Win Prints, Ahmedabad V. The Income tax Officer,Ward-6(2), Ahmedabad

ITA 2371/AHD/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9866 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 28-10-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 22-10-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: J P SHAH
• Keywords: Bogus purchase; Bad and doubtful debts
• Section: 143(3); 133(6); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER. ITA. NO. 2371/AHD/2012 (ASSESSMENT YEAR:2009-10) WIN PRINTS, H-903, SARJAN TOWER, GURUKUL ROAD, MEMNAGAR, AHMEDABAD APPELLANT VS. INCOME TAX OFFICER, WARD 6(2), AHMEDABAD RESPONDENT PAN: AAAFW4084A / BY ASSESSEE : MR. J. P. SHAH, A.R. / BY REVENUE : MR. PRASOON KABRA, SR. D.R. /DATE OF HEARING : 28.10.2016 /DATE OF PRONOUNCEMENT : 30.11.2016 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2009-10 ARISES AGAINST THE CIT(A)-XI, AHMEDABADS ORDER DATED 27.09.2012, IN A PPEAL NO. CIT(A)- XI/252/WD-6(2)/11-12, IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. ITA NO.2371/AHD/2012 (WIN PRINTS VS. ITO) A.Y. 2007-08 - 2 - 2. THE ASSESSEES FIRST SUBSTANTIVE GROUND RAISED I N THE INSTANT APPEAL CHALLENGES ACTION OF BOTH THE LOWER AUTHORITIES IN MAKING SECTION 41(1) ADDITION OF CESSATION OF SUNDRY CREDITORS LIABILITI ES OF RS.31,48,943/-. 3. WE COME TO THE RELEVANT FACTS. THIS ASSESSEE MA NUFACTURES AND TRADES IN PLASTIC PACKAGING MATERIALS. IT CARRIED FORWARD THE IMPUGNED OUTSTANDING LIABILITIES WITH RESPECT TO 17 SUNDRY CREDITORS. T HE ASSESSING OFFICER ISSUED A SHOW CAUSE THAT MOST OF THEM PERTAINED TO TIME SPAN PRIOR TO ASSESSMENT YEAR 1996-97. HE FURTHER OPINED THAT ADDRESSES IN CASES OF 9 PARTIES HAD ALSO NOT BEEN GIVEN. THE ASSESSING AUTHORITY ACCORDINGLY SO UGHT TO INVOKE SECTION 41(1) OF THE ACT. 4. THE ASSESSEE FILED ITS REPLY TO THE ABOVE SHOW C AUSE NOTICE ON 22.12.2011. IT STATED TO HAVE EXPLAINED ALL THESE CREDITS AND PARTICULARLY NINE OF THE ABOVE STATED PARTIES BEFORE SETTLEMENT COMMI SSION AFTER A SEARCH CONDUCTED AT ITS PREMISES ON 22.07.1992. THE ASSES SING OFFICER APPEARS TO HAVE OBSERVED THAT NO SUCH ISSUE OF BOGUS CREDITOR HAD ARISEN BEFORE THE SAID SETTLEMENT COMMISSIONS PROCEEDINGS. HE THEN QUOTED ONE OF THE CREDITOR PARTY M/S. PAHARPURS REPLY TO SECTION 133(6) NOTIC E THAT IT HAD ALREADY TREATED THE ASSESSEE AS A BAD DEBTOR TO WRITE OFF T HE AMOUNT IN QUESTION OF RS.4,29,989/- WHICH PROVED CESSATION OF LIABILITY U /S.41(1) OF THE ACT. THE ASSESSING OFFICER THEREAFTER NOTICED THAT ADDRESSES OF NINE SUCH PARTIES WERE ALSO NOT FORTH COMING SO AS TO BE TREATED AS GENUIN E. ALL THIS RESULTED IN THE IMPUGNED ADDITION OF RS.31,48,943/- IN QUESTION. 