ITO, Jaipur V. M/S. WOOD CRAFTS, Jaipur

ITA 227/JPR/2012

• Counselvise Citation: 22723114 RSA 2012
• Duration Of Justice: 2 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 09-03-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NEENA JEEPH
• Keywords: Depreciation

Judgement Text

ITA NO. 227/JP/2012 ITO , WARD- 4(2) VS. M/S. WOOD CR AFTS JAIPUR 1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. ME ENA) ITA NO. 227/JP/2012 ASSESSMENT YEAR: 2008-09 PAN : AAAFW 7102 P THE ITO VS. M/S. WOOD CRAFTS WARD- 4(2) B-3, CENTRAL TOWER, CENTRAL SPINE JAIPUR VIDHYADHAR NAGAR, JAIPUR (APPELLANT) (RESPONDENT) DEPARTMENT BY: MS. NEENA JEEPH ASSESSEE BY : NONE (A.D. ON RECORD) DATE OF HEARING: 01-10-2014 DATE OF PRONOUNCEMENT: 21 -11-2014 ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A)-II, JAIPUR DATED 01-12-2011 WHEREIN THE REV ENUE HAS RAISED FOLLOWING GROUND IN ITS APPEAL. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN RESTRICTING THE ADD ITION TO RS. 8,29,194/- BY APPLY 3% NET PROFIT RATE AS AGAINST A DDITION OF RS. 32,07,616/- MADE BY THE AO APPLYING NET PROFIT RATE OF 12% WITHOUT APPRECIATING THAT IN PREVIOUS YEAR THE CIT( A) APPLIED NET PROFIT RATE AT 3.74% AND NO FURTHER APPEAL WAS FILED BY THE ASSESSEE . ITA NO. 227/JP/2012 ITO , WARD- 4(2) VS. M/S. WOOD CR AFTS JAIPUR 2 2.1 NONE APPEARED ON BEHALF OF THE ASSESSEE IN SPIT E OF SEVERAL EARLIER NOTICES AND THE SERVICE OF NOTICE OF THIS HEARING. CONSEQUENTLY WE ARE LEFT WITH NO ALTERNATIVE BUT TO DECIDE THE APPEAL ON MER ITS, EX PARTE QUA THE ASSESSEE, AFTER HEARING LD. DR AND AFTER PERUSAL OF THE MATERIALS AVAILABLE ON RECORD. 2.2 THE LD. DR CONTENDS THAT IN PRECEDING YEAR THE THEN LD. CIT(A) HIMSELF HAD ADOPTED NET PROFIT RATE OF 3.74%. HOWEV ER, THE LD. CIT(A) WITHOUT MAKING PROPER REFERENCE TO HIS PREDECESSOR S ORDER, THE NET PROFIT RATE HAS BEEN ESTIMATED AT 3% TO THE FACTS OF THE C ASE. WHEN THE BOOKS OF ACCOUNT ARE REJECTED AND PROFITS ARE ESTIMATED THEN THE AO IS JUSTIFIED IN MAKING ESTIMATE. WHILE REDUCING IT IN APPEAL, THE L D. CIT(A) OUGHT TO HAVE APPLIED THE NET PROFIT RATE AS ADOPTED BY HIS PREDE CESSOR IN PRECEDING YEAR. 2.3 WE HAVE HEARD THE LD. DR AND PERUSED THE MATERI ALS AVAILABLE ON RECORD. WE FIND MERIT IN THE ARGUMENTS OF THE LD. D R . IT IS NOT DISPUTED THAT NET PROFIT RATE OF THE ASSESSEE IN PRECEDING YEAR W AS HELD BY THE THEN LD. CIT(A) AT 3.74% AFTER DOING THE RELEVANT WORKING O F DEPRECIATION, INTEREST AND REMUNERATION TO THE PARTNERS. IN OUR CONSIDERED OUR VIEW, THE LD. CIT(A) ITA NO. 227/JP/2012 ITO , WARD- 4(2) VS. M/S. WOOD CR AFTS JAIPUR 3 SHOULD HAVE ADOPTED THE NET PROFIT RATE OF 3.74%. C ONSEQUENTLY, WE DIRECT THE AO TO ADOPT THE NET PROFIT RATE OF 3.74% AS APP LIED IN PRECEDING YEAR. .0 IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 21-1 1-2014 SD/- SD/- (T.R. MEENA) (R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR DATED: 21 ST NOV. 2014 *MISHRA COPY FORWARDED TO:- 1.THE ITO, WARD- 4 (2), JAIPUR 2. M/S. WOOD CRAFTS, JAIPUR 3. THE LD. CIT(A) 4. THE LD. CIT BY ORDER 5..THE LD. DR 6.THE GUARD FILE (IT NO. 227/JP/2012) AR ITAT, JAIPUR