The ITO, Ward-2(3), Surat V. Shri Kanchanlal Ranglidas Gilitwala, Surat

ITA 2106/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89652 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 22-06-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 26-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Keywords: Gross profit estimation; Rejection of books of accounts; Maximum Marginal Rate; Tax effect

Judgement Text

, ,, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , , BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.2106/AHD/2011 ( / ASSESSMENT YEAR : 2007-08) THE INCOME TAX OFFICER WARD-2(3) SURAT / VS. SHRI KANCHANLAL RANGLIDAS GILITWALA 25 FAB TEX INDUSTRIAL SOCIETY KHATODARA, SURAT ' ./ ./ PAN/GIR NO. : ABAPG 9274 B ( '% / APPELLANT ) .. ( &''% / RESPONDENT ) AND CO NO.233/AHD/2011 AY 2007-08 (IN ITA NO.2106/AHD/2011 AY 2007-08) SHRI KANCHANLAL RANGLIDAS GILITWALA VS. THE INCO ME TAX OFFICER SURAT WARD-2(3), SURAT (CROSS OBJECTOR) .. (RESP ONDENT) REVENUE BY : SHRI B.L. YADAV, SR.DR ASSESSEE BY : NONE (WRITTEN SUBMISSIONS) () / DATE OF HEARING 22/06/2015 *+,-) / DATE OF PRONOUNCEMENT 30/06/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL AND CROSS-OBJECTION BY THE REVENUE AN D THE ASSESSEE RESPECTIVELY AGAINST THE ORDER OF THE LD.COMMISSION ER OF INCOME ITA NO.2106 /AHD/2011 (BY REVENUE) AND CO NO.233/AHD/2011 (BY ASSESSEE) ITO VS. SHRI KANCHANLAL R.GILITWALA ASST.YEAR 2007-08 - 2 - TAX(APPEALS)-II, SURAT (CIT(A) IN SHORT) DATED 01/06/2011 PERTAINING TO ASSESSMENT YEAR (AY) 2007-08. 2. NONE APPEARED ON BEHALF OF ASSESSEE, HOWEVER A LETTER DATED 19/06/2015 IS PLACED ON RECORD. THE SUBMISSIONS MA DE ON BEHALF OF ASSESSEE ARE AS UNDER:- 1. IN THIS CASE, THE APPEAL HAS BEEN FILED BY THE REVENUE CONTESTING FOLLOWING ADDITIONS DELETED BY THE CIT(A): I. ADDITION OF RS.2,37,807/- FOR LOW GROSS PROFIT. II. ADDITION OF RS.4,07,033/- TOWARDS CESSATION OF LIAB ILITY U/S.41(1). III. DISALLOWANCE OF VATAV KASAR EXPENSES OF RS.83,060/- . 2. SO TOTAL ADDITIONS DISPUTED BY THE REVENUE ARE AMOUNTING TO RS.7,27,900/-. THE MAXIMUM MARGINAL RATE INCLUDING SURCHARGE FOR A.Y. 2007-08 IS 33.66%. SO TAX EFFECT INVOLVE IN THE REVENUES APPEAL IS RS.2,45,010/-. 3. FOR THE APPEAL FILED AFTER 09.02.2011, THE INSTR UCTION NO.3/11 DATED 09.02.2011 IS APPLICABLE WHICH LAYS DOWN MONE TARY LIMIT OF RS.3 LACS FOR FILING APPEAL BEFORE HONOURABLE TRIBU NAL BY DEPARTMENT. AS THIS APPEAL IS FILED ON 26.08.2011, IT IS CLEARL Y GOVERNED BY THE SAID INSTRUCTION AND SO THE APPEAL OF REVENUE IS LIABLE TO BE DISMISSED. THE ASSESSEES CROSS OBJECTION BEING CONSEQUENTIAL, IT IS ALSO REQUIRED TO BE DISMISSED ALTHOUGH IT INVOLVES DISPUTING ADDITION O F RS.6,83,896/-. 2.1. AS PER THE ABOVE WRITTEN SUBMISSION, THE CONTE NTION OF THE ASSESSEE IS THAT THE APPEAL OF THE REVENUE DESERVES TO BE DISMI SSED ON ACCOUNT OF THE LOW- TAX EFFECT IN VIEW OF THE INSTRUCTION NO.3/2011 [F. NO.279/MISC.142/2007- ITJ], DATED 09/02/2011. AS PER THE ASSESSEE, TOTAL ADDITION MADE BY THE ASSESSING OFFICER IS OF RS.7,27,900/-. THE MAXIMUM MARGINAL RATE INCLUDING SURCHARGE FOR AY 2007-08 IS 33.66%. SO, TAX EFFECT INVOLVED IN THE REVENUES ITA NO.2106 /AHD/2011 (BY REVENUE) AND CO NO.233/AHD/2011 (BY ASSESSEE) ITO VS. SHRI KANCHANLAL R.GILITWALA ASST.YEAR 2007-08 - 3 - APPEAL IS RS.2,45,010/-. THIS CONTENTION OF THE AS SESSEE IS NOT CONTROVERTED BY THE LD.SR.DR BY PLACING ANY MATERIAL ON RECORD. M OREOVER, THE REVENUE HAS ALSO NOT PLACED ON RECORD ANY MATERIAL SUGGESTING T HAT THE PRESENT CASE FALLS UNDER THE CLAUSE8 OF THE INSTRUCTION NO.3/2011 [F.N O.279/MISC.142/2007- ITJ], DATED 09/02/2011 ISSUED BY CBDT. AS PER CLA USE 3 OF THE CBDTS INSTRUCTION NO.3/2011 DATED 09/02/2011, NO APPEAL S HALL BE FILED ON BEHALF OF THE REVENUE WHERE THE TAX EFFECT DOES NOT EXCEED TH E MONETARY LIMITS OF RS.3 LACS BEFORE THE TRIBUNAL. IN THE INSTANT CASE, THE TAX EFFECT IS OF RS.2,45,010/-, THEREFORE THE PRESENT APPEAL AS FILED BY THE REVENU E IS NOT MAINTAINABLE ON ACCOUNT OF PECUNIARY LIMIT PRESCRIBED UNDER INSTRUC TION NO.3/2011 DATED 09/02/2011. UNDER THESE FACTS, WE DISMISS THE APPE AL OF THE REVENUE BEING NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT. BEFOR E PARTING WITH THE MATTER, WE MAKE IT CLEAR THAT WE HAVE NOT EXPRESSED OUR VIEW O N THE MERIT OF THE CASE. AS A RESULT, THE APPEAL OF THE REVENUE IS REJECTED. 3. NOW, WE TAKE UP THE ASSESSEES CROSS OBJECTION NO.233/AHD/2011 FOR AY 2007-08 (ARISING OUT OF ITA NO.2106/AHD/2011 FOR AY 2007-08 - BY REVENUE), WHER EIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- [1] ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD.CIT(A)-II, SURAT HAS ERRED IN RESTRICTING THE ES TIMATION OF G.P. @ 8.5% AS AGAINST 10% ESTIMATED BY THE A.O. ON REJECTION OF BOOKS OF ACCOUNTS U/S.145(3) OF THE I.T.ACT AND, THUS, GRANTING RELIEF OF RS.2,37,806/-, WITHOUT APPRECIATING THE F ACTS THAT ASSESSEE FAILED TO PRODUCE ANY REGISTER, QUALITATIV E AND QUANTITATIVE DETAILS OF PRODUCTION, CONSUMPTION OR VOUCHERS FOR EXPENSES. ITA NO.2106 /AHD/2011 (BY REVENUE) AND CO NO.233/AHD/2011 (BY ASSESSEE) ITO VS. SHRI KANCHANLAL R.GILITWALA ASST.YEAR 2007-08 - 4 - [2] ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND I N LAW, THE LD.CIT(A)-II, SURAT HAS ERRED IN DELETING THE ADDIT ION TOWARDS CESSATION OF LIABILITY U/S.41(1) RS.4,07,033/- WITH OUT NOTING THAT THE ASSESSEE FAILED TO DISCHARGE THE ONUS OF PROVIN G THE GENUINENESS OF THE CREDITORS IN SPITE OF BEING AFFO RDED AN OPPORTUNITY TO DO SO. [3] ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD.CIT(A)-II, SURAT HAS ERRED IN DELETING THE ADDIT ION TOWARDS DISALLOWANCES OF VATAV/KASAR EXPENSES OF RS.83,060/ - EVENTHOUGH THE ASSESSEE FAILED TO DISCHARGE THE ONU S CAST ON HIM AS PER LAW TO PROVE THE GENUINENESS OF THE CLAIM. [4] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. [5] IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A) MAY BE SET- ASIDE AND THAT OF ASSESSING OFFICER MAY BE RESTORED TO THE ABOVE EXTENT. 3.1. THE ASSESSEE IN ITS WRITTEN SUBMISSION DATED 19/06/2015 HAS SUBMITTED THAT THE CROSS-OBJECTION FILED BEING CONS EQUENTIAL IN NATURE. IN VIEW OF THE SUBMISSION OF THE ASSESSEE, THE CROS S-OBJECTION OF THE ASSESSEE IS DISMISSED. 4. IN THE COMBINED RESULT, THE APPEAL OF THE REVENU E AS WELL AS THE CROSS-OBJECTION FILED BY THE ASSESSEE BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON TUESDAY, THE 30 TH DAY OF JUNE, 2015 AT AHMEDABAD. SD/- SD/- ( ) ( ) ( ANIL CHATURVEDI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 30/ 06 /2015 1..,.../ T.C. NAIR, SR. PS ITA NO.2106 /AHD/2011 (BY REVENUE) AND CO NO.233/AHD/2011 (BY ASSESSEE) ITO VS. SHRI KANCHANLAL R.GILITWALA ASST.YEAR 2007-08 - 5 - !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. '% / THE APPELLANT 2. &''% / THE RESPONDENT. 3. 234 5 / CONCERNED CIT 4. 5 ( ) / THE CIT(A)-II, SURAT 5. 67& 34 , 34- , 2 / DR, ITAT, AHMEDABAD 6. 79:;( / GUARD FILE. / BY ORDER, '6 & //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 22.6.15 (DICTATION-PAD 5+ PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 23.6.15 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.30.6.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 30.6.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER