Shri Prakash Mafatlal Doshi (HUF), Navsari V. The Income Tax Officer, Ward-3, Navsari

ITA 1717/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0290 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 13-10-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 12-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVETIA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI S. S. GODARA, JUDICIAL MEMBER) ITA. NO: 1717/AHD/2013 (ASSESSMENT YEAR: 2009-10) PRAKASH MAFATLAL DOSHI (HUF) PROP. OF SUN GOLD, 303, NIRMAL CHAMBERS, SATTAPIR, NAVSARI V/S INCOME TAX OFFICER, WARD- 3, NAVSARI (APPELLANT) (RESPONDENT) PAN: AADHD 3347N APPELLANT BY : SHRI S. N. DIVETIA, AR RESPONDENT BY : SHRI JAMES KURIAN, SR. D.R. ( )/ ORDER DATE OF HEARING : 13 -10-20 16 DATE OF PRONOUNCEMENT : 18 -10-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER 1. WITH THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE C ORRECTNESS OF THE ORDER OF THE LD. CIT(A), VALSAD DATED 31.03.2013 PERTAINI NG TO A.Y. 2009-10. ITA NO 1717/ AHD/2013 . A.Y. 2009-1 0 2 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE ASSES SEE IS THAT THE LD. CIT(A) ERRED IN UPHOLDING THE ADDITION @ 0.5% OF TH E TOTAL TURNOVER MADE BY A.O. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE A SSESSEE RUNS A PROPRIETARY CONCERN IN THE NAME AND STYLE OF SUN GOLD ENGAGED I N THE BUSINESS OF TRADING IN GOLD. 4. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS, THE A.O. NOTED THAT THE ASSESSEE HAS SHOWN NET LOSS OF RS. 5,84,12 5/- ON A TOTAL TURNOVER OF RS. 1.35 CRORES. THE A.O. WAS NOT SATISFIED WITH TH E LOSS QUA THE TURNOVER. ON VERIFICATION OF CERTAIN BILLS OF MMTC LTD., THE A.O. FORMED AN OPINION THAT THE ASSESSEE HAS INFLATED PURCHASE PRICE AND H AS SHOWN NET LOSS. THE A.O. CONCLUDED BY MAKING AN ADDITION @ 0.5% OF THE TOTAL TURNOVER AT RS. 67,657/-. 5. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. 6. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE VEHEMEN TLY SUBMITTED THAT ALL THE PURCHASES ARE DULY SUPPORTED BY INVOICES, DELIV ERY CHALLANS AND NO DEFECT HAS BEEN POINTED OUT BY THE A.O. EXCEPT SOME GENERAL AND VAGUE OBSERVATIONS. IT IS THE SAY OF THE LD. COUNSEL THAT NO VERIFICATION HAS BEEN DONE BY THE A.O. TO VERIFY THE GENUINENESS OF THE B ILLS FROM MMTC LTD. THE LD. COUNSEL CONCLUDED BY STATING THAT REJECTION OF BOOK RESULTS ON FRIVOLOUS GROUNDS IS UNWARRANTED. THEREFORE, THE ADDITIONS DE SERVE TO BE DELETED. ITA NO 1717/ AHD/2013 . A.Y. 2009-1 0 3 PER CONTRA, THE LD. D.R. STRONGLY SUPPORTED THE ORD ERS OF THE AUTHORITIES BELOW. 7. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. WE FIND THAT THE A.O. HAS DOUBTED THE INVOIC E PRICE OF MMTC LTD. WE FAIL TO UNDERSTAND WHAT BENEFIT A GOVERNMENT OF INDIA UNDERTAKING WOULD DERIVE BY ISSUING INFLATED INVOICES TO THE AS SESSEE. THE A.O. HAS DOUBTED THE GENUINENESS OF THE PURCHASES MADE FROM A GOVERNMENT OF INDIA UNDERTAKING. SUCH SUSPICION OF THE A.O. IS UN CALLED FOR. FURTHER, NO CROSS VERIFICATION IS DONE BY THE A.O. WITH MMTC LT D., WE DO NOT FIND ANY MERIT IN THE IMPUGNED ADDITIONS. WE, ACCORDINGLY, S ET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE A.O. TO DELETE THE AD DITION OF RS. 67,657/-. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 18 - 10- 20 16. SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. ITA NO 1717/ AHD/2013 . A.Y. 2009-1 0 4 BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD