The DCIT, Circle-1(1), Baroda V. M/s. Goradia Innovative Technologies Pvt.Ltd., Baroda

ITA 1926/AHD/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73102 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 18-02-2014
• Assessment Year: 1998-1999
• Appeal Filed On: 04-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS
• Assessee Lawyers: SN SOPARKARAR

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BENCH, AHMEDABAD .., ! '# '# '# '# $ %&, ! BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER #./ I.T.A. NO.1926/AHD/2010 ( ( ')( ( ')( ( ')( ( ')( / / / / ASSESSMENT YEAR : 1998-99) THE DCIT CIRCLE-1(1) BARODA / VS. GORADIA INNOVATIVE TECHNOLOGIES PVT.LTD. UNIT OF DIAMOND MOULDERS LTD. SUBHAG, B-15/16, RAMIN PARK, OLD PADRA ROAD, BARODA -20. !* #./+, #./ PAN/GIR NO. : AAACG 7338 N ( *- / // / APPELLANT ) .. ( ./*- / RESPONDENT ) *- 0 / APPELLANT BY : SHRI K.C. MATHEWS, SR.DR ./*- 1 0 / RESPONDENT BY : SHRI S.N. SOPARKAR, AR $'2 1 & / / / / DATE OF HEARING : 18/2/2014 34) 1 & / DATE OF PRONOUNCEMENT : 28/02/2014 5 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-I, BARODA (CIT(A) FOR SHORT) DATED 22/03/2010 PERTAINING TO ASSESSMENT Y EAR (AY) 1998-99. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- 1. ON THE FACTS AD I THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(APPEALS) ERRED I DELETING THE ADDITIONS OF R S.43,38,007/- MADE ON ACCOUNT OF ABNORMALLY SUPPRESSED JOB WORK RECEIP TS. THE LD.CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE ASSESSE E HAD REDUCED ITS PER ITA NO1926/AHD/ 2010 THE DCIT VS. GORADIA INNOVATIVE TECHNOLOGIES P.LT D. ASST.YEAR 1998-99 - 2 - PIECE JOB WORK RATE BY 33% OVER THE PRECEDING YEAR, WHILE THE DECLINE IN THE SALE PRICE BY THE ASSOCIATE CONCERN WAS ONLY OF 19%. 2. THE APPELLANT CRAVES LEAVE TO ADD TO AMEND OR A LTER THE ABOVE GROUNDS AS MAY BE DEEMED NECESSARY. RELIEF CLAIMED IN APPEAL THE ORDER OF THE CIT(APPEALS) ON THE ABOVE ISSUE MA Y BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. BRIEFLY STATED FACTS ARE THAT THIS IS THE SECOND INNING. EARLIER, THE MATTER WAS RESTORED BACK TO THE FILED OF AO BY THE HONBLE COORDINATE BENCH (ITAT D BENCH AHMEDABAD) IN ITA NO.551/AHD/ 2002 FOR AY 1998-99 VIDE ORDER DATED 28/07/2006 TO DECIDE THE M ATTER AFRESH. IN PURSUANCE TO THE DIRECTION OF THE HONBLE COORDINAT E BENCH, THE AO YET AGAIN RETAINED THE ADDITION MADE ON ACCOUNT OF JOB- WORK AMOUNTING TO RS.43,38,007/-. THE ASSESSEE FILED AN APPEAL BEFOR E THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS ALLOWED THE APPEA L. NOW, THE REVENUE IS IN APPEAL BEFORE US. 3. THE LD.SR.DR STRONGLY SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT THE LD.CITA WAS NOT JUSTIFIED IN DEL ETING THE ADDITION. 