M/s. Luhar Jiva Anand & Sons, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-1(3), RAJKOT-GUJARAT

ITA 208/RJT/2013

• Counselvise Citation: 20824914 RSA 2013
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 16-01-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 06-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR JAYANT B JHAVERI
• Assessee Lawyers: DR ADHIA
• Keywords: Reasonable cause; Third party statement
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBULAL, SMC BENCH, RAJKOT BEFORE SHRI T. K. SHARMA, JM ITA NO. 208/RJT/2013 ASSESSMENT YEAR : 2005-06 M/S. LUHAR JIVA ANAND & SONS, 8-LATI PLOT, RAJKOT PAN : AABFL 7357 E ( / APPELLANT) THE I.T.O., WARD- 1(3), RAJKOT / RESPONDENT / ASSESSEE BY SHRI D.R. ADHIA, AR / REVENUE BY DR. JAYANT B. JHAVERI, DR / DATE OF HEARING 16.01.2014 !'# / DATE OF PRONOUNCEMENT 17.01.2014 / ORDER THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DA TED 20.11.2012 OF LD. CIT(A)-II, RAJKOT FOR THE ASSESSMENT YEAR 2005-06. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM, ENGAGED IN JOB WORK CONTRACT IN IRON WITH SEVERAL FIRMS. FOR THE A SSESSMENT YEAR UNDER APPEAL, IT FILED RETURN OF INCOME DECLARING TOTAL INCOME AT RS. NIL. IN PARAGRAPH 4 OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER OBSERVED THAT DURING T HE YEAR UNDER REVIEW THE ASSESSEE-FIRM HAS CARRIED OUT JOB WORK CONTRACT MAI NLY FOR TWO COMPANIES NAMELY RMP BEARING LTD. AND LEXSPIN BEARING LTD. ON THE BA SIS OF COPY OF ACCOUNTS, INQUIRIES U/S 133(6) WERE CARRIED OUT WITH THESE TW O COMPANIES. THE ASSESSING OFFICER FOUND THAT THERE IS MISMATCH OF FIGURES AS PER CONTRA ACCOUNTS FURNISHED BY M/S. TEXSPIN BEARING LTD. AND RMP BEARING LTD. AND AS PER BOOKS OF THE ASSESSEE. AS PER THE DETAILS FURNISHED BY M/S. TEXSPIN BEARIN G LTD., THE SAID COMPANY HAD SHOWN DUE IN THE NAME OF THE ASSESSEE AT RS.122824/ - WHEREAS AS PER THE BOOKS OF ASSESSEE, IT IS RS.198125/-. IN THE NAME OF M/S. R MP BEARING LTD., THE ASSESSEE HAS SHOWN RS.130214 RECEIVABLE, WHEREAS THE CONTRA CONFIRMATION ACCOUNT RECEIVED FROM THE SAID COMPANY, IT HAS SHOWN RS.365099/- AS PAYABLE TO THE ASSESSEE. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE MISMATCH. THE ASSESSEE ADMITTED THE MISMATCH AND ON THIS BASIS, THE ASSESS ING OFFICER ADDED GROSS DIFFERENCE OF RS.310186/- (RS. 75301 + RS.234885) T O THE INCOME OF THE ASSESSEE. ON APPEAL, IN THE IMPUGNED ORDER, THE LD. CIT(A) CO NFIRMED THE ADDITION AS NO EXPLANATION WAS FURNISHED BY THE ASSESSEE BEFORE TH E LD. CIT(A). AGGRIEVED WITH THE 2 208-RJT-2013 LUHAR JIVA ANAND & SONS (SMC) ORDER OF LD. CIT(A), THE ASSESSEE IS NOW IN APPEAL BEFORE THIS TRIBUNAL ON THE FOLLOWING GROUNDS:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CO NFIRMING ADDITION OF RS.3,10,186 (75,301/- + 2,34,885). THE SAME NEEDS D ELETION. 2. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING ADDITION OF RS.75,301/- IN RESPECT OF JOB WORK PERTAINING TO TE XSPIN BEARING LTD. THE SAME NEEDS DELETION. 3. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING ADDITION OF RS.2,34,885/- IN RESPECT OF RMP BEARING LTD. THE SA ME NEEDS DELETION. 4. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING ADDITION OF RS.3,10,186 WITHOUT ALLOWING SUFFICIENT TIME TO REC ONCILE THE SAME. THE SAME NEEDS DELETION. 5. TAKING INTO CONSIDERATION THE LEGAL, STATUTORY, FACTUAL AND ADMINISTRATIVE ASPECTS, NO ADDITION OF RS.3,10,186/- OUGHT TO HAVE BEEN CONFIRMED. THE ADDITIONS NEED DELETION. 6. WITHOUT PREJUDICE, THE LD. CIT(A) HAS ERRED IN L AW AND FACTS IN NOT CONSIDERING THAT THE ENTIRE AMOUNT OF JOB WORK REMA IN TO BE SHOWN CAN NOT BE ADDED IN FULL AND ONLY THE AMOUNT EQUIVALENT TO BOO K RESULT OUGHT TO HAVE BEEN DIRECTED TO BE ADDED. THE ADDITION NEEDS SUITABLE R EDUCTION. 7. WITHOUT PREJUDICE, THE LD. CIT(A) HAS ERRED IN L AW AND FACTS IN NOT CONSIDERING THAT THE ENTIRE AMOUNT OF JOB WORK REMA IN TO BE SHOWN CANNOT BE ADDED IN FULL ONLY AND THE AMOUNT AT 8% AS PRESCRIB ED UNDER THE ACT FOR CONTRACT RECEIPT OUGHT TO HAVE BEEN DIRECTED TO BE ADDED. THE ADDITION NEEDS SUITABLE REDUCTION. 3. AT THE OUTSET, SHRI D.R. ADHIA, AUTHORIZED REPRE SENTATIVE OF THE ASSESSEE, POINTED OUT THAT THIS APPEAL IS TIME BARRED BY 95 D AYS. HE EXPLAINED THAT THIS DELAY HAS OCCURRED DUE TO THE FACT THAT EARLIER THE APPEA L WAS FILED WHEREIN, THROUGH INADVERTENTLY, INSTEAD OF DISPUTING THE ADDITION OF RS.3,10,196/- IN THE GROUNDS OF APPEAL, THE ASSESSEE HAS MENTIONED WRONG SECTION I. E. PENALTY U/S 271(1)(C). ON ACCOUNT OF THIS WRONG FILING OF EARLIER APPEAL, THE TRIBUNAL DISMISSED THE APPEAL OF THE ASSESSEE IN ITA NO.21/RJT/2013 DATED 15.04.2013. HE FURTHER SUBMITTED THAT SINCE THE ORIGINAL APPEAL WAS FILED IN TIME AND THIS DELA Y WAS OCCURRED DUE TO THE MISTAKE IN MENTIONING THE WRONG SECTION IN THE GROUNDS OF APPE AL; THEREFORE, THIS SMALL DELAY OF 95 DAYS BE CONDONED. THE LD. DR STATED THAT HE HAS NO OBJECTION. 4. AFTER HEARING BOTH THE SIDES ON CONDONATION OF D ELAY, I AM CONVINCED THAT THERE IS A REASONABLE CAUSE FOR DELAY OF 95 DAYS AS EXPLAINED BY THE LD. AR OF THE ASSESSEE; THEREFORE, THE SAME IS CONDONED AND APPEA L IS ADMITTED. 5. ON MERITS, RELYING ON THE PLEA RAISED IN THE GRO UNDS OF APPEAL, LD. AR OF THE ASSESSEE CONTENDED THAT ONLY NET ADDITION OF RS.1,5 9,584/- (RS.2,34,885/- MINUS 3 208-RJT-2013 LUHAR JIVA ANAND & SONS (SMC) RS.75,301/-) SHOULD BE MADE. HE POINTED OUT THAT TH E ASSESSING OFFICER HAS COMMITTED THE CASTING ERROR; THEREFORE, THE SAME WO ULD BE CORRECTED. ALTERNATIVELY, HE CONTENDED THAT IN RESPECT OF DISCREPANCY IN RECORDI NG THE JOB WORK CHARGES, ONLY 8% OF PROFIT EMBODIED THEREIN SHOULD BE ADDED AND NOT THE ENTIRE ADDITION OF RS.3,10,186/-. 6. ON THE OTHER HAND, DR. JAYANT B. JHAVERI, DR, AP PEARED ON BEHALF OF THE REVENUE VEHEMENTLY SUPPORTED THE ORDER OF LD. CIT(A ). HE CONTENDED THAT BEFORE THE ASSESSING OFFICER, THE ASSESSEE FAIRLY ADMITTED THA T HE HAS NO EXPLANATION. EVEN BEFORE THE LD. CIT(A), THE ASSESSEE CHOOSE NOT TO A PPEAR DESPITE OF ENOUGH OPPORTUNITY WAS ALLOWED. THE LD. DR FURTHER POINTED OUT THAT THERE IS NO CASTING ERROR IN THE CASE ON HAND. IN RESPECT OF M/S. TEXSPIN BEA RING LTD, THE ASSESSEE HAS NOT RECORDED IN THE BOOKS OF ACCOUNTS THE AMOUNTS RECEI VED FROM THE SAID PARTY TO THE EXTENT OF RS.75,301/- AND IN RESPECT OF SECOND PART Y NAMELY M/S. RMP BEARING LTD., THE ASSESSEE HAS NOT RECORDED THE ENTIRE JOB WORK C HARGES WHICH ARE RECEIVABLE. THEREFORE, THE ORDER OF LD. CIT(A) CONFIRMING THE A DDITION OF RS.3,10,186/- BE CONFIRMED. 7. HAVING HEARD BOTH THE SIDES, I HAVE CAREFULLY GO NE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THERE IS NO CASTING ERROR AS BOT H PARTIES ARE DIFFERENT; THEREFORE THIS PLEA IS REJECTED. BEFORE NONE OF THE AUTHORITIES BE LOW THE ASSESSEE HAS EXPLAINED THE DIFFERENCE. ADMITTEDLY, IN THIS CASE, THE ASSESSEE HAS NOT RECORDED THE JOB WORK RECEIPT OF RS.3,10,186/-; THEREFORE, THE ORDER OF L D. CIT(A) IS UPHELD AS THE ASSESSEE HAS FAILED TO DEMONSTRATE EITHER BEFORE THE AUTHORI TIES BELOW OR BEFORE THE TRIBUNAL THAT THE ASSESSEE-FIRM HAS INCURRED THE EXPENDITURE WHICH IS NOT RECORDED IN THE BOOKS OF ACCOUNTS. WE, THEREFORE, DECLINE TO INTERF ERE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- ( $.. &' / T. K. SHARMA) ( ) /JUDICIAL MEMBER *)& +) ,/ ORDER DATE: 17.01.2014 !$ /RAJKOT *BT 4 208-RJT-2013 LUHAR JIVA ANAND & SONS (SMC) / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT- M/S. LUHAR JIVA ANAND & SONS, 8-LATI PLOT, RAJKOT 2. / RESPONDENT- THE I.T.O., WARD- 1(3), RAJKOT 3. ,0,1 * * 2 / CONCERNED CIT-I, RAJKOT 4. * * 2- / CIT (A)-II, RAJKOT 5 . 567 1, * 1#, !$ / DR, ITAT, RAJKOT 6 . 79 :; / GUARD FILE *)& / BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT