Kadamwala Dyeing & Printing Pvt.Ltd., Surat V. The Income tax Officer,Ward-1(3), Surat

ITA 1918/AHD/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57042 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-12-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 10-06-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SAMIR TEKRIWAL SRDR
• Assessee Lawyers: R B SHAH
• Keywords: Gross profit estimation; Depreciation; Unabsorbed depreciation
• Section: 143(3); 115JB

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD .., !'# $ $ $ $ %% % &, ' ( # BEFORE SHRI G.D.AGARWAL, VICE-PRESIDENT AND SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER 1. $./ I.T.A.NO.1918/AHD/2009 - * * * */ // / A.Y. 2006-07 2. $./ I.T.A.NO.2297/AHD/2009 - * * * */ // / A.Y. 2006-07 1. KADMAWALA DYEING & PRINTING PVT.LTD. 122, SARVODYA MARKET RING ROAD, SURAT 2. INCOME TAX OFFICER WARD-1(3), SURAT / VS. 1. INCOME TAX OFFICER WARD-1(3), SURAT 2. KADMAWALA DYEING & PRINTING PVT.LTD., SURAT '+ (, $./- $./ PAN/GIR NO. : AACCK 1112 E ( +. / // / APPELLANTS ) .. ( /0+. / RESPONDENTS ) ASSESSEE BY : SHRI R.B. SHAH, A.R. REVENUE BY : SHRI SAMIR TEKRIWAL SR.DR % 1 2 &, / / / / DATE OF HEARING : 02/12/2011 34* 2 &, / DATE OF PRONOUNCEMENT :20/JAN/2012 (5 / O R D E R PER BENCH: THESE TWO APPEALS ARE THE CROSS-APPEALS RESPECT IVELY FILED BY THE ASSESSEE AND THE REVENUE ARISING FROM THE ORDER OF THE LEARNED CIT(APPEALS)-I, SURAT DATED 27/5/2009 PASSED FOR A. Y. 2006-07. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: - ITA NOS.1918/AHD/2009 (BY ASSESSEE) & ITA NO.2297/AHD/2009 (BY REVENUE) KADMAWALA DYEING & PRINTING P.LTD. VS. ITO ASST.YEAR - 2006-07 - 2 - 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE A S WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN R EJECTING BOOKS OF ACCOUNT U/S.145(3) OF THE ACT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS W ELL AS LAW ON THE SUBJECT, THE LEARNED CIT (APPEALS) HAS ERRED IN PA RTLY CONFIRMING THE ADDITION OF RS.13,58,093/- OUT OF ADDITION OF RS.14 ,74,501/- MADE BY ASSESSING OFFICER ON ACCOUNT OF LOW GROSS PROFIT. 3. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE A S WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN M AKING DISALLOWANCE OF RS.1,04,323/- U/S.40(A)(IA) OF THE ACT. 4. IT IS THEREFORE PRAYED THAT THE ABOVE ADDITIONS /DISALLOWANCES MADE BY ASSESSING OFFICER AND CONFIRMED BY COMMISSIONER OF INCOME-TAX (APPEALS) MAY PLEASE BE DELETED. 5. APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ANY GROUND(S) EITHER BEFORE OR IN THE COURSE OF HEARING OF THE APPEAL. 2.1. THE GROUNDS RAISED BY THE REVENUE ARE AS UN DER:- 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE GP ADDITION AT 17.50% AS AGAINST THE GP ADDITION MADE BY THE AO AT 19% (AGAINST GP OF 19.87% DISCLOSED BY THE ASSESSEE ITSELF IN THE IMMEDIATE P RECEDING YEAR) ON THE GROUND THAT THE AO HAS NOT BROUGHT ON RECORD ANY M ATERIAL TO SHOW THAT ANY SPECIFIC DEFECTS EITHER IN EXPENSES OR PUR CHASE/SALES WITHOUT APPRECIATING THE FACTS THAT I) THE ASSESSEE HAS NOT MAINTAINED ANY STOCK REGISTER OR DETAILS OF ANY QUANTITATIVE TALLY WHICH ARE OF GREA T IMPORTANCE BECAUSE THAT IS A MEAN OF ASCERTAINING O F TRUE AND CORRECT PROFIT OF THE ASSESSEE. II) THAT AS PER RATIO LAID DOWN BY HONBLE SUPREME COUR T IN THE CASE OF S.N. NAMASIVAYAM CHETTIAR VS. CIT (1960 ) REPORTED IN 38 ITR 579 (SC), IF AFTER TAKING INTO A CCOUNT ITA NOS.1918/AHD/2009 (BY ASSESSEE) & ITA NO.2297/AHD/2009 (BY REVENUE) KADMAWALA DYEING & PRINTING P.LTD. VS. ITO ASST.YEAR - 2006-07 - 3 - ALL THE MATERIALS INCLUDING WANT OF STOCK REGISTER , IT IS FOUND THAT THE METHOD OF ACCOUNTING OF THE ASSESSEE IS SUCH THAT NO TRUE AND CORRECT PROFIT IS ASCERTAINAB LE, PROVISIONS OF SECTION 145(3) IS ATTRACTED. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESS ING OFFICER. 3) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE C IT(A) MAY BE SET ASIDE AND THAT OF ASSESSING OFFICER MAY BE RESTORED TO THE ABOVE EXTENT. 3. AT THE OUTSET, PARTIES APPEARING BEFORE US HAVE INFORMED THAT VIDE AN ORDER U/S.143(3) R.W.S. 145(3) DATED 30/07/2008, THE ASSESSING OFFICER HAD MADE THE COMPUTATION OF INCOME AS UNDER:- INCOME FROM BUSINESS AND PROFESSION NET PROFIT AS PER PROFIT & LOSS ACCOUNT 16,98,581 ADD: DISALLOWABLE/ADDITIONS - DEPRECIATION TREATED SEPARATELY 22,84,666 - LOSS ON SALE OF FIXED ASSETS 44,322 23,28,98 8 40,27,569 LESS: DEPRECIATION AS PER I.T. ACT 33,57,530 ADD: DISALLOWANCE / ADDITIONS 6,70,039 (I) SUPPRESSION OF G.P. AS PER PARA B OF THE ORDER 14,74,501 (II) DISALLOWANCE U/S.36(I)(VA) OF THE I.T. ACT AS PER PARA C OF THE ORDER 18,831 (III) DISALLOWANCE U/S.40A(IA) OF THE I.T. ACT AS PER PARA D OF THE ORDER 1,04,323 15,97,655 22,67,694 LESS : UNABSORBED DEPRECIATION U/S.32(2) 17,94,546 TOTAL INCOME 4,73,148 OR SAY 4,73,150 ASSESSED U/S.115JB OF THE I.T. ACT RS.16,98,581/- ITA NOS.1918/AHD/2009 (BY ASSESSEE) & ITA NO.2297/AHD/2009 (BY REVENUE) KADMAWALA DYEING & PRINTING P.LTD. VS. ITO ASST.YEAR - 2006-07 - 4 - 22. ASSESSED U/S 143(3) OF THE I.T. ACT. ISSUE DE MAND NOTICE OF RS.18,676/- WORKED OUT AS UNDER: CALCULATION OF TAX PARTICULARS AMOUNT (RS.) TOTAL INCOME ASSESSED 4,73,148 TAX 1,44,944 SURCHARGE 14,194 EDUCATION CESS 3,123 TOTAL TAX 1,59,261 INTEREST U/S.244A WITHDRAWN 1,633 INTEREST U/S.234D 718 TOTAL TAX PAYABLE 1,61,612 LESS : CREDIT GIVEN U/S.143(1) 1,42,936 BALANCE TAX PAYABLE 18,676 3.1. ON THE BASIS OF THE ABOVE CALCULATION OF TAX, IT IS INFORMED THAT GROUND NOS.1 & 2 OF THE ASSESSEE AND ALL THE GROUND S OF THE REVENUE ARE MERELY ACADEMIC IN NATURE. THE ULTIMATE EFFECT ON TAX IS NOT CAUSED BY THE ISSUE INVOLVED BECAUSE THE ASSESSMENT WAS MADE BY INVOKING THE PROVISIONS OF SECTION 115JB OF THE I.T.ACT, 1961. THE LD.AR MR.R.B.SHAH HAS ALSO EXPRESSED NOT TO PRESS GROUND NO.3 RAISED IN ASSESSEES APPEAL. 4. IN THE LIGHT OF THE CONCESSIONS GIVEN BY BOTH TH E SIDES ON THE PRELIMINARY REASON THAT NO ADVERSE EFFECT SHALL BE ON THE TAX AND NO PREJUDICE SHALL BE CAUSED TO THE EITHER SIDE IF THE IMPUGNED ADDITION IS NOT DISTURBED AND THE VIEW OF THE LEARNED CIT(APPEALS) IS CONFIRMED. UNDISPUTEDLY, A PRESUMPTIVE TAX U/S.115JB OF THE I. T.ACT WAS IMPOSED ITA NOS.1918/AHD/2009 (BY ASSESSEE) & ITA NO.2297/AHD/2009 (BY REVENUE) KADMAWALA DYEING & PRINTING P.LTD. VS. ITO ASST.YEAR - 2006-07 - 5 - AND THAT IMPOSITION OF TAX HAS NOT BEEN DISPUTED BY THE EITHER SIDE BEFORE US. IN VIEW OF THIS, BOTH THE APPEALS ARE HEREBY D ISMISSED. 5. IN THE RESULT, REVENUES APPEAL AS WELL AS ASSES SEES APPEAL BOTH ARE DISMISSED. SD/- SD/- ( G.D. AGARWAL ) ( MUKUL KR. SHR AWAT ) VICE PRESIDENT J UDICIAL MEMBER AHMEDABAD; DATED 20TH / JAN /2012 ORDER PRONOUNCED SD/- SD/- AM. J.M. (B.P.J.) (M.K.S.) 20.1.12 6.. , . ../ T.C. NAIR, SR. PS (5 2 /&7 (7*& (5 2 /&7 (7*& (5 2 /&7 (7*& (5 2 /&7 (7*&/ COPY OF THE ORDER FORWARDED TO : 1. +. / THE APPELLANT 2. /0+. / THE RESPONDENT. 3. $$ & %8 / CONCERNED CIT 4. %8() / THE CIT(A)-I, SURAT 5. 7;< /& , , / DR, ITAT, AHMEDABAD 6. < =1 / GUARD FILE. (5 % (5 % (5 % (5 % / BY ORDER, 07& /& //TRUE COPY// ! !! !/ // / $ $ $ $ ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION.. 13.12.11 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 13.12.11 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 D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 20.1.12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 20.1.12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER