The DCITBharuch Circle, Bharuch V. M/s. Mona Packaged Dringking Water, Bharuch

ITA 2286/AHD/2010

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1546 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-05-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 08-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Audit objection; Tax effect
• Section: 40A(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMEDABAD , BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER. ITA. NO.2286/AHD/2010 (ASSESSMENT YEAR:2007-08) DEPUTY COMMISSIONER OF INCOME TAX, BHARUCH CIRCLE, BHARUCH APPELLANT VS. M/S. MONA PACKAGED DRINKING WATER, 5 TO 8, MONA PLAZA, DAHEJ BY-PASS ROAD, JAMBUSAR CHOKDI, BHARUCH 3 RESPONDE NT PAN: AANFM1840K /BY APPELLANT : SHRI DINESH SINGH, SR.D.R. /BY RESPONDENT :NONE /DATE OF HEARING : 23.05.2016 /DATE OF PRONOUNCEMENT : 23.05.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST THE O RDER OF COMMISSIONER OF INCOME TAX (APPEALS)-VI, BARODA, DATED 20.04.2010 FOR A.Y. 2007-08 ON FOLLOWING GROUNDS:- ITA NO.2286/AHD/10 A.Y. 07-08 [DCIT VS. M/S. MONA PACKAGED DRINKING WATER] PAGE 2 1(I). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN RESTRICTING THE GP RATE @ 41.79% TO 20% OF THE TOTAL SALES OF RS.36,50,920/-, THEREBY GRANTING RELIEF OF RS.7,95,535/- TO THE ASS ESSEE. (II). THE CIT(A) ERRED IN NOT APPRECIATING THE FACT S THAT DURING SURVEY U/S. 133A THE ASSESSEE ADMITTED THAT THE BOOKS OF ACCOUNT ARE INCOMPLETE AND SOME OF THE EXPENSES ARE YET TO BE ACCOUNTED FOR. THE ASSESSEE FAILED TO ESTABLISH AS TO WHY AND WHAT EXTENT THE EXPENSES REMAINS TO BE ACCOUNTED FOR. IT WAS ALSO FOUND THAT THE ASSESSEE HAS NOT DECLARED PROPER SALE VALUE IN THE TRADING AND PROFIT: & LOSS ACCOUNT. THE ASSESSEE HA S NOT MAINTAINED REGULAR BOOKS OF ACCOUNT AND HAS NOT ACCOUNTED FOR ALL THE TRANSACTIONS OF INCOME AND EXPENDITURE. HENCE, THE BOOK RESULTS OF THE ASSESSE E WAS REJECTED BY INVOKING THE PROVISIONS OF SECTION 145(3) OF THE ACT AND THE GP WAS ESTIMATED @ 41.79% OF THE TURNOVER IN CONFORMITY WITH THE TRADING AND PROFIT & LOSS ACCOUNT AS ON 16.12.2006 PREPARED BY THE ASSESSEE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS . 3,76,157/- ON ACCOUNT OF NEGATIVE CASH BALANCE IN C ASH BOOK, WHICH REPRESENTS THE PAYMENT OF EXPENSES OR PAYMENT TO OTHERS BY CASH AND THE SAME HAVE NOT BEE N REFLECTED IN THE BOOKS OF ACCOUNT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) ERRED IN DELETING THE DISALLOWAN CE U/S. 40A(3) OF RS.5,15,930/-IN RESPECT OF VARIOUS PAYMENTS MADE BY THE ASSESSEE IN CONTRAVENTION OF PROVISIONS OF SECTION 40A(3) OF THE ACT. 2. ON THE DATE OF HEARING, NONE APPEARED ON BEHALF OF ASSESSEE BUT HOWEVER THE LD. D.R. FAIRLY ADMITTED T HAT THE TAX EFFECT ON THE IMPUGNED ADDITIONS IS LESS THAN T HE LIMIT ITA NO.2286/AHD/10 A.Y. 07-08 [DCIT VS. M/S. MONA PACKAGED DRINKING WATER] PAGE 3 PRESCRIBED BY THE CBDT CIRCULAR OF 10.12.2015 BEARI NG NO. 21 OF 2015. 2.1 WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATI VE AND PERUSED THE MATERIAL ON RECORD. ON PERUSING TH E GROUNDS OF APPEAL RAISED BY THE REVENUE, WE PRIMA-F ACIE FIND THAT THE TAX EFFECT IN THIS APPEAL IS BELOW RS .10 LACS. AS PER THE ANNOUNCEMENT OF CENTRAL BOARD OF DIRECT TAX ES (CBDT) DATED 10.12.2015 (CIRCULAR NO.21 OF 2015), N O DEPARTMENT APPEALS ARE TO BE FILED AGAINST RELIEF G IVEN BY LD. CIT(A) BEFORE THE INCOME TAX APPELLATE TRIBUNAL UNLESS THE TAX EFFECT, EXCLUDING INTEREST, EXCEEDS RS.10 L ACS AND IT FURTHER STATES THAT THE INSTRUCTIONS WILL APPLY RETROSPECTIVELY TO THE PENDING APPEALS. THE BOARD HAS PROVIDED EXEMPTIONS AT CLAUSE (8) OF THE INSTRUCTIO NS WHEREIN IT HAS BEEN PROVIDED THAT THESE INSTRUCTION S WILL NOT BE APPLICABLE, IF VIRES OF ANY PROVISIONS HAS B EEN QUASHED BY IMPUGNED ORDER OR ADDITION WAS MADE ON S OME AUDIT OBJECTIONS OR THE ADDITION RELATES TO UNDISCL OSED FOREIGN ASSETS/BANK ACCOUNTS, ETC. WE PRIMA-FACIE F IND THAT THE PRESENT CASE DOES NOT FALL WITHIN THE EXEMPTION CLAUSE AND THE TAX EFFECT OF THIS IS BELOW RS. 10 LAKHS. IT IS FURTHER OBSERVED THAT SINCE, WHILE HEARING THE APPEAL, SUCH FACTORS WERE NOT CONSIDERED, THEREFORE, IN CASE, ON RE-VERI FICATION AT THE END OF THE ASSESSING OFFICER, IT CAME TO THE NO TICE THAT THE TAX EFFECT IS MORE OR IT FALLS WITHIN THE AMBIT OF EXCEPTIONS PROVIDED IN THE INSTRUCTION, THEN THE ITA NO.2286/AHD/10 A.Y. 07-08 [DCIT VS. M/S. MONA PACKAGED DRINKING WATER] PAGE 4 DEPARTMENT WILL BE AT LIBERTY TO APPROACH THE TRIBU NAL FOR RECALL OF THIS ORDER. SUCH APPLICATION SHOULD BE F ILED WITHIN FOUR YEARS OF THIS ORDER. IN VIEW OF THE ABOVE, TH E APPEAL OF THE REVENUE IS DISMISSED. 3. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON THIS THE 23 RD DAY OF MAY, 2016. SD/- SD/- (ANIL CHATURVEDI) (SHAILENDRA KUMAR YA DAV) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 23/05/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE $ %&%'( ) / CONCERNED CIT 4 )- / CIT (A) ,-./00'(1 '( 123& / DR, ITAT, AHMEDABAD 4/5678 / GUARD FILE. BY ORDER / 1 / 2% '( 123&