M/S. REBEL & REBEL (INDIA), JALANDHAR V. INCOME TAX OFFICER, JALANDHAR

ITA 207/ASR/2019

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 9831 (ITAT-AMRITSAR)
• Duration Of Justice: 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-11-2019
• Assessment Year: 2015-2016
• Appeal Filed On: 28-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRABHJOT KAUR
• Keywords: Business income; Additional evidence; Tangible material
• Section: 69; 144; 143(3); 201; 251; 145(3); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DB, BEN CH AMRITSAR BEFORE SHRI N.K. CHOUDHRY, JM &DR. A.L.SAINI, AM ./ITA NO.207/ASR/2019 ( / ASSESSMENT YEAR: 2015-16) M/S.REBEL & REBEL (INDIA) BASTI PEER DAD ROAD, JALANDHAR, PUNJAB-144 002. VS. INCOME TAX OFFICER, WARD-1(3), JALANDHAR. ./ ./PAN/GIR NO.: AAEFR 2603 J (APPELLANT) .. (RESPONDENT) APPELLANT BY :SH. SUDHIR SEHGAL, ADV. RESPONDENT BY :SMT. PRABHJOT KAUR, CIT(DR). / DATE OF HEARING : 28/11/2019 /DATE OF PRONOUNCEMENT : 30/12/2019 / O R D E R PER DR. A.L. SAINI : THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAIN ING TO ASSESSMENT YEAR 2015-16, IS DIRECTED AGAINST THE ORDER PASSED BY TH E COMMISSIONER OF INCOME TAX (APPEALS)-1, JALANDHAR IN APPEAL NO. CIT(A)-1/JAL/1 0229/17-18, WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 26.12.2017 . 2. GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS FOLLOWS: 1. THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF GROSS PROFIT OF RS. 29,58,903/- (I.E. 24.70%) OF RS. 1,19,79,364/- OF U NRECORDED EXPORT SALES) OUT OF ADDITION OF GROSS PROFIT OF RS. 52,07,3871- @ 24.70% ON UNAC COUNTED EXPORT SALES OF RS. 2,10,82,538/- MADE BY THE ASSESSING OFFICER AS PER PARA 5.2 OF HIS ORDER. ITA NO.207/ASR/2019 ASSESSMENT YEAR: 2015-16 M/S. REBEL & REBEL (INDIA) P PP PA AA AG GG GE EE E | || | 2 22 2 2. THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE A DDITION U/S 69 OF THE INCOME TAX ACT AMOUNTING TO RS. 90,20,461/- ON ACCOUNT OF SO CALLE D UNACCOUNTED PURCHASE OUT OF ADDITION OF RS. 1,19,79,364/- MADE BY THE ASSESSING OFFICER. 3. THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE O RDER OF THE ASSESSING OFFICER IN REJECTING THE BOOKS OF ACCOUNTS U/S 145(3) AND COMP LETING THE ASSESSMENT IN THE MANNER PROVIDED U/S 144 BY NOT CONSIDERING THAT THE ASSESS EE MAINTAINED PROPER BOOKS OF ACCOUNTS, WHICH WERE DULY AUDITED BY THE CHARTERED ACCOUNTANT AND NO SPECIFIC DEFECT/DEFICIENCY WAS FOUND IN IT DURING THE COURSE OF HEARING. 4. THAT THE LD. CIT(A) HAS ERRED IN DIRECTING THE A O TO INCLUDE THE EXPORT TURNOVER OF RS. 91,25,535/- IN THE TURNOVER OF FY 2013-2014 REL EVANT TO A.Y 2014-2015 AS PER THE PROVISION OF SECTION 251 R.W.S 150 OF THE ACT WHERE AS, THE APPELLANT HAS ALREADY SHOWN THE SAID TURNOVER IN ITS BOOKS OF ACCOUNT FOR THE F .Y 2015-2016 RELEVANT TO A.Y 2016- 2017. 