Rohit Creation Pvt.Ltd., Surat V. The Income tax Officer,Ward-4(1), Surat

ITA 1649/AHD/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9828 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 23-09-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 13-05-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R K DHANESTA
• Assessee Lawyers: J P SHAH
• Keywords: Reopening of assessment; Business income; Depreciation
• Section: 69C

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A AHMEDABAD BEFORE S/SHRI MAHAVIR SINGH, JM AND D.C.AGRAWAL, AM ROHIT CREATION (P) LTD., 105, RESHAMWALA MARKET, NEAR SAHARA DARWAJA, RING ROAD, SURAT. VS. INCOME-TAX OFFICER, WARD 491), SURAT. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI J. P. SHAH, AR RESPONDENT BY:- SHRI R. K. DHANESTA, DR O R D E R PER D.C. AGRAWAL, ACCOUNTANT MEMBER . THIS IS AN APPEAL FILED BY THE ASSESSEE RAISING SE VERAL GROUNDS RELATING TO REOPENING OF ASSESSMENT, REJECTION OF B OOKS, ESTIMATING THE GP, DEPRECIATION, ADDITION UNDER SECTION 69C OF RS. 5,661/-, EXCESS PURCHASE OF RS.6,987/- AND OTHERS. THE LD. AR DID N OT PRESS ANY OF THE ABOVE GROUNDS EXCEPT THE GROUND OF ESTIMATING PROFI T. 2. THE FACTS RELATING TO THIS ISSUE ARE THAT THE AS SESSEE IS DOING BUSINESS IN SALES OF DRESS MATERIALS. DURING THE AS ST. YEAR IN QUESTION THE ASSESSEE DECLARED GP OF RS.18,61,795/- ON TOTAL SAL ES OF RS.5,15,70,842/- @ 3.61%. IN THE IMMEDIATELY PRECEDING YEAR IT HAS S HOWN GP OF RS.5,32,008/- ON TOTAL SALES OF RS.55,65,818 @ 9.56 %. IT WAS EXPLAINED TO THE AO THAT THE ASSESSEE HAS CHANGED THE BUSINES S THIS YEAR. IT IS DEALING THIS YEAR IN SALES OF PROCESSED GREY MATERI AL WHEREAS IN EARLIER ITA NO.1649/AHD/2008 ASST. YEAR :2003-04 ITA NO.1649/AHD/2008 ASST. YEAR 2003-04 2 YEAR IT WAS DEALING IN PRINTED CLOTH AND DRESS MATE RIALS MADE THEREFROM WHICH YIELDED HIGHER PROFITS TO HIM. THE AO DID NOT AGREE AND LEVIED A HIGHER GP WHICH RESULTED IN AN ADDITION OF RS.7,16, 745/-. THE LD. CIT(A) CONFIRMED THE SAME. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. THE ASSESSEE HAS SHOWN VERY HIGH TURNOVE R ALMOST 10 TIMES AS COMPARED TO PREVIOUS YEAR AND THAT RESULTED IN BETT ER PROFITS AND BETTER TAX THIS YEAR. IT ALSO CHANGED THE LINE OF BUSINESS I.E . DEALING IN GREY PROCESSED CLOTH WHICH YIELDED LESS RATE OF PROFIT T O HIM. ON THE OTHER HAND, THE CASE WITH THE REVENUE IS THAT PROFIT MARG IN THIS YEAR IS VERY LOW AND IT IS NOT FULLY EXPLAINED BY THE ASSESSEE. CONS IDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE CONFIRM AN ADDITION OF RS.2,50,000/- TO THE DECLARED PROFITS. THE ASSESSEE GETS CONSEQUENTIAL RELIEF. THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER WAS PRONOUNCED IN OPEN COURT ON 30/9/10. SD/- SD/- (MAHAVIR SINGH) (D.C. AGRAWAL) JUDICIAL MEMBER ACCOUNTANT ME MBER AHMEDABAD, DATED : 30/9/10. MAHATA/- ITA NO.1649/AHD/2008 ASST. YEAR 2003-04 3 COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD 1.DATE OF DICTATION 23/9/2010. 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 28/9/2010 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..