Shiv Nandan Prasad & Sons, Meerut V. ITO, Ward-3(5), Hapur

ITA 1924/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6456 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I2
• Assessment Year: 2013-2014
• Appeal Filed On: 19-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: YOGESH SHARMA SENIOR
• Assessee Lawyers: RK GARG
• Section: 145; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCHES (CAMP AT MEERUT) BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.1924/DEL./2018 (ASSESSMENT YEAR : 2013-14) SHIV NANDAN PRASAD & SONS, VS. ITO, WARD 3 (5), C/O R.K. GARG, T-314, GANGA PLAZA, HAPUR. BEGUM BRIDGE ROAD, MEERUT. (PAN : ABXFS3672G) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.K. GARG, AR REVENUE BY : SHRI YOGESH SHARMA, SENIOR DR DATE OF HEARING : 09.01.2019 DATE OF ORDER : 16.01.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, SHIV NANDAN PRASAD & SONS (HEREINAFT ER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESEN T APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 23.11.2017 PASSE D BY LD. CIT (APPEALS), MUZAFFARNAGAR QUA THE ASSESSMENT YEAR 20 13-14 ON THE GROUNDS INTER ALIA THAT :- THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LEARNED CIT (A) HAS ERRED TO REJECT THE BOOKS O F ITA NO.1924/DEL./2018 2 ACCOUNT U/S 145 (3) AND ESTIMATE THE GROSS PROFIT A T 8% AS AGAINST 6.32% DISCLOSED BY THE ASSESSEE AND THER EBY SUSTAINING THE ADDITION OF RS.3,16,210/-. THE REJE CTION OF ACCOUNT AND ESTIMATION GP AT 8% AND THEREBY SUSTAIN WAS THE ADDITION OF RS.3,16,210/- IS, THERE FORE, ARBITRARY, UNJUST, UNCALLED-FOR, ILLEGAL AND IN ANY CASE HIGHLY EXCESSIVE. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ASSESSEE HAS CHALLENGED R EJECTION OF BOOKS OF ACCOUNT UNDER SECTION 145 (3) OF THE INCOM E-TAX ACT, 1961 (FOR SHORT THE ACT) BY ASSESSING OFFICER AS WELL AS LD. CIT (A) AND ESTIMATED THE GROSS PROFIT AT 8% AS AGAINST 6.32% DISCLOSED BY THE ASSESSEE AND THEREBY MAKING ADDITION OF RS.3 ,16,210/-. 3. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (A) WHO HAS CONFIRMED THE ADDITION BY PARTL Y ALLOWING THE APPEAL. FEELING AGGRIEVED, THE ASSESSEE HAS COME U P BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. UNDISPUTEDLY, THE ASSESSEE HAS FAILED TO FURNISH THE STOCK REGISTER CONTAINING QUALITY-WISE DETAIL OF THE TIMB ER PURCHASED AND SOLD BY HIM. IT IS THE CASE OF THE ASSESSEE THAT HE HAS PREPARED ITA NO.1924/DEL./2018 3 TIMBER CHART, AVAILABLE AT PAGES 28 TO 41 OF THE PA PER BOOK, CONTAINING QUALITY-WISE DETAIL OF THE TIMBER. HOWE VER, THE LD. AR FOR THE ASSESSEE FAIRLY CONCEDED AT BAR THAT QUALIT Y-WISE REGISTER HAS NOT BEEN MAINTAINED BY THE ASSESSEE. 6. WHEN THE ASSESSEE HAS BEEN PURCHASING AND SELLIN G TIMBER OF DIFFERENT QUALITIES, THE BOOKS OF ACCOUNT CANNOT BE SAID TO BE COMPLETE WITHOUT QUALITATIVE DETAILS ENTERED INTO T HE STOCK REGISTER. SO, IN THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERE D VIEW THAT AO/CIT (A) HAS RIGHTLY REJECTED THE BOOKS OF ACCOUN T. 7. THEN LD. AR FOR THE ASSESSEE PROCEEDED TO ARGUE THAT THE GROSS PROFIT (GP) RATE OF 8% ESTIMATED BY LD. CIT ( A) IS ON HIGHER SIDE. DURING THE COURSE OF ARGUMENTS, THE LD.AR FO R THE ASSESSEE AS WELL AS LD. DR FOR THE REVENUE STATED AT BAR THAT F AIR AND REASONABLE GP RATE MAY BE ESTIMATED BY THE BENCH KE EPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. THE LD. CIT (A) ESTIMATED THE GP RATE @ 8% BY CO MPARING GP RATE OF ASSESSEE WITH M/S. SHIV NANDAN PRASAD JA I PRAKASH, HAPUR, WHO HAS SHOWN GP RATE OF 7.76% FOR AY 2010-1 1. HOWEVER, WE ARE OF THE CONSIDERED VIEW THAT IN ANY CASE, TWO BUSINESS SET UP WORKING UNDER DIFFERENT CIRCUMSTANC ES CANNOT BE COMPARED IN ORDER TO ESTIMATE THE GP RATE. SO, KEE PING IN VIEW THE HISTORICAL BACKGROUND OF THE ASSESSEES BUSINESS WH O HAS SHOWN ITA NO.1924/DEL./2018 4 GP RATE OF 6.32%, THE FAIR AND REASONABLE GP RATE I S ESTIMATED AT 7%. SO, AO IS DIRECTED TO RECOMPUTE THE INCOME OF THE ASSESSEE BY ADOPTING GROSS PROFIT AT 7% OF THE DISCLOSED TURNOV ER BY ALLOWING INTEREST TO THE PARTNERS OF RS.6,63,235/- AS CLAIME D IN THE RETURN OF INCOME BY THE ASSESSEE. SO, THE APPEAL FILED BY TH E ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 16 TH DAY OF JANUARY, 2019. SD/- SD/- (N.S. SAINI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 16 TH DAY OF JANUARY , 2019 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), MUZAFFARNAGAR. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.