABEN CHETANKUMAR DESAI V. ITO WD-1 NAVSARI/I.T.A. NO.1647/AHD/2014/A.Y.:09-10 PAGE 2 OF 5 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE AO HAS MADE ADDITION AS THERE WAS NON-RECONCILIATION OF LEDGER ACCOUNT OF DABUR INDIA LTD. NOR ANY SUPPORTING EVIDENCES WERE FILED. THE CIT (A) HAS ALSO CONFIRMED THE SAID ADDITION. THE LD. A.R. CONTENDED BEFORE US THAT DIFFERENCE IN CLOSING BALANCE IS DUE TO DIFFERENCE IN OPENING BALANCE. THE LD. A.R. FILED A RECONCILIATION STATEMENT, ACCORDING TO WHICH THE DABUR INDIA LTD. HAS NOT CONSIDERED THE CLOSING BALANCE DIFFERENCE. AU CONTRAIRE, THE LD. SR. D.R. SUBMITTED THAT THIS RECONCILIATION HAS BEEN CONSIDERED IN THE CASE OF DABUR INDIA LTD. AND THE ASSESSEE IS NOT ABLE TO RECONCILE THE SAME. IN VIEW OF THIS MATTER, WE ARE NOT INCLINED TO INTERFERE WITH THE FINDINGS OF CIT (A), HENCE, SAME IS UPHELD. 5. GROUND NO. 2 RELATES TO CONFIRMATION OF ADDITION OF RS. 3,40,781 BEING DIFFERENCE IN PAYMENTS AS PER CREDITORS ACCOUNT AND AS PER APPELLANT`S MANUAL BOOKS OF ACCOUNTS, IGNORING THE DEVANGNABEN CHETANKUMAR DESAI V. ITO WD-1 NAVSARI/I.T.A. NO.1647/AHD/2014/A.Y.:09-10 PAGE 3 OF 5 FACTS THAT INSTEAD OF MAKING ADDITION FOR GROSS AMOUNT , GROSS PROFIT ADDITION IS TO BE MADE AS PER DECIDED CASE LAWS. 6. THE ASSESSING OFFICER(THE AO) FOUND THAT THE AGGREGATE CASH PAYMENTS OF RS. 3,06,910 AND RS. 33,871 MADE TO V. B. MEDICO AND ALISH AGENCY RESPECTIVELY WAS NOT REFLECTED IN THE BOOKS OF ACCOUNTS NOR IN CASH BOOK AND LEDGER ACCOUNT, WHICH WAS MADE AGAINST THE PURCHASE OF GOODS. THE LD. A.R. ARGUED THAT THIS BEING UNRECORDED PURCHASES, HENCE, ONLY GROSS PROFIT ADDITION SHOULD HAVE BEEN MADE AND NOT THE ENTIRE PURCHASES AS THE ASSESSEE HAS EARNED ONLY GROSS PROFIT FOR SUCH PURCHASES. PER CONTRA, LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF CIT (A). ON CAREFUL CONSIDERATION OF FACTS, WE ARE OF THE VIEW THAT SINCE THE ASSESSEE HAS MADE UNVERIFIABLE PURCHASES WITH RECORDED PURCHASES AND SALES. THEREFORE, IT WOULD BE REASONABLE IF GROSS PROFIT ADDITION IS MADE, THEREFORE, THE ADDITION @ 12.5% OF AGGREGATE PURCHASES OF RS. 3,40,781 IS UPHELD, WHICH WORKED OUT TO RS. 42,598. THEREFORE, SAME IS CONFIRMED AND BALANCE ADDITION OF RS. DEVANGNABEN CHETANKUMAR DESAI V. ITO WD-1 NAVSARI/I.T.A. NO.1647/AHD/2014/A.Y.:09-10 PAGE 4 OF 5 2,90,183 I.E. [ 3,40,781- 42,598] IS DELETED. THIS GROUND OF APPEAL IS THEREFORE, PARTLY ALLOWED. 7. GROUND NO. 3 RELATES TO CONFIRMATION OF ADDITION OF RS. 99,092 IN RESPECT OF PURCHASES NOT RECORDED BY THE APPELLANT IN HER BOOKS OF ACCOUNTS IN RESPECT OF 3 CREDITORS/ SUPPLIERS NAMELY VB MEDICO RS. 22,227, DABUR INDIA LTD. RS. 11,165 AND MM ASSOCIATES RS. 65,700. 8. THE AO NOTED THAT PURCHASES FROM 3 PARTIES WERE NOT RECORDED IN BOOKS OF ACCOUNTS HENCE, THESE WERE TREATED AS UNEXPLAINED WHICH WERE ALSO UPHELD BY THE CIT (A). IN APPEAL BEFORE US, THE LD. A.R. ARGUED THAT THE AO HAS NOT FOUND ANY INVOICE NUMBER OF SUCH BILLS FROM WHOM ALLEGED PURCHASES WERE MADE. THE SUPPLIER ITSELF STATED THAT THESE ARE NOT AGAINST SALES. NOR SUCH AMOUNT IS APPEARING IN THE SUPPLIERS ACCOUNT OF ALL THE ABOVE MENTIONED 3 PARTIES . THEREFORE, NO ADDITION SHOULD HAVE BEEN MADE. WE HAVE HEARD THE RIVAL SUBMISSIONS AND OF THE VIEW THAT THE ASSESSEE IS NOT ABLE TO RECONCILE THE PURCHASES MADE FROM DEVANGNABEN CHETANKUMAR DESAI V. ITO WD-1 NAVSARI/I.T.A. NO.1647/AHD/2014/A.Y.:09-10 PAGE 5 OF 5 THE PARTIES CONCERNED. THEREFORE, IT WOULD BE REASONABLE TO ESTIMATE GROSS PROFIT ADDITION BY APPLYING GROSS PROFIT RATE OF 12.5% ON SUCH PURCHASES WHICH WORKED OUT TO RS.13,386 HENCE, ADDITION TO THE EXTENT OF RS.13,386 IS SUSTAINED AND BALANCE ADDITION OF RS.86,706 IS DELETED. THIS GROUND OF APPEAL IS THEREFORE, PARTLY ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 10. ORDER PRONOUNCED IN THE OPEN COURT ON 06.07.2018 SD/- SD/- ( . . /C.M. GARG) ( . . /O.P.MEENA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER DATED: 06 JULY, 2018 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) THE CIT(A)4. / PR. CIT 5. , / D.R.(ITAT) 6. / GUARD FILE ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT