Handee Foods , Baroda V. The ACIT.,Circle-3, Baroda

ITA 2106/AHD/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8233 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 17-07-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 14-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MEHUL K PATEL
• Keywords: Depreciation; Additional evidence
• Section: 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD LOZJH IZNHI DQEKJ DSFM;K] YS[KK LNL; ,OA EGKOHN IZL KN] LOZJH IZNHI DQEKJ DSFM;K] YS[KK LNL; ,OA EGKOHN IZL KN] LOZJH IZNHI DQEKJ DSFM;K] YS[KK LNL; ,OA EGKOHN IZL KN] LOZJH IZNHI DQEKJ DSFM;K] YS[KK LNL; ,OA EGKOHN IZL KN] U;KF;D LNL; DS LE{KA U;KF;D LNL; DS LE{KA U;KF;D LNL; DS LE{KA U;KF;D LNL; DS LE{KA BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO.2106/AHD/2014 ( / ASSESSMENT YEAR : 2005-06) HANDEE FOODS C/O. RITA H. DESAI SHRI HIRA NIVAS GHANTIADA GHADIALI POLE BARODA - 390001 / VS. ACIT CIRCLE 3 AAYKAR BHAVAN, RACE COURSE, BARODA ./ ./ PAN/GIR NO. : AABFH 4786 R ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI MEHUL K. PATEL, A.R. / RESPONDENT BY : SHRI MUDIT NAGPAL, SR.D.R. / DATE OF HEARING 09/10/2017 !'# / DATE OF PRONOUNCEMENT 30/10/2017 $% / O R D E R PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-II, BARODA, DAT ED 21/03/2014 FOR THE ASSESSMENT YEAR (AY) 2005-06, ON THE FOLLOW ING GROUNDS: I. THE LEARNED CIT (APPEALS) ERRED IN IGNORING THE ADDITIONAL EVIDENCES FILED IN RESPECT OF UNSECURED LOANS DURIN G THE COURSE OF APPELLATE PROCEEDINGS AGAINST PENALTY LEVIED U/S.27 1(1)(C). ITA NO.2106/AHD /2014 HANDEE FOODS VS. ACIT ASST.YEAR 2005-06 - 2 - II. THE LEARNED CIT (APPEALS) ERRED IN HOLDING THAT THE APPELLANT FIRM COULD NOT PROVE THAT IT HAD NOT FURNISHED INAC CURATE PARTICULARS OF INCOME. III. THE LEARNED CIT (APPEALS) ERRED IN CONFIRMING THE PENALTY LEVIED U/S.271 (L)(C) AMOUNTING TO RS.6,56,820/-. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- IN THIS CASE, THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF RESTAURANT. DURING THE YEAR THE ASSESSEE HAS NET LO SS OF RS.8,26,213/-. 2.2 LEARNED AO STATED THAT DESPITE OF THE FACT THAT NOTICE WAS ISSUED TO THE ASSESSEE BUT HE DID NOT CO-OPERATE, THEREFORE, ON THE BASIS OF MATERIAL AVAILABLE ON RECORD, AS PER PROVISION OF SECTION 68 OF THE ACT RS.16,66,800/- WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 2.3 THE COMPARATIVE GROSS PROFIT FOR THE YEAR UNDER CONSIDERATION AND PRECEDING YEAR UNDER CONSIDERATION IS ENUMERATED AS UNDER: A.Y. SALES GROSS PROFIT GP RATIO 2004-05 1497274 286096 19.10 2005-06 1378582 78715 05.70 AO WAS OF THE OPINION THAT GP RATE DECLARED IS NOT CORRECT AND ACCORDINGLY, THE MOST APPROPRIATE GP OF 19% WAS ADO PTED FOR THE YEAR UNDER CONSIDERATION. THE DIFFERENCE OF THE GP ADOPT ED AND DECLARED BY ITA NO.2106/AHD /2014 HANDEE FOODS VS. ACIT ASST.YEAR 2005-06 - 3 - THE ASSESSEE I.E. RS.1,83,215/- WAS ADDED BACK TO T HE TOTAL INCOME OF THE ASSESSEE. 2.4 DURING THE ASSESSMENT YEAR, ASSESSEE HAS MADE A DDITION OF ASSETS BY WAY OF PURCHASE OF UTENSILS TO THE TUNE OF RS.61 ,542/-. HOWEVER, THE ASSESSEE HAS NOT PRODUCED ANYTHING ON RECORD TO JUS TIFY THE CLAIM OF DEPRECIATION ON SAID ADDITION IN ASSET. ACCORDINGLY , THE DEPRECIATION CLAIMED ON SAID ADDITION IN ASSET TO THE TUNE OF RS .6,154/- IS DISALLOWED AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. 2.5 AS COMPARED TO THE PRECEDING YEAR, THE ASSESSEE HAS SHOWN INCREASE IN INDIRECT EXPENSES TO THE TUNE OF RS. 1. 22 LACS. AS THE ASSESSEE HAS NOT BROUGHT ANYTHING ON RECORD EXCEPT THE CONFI RMATION OF UNSECURED LOANS, THE EXPENSES ARE NOT VERIFIABLE. THE ASSESSE E HAS NOT FURNISHED ANY CONTRA ACCOUNT FROM THE DEPOSITORS CONFIRMING THE A MOUNT OF INTEREST PAID NOR THE DEPRECIATION CHART HAS BEEN FURNISHED ALONG WITH RETURN OF INCOME OR WITH THE SUBMISSIONS. ACCORDINGLY, AS THE EXPENSES DEBITED AS INDIRECT EXPENSE ARE NOT VERIFIABLE, THE INCREASE S HOWN TO THE EXTENT OF RS.1.22 LACS AS COMPARED TO PRECEDING YEAR IS DISAL LOWED. 2.6 FINALLY DISALLOWANCE OF RS.19,78,169/- WERE MAD E AGAINST THE ASSESSEE. ITA NO.2106/AHD /2014 HANDEE FOODS VS. ACIT ASST.YEAR 2005-06 - 4 - 2.7 PENALTY PROCEEDINGS U/S.271(1)(C) OF ACT WERE I NITIATED AND SAME WAS CONFIRMED BY THE LEARNED CIT(A). 3. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMP UGNED ORDER. LEARNED AR CITED AN ITAT, AHMEDABAD ORDER COPY IN I TA NO.1582/AHD/2011 FOR ASST. YEAR 2005-06 VIDE ORDER DTD.06/01/2016, IN THIS CASE, IN QUANTUM PROCEEDINGS CO-ORDINATE BENCH HAS SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR FRE SH ADJUDICATION AND APPEAL OF THE ASSESSEE WAS ALLOWED. 4. IN VIEW OF THE ITAT ORDER, IN QUANTUM PROCEEDING S, WE DELETE THE PENALTY AGAINST THE ASSESSEE AND ALLOWED THE ASSESS EES APPEAL. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 30/10/2017 SD/- SD/- IZNHI DQEKJ DSFM;K IZNHI DQEKJ DSFM;K IZNHI DQEKJ DSFM;K IZNHI DQEKJ DSFM;K EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LNL; L; L; L; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; (PRADIP KUMAR KEDIA) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 30/10/2017 PRITI YADAV, SR.PS ITA NO.2106/AHD /2014 HANDEE FOODS VS. ACIT ASST.YEAR 2005-06 - 5 - !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & '( ) / CONCERNED CIT 4. ) () / THE CIT(A)-II, BARODA. 5. ,-. //'( , '(# , 12$&$ / DR, ITAT, AHMEDABAD 6. .34 5 / GUARD FILE. % & / BY ORDER, , / //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD TRUE COPY 1. DATE OF DICTATION 09/10/2017 (DICTATION-PAD 3 PAGE S ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 10/10/2017 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. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 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