Ramraj Industries, Vellore V. ITO Ward 3, Vellore

ITA 2279/CHNY/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6784 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Appeal Filed On: 02-08-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M. SUBASHRI
• Section: 201

Judgement Text

, SMC , IN THE INCOME TAX APPELLATE TRIBUNAL D SMC BENCH : CHENNAI , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER ./ I.T.A.NO.2279/CHNY/2018 / ASSESSMENT YEAR : 2015-16 M/S.RAMRAJ INSDUSTRIES , 68-B,M.C.ROAD, VELLORE. VS. THE INCOME TAX OFFICER, WARD-3, VELLORE. [PAN AALFR 6769 G ] ( / APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI T.VASUDEVAN,ADVOCATE /RESPONDENT BY : SMT.M.SUBASHRI,JCIT,D.R ' / DATE OF HEARING : 11 - 07 - 201 9 ' / DATE OF PRONOUNCEMENT : 12 - 07 - 201 9 / O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-13, CHENNAI I N APPEAL NO.155/C.I.T(A)-13/A.Y 2015-16 DATED 30.05.2018 FOR THE ASSESSMENT YEAR 2015-16. 2. SHRI T.VASUDEVAN REPRESENTED ON BEHALF OF THE ASSESSEE AND SMT.M.SUBASHRI REPRESENTED ON BEHALF OF THE REVENUE. ITA NO.2279/CHNY/2018 :- 2 -: 3. IT WAS SUBMITTED BY THE LD.AR THAT ASSESSEE IS A FIRM, WHICH IS IN THE BUSINESS OF MANUFACTURING AND EXPORTING SHOE S. LD.AR SUBMITTED THAT IN THE COURSE OF ASSESSMENT, THE ASS ESSEE WAS ASKED TO PRODUCE THE BOOKS OF ACCOUNTS AND LEDGERS IN SUPPOR T OF ITS RETURN. IT WAS A SUBMISSION THAT ONE OF THE PARTNERS OF THE AS SESSEE FIRM HAD FILED A LETTER ON 20.11.2017 STATING THAT THERE WAS A MAJOR FIRE ACCIDENT IN THE BUSINESS PREMISES OF ASSESSEE ON 17.02.2017 AND THEY HAD LOST ALL THE RELEVANT FINANCIAL STATEMENTS AND OTHER DOC UMENTS. CONSEQUENTLY, THE ASSESSING OFFICER HAD COMPARED TH E RATIO OF NET PROFIT OFFERED FOR FINANCIAL YEAR 2014-15 RELEVANT TO ASSESSMENT YEAR 2015-16 WITH THE FINANCIAL YEAR 2013-14, RELEVANT T O THE ASSESSMENT YEAR 2014-15, I.E. THE LD.ASSESSING OFFICER HAD COM PARED THE ASSESSEES NET PROFIT FOR THE RELEVANT ASSESSMENT Y EAR WITH THAT OF THE IMMEDIATELY PRECEDING ASSESSMENT YEAR. IT WAS A SUB MISSION THAT THE ASSESSEE HAD OFFERED LOW NET PROFIT COMPARED TO THE PREVIOUS YEAR NET PROFIT AND CONSEQUENTLY THE ASSESSING OFFICER HAD A DOPTED THE NET PROFIT OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEAR TO BE THE SAME AS THAT OF THE IMMEDIATELY PRECEDING ASSESSMENT YEA R. THIS RESULTED IN AN ADDITION OF RS.4,15,852/-. IT WAS A FURTHER SUBM ISSION THAT THERE HAD BEEN A DROP IN THE NET PROFIT ON ACCOUNT OF FLU CTUATION IN THE EURO CURRENCY RATE. LD.AR PLACED BEFORE ME A COPY OF EUR O REFERENCE EXCHANGE RATE FROM 10.08.2013 TO 10.08.2015. IT WAS A SUBMISSION ITA NO.2279/CHNY/2018 :- 3 -: THAT THE EURO HAD DROPPED FROM RS.82.58 TO RS.67.91 , DROP OF INDIAN CURRENCY OF NEARLY RUPEE 14.67. IT WAS A SUBMISSIO N THAT THIS HAS RESULTED IN DROP IN THE NET PROFIT. 4. IN REPLY, LD.DR VEHEMENTLY SUPPORTED THE ORDER OF LD.CIT(A) AND THE ORDER OF LD.ASSESSING OFFICER. LD.DR SUBMITTED THAT JUST BECAUSE OF DROP IN THE EURO RATE WOULD NOT MAKE MUCH DIFFEREN CE BECAUSE THE ASSESSEE IS IN THE BUSINESS OF NOT ONLY EXPORT, BUT ALSO DOING LOCAL SALES. IT WAS A SUBMISSION THAT THE SAME ARGUMENT WAS PLACED BEFORE THE LD.CIT(A) AND THE LD.CIT(A) HAD DISMISSED THE S AID ARGUMENT ON GROUND THAT THE SAID FLUCTUATION RESULTING IN THE D ROP IN THE NET PROFIT WAS NOT SUPPORTED BY THE DOCUMENTS LIKE SALE INVOIC ES AND RECEIPTS. IT WAS A SUBMISSION THAT THE ASSESSEES OWN NET PROFIT FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEAR, WHICH HAS BE EN ADOPTED, WAS THE LOWEST WHEN COMPARED TO THE EARLIER ASSESSMENT YEARS. IT WAS A SUBMISSION THAT THE ORDERS OF THE LD.CIT(A) AND THE LD.ASSESSING OFFICER WERE LIABLE TO BE SUSTAINED. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. A DRO P IN THE EURO RATE BY NEARLY RUPEE 14.67 ESCALATES INTO PERCENTAGE DIF FERENCE OF 17.76%, WHEN THE EURO RATE OF 82.58 IS CONSIDERED. WHEN CO NSIDERING THE NET PROFIT RATE OF 1.37% IS CONSIDERED AS DISCLOSED FOR IMMEDIATELY PRECEDING ASSESSMENT YEAR, THE DROP IN THE EURO RAT E FOR THE RELEVANT ASSESSMENT YEAR IS TO AN EXTENT OF 17.76% WHEREAS A SSESSEES NET ITA NO.2279/CHNY/2018 :- 4 -: PROFIT HAS DROPPED BY ONLY FEW POINT PERCENTAGES. O BVIOUSLY, THIS IS NOT THE REASON FOR THE DROP IN THE NET PROFIT. FURT HER, AS HAS BEEN MENTIONED BY THE LD.CIT(A), THE ASSESSEE HAS NOT BE EN ABLE TO SUBSTANTIATE HOW THIS DROP IN EURO HAS AFFECTED THE NET PROFIT MARGIN WITH ANY SUPPORTING DOCUMENTS LIKE SALE INVOICES AN D RECEIPTS. THIS BEING SO, I FIND NO ERROR IN THE ORDER OF THE LD.CI T(A), WHICH CALLS FOR ANY INTERFERENCE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED ON 12 TH JULY, 2019, AT CHENNAI. SD/- ( ) (GEORGE MATHAN) ! # / JUDICIAL MEMBER / CHENNAI ' / DATED: 12 TH JULY, 2019. K S SUNDARAM )* +* / COPY TO: 1 . / APPELLANT 4. , / CIT 2. / RESPONDENT 5. * / / DR 3. , () / CIT(A) 6. / GF