Manish Kumar Tulsyan,C/o Shiva Exports, Varanasi V. Asstt.CIT., Varanasi

ITA 220/ALLD/2011

• Counselvise Citation: 22020714 RSA 2011
• Duration Of Justice: 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 29-11-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: Y P SRIVASTA VA
• Assessee Lawyers: SUBHASH CHA ND
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, ALLAHABAD BENCH, ALLAHABAD BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 220/ALLD./2011 ASSTT. YEAR : 2006-07 MANISH KUMAR TULSYAN, VS. A.C.I.T., RANGE-2, C/O SHIVA EXPORTS, VARANASI. D.60/85A, CHHOTI GAIBI, SINGRA THANA, VARANASI. (PAN : ACYPT 5495 J) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUBHASH CHAND, ADVOCATE RESPONDENT BY : SHRI Y.P. SRIVASTAVA, DR DATE OF HEARING : 07.11.2012 DATE OF PRONOUNCEMENT OF ORDER : 08.11.2012 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF LD. CIT(A), VARANASI DATED 21.10.2011 FOR THE ASSESSMENT YEAR 2 006-07. 2. IN THE PRESENT APPEAL, THE ASSESSEE CHALLENGED A DDITION OF RS.4,12,601/- ON ACCOUNT OF EXTRA PROFIT. THE ASSESSING OFFICER REJE CTED THE BOOK RESULT U/S. 145(3) OF THE IT ACT BECAUSE NOT EVEN A SINGLE SIGNATURE O N THE PURCHASE INVOICE / PURJA WAS FOUND THEREIN. ONLY CHEQUE NUMBER WAS MENTIONED . A LETTER WAS ALSO ISSUED TO IDBI BANK ON 06.11.2007 U/S. 133(6) FOR VERIFICATIO N AND IT WAS NOTICED THAT ALL THE ITA NO. 220/ALLD./2011 2 CHEQUES WERE WITHDRAWN BY SINGLE PERSON ONLY. THE A SSESSEE DID NOT FILE ANY REPLY TO THE NOTICE. THEREFORE, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE USED TO WITHDRAW THE SO CALLED PAYMENTS TO KARIGARS . THE PURCHASES ARE NOT VERIFIABLE. NO STOCK DETAILS WERE MENTIONED BY THE ASSESSING OFFICER. THEREFORE, THE G.P. RATE OF 8.36% WAS APPLIED AND ADDITION WAS MADE ON ACCOUNT OF EXTRA PROFIT BY RS.4,12,601/-. THE LD. CIT(A), CONSIDERIN G THE EXPLANATION OF THE ASSESSEE UPHELD THE ORDER OF THE ASSESSING OFFICER IN REJECT ING THE BOOK RESULT U/S. 145(3), HOWEVER, THE PROFIT RATE WAS RESTRICTED TO 8%. THE APPEAL OF THE ASSESSEE WAS PARTLY ALLOWED. 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LETTER ISSUED TO IDBI BANK PERTAINS TO 14 CHEQUES ISSUED ON 10.08.2008, W HICH IS NOT RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL AND THE ONLY QUESTION LEFT THAT PURCHASES WERE NOT VERIFIABLE AND NO STOCK DETAILS HAVE BEEN MAINTAINE D BY THE ASSESSEE. HE HAS RELIED UPON THE ORDER OF THE ITAT, ALLAHABAD BENCH IN THE CASE OF JCIT VS. MATHURA DAS ASHOK KUMAR, 101 TTJ, 810, IN WHICH IT WAS HELD PURCHASES HAVING BEEN ACCEPTED TO BE GENUINE, BALA NCE REMAINING OUTSTANDING AT THE END O THE YEA AGAINST SUCH PURCHASES CANNOT BE TREATED AS BOGUS LIABILITY, ADDITION MADE ON THAT BASIS CANNOT BE SUSTAINED. HE HAS SUBMITTED THAT NO STOCK WAS LEFT WITH THE AS SESSEE. HE HAS REFERRED TO REMAND REPORT FILED BY THE ASSESSING OFFICER DATED 31.01.2011, COPY OF WHICH IS ITA NO. 220/ALLD./2011 3 FILED AT