5. THAT THE ADDITION IN THE AFORESAID PARAS HAS BEE N CONFIRMED BY THE LD. CIT(A) AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE AND DETAILE D SUBMISSIONS FILED BEFORE THE ASSESSING OFFICER AND ALSO DURING THE COURSE OF HEA RING BEFORE THE LD. CIT(A) HAS NOT BEEN CONSIDERED PROPERLY. 6. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DISPOSED OFF. 3. AT THE OUTSET ITSELF, THE LD. COUNSEL FOR THE AS SESSEE SUBMITTED BEFORE US ADDITIONAL SUBMISSIONS/ EVIDENCES, WHICH ARE REPROD UCED BELOW: 1. THIS IS THE CASE OF A PARTNERSHIP FIRM ENGAGED IN MANUFACTURING OF SANITARY FITTINGS AND AS PER GROUND NO 3 WHICH DEALS WITH THE REJECTI ON OF BOOKS OF ACCOUNTS UNDER SECTION 145(3) IS NO PRESSED. 2. THE OTHER GROUNDS OF APPEAL RELATE TO APPLICATIO N OF NET PROFIT RATE ON THE SALES OMITTED TO BE RECORDED IN THE BOOKS OF ACCOUNTS TO THE TUNE OF RS 1,19,79,364/- FOR WHICH, THE ASSESSEE HAD AGREED BEFORE THE ASSESSING OFFICER AS PER PAGE NO 6, OF THE ORDER OF A.O. THE ASSESSEE OFFERED, NET PROFIT RATE OF 5.35 TO BE APPLIED ON ABOVE SALES, FOR WHICH THE ADDITION WAS OFFERED BEFORE THE ASSESSING OFFICER O N THIS ACCOUNT WHICH WORKED OUT 6,40,894/- AS PER PAGE NO 3, READ WITH PAGE NO 6, O F THE ORDER OF A.O. 3. WE HAD SUBMITTED BEFORE THE A.O. BY WAY OF WRITT EN SUBMISSIONS, STARTING FROM PARA 7.1 PAGE NO 5 TO PAGE 6 OF THE ORDER, OF AO, THAT C OST OF THE GOODS EXPORTED HAD BEEN DEBITED TO THE TRADING ACCOUNT. BESIDES THAT, THERE HAD BEEN OPENING STOCK OF RS 97,33,774/- THAT HAD NOT BEEN CONSIDERED BY THE AO AND WE RELY ON OUR SUBMISSIONS AS PER PAGE 6 OF THE ORDER OF THE ASSESSING OFFICER. 4. THE LD. CIT(APPEAL) HAD APPLIED GROSS PROFIT RAT E OF 24.70% ON THE SALES OMITTED TO BE RECORDED IN THE BOOKS TO THE TUNE OF RS 1,19,79,364 /- AND DETERMINED GROSS PROFIT OF RS 29,58,903/- AND BALANCE AMOUNT OF RS 90,20,461/-, H AS SEPARATELY BEEN CONSIDERED AS INVESTMENT IN PURCHASES AND, THUS, TOTAL SALES NOT DISCLOSED IN THE BOOKS HAVE BEEN ADDED AS PROFIT AS PER PARA 5.2 OF THE ORDER OF CIT(A), P AGE NO 10-11. 5. THERE IS NO OTHER TANGIBLE MATERIAL FOR MAKING A DDITION OF INVESTMENT IN PURCHASES AS CONFIRMED BY THE CIT(A) AND AS PER THE JUDGMENT OF GUJRAT HIGH COURT AND M.P. HIGH ITA NO.207/ASR/2019 ASSESSMENT YEAR: 2015-16 M/S. REBEL & REBEL (INDIA) P PP PA AA AG GG GE EE E | || | 3 33 3 COURT THAT TOTAL SALES CANNOT BE CONSIDERED AS PROF IT AND NET PROFIT RATE IS TO BE APPLIED AND THUS, ONLY ADDITION TO BE SUSTAINED IS THE ELEM ENT OF NET PROFIT @ 5.35% ON SALES OF RS. 11979364.00 WHICH WORKS OUT TO RS 6,40,895/- AS ALL THE PURCHASES AND MANUFACTURING EXPENSES RELATING TO SALES OMITTED TO BE RECORDED IN THE BOOKS, AS PER OUR SUBMISSION AT PAGE NO 6 OF ORDER OF A.O. ACTUALLY, THERE WAS PRACTICE OF BOOKING THE EXPORT SALES WAS WHEN PAYMENT WAS RECEIVED FROM FOR EIGN BUYERS AND I.E. SUCH SALES HAVE BEEN OMITTED. THESES SUBMISSION WILL TAKE CARE OF G ROUND NO 1 AND GROUND NO 2. 6. AS PER GROUND NO 4, WE AGREE TO THE FINDING OF C IT(A) IN PARA 5.1 AT PAGE NO 9, SUBJECT TO THE FINDING THAT THE SALES ALREADY BOOKED IN THE F.Y. 2015-16 SHOULD BE REDUCED SINCE SALES OF 91,25,535/- HAVE ALREADY BEEN DISCLOSED IN F.Y. 2015-16 IF SUCH SALES ARE TO BE CONSIDERED IN F.Y. 2013- 14. 7. GROUND NO 5 AND 6 ARE GENERAL IN NATURE AND NEED S NO COMMENTS. 4. WE HAVE HARD BOTH THE PARTIES AND PERUSED THE MA TERIAL AVAILABLE ON RECORD. AT THE OUTSET ITSELF, THE LD. DR FOR THE REVENUE SUBMI TTED THAT SINCE THE ASSESSEE HAS FURNISHED BEFORE THE BENCH THE ADDITIONAL EVIDENCES /SUBMISSIONS WHICH HAVE NEVER BEEN EXAMINED BY THE LD. CIT(A) DURING THE APPELLAT E PROCEEDINGS. THE LD. DR POINTED OUT THAT THE ASSESSEE HAS TAKEN THE NEW PLE A/NEW EVIDENCE WHICH IS REPRODUCED BELOW: AS PER GROUND NO 4, WE AGREE TO THE FINDING OF CIT (A) IN PARA 5.1 AT PAGE NO 9, SUBJECT TO THE FINDING THAT THE SALES ALREADY BOOKED IN THE F.Y. 2 015-16 SHOULD BE REDUCED SINCE SALES OF 91,25,535/- HAVE ALREADY BEEN DISCLOSED IN F.Y. 201 5-16 IF SUCH SALES ARE TO BE CONSIDERED IN F.Y. 2013- 14. THEREFORE, LD DR STATED BEFORE THE BENCH THAT THE NEW PLEA/NEW EVIDENCE HAS NEVER BEEN EXAMINED BY LD CIT(A),THEREFORE THE MATTER SHOULD B E REMITTED BACK TO THE FILE OF THE LD. CIT(A) TO EXAMINE THE NEW SUBMISSIONS/EVIDENCES . THE LD COUNSEL FAIRLY AGREED WITH THE PROPOSITION CANVASSED BY LD DR FOR THE REV ENUE. WE NOTE THAT ONE MORE OPPORTUNITY SHOULD BE GIVEN TO THE ASSESSEE TO PLEA D HIS CASE BEFORE THE LD CIT(A). WE FIND MERIT IN THE SUBMISSIONS OF THE LD. DR AND WE ARE OF THE VIEW THAT THESE NEW WRITTEN SUBMISSIONS/DOCUMENTS SHOULD BE REMITTED BA CK TO THE FILE OF THE LD. CIT(A) FOR HIS EXAMINATION. WE DIRECT THE LD. CIT(A) TO EX AMINE THE WRITTEN SUBMISSIONS AND THE DOCUMENTS/EVIDENCES INVOLVED IN THE WRITTEN SUB MISSIONS AND ADJUDICATE THE ISSUE IN ACCORDANCE WITH LAW. FOR STATISTICAL PURPOSES, T HE APPEAL OF THE ASSESSEE IS TREATED TO BE ALLOWED. ITA NO.207/ASR/2019 ASSESSMENT YEAR: 2015-16 M/S. REBEL & REBEL (INDIA) P PP PA AA AG GG GE EE E | || | 4 44 4 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 30.12.2019 SD/- SD/- ( N.K. CHOUDHRY ) (A.L.SAINI) ' / JUDICIAL MEMBER / ACCOUNTANT MEMBER AMRITSAR AMRITSAR * / DATE: 30/12/2019 ( BCG, PS ) COPY OF THE ORDER FORWARDED TO: 1. M/S. REBEL & REBEL (INDIA), BASTI PEER DAAD ROAD ,JALANDHAR,PUNJAB-144 002. 2. INCOME TAX OFFICER,WARD-1(3),JALANDHAR. 3. C.I.T(A)-1, JALANDHAR. 4. C.I.T.- CONCERNED. 5. THE SR. DR, I.T.A.T., AMRITSAR. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, AMRIT SAR BENCH