ITO, Karnal V. M/s. Jay Pee Industries, Karnal

ITA 1739/DEL/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9803 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 27-08-2009
• Assessment Year: 2006-2007
• Appeal Filed On: 29-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANOOP KUMA R SINGH
• Section: 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `D : NEW DELHI) BEFORE SHRI D.R. SINGH, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.1739/DEL./2009 (ASSESSMENT YEAR- BP : 2006-07) ITO, KARNAL, VS. M/S JAY PEE INDUSTRIES, NEW DELHI. SHIV PURI ROAD, KARNAL. (PAN/GIR NO.AAEFJ3164E) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SATISH KUMAR GOEL, ADV. REVENUE BY : SHRI ANOOP KUMAR SINGH, SR.DR ORDER PER A.K. GARODIA: AM THIS IS A REVENUE APPEAL DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME- TAX (APPEALS), KARNAL DATED 16.2.2009 FOR ASSESSMEN T YEAR 2006-07. THE ONLY GROUND RAISED BY THE REVENUE IN THIS APPEAL READS AS UNDER : ON FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CI T(A) HAS ERRED IN DELETING THE ADDITION OF RS.6,73,316/- MADE ON ACCOUNT OF LOW G. P. RATE ON THE BASIS THAT THE ASSESSEE HAS PRODUCED ALL THE NECESSARY DETAILS AN D HAS BEEN KEEPING THE COMPLETE BOOKS OF ACCOUNTS ,[SINCE, THE AVERAGE COS T PER UNIT AND SALE PER UNIT HAS BEEN WORKED OUT ON THE BASIS OF THE DETAILS FILED B Y THE ASSESSEE ITSELF TAKEN OUT FROM THE BOOKS OF ACCOUNTS AS WELL AS DOCUMENTS PRO DUCED BY THE ASSESSEE] WHEREAS THE ADMISSIONS OF THE ASSESSEE TO THE EFFEC T THAT TRADE DISCOUNT AT RS.68,200/- RECEIVED FROM LUXMI TRADE AND TECHNOLOG Y AND SHREE BALAJI HAVE ERRONEOUSLY BEEN CREDITED TO P & L A/ SHOWS THAT IN SPITE OF THE CLAIM OF THE ASSESSEE THAT PROPER BOOKS OF A/C ARE MAINTAINED AN D HAS BEEN AUDITED BY A CHARTERED ACCOUNTANT, HAVE BEEN GROSS ERRORS IN THE BOOKS OF ACCOUNTS. 2. BRIEFLY STATED, THE FACTS ARE THAT IT IS NOTED B Y THE ASSESSING OFFICER IN THE ASSESSMENT ORDER THAT ON THE BASIS OF DETAILS FURNI SHED BY THE ASSESSEE REGARDING QUANTITY AND VALUE OF RAW-MATERIAL PURCHASED AND GOODS SOLD AND PRODUCTION COST ETC., THE G.P. RATE WORKS OUT TO 8.66%, BUT THE G.P. RATE DECLARED BY T HE ASSESSEE IS LESS. IT IS NOTED BY THE ASSESSING OFFICER THAT AS PER G.P. RATE OF 8.66%. G .P. WORKS OUT TO RS.1434610 AS AGAINST RS.761294 DECLARED BY THE ASSESSEE. ON ACCOUNT OF T HIS DIFFERENCE, THE ASSESSING OFFICER MADE AN ADDITION OF BALANCE AMOUNT OF RS.673316. T HERE IS NO MENTION IN THE ASSESSMENT ORDER REGARDING REJECTION OF BOOKS OF AC COUNT. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE COMMISSIONE R OF INCOME-TAX (APPEALS), WHO HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE ON THE BASIS THAT THE ASSESSING OFFICER HAS NOT EVEN REJECTED THE BOOKS OF ACCOUNT BECAUSE NO ORDER U/S 145 HAS BEEN PASSED AND TRADING RESULTS HAS BEEN DISTURBED WITHOUT REJECTION OF BOO KS OF ACCOUNT. IT IS ALSO NOTED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) THAT THE ASSES SEE HAS EXPLAINED THE REASONS FOR DECLINE IN G.P. RATE VIDE LETTER DATED 28.4.2008 AS PER WHICH EXCISE DUTY RATE HAS INCREASED FROM 9.6% TO 16% AND LEVY OF EDUCATION CESS @ 2% OF EXCISE DUTY. OTHER REASONS ARE GIVEN BY THE ASSESSEE SUCH AS TRADE DISCOUNT OF RS. 68,200 AND RATE DIFFERENCE CHARGEABLE TO TRADING ACCOUNT OF RS.116800. IT HAS ALSO BEEN SUBMITTED THAT THERE WAS FLUCTUATION IN MARKET PRICE OF PURCHASE AS WELL AS SALES DUE TO WH ICH THERE WAS NET DECREASE IN NET PROFIT TO THE EXTENT OF RS.10.25LAKH. NOW, THE REVENUE IS IN APPEAL BEFORE US. 3. LD.DR OF THE REVENUE SUPPORTED THE ASSESSMENT OR DER WHEREAS THE LD.AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. WE FIND THAT IN THE ASSESSMENT ORDER, THERE IS MENT ION REGARDING REJECTION OF BOOKS OF ACCOUNT. WE ARE IN AGREEMENT WITH COMMISSIONER OF INCOME-TAX (APPEALS) THAT WITHOUT REJECTION OF BOOKS OF ACCOUNT, TRADE RESULTS SHOWN BY THE ASSESSEE CANNOT BE DISTURBED. ON MERIT ALSO, WE FIND THAT SUFFICIENT REASONS ARE EXPLAINED BY THE ASSESSEE REGARDING FALL IN GROSS PROFIT SUCH AS INCREASE IN EXCISE DUTY LIA BILITY, TRADE DISCOUNT, RATE DIFFERENCE AND FLUCTUATION IN PRICES OF PURCHASE AND SALE. IN THE STATEMENT OF FACTS IN PARA.(E), IT IS STATED BY THE ASSESSEE THAT DUE TO FLUCTUATION IN PRICES, AVERAGE PURCHASE PRICE FELL FROM RS.32.63 TO RS.24.12, BUT NET SALE PRICE HAS FALLEN FROM RS.41.80 TO 30.96. CONSIDERING ALL THESE FACTS, WE FIND NO REASON TO INTERFERE IN THE ORDER OF THE COMMISSIONER OF INCOME- TAX (APPEALS) ON THIS ISSUE AND HENCE, WE UPHOLD TH E SAME. THIS GROUND OF THE APPEAL IS REJECTED. 5. IN THE RESULT, THIS APPEAL OF THE REVENUE IS DIS MISSED. 6. ORDER PRONOUNCED IN OPEN COURT ON 11.09.2009. (D.R. SINGH) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: SEP. 11, 2009. *SKB* COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A),KARNAL. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. AR/ITAT