PAGE 1 OF THE PAPER BOOK IN WHICH IN PARA 3, THE ASSESSING OFFICER REPORTED THAT ON COMPARISON OF G.P. ADOPTED BY THE ASSESSING OFFICER, THERE IS NO CONCEALMENT OF PURCHASE AND SALES, WHICH REQUIRES N O ACTION. HE HAS SUBMITTED CHART OF G.P. AT PAGE 10 OF THE PAPER BOOK TO SHOW THAT IN THE YEAR UNDER APPEAL THE ASSESSEE HAS SHOWN G.P. RATE OF 6.1%. HE HAS SUBMIT TED THAT IT WAS FIRST YEAR OF THE BUSINESS OF THE ASSESSEE AND IN SUBSEQUENT YEAR, TH E ASSESSEE HAS SHOWN G.P. RATE OF 7%. ON THE OTHER HAND, THE LD. DR RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE ENCASHED THE CHEQUES AND IT IS A FAMILY BUSINESS OF THE ASSESSEE, THEREFORE, THE ADDITION I S UNJUSTIFIED. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD. THE ASSESSING OFFICER ON VERIFICATION OF THE PURCHASE V OUCHERS, FOUND THAT THERE WAS NOT A SINGLE SIGNATURE ON ANY PURCHASE INVOICE/PURJ A, THEREFORE, THE PURCHASES ARE NOT VERIFIABLE. RESULTANTLY, THE GROSS PROFIT OF TH E ASSESSEE IS NOT ASCERTAINABLE. FURTHER, NO STOCK REGISTER WAS MAINTAINED BY THE AS SESSEE. THESE ISSUES HAVE NOT BEEN ADDRESSED TO DURING THE PROCEEDINGS BEFORE THE AUTHORITIES BELOW. THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE DECISION I N THE CASE OF MATHURA DAS ASHOK KUMAR (SUPRA) IN WHICH THE PURCHASES HAVE BEEN HELD TO GENUINE AND BALANCE REMAINING OUTSTANDING COULD NOT BE TREATED AS BOGUS LIABILITY. THIS DECISION WOULD NOT SUPPORT THE CASE OF THE ASSESSEE. IN VIEW OF TH ESE DEFECTS AND IN THE ABSENCE OF ANY PLAUSIBLE EXPLANATION, THE AUTHORITIES BELOW WE RE JUSTIFIED IN REJECTING THE BOOK ITA NO. 220/ALLD./2011 4 RESULTS OF THE ASSESSEE. FURTHER, THE REMAND REPORT OF THE ASSESSING OFFICER WOULD NOT SUPPORT THE CASE OF THE ASSESSEE BECAUSE THE AS SESSING OFFICER MORE OR LESS REITERATED THE FINDINGS GIVEN IN THE ASSESSMENT ORD ER AND ULTIMATELY REQUESTED TO THE LD. CIT(A) TO REJECT THE APPEAL OF THE ASSESSEE. FU RTHER, THE ISSUE OF INFORMATION COLLECTED FROM IDBI BANK WOULD NOT BE ADVERSE AGAIN ST THE ASSESSEE BECAUSE IT BELONGS TO 14 CHEQUES PERTAINING TO 10.08.2008, WHI CH IS NOT RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL, I.E., 2006-07. HOWEVE R, IT IS A FACT THAT THIS IS THE FIRST YEAR OF BUSINESS OF ASSESSEE AS EXPLAINED BY THE LD. COUNSEL FOR THE ASSESSEE AND THE ASSESSEE HAD SHOWN PROFIT RATE OF 6.1% AND IN SUBSEQUENT ASSESSMENT YEAR PROFIT RATE HAS BEEN SHOWN AT 7%. THEREFORE, THE EN DS OF JUSTICE WOULD MEET IF THE G.P. RATE IS RESTRICTED TO 7% AS AGAINST 8% CONFIRM ED BY THE LD. CIT(A). WE, ACCORDINGLY, MODIFY THE ORDERS OF THE AUTHORITIES B ELOW AND DIRECT THE ASSESSING OFFICER TO MAKE ADDITION ON THIS ISSUE BY APPLYING THE G.P. RATE OF 7%. ACCORDINGLY, THE APPEAL OF THE ASSESSEE DESERVES TO ALLOWED PARTLY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- ITA NO. 220/ALLD./2011 5 COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, ALLAHABAD 6. GUARD FILE ASSTT. REGISTRAR TRUE COPY