3.1. ON THE CONTRARY, LD.COUNSEL FOR THE ASSESSEE S UBMITTED THAT THE ORDER OF THE LD.CIT(A) IS JUSTIFIED AND THE REVENUE HAS N OT PLACED ANYTHING ON RECORD SUGGESTING THAT THE ASSESSEE HAD RECEIVED TH E BUSINESS CONSIDERATION HIGHER THAN THE DECLARED AMOUNT. IN SUPPORT OF THIS CONTENTION, HE RELIED ON THE DECISION OF HONBLE SU PREME COURT RENDERED IN THE CASE OF CIT VS. CALCUTTA DISCOUNT CO.LTD. ( 1973) 91 ITR 08 (SC). ITA NO1926/AHD/ 2010 THE DCIT VS. GORADIA INNOVATIVE TECHNOLOGIES P.LT D. ASST.YEAR 1998-99 - 3 - 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS GIVEN A FINDING ON F ACT THAT A PERUSAL OF COMPARATIVE CHART OF INCOME AND EXPENSES SUBMITTED BY THE APPELLANT REVEALS THAT THERE WAS A RISE IN JOB WORK INCOME BY 324% IN SPITE OF THE REDUCTION IN THE PER PIECE JOB WORK CHARGES AND THE EXPENSES ON THE OTHER HAND HAD NOT INCREASED IN THE SAME PERCENTAGE. AS A RESULT, THOUGH IN THE PRIOR YEAR THERE WAS A LOSS OF RS.1.68 LACS TO THE COMPANY, DURING THE YEAR UNDER CONSIDERATION, THERE WAS A PROFIT OF RS. 61.14 LACS. IT IS FURTHER OBSERVED THAT THE AO IN HIS ORIGINAL ASSESSMENT ORD ER AS WELL AS IN THE CURRENT ORDER HAS CONTENDED THAT WHILE THE REDUCTIO N IN JOB WORK RATE OF TOOTH BRUSH HANDLES WAS 33%, THE REDUCTION IN THE R ATE OF SALE PRICE OF TOOTH BRUSHES SOLD BY M/S. UNIDENT BRUSHES PVT.LTD. WAS ONLY 15.9% TO 19%. IT WAS OBSERVED BY THE LD.CIT(A) THAT THE T WO ARE NOT AT ALL COMPARABLE. WHILE UNIDENT BRUSHES LTD. IS A FULL S CALE MANUFACTURER OF TOOTHBRUSHES AND HAS COSTS RELATED TO MATERIAL, MA NPOWER, SALES EXPENDITURE, ETC., THE APPELLANT IS SIMPLY A JOB WO RKER AND DOES NOT HAVE COSTS RELATED TO MATERIAL TO CONSIDER. IT IS OBS ERVED BY THE LD.CIT(A) THAT THERE IS NO BASIS FOR THE ADDITION OR THE REJE CTION OF BOOKS OF ACCOUNT EXCEPT FOR THE FACT THERE HAS BEEN A DECLINE IN THE PER PIECE JOB WORK RATE AND THE SAME WAS MORE THAN THE DECLINE IN THE SALE PRICE OF TOOTH-BRUSHES. THE LD.CIT(A) WAS OF THE OPINION THAT THIS IN ITSEL F IS NOT A SUFFICIENT BASIS TO REJECT BOOKS OF ACCOUNTS OR TO MAKE AN ADD ITION TO THE TOTAL INCOME. ITA NO1926/AHD/ 2010 THE DCIT VS. GORADIA INNOVATIVE TECHNOLOGIES P.LT D. ASST.YEAR 1998-99 - 4 - 4.1. BEFORE THIS TRIBUNAL, THE REVENUE HAS NOT P LACED ANYTHING ON RECORD SUGGESTING THAT THE ASSESSEE HAS DECLARED TH E LESS JOB WORK CHARGES THAN ACTUALLY RECEIVED. THE REVENUE OUGHT TO HAVE PLACED MATERIAL ON RECORD BRINGING THAT THE REDUCTION IN THE CHARGES O F JOB-WORK WAS FOR THE PURPOSE OF AVOIDING THE TAX AND, IN FACT, THE ASSES SEE HAS RECEIVED HIGHER CHARGES. THEREFORE, IN OUR CONSIDERED VIEW, THERE IS NO INFIRMITY IN THE ORDER OF THE LD.CIT(A), THE SAME IS HEREBY UPHELD. THUS, THE GROUND OF REVENUES APPEAL IS REJECTED. 5. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED . ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HER EINABOVE AT CAPTION PAGE SD/- SD/- ( .. ) ($ %&) ! ! ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 28/ 02 /2014 8.., '.../ T.C. NAIR, SR. PS 5 1 .&9 :9)& 5 1 .&9 :9)& 5 1 .&9 :9)& 5 1 .&9 :9)&/ COPY OF THE ORDER FORWARDED TO : 1. *- / THE APPELLANT 2. ./*- / THE RESPONDENT. 3. ## & $; / CONCERNED CIT 4. $;() / THE CIT(A)- 5. 9'%< .& , , / DR, ITAT, AHMEDABAD 6. <( =2 / GUARD FILE. 5$ 5$ 5$ 5$ / BY ORDER, /9& .& //TRUE COPY// > >> >/ // / #+ #+ #+ #+ ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD