Shri Valabhbhai Hirabhai Patel, RAJKOT-GUJARAT V. The Deputy Commissioner of Income Tax, Circle-1, RAJKOT-GUJARAT

ITA 195/RJT/2012

• Counselvise Citation: [2012] 120 COUNSELVISE.COM (IT) 0123 (ITAT-RAJKOT)
• Duration Of Justice: 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-12-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 17-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: J C RANPURA
• Keywords: Opportunity of being heard

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. BEFORE SHRI T. K. SHARMA JM AND SHRI B. R. JAIN AM ITA NO.195/RJT/2012 / ASSESSMENT YEAR 2003-04.. SHRI VALLABHBHAI HIRABHAI PATEL, 1, KEWADAWADI CHOWK, RAJKOT. PAN : ADPPP5909H ( / APPELLANT V/S THE DEPUTY CIT, CIRCLE-1, RAJKOT. / RESPONDENT / ASSESSEE BY SHRI J. C. RANPURA, C.A. # / REVENUE BY SHRI AVINASH KUMAR, D.R. & / DATE OF HEARING 06-12-2012 & / DATE OF PRONOUNCEMENT 06 - 12-2012 / / / / ORDER B. R. JAIN, A. M. : THIS APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 16-03-2012 OF LEARNED CIT(A)-II, RAJKOT RAISES THE FOLLOWING GROUNDS:- 1. THE GROUNDS OF APPEAL MENTIONED HEREINUNDER ARE WITHOUT PREJUDICE TO ONE ANOTHER. 2. THE LEARNED COMMISSIONER OF INCOME TAX, (APPEALS -II), RAJKOT [HEREINAFTER REFERRED TO AS THE CIT(A)] ERRED ON FACTS AS ALSO IN LAW IN HARDING THAT THE AO WAS JUSTIFIED IN REJECTING T HE BOOKS OF ACCOUNT AND THEREBY MAKING AN ADDITION OF RS.11,16, 449/-. THE LEARNED CIT(A) FAILED TO APPRECIATE THE FACT S SUBM ITTED BEFORE HIM. THE ADDITION OF RS.11,16,449/- MADE BY THE AO AND C ONFIRMED BY THE LEARNED CIT(A) BEING UNJUSTIFIED ON FACTS AS AL SO IN LAW, MAY KINDLY BE DELETED. ITA 195/RJT/2012 2 2. THE LD. CIT(A) CONSIDERING THE EARLIER TRIBUNAL DECISION IN ASSESSEES OWN CASE FOR A.Y. 2002-03 UPHELD THE REJECTION OF BOOK RESULTS AND CONFIRMED THE ADDITION OF RS.11,16,449/- VIDE PARA-4.1 OF THE IMP UGNED ORDER AS UNDER:- 4.1 I HAVE PERUSED THE FINDINGS OF THE A.O. IN HIS ASSESSMENT ORDER AND THE SUBMISSIONS OF THE AR OF THE APPELLANT AS MADE DURING THE COURSE OF APPELLATE PROCEEDINGS. I HAVE ALSO GONE THROUGH THE ORDERS OF THE LD. CIT(A) AS WELL AS THE HONBLE ITAT IN APPELLANTS O WN CASE FOR A.Y.2002- 03. THE LD. CIT(A), VIDE HIS ORDER IN APPEAL NO. C IT(A)-I/R/0082/05-06 DATED 9/3/2006 HAS HELD THAT THE A.O. WAS NOT JUSTI FIED IN ADDING RS.15,83,000/-, HOWEVER IT IS SEEN THAT IN A.Y. 200 1-02 (WHEN BUSINESS WAS DONE BY THE FIRM) WHERE MORE OR LESS FACTS AS R EGARD TO MAINTENANCE OF BOOKS, RECORDS AND VOUCHERS WERE THE SAME, A LUM PSUM ADDITION OF RS.62000/- WAS MADE AND ACCORDINGLY HE RESTRICTED T HE ADDITION TO RS.1,50,000/- AS AGAINST RS.15,83,000/- MADE BY THE A.O. THEREAFTER, THE DEPARTMENT PREFERRED APPEAL BEFORE THE ITAT AND THE HONBLE ITAT, RAJKOT BENCH, VIDE ITS ORDER IN ITA NO.244/RJT/2006 DATED 28/3/2008 HAD HELD THAT CONSIDERING THE FACTS AND CIRCUMSTANCES O F THE APPELLANTS CASE, PARTICULARLY THE FACT OF OUTSTANDING LABOUR PAYMENT S AT THE YEAR-END BEING IN A MUCH HIGHER RATIO (APPROXIMATELY 29% OR AT AN AVERAGE OF 3.5 MONTHS) THAT THE NORMAL LEVEL GENERALLY OBSERVED IN THE IND USTRY, THE SAME CONSTITUTES GOOD ENOUGH REASONS FOR THE REJECTION O F THE BOOKS WHICH EXHIBIT A STEEP DECLINE IN THE TRADING RESULTS AND OF WHICH THE IMPUGNED LABOUR PAYMENT CONSTITUTE A SUBSTANTIAL PART FOR WH ICH THE APPELLANT HAS NEITHER ADVANCED ANY COGENT REASON FOR THE SAID DEC LINE NOR FOR THE DISPROPORTIONATE OUTSTANDING LABOUR BILLS. THEREFO RE, THE HONBLE ITAT CONFIRMED THE A.OS ACTION OF REJECTING THE BOOKS O F ACCOUNTS OF THE APPELLANT. MOREOVER, THE TRIBUNAL HAS ALSO OBSERVE D THAT THERE HAS BEEN A CONTINUOUS DECLINE IN THE APPELLANTS GP RATE OVE R THE YEARS. ITA 195/RJT/2012 3 3. THE PARTIES STATE THAT THE APPELLATE TRIBUNAL IN CONCLUSION BY HIS ORDER DATED 28-03-2008 IN ITA NO.244/RJT/2006 AND C.O. NO .25/RJT/2006 FOR ASSESSMENT YEAR 2002-03 HAS RESTORED BACK THE REVEN UES APPEAL AS WELL AS CROSS-OBJECTIONS OF THE ASSESSEE BY ALLOWING THE SA ME FOR STATISTICAL PURPOSES. A PRAYER THEREFORE, HAS BEEN MADE TO REMIT THIS MATTE R ALSO BACK TO THE FILE OF THE LD. CIT(A). 4. HEARD PARTIES WITH REFERENCE TO MATERIAL ON RECO RD. WE HAVE PERUSED THE IMPUGNED ORDER AS WELL AS THE ORDER DATED 28-03-200 8 PASSED BY THE TRIBUNAL IN ASSESSEES OWN CASE OF A.Y. 2002-03. THE APPELLATE TRIBUNAL BY RECORDING FINDINGS AND MAKING OBSERVATIONS, IN THAT ORDER, RE STORED THE MATTER BACK TO THE FILE OF LD. CIT(A) AND ALLOWED THE REVENUES APPEAL AS WELL AS CROSS-OBJECTIONS BY THE ASSESSEE FOR STATISTICAL PURPOSES ONLY. THE DE CISION FOR A.Y. 2002-03 IS NOT SHOWN TO HAVE BEEN RENDERED SO FAR BY LD. CIT(A). S INCE THE FINDINGS OF A.Y. 2002-03 HAVE A BEARING ON THE FINDINGS AND CONCLUSI ON IN THE IMPUGNED YEAR, WE, THEREFORE, AGREE WITH THE PRAYER OF THE PARTIES TO SET ASIDE THE IMPUGNED ORDER AND REMIT THE MATTER BACK TO THE FILE OF THE LD. CIT(A) FOR TAKING A DECISION AFRESH AFTER HAVING REGARD TO THE CONSEQUENT JUDGME NT IN REMIT PROCEEDINGS FOR THAT YEAR IN ASSESSEES OWN CASE. NEEDLESS TO ADD, A REASONABLE AND EFFECTIVE OPPORTUNITY OF BEING HEARD SHALL BE ALLOWED BEFORE TAKING DECISION IN ACCORDANCE WITH LAW. 5. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSES AS ANNOUNCED IN THE OPEN COURT IN PRESENCE OF PARTIES IMMEDIATELY AFTER CONCLUSION OF HEARING ON 06-12-2012. SD/- SD/- ( T. K. SHARMA ) ( B. R. JAIN ) # /JUDICIAL MEMBER # / ACCOUNTANT MEMBER +/ ORDER DATE 06-12-2012. /RAJKOT NVA/- ITA 195/RJT/2012 4 - - - - .- .- .- .- / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-SHRI VALLABHBHAI HIRABHAI PATEL, RAJKOT . 2. /RESPONDENT-THE DEPUTY CIT, CIR-1, RAJKOT.. 3. 4 / CIT-I, RAJKOT. 4. 4- / CIT (A)-II, RAJKOT. 5. - , , / DR, ITAT, RAJKOT 6. / GUARD FILE. / BY ORDER , TRUE COPY. SENIOR PRIVATE SECRETARY, , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.