5. THE CIT(A) UPHOLDS ASSESSING OFFICERS ACTION AS FOLLOWS: 3.2 I HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTI ONS. IT IS SEEN THAT THE APPELLANT HAS CONTESTED THIS ADDITION MAINLY ON TWO ACCOUNTS. THE APPELLANTS FIRST CONTENTION IS THAT THE PAYMENT TO FOUR CREDITORS HA S BEEN MADE OUT OF UNDISCLOSED BANK ACCOUNTS. ACCORDING TO THE APPELLANT TOTAL PAY MENT FROM THESE BANK ACCOUNTS WORKS OUT TO RS.24,72,670/-. IT IS FURTHER CONTENDE D THAT THESE AMOUNTS HAVE BEEN ITA NO.2371/AHD/2012 (WIN PRINTS VS. ITO) A.Y. 2007-08 - 3 - DECLARED BEFORE THE HON'BLE SETTLEMENT COMMISSION A ND THE SAME STANDS SETTLED BY THE HON'BLE SETTLEMENT COMMISSION. THE APPELLANT AL SO CONTENDED THAT THESE LIABILITIES PERTAINS TO A.Y.92-93 AND AS PER THE PR OVISIONS OF I.T.ACT NO REMEDIAL ACTION CAN BE TAKEN BEYOND SIX YEAR 3.3 I HAVE CAREFULLY CONSIDERED THE APPELLANT'S CON TENTION AND I AM INCLINED NOT TO AGREE WITH THE LD. A.R. FOR THE FOLLOWING REASONS : - A) THE APPELLANT CONTENDED THAT PAYMENT OF RS. 24,7 2,670/- TO 4 PARTIES HAVE BEEN MADE OUT OF UNDISCLOSED BANK ACCOUNTS. TH E PARTICULARS OF THESE PARTIES AND PAYMENTS ARE MENTIONED AS UNDER:- SR. NO. PARTICULARS AMOUNT RS. 1. S.P. TRADING AGENCY 4,02,713 2. PAN ASIA INTERNATIONAL 2,31,212 3. PAHAPUR-3P 4,29,000 4. GUJARAT PICKERS INDUSTRIES 13,91,745 TOTAL 24,72,670 PERUSAL OF HON'BLE SETTLEMENT COMMISSIONS ORDER DAT ED 28.2.2006 REVEALS THAT THE HON'BLE SETTLEMENT COMMISSION HAD CONSIDERED PURCHA SES OF RS. 11,81,860/-, PAYMENTS AGAINST WHICH WERE MADE OUT OF THESE NINE UNDISCLOSED BANK ACCOUNTS. FOR THE SAKE OF READY REFERENCE, THE RELEVANT PORTI ON OF PARA 8.6(PAGE 23) OF THE HON'BLE SETTLEMENT COMMISSIONS ORDER IS REPRODUCED AS UNDER :- 'HOWEVER, SINCE PURCHASES SHOWN OUT OF 9 BANK ACCOU NTS TO THE TUNE OF RS.11,81,860/- ARE NOT SUPPORTED BY ANY EVIDENCE, T HE CLAIM OF THE APPELLANT IN THIS RESPECT IS NOT ACCEPTED. THIS WILL RESULT INTO ADDI TION TO THE EXTENT OF RS.11,81,860/- .......' THE ABOVE FACTS CLEARLY INDICATE THAT THE FACTS PRE SENTED BY THE LD. A.R. IS NOT REFLECTED IN THE HON'BLE SETTLEMENT COMMISSIONS ORD ER. THUS THE SUBMISSIONS OF LD. A.R. CANNOT BE RELIED UPON. B) DURING THE ASSESSMENT PROCEEDINGS THE A.O. M ADE ENQUIRIES FROM M/S. PAHARPUR-3. THE APPELLANT HAD SHOWN AN OUTSTANDING LIABILITY OF RS. 4,29,000/- AGAINST THIS PARTY. IT IS SUBMITTED BY THE APPELLAN T THAT PAYMENT TO THIS PARTY HAS BEEN MADE OUT OF UNDISCLOSED BANK ACCOUNTS. IF THE APPELLANT'S CONTENTION IS TAKEN AS TRUE, THEN NO LIABILITY IS OUTSTANDING AGAINST T HIS PARTY. HOWEVER, M/S. PAHARPUR-3 IN REPLY TO NOTICE U/S. 133(6) OF THE I. T. ACT, 1961 INFORMED THE A.O. THAT THEY HAVE TREATED THE APPELLANT AS BAD DEBTOR AND BAD DEBTS OUTSTANDING AGAINST THE APPELLANT WERE WRITTEN OFF ON 31.12.200 3. THIS WAY THE FACTS SUBMITTED BY THE APPELLANT DURING APPELLATE PROCEEDINGS ARE I N CONTRADICTION TO THE FACTS AS CONFIRMED BY M/S. PHARPUR-3. THESE FACTS CLEARLY IN DICATE THAT THE CONTENTIONS OF THE APPELLANT ARE INCORRECT. C) IF THE CONTENTIONS OF THE APPELLANT THAT PAY MENT OF RS.24,72,670/- WAS MADE TO THE ABOVE MENTIONED FOUR PARTIES OUT OF NINE UND ISCLOSED BANK ACCOUNTS AND THIS FACT WAS DISCLOSED BEFORE THE SETTLEMENT COMMISSION , THEN THE APPELLANT SHOULD ITA NO.2371/AHD/2012 (WIN PRINTS VS. ITO) A.Y. 2007-08 - 4 - HAVE SQUARED UP THESE ACCOUNTS. HOWEVER, THE APPELL ANT HAS SHOWN THESE LIABILITIES OUTSTANDING EVEN TODAY. THESE FACTS CLEARLY REVEALS THAT THE APPELLANT HAS NOT DISCLOSED THE FACT OF BOGUS PURCHASES BEFORE THE HO N'BLE SETTLEMENT COMMISSION TRUTHFULLY. D) THE APPELLANT'S CONTENTION THAT REMEDIAL ACTION CANNOT BE TAKEN IN RESPECT OF TRANSACTIONS WHICH ARE OLDER THAN SIX YEARS CANN OT BE ACCEPTED AS THE PROVISIONS OF SEC.41(1) UNDER WHICH IMPUGNED ADDITION HAS BEEN MADE DOES NOT RESTRICT THE A.O.TO MAKE ADDITION IN RESPECT OF LIABILITIES WHIC H IS OUTSTANDING FOR MORE THAN SIX YEARS. THE APPELLANT HAS APPARENTLY TAKEN THIS ARGUMENTS FROM THE PROVISIONS OF SEC. 148 OF THE IT.ACT. HOWEVER, THE A.O. HAS NO T MADE IMPUGNED ADDITION U/S.148 AND ACCORDINGLY I HOLD THAT THE APPELLANT'S CONTENTION IS MISPLACED. 3.4 IN VIEW OF ABOVE, THE CONTENTIONS OF LD. A.R. A RE REJECTED. SINCE ADDITION OF RS. 31,48,943/- WAS MADE U/S.41(1) OF THE I.T.ACT, 1961, IT WILL BE APPROPRIATE TO DISCUSS THE PROVISIONS OF SEC.41(1) IN DETAIL. TO I NVOKE PROVISIONS OF SEC.41(1) THE FOLLOWING CONDITIONS SHOULD BE FULFILLED. (I) IN THE ASSESSMENT OF AN ASSESSEE, AN ALLOWANCE OR DEDUCTION HAS BEEN MADE IN RESPECT OF ANY LOSS, EXPENDITURE OR TR ADING LIABILITY INCURRED BY HIM. (II) (A) ANY AMOUNT IS OBTAINED IN RESPECT OF SUC H LOSS OR EXPENDITURE, OR (B) ANY BENEFIT IS OBTAINED IN RESPECT OF SUCH TRAD ING LIABILITY BY WAY OF REMISSION OR CESSATION THEREOF, (III) SUCH AMOUNT OR BENEFIT IS OBTAINED BY THE AS SESSEE; AND (IV) SUCH AMOUNT OR BENEFIT IS OBTAINED IN A SUBSE QUENT YEAR. 3.5 IT IS AN ADMITTED FACT THAT THESE LIABILITIES W ERE ALLOWED AS TRADING LIABILITIES IN THE EARLIER ASSESSMENT YEARS. IT IS ALSO AN ADMITTED -FACT THAT PAYMENTS OF RS. 24,72,670/- HAS BEEN MADE BY THE APPELLANT I N THE-EARLIER YEARS TO THE FOUR PARTIES NAMELY M/S. S.P. TRADE AGENCY, PAN ASIA INT ERNATIONAL, PAHARPUR 3P AND GUJARAT PICKERS INDUSTRIES. THIS FACT HAS ALREADY B EEN ADMITTED BY THE LD. A.R. THIS WAY LIABILITIES TO THE EXTENT OF RS.24,72,670/-CEAS ED TO EXIST. IN VIEW OF THIS FACT, I HOLD THAT THE FIRST TWO CONDITIONS AS MENTIONED ABO VE ARE FULFILLED. SINCE LIABILITIES TO THE EXTENT OF RS.24,72,670/- ARE BOGUS AND TO TH IS EXTENT THE ASSETS OF THE APPELLANT IS INFLATED, ACCORDINGLY, I HOLD THAT APP ELLANT HAS ALREADY OBTAINED BENEFITS AGAINST THESE LIABILITIES. IN VIEW OF THIS , I HOLD THAT EVEN CONDITIONS NO.(III) & (IV) ARE FULFILLED IN THE CASE OF THE APPELLANT. IN VIEW OF ABOVE, I AM OF THE CONSIDERED VIEW THAT PROVISIONS OF SEC|41(1) HAS BE EN RIGHTLY INVOKED BY THE A.O. IN THE CASE OF THE APPELLANT. 3.6 THE APPELLANT HAS NOT MADE ANY SUBMISSION IN RE SPECT OF BALANCE OF ADDITION OF RS. 6,76,273/- (RS. 31,48,943 - 24.72.670/-). IT CL EARLY INDICATE THAT THE APPELLANT AGREED WITH THIS ADDITION. THE APPELLANT HAS FAILED TO FURNISH EVEN EVIDENCES TO PROVE THAT THESE LIABILITIES SUBSISTS AS ON TODAY. IT IS AN ESTABLISHED PROPOSITION OF LAW THAT FOR THE PURPOSE OF SECTION 41(1), THE BURD EN IS ON APPELLANT TO PROVE THAT THE LIABILITIES SUBSISTS. IN CASE THE APPELLANT FAI LS TO DISCHARGE ITS ONUS, THE A.O. CAN INVOKE PROVISIONS OF SEC.41(1) OF THE I.T. ACT. RELIANCE IN THIS REGARD IS MADE ON KESORAM INDUSTRIES AND COTTON MILLS LTD. V CIT ( 1992) 196 ITR 845 (CAT). SINCE THE APPELLANT HAS FAILED TO DISCHARGE HIS ONU S, ACCORDINGLY, I HOLD THAT THE ITA NO.2371/AHD/2012 (WIN PRINTS VS. ITO) A.Y. 2007-08 - 5 - LD. A.O. HAD VALIDLY INVOKED PROVISIONS OF SECTION 41(1) OF THE I.T.ACT, 1961 IN RESPECT OF THESE LIABILITIES. 3.6 IN VIEW OF ABOVE, I AM INCLINED TO AGREE WITH T HE CONTENTIONS OF THE A.O. ACCORDINGLY, ADDITION OF RS. 31,48,943/- MADE BY TH E A.O. U/S.41(1) OF THE I.T.ACT IS CONFIRMED. THIS GROUND OF APPEAL IS DISMISSED. 6. HEARD BOTH SIDES. RELEVANT FINDINGS PERUSED. T HERE IS NO DISPUTE THAT BOTH THE LOWER AUTHORITIES HAVE INVOKED SECTION 41( 1) OF THE ACT QUA THE OUTSTANDING SUNDRY CREDITS LIABILITY IN QUESTION BE ING SHOWN IN THE BALANCE SHEET FOR THE PAST VERY MANY ASSESSMENT YEARS. FIR ST OF ALL WE COME TO THE CIT(A)S FINDINGS THAT ASSESSEES LIABILITIES IN QU ESTION TO THE TUNE OF RS.24,72,670/- CEASED TO EXIST IN CASE OF FOUR CORR ESPONDING SUNDRY CREDITORS GIVEN IN PARA 3.5 EXTRACTED HEREINABOVE. LEARNED C OUNSEL FAILS TO REBUT THIS FACTUAL POSITION BY PLACING ON RECORD ANY COGENT MA TERIAL. WE THUS FIND NO REASON TO INTERFERE SO FAR AS THE ABOVE STATE SUM I S CONCERNED. 7. WE NOW COME TO THE REMAINING ADDITION AMOUNT OF RS.6,76,273/-. WE NOTICE THAT THE CIT(A) ALTHOUGH OBSERVES IN PARA 3. 6 THAT THE ASSESSEE HAS NOT MADE ANY SUBMISSION IN RESPECT OF THIS PORTION OF T HE OUTSTANDING LIABILITY. HE HOWEVER NOWHERE POINTS OUT THAT THE ASSESSEE HAD ANYWHERE GIVEN UP ITS GRIEVANCE IN QUESTION. BE THAT AS IT MAY, THE ASSE SSING OFFICER MADE THE IMPUGNED ADDITION ON THE GROUND THAT THESE CREDITS ARE BEING SHOWN IN THE BALANCE SHEET WELL PRIOR TO ASSESSMENT YEAR 1996-97 . THE CIT(A) ALSO IN THE ABOVE EXTRACTED FINDINGS NOWHERE REFERS TO ANY MATE RIAL WHICH COULD POINT OUT CESSATION THEREOF IN THE RELEVANT PREVIOUS YEAR SO FAR AS THE REMAINING 13 PARTIES ARE CONCERNED. NEITHER OF THE LOWER AUTHOR ITIES EVER ISSUED A NOTICE TO THE ABOVE PARTIES EXCEPT IN CASE OF M/S. PAHARPUR ( SUPRA) WHICH ALREADY STANDS ACCEPTED TO HAVE BEEN PAID. IT THUS TRANSPI RES THAT BOTH THE LOWER AUTHORITIES HAVE MADE THE IMPUGNED ADDITION MERELY BECAUSE OF THE FACT THAT THE LIABILITIES IN QUESTION ARE BEING SHOWN FOR A V ERY LONG TIME. WE FIND THAT HONBLE JURISDICTIONAL HIGH COURT IN CASE OF CIT VS . NITIN S. GARG (2012) 208 ITA NO.2371/AHD/2012 (WIN PRINTS VS. ITO) A.Y. 2007-08 - 6 - TAXMANN 16 (GUJ) UPHOLDS THIS TRIBUNALS ORDER IN I DENTICAL FACTS CONCLUDING THAT THE MERE FACT THAT AN OUTSTANDING LIABILITY IS BEING CLAIMED FOR A VERY LONG TIME WOULD NOT ITSELF AMOUNT TO CESSATION THEREOF. WE MAKE IT CLEAR THAT ASSESSEES BALANCE SHEET OR BOOKS NOWHERE HAVE WRIT TEN OFF THE SAME SO AS TO PRESS INTO ACTION EXPLANATION 1 TO SECTION 41(1) OF THE ACT. 8. SHRI KABRA AT THIS STAGE INVITES OUR ATTENTION T O CIT(A)S OBSERVATION THAT THE ASSESSEE NEVER CHALLENGED THE REMAINING AD DITION SUM. WE GO BY OUR FINDING HEREINABOVE THAT THE ASSESSEE NEVER ABDICAT ED ITS PLEA CHALLENGING THE IMPUGNED ADDITION. SHRI KABRA THEN QUOTES CASE LAW (2016) 71 TAXMANN.COM 322 (BOM.) PALKHI INVESTMENT & TRADING CO. PVT. LTD . VS. ITO (IN PENALTY CASE WHEREIN QUANTUM ADDITION U/S. 41(1) OF THE ACT STOOD CONFIRMED UPTO THE HONBLE APEX COURT) IN SUPPORT OF THIS CONTENTION T HAT BOTH THE LOWER AUTHORITIES HAVE RIGHTLY MADE THE IMPUGNED ADDITION . WE NOTICE THAT FACTS OF THIS CASE LAW ARE ENTIRELY DIFFERENT SINCE SOME OF THE CREDITORS WERE NOT FOUND AVAILABLE AT THE GIVEN ADDRESSES AND THE ASSESSMENT AUTHORITIES TREATED THE CLAIM AS A FALSE ONE. WE REPEAT THAT THERE ARE NO SUCH CIRCUMSTANCES INVOLVED IN THE INSTANT APPEAL. WE THUS CONCLUDE IN VIEW OF HONBLE JURISDICTIONAL HIGH COURTS DECISION THAT THE IMPUGNED SECTION 41(1) AD DITION OF RS.6,76,273/- IN NOT SUSTAINABLE. THE SAME ACCORDINGLY STANDS DELET ED. THIS FIRST SUBSTANTIVE GROUND IS PARTLY ACCEPTED. 9. THIS LEAVES US WITH ASSESSEES LATTER SUBSTANTIV E GROUND AVERRING THAT THE CIT(A) HAS ERRED IN RESTRICTING GROSS PROFITS A DDITION OF RS.7,96,616/- TO RS.3,98,308/-. WE DEEM IT APPROPRIATE AT THIS STAGE TO REPRODUCE THE LOWER APPELLATES FINDINGS DISCUSSING AT LENGTH THE ISSUE IN QUESTION AS FOLLOWS: 4.2 I HAVE CAREFULLY CONSIDERED RIVAL CONTENTIONS. IT IS SEEN THAT THE APPELLANT DURING THE ASSESSMENT PROCEEDINGS AS WELL AS APPELL ATE PROCEEDINGS CONTENDED THAT THE COST OF MAIN RAW MATERIALS NAMELY LDPE FIL MS AND POLYESTER FILMS HAD INCREASED DURING THE YEAR UNDER CONSIDERATION AS CO MPARED TO THE LAST YEAR. THE APPELLANT HAS ALSO CONTENDED THAT THE SALE PRICE HA S REMAINED STAGNANT I.E. THE ITA NO.2371/AHD/2012 (WIN PRINTS VS. ITO) A.Y. 2007-08 - 7 - SALES PRICE REMAINS ALMOST THE SAME AS IT WAS IN TH E EARLIER YEAR. IN VIEW OF THIS THE APPELLANT CONTENDED THAT THE GROSS PROFIT WAS REDUC ED. AFTER CAREFUL CONSIDERATION I AM NOT INCLINED TO AGREE WITH THE CONTENTIONS OF LD. A.R. IN TOTO. IT IS SEEN THAT THE A.O. HAS GIVEN A CLEAR FINDING THAT THE RATE OF LDPE FILMS IN THE A.Y.07-08 WAS RS. 84.75 PER UNIT WHILE THE AVERAGE RATE OF LD PE FILMS IN THE JY.2008-09 WAS 81.31 PER UNIT. PERUSAL OF THE ASSESSMENT ORDER FURTHER REVEALS THAT THE RATE OF POLYESTER FILMS HAS INCREASED FROM 63.31 PER UNIT T O 103.21 PER UNIT DURING THE YEAR UNDER CONSIDERATION. THIS WAY THE AVERAGE RATE OF LDPE FILMS REMAIN THE SAME DURING THE YEAR UNDER CONSIDERATION AS IT WAS IN THE PREVIOUS YEAR WHILE THE AVERAGE RATE OF POLYESTER FILM HAS INCREASED BY ALM OST 63% COMPARED TO THE EARLIER YEAR. IT IS ALSO A MATTER OF RECORD THAT DU RING THE YEAR UNDER CONSIDERATION THE SHARE OF POLYESTER FILMS IN THE TOTAL CONSUMPTI ON OF RAW MATERIAL WAS OF THE ORDER OF 55%. THESE FACTS CLEARLY INDICATE THAT THE COST OF RAW MATERIAL INCREASED SUBSTANTIALLY (SPECIALLY THE POLYESTER FILMS), WHIL E THE SALE PRICE OF FINISHED GOODS REMAINED ALMOST THE SAME DURING THE YEAR UNDER CONS IDERATION. THIS WAY, THE APPELLANT WAS ABLE TO JUSTIFY PART OF REDUCTION OF G.P. HOWEVER, THE A.O. HAD NOT CONSIDERED THIS FACT AT ALL. IN VIEW OF ABOVE FACTS I AM OF THE CONSIDERED VIEW, THAT THE APPELLANT SHOULD BE GIVEN BENEFIT OF PRICE INCR EASE OF THE POLYESTER FILMS. TAKING ENTIRETY OF FACTS IN VIEW, I AM OF THE CONSI DERED VIEW THAT THE ENDS OF JUSTICE WILL MEET IF THE FALL IN G.P. TO THE EXTENT OF 4% O F TURNOVER IS ASCRIBED TO INCREASE IN THE PRICE OF POLYESTER FILMS. THIS WILL RESULT IN R ELIEF OF G.P. ADDITION OF 4% OF TURNOVER TO THE APPELLANT. AS A RESULT OF THIS ORDE R APPELLANT WILL GET A RELIEF OF RS. 3,98,308/- AND ADDITION TO THE EXTENT OF RS.3,98,30 3/- IS CONFIRMED. THIS GROUND OF APPEAL IS PARTLY ALLOWED. 10. WE HAVE HEARD BOTH THE PARTIES REITERATING THEI R RESPECTIVE STANDS. THERE IS NO DISPUTE THAT ASSESSEES GP IN THE IMPUG NED ASSESSMENT YEAR @10.68% IS LESS THAN THAT @19.39% DECLARED IN THE I MMEDIATE PRECEDING ASSESSMENT YEAR. IT SEEMS TO HAVE USED POLYESTER A ND LDPE FILMS IN MANUFACTURING PROCESS. EVEN THE CIT(A) IS FAIR ENO UGH IN HOLDING THAT USES OF FORMER ITEM IS TO THE TUNE OF 55% WHOSE COSTS HA VE SHOT UP TO RS.103.21 IN THE RELEVANT PREVIOUS YEAR FROM RS.63.31 IN THE EAR LIER ASSESSMENT YEAR. THERE IS FURTHER NO ISSUE THAT ASSESSEES SALE PRIC ES HAVE SEEN NO SIGNIFICANT UPWARD TREND. IT IS FURTHER NOT IN DISPUTE THAT TH E CIT(A) HAS ALREADY RESTRICTED THE IMPUGNED ADDITION TO THE TUNE OF 50% AS COMPARED TO THAT MADE IN THE COURSE OF ASSESSMENT. WE OBSERVE IN THESE P ECULIAR FACTS THAT LARGER INTEREST OF JUSTICE WOULD BE MET IN CASE THE IMPUGN ED ADDITION IS FURTHER RESTRICTED TO A LUMP SUM FIGURE OF RS.2LACS ONLY SI NCE THE IMPUGNED ASSESSMENT YEAR HAS SEEN EXORBITANT COST OF THE MAI N RAW MATERIAL COMPONENT ITA NO.2371/AHD/2012 (WIN PRINTS VS. ITO) A.Y. 2007-08 - 8 - AND IT CANNOT BE DENIED IN SUCH CIRCUMSTANCES THAT THE CORRESPONDING HANDLING AND OTHER SUPPLEMENTARY CHARGES ALSO SEE A N UPWARD TREND IN A NORMAL SITUATION. THIS LATTER GROUND ALSO SUCCEEDS IN PART. 11. THIS ASSESSEES APPEAL IS PARTLY ALLOWED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 30 TH DAY OF NOVEMBER, 2016.] SD/- SD/- (AMARJIT SINGH) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBE R AHMEDABAD: DATED 30/11/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0