ACIT, Circle - 34, Kolkata, Kolkata V. M/s. Braun Textile Processor, Kolkata

ITA 1717/KOL/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74988 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2014
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 02-09-2010
• Court: TRIBUNAL
• Department Lawyers: A P ROY JCITSR
• Keywords: Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C , KOLKATA [BEFORE HONBLE SRI P.K.BANSAL, AM & HONBLE SRI MAHAVIR SINGH, JM] ITA NO.1717/KOL/2010 ASSESSMENT YEAR : 2007-08 ( APPELLANT ) - (RESPONDENT) A.C.I.T., CIRCLE-34, M/S.BRAUN TEXTILE PROCESS OR KOLKATA -VERSUS- KOLKATA (PAN: AAEFB 4314 J) FOR THE APPELLANT: SHRI A.P.ROY, JCIT,SR.DR FOR THE RESPONDENT: NONE DATE OF HEARING : 13.01.2014 DATE OF PRONOUNCEMENT : 17.01.2014. / ORDER PER SHRI P.K.BANSAL, AM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A)-XX, KOLKATA DATED 07.06.2010 BY TAKING THE FOLLOWING EF FECTIVE GROUNDS OF APPEAL : 1. THE LD. CIT(A)-XX, KOLKATA HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION IN THE HEAD OF GROSS PROFIT OF RS.96,00,587/- MADE BY THE AO. 2. AT THE TIME OF HEARING NONE APPEARED ON BEHALF OF THE ASSESSEE. EVEN THOUGH AN APPLICATION FOR ADJOURNMENT HAD BEEN FILED SINCE WE DO NOT FIND ANY PLAUSIBLE REASON WE THEREFORE REJECTED THE ADJOURNMENT APPLICATION A ND DECIDED TO DISPOSE OF THIS APPEAL AFTER HEARING THE LD. DR. 3. WE HAVE HEARD THE LD. DR AND CAREFULLY CONSIDER ED THE SUBMISSIONS MADE BY HIM. WE NOTED THAT IN THIS CASE THE AO WITHOUT REJE CTING THE BOOKS OF ACCOUNT OF THE ASSESSEE SIMPLY REJECTED THE GROSS PROFIT SHOWN BY ASSESSEE MERELY ON THE BASIS THAT AS PER THE TAX AUDIT REPORT AND TRADING ACCOUNT OF THE ASSESSEE FOR A.YR.2006-07 AND THE IMPUGNED A.YR. THE RATIO OF MANUFACTURING EXPEN SES TO PURCHASE HAD INCREASED FROM 23.76% TO 25.49% WHILE THE NATURE OF BUSINESS OF THE ASSESSEE REMAINS THE SAME AND ON THIS BASIS ONLY HE ENHANCED THE GROSS PROFIT RATE AT 1% ON THE TURN OVER AND MADE THE ADDITION OF RS.96,00,587/-. NO DEFECT WHAT SOEVER HAS BEEN POINTED OUT BY THE AO. THE ESTIMATION OF THE INCOME CAN BE MADE BY THE AO IF THE AO CHECKS THE ITA NO.1717/KOL/2010 ACIT,KOL VS M/S.BRAUN TEXTILE PROCESSOR A.YR.2007-08 2 BOOKS OF ACCOUNT BY INVOKING THE PROVISION OF SECTI ON 145(3) OF THE I.T.ACT. IT IS NOT THE CASE WHERE THE AO HAS DISALLOWED PARTICULAR EXP ENDITURE INCURRED BY THE ASSESSEE ON THE BASIS THAT THE ASSESSEE FAILED TO PROVE THE GENUINITY OF THE EXPENDITURE INCURRED FOR THE PURPOSE OF THE BUSINESS. EVEN THERE IS NO A LLEGATION THAT THE EXPENDITURE INCURRED BY THE ASSESSEE ARE CAPITAL EXPENDITURE FO R PERSONAL EXPENSES HAVE NOT BEEN INCURRED FOR THE PURPOSE OF THE BUSINESS OF THE ASS ESSEE. THE RATIO OF THE MANUFACTURING EXPENSES TO THE PURCHASE IN EACH YEAR WILL REMAIN THE SAME. THE ADDITIONS MADE IN THE GROSS PROFIT AND CONSEQUENTLY IN THE INCOME OF THE ASSESSEE, IN OUR OPINION, IS SIMPLY BASED ON CONJECTURES AND SUR MISES AND FOR THE SAKE OF MAKING THE ADDITIONS. SUCH APPROACH OF THE AO IS NOT APPRE CIABLE HAD SHAKEN THE CONFIDENCE OF THE PUBLIC. IN OUR OPINION THE CIT(A) UNDER THE FACTS AND CIRCUMSTANCES HAS RIGHTLY DELETED THE ADDITION. THE ASSESSEE SINCE HAS NOT FI LED ANY APPEAL OR CROSS OBJECTION THIS, IN OUR OPINION, WOULD HAVE BEEN A FIT CASE FO R IMPOSING OF THE COST ON THE REVENUE HAD THE ASSESSEE DEMANDED FOR IT. WE THEREFORE DISM ISS THE GROUND TAKEN BY THE REVENUE. 4. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 17.01.2014. SD/- SD/- [MAHAVIR SINGH ] [P.K.BANSAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 17.01.2014.. R.G.(.P.S.) COPY OF THE ORDER FORWARDED TO: 1. M/S. BRAUN TEXTILE PROCESSOR, 56/1, CANNING STREET, KOLKATA-700001. 2 A.C.I.T., CIRCLE-34, KOLKATA. 3 . CIT KOLKATA 4 . CIT(A)-XX, KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES ITA NO.1717/KOL/2010 ACIT,KOL VS M/S.BRAUN TEXTILE PROCESSOR A.YR.2007-08 3