The DCIT, Circle-5, Ahmedabad V. Promens India Pvt.Ltd., Ahmedabad

ITA 2418/AHD/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2083 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2013
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 05-03-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 28-07-2010
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR
• Keywords: Gross profit estimation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE SHRI G. C. GUPTA, VP AND SHRI A. MOHAN ALAN KAMONY, AM) ITA NO.2418/AHD/2010 A. Y.: 2007-08 THE D. C. I. T., CIRCLE-5, C. U. SHAH COLLEGE BUILDING, 2 ND FLOOR, AHMEDABAD VS PROMENS INDIA PVT. LTD., (FORMERLY KNOWN AS SAEPLAST (INDIA) LTD.,) A-71, CORPORATE HOUSE, S. G. HIGHWAY, AHMEDABAD P. A. NO. AACCS 1023 J (APPELLANT) (RESPONDENT) APPELLANT BY SHRI RAHUL KUMAR, SR. DR RESPONDENT BY NONE DATE OF HEARING: 05-03-20123 DATE OF PRONOUNCEMENT:10-05-2013 O R D E R PER A. MOHAN ALANKAMONY: THIS APPEAL IS PREFERRED BY THE REVENUE BEING AGGRIEVED BY THE ORDER OF THE LEA RNED CIT(A)-XI, AHMEDABAD IN APPEAL NO. CIT(A)-XI/1051/2009-10, DAT ED 3 RD MAY, 2010, FOR THE ASSESSMENT YEAR 2007-08, PASSED U/S 2 50 READ WITH SECTION 143(3) OF THE INCOME TAX ACT. 2. THE REVENUE IN THIS APPEAL HAS RAISED THREE GROU NDS WHEREIN GROUNDS NO.2 AND 3 ARE GENERAL IN NATURE AND DO NOT SURVIVE FOR ADJUDICATION. THE LONE SURVIVING GROUND NO.1 OF THE REVENUES APPEAL IS REPRODUCED HEREIN UNDER FOR ADJUDICATION:- ITA NO.2418/AHD/2010 (AY: 2007-08) DCIT, CIR-5, AHMEDABAD VS PROMENS INDIA PVT. LTD. 2 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XI , AHMEDABAD HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING TH E ADDITION MADE OF RS.48,43,382/- ON ACCOUNT OF ESTIMATION OF G. P. 3. THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGE D IN THE BUSINESS OF MANUFACTURING PLASTIC INSULATED CONTAIN ERS FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 ON 31-10- 2007 DECLARING INCOME OF RS.63,82,445/-. THE RETURN WAS INITIALLY PROCESSED U/S 143(1) OF THE ACT AND SUBSEQUENTLY TAKEN UP FOR SCR UTINY ASSESSMENT AND FINALLY ASSESSMENT U/S 143(3) OF THE ACT WAS CO MPLETED VIDE ORDER DATED 04-12-2009 WHEREIN THE LEARNED AO AMONG ST CERTAIN ADDITIONS, MADE AN ADDITION OF RS.48,43,832/- ON AC COUNT OF LOW GROSS PROFIT. 4. THE LEARNED AO MADE THE ADDITION OF RS.48,43,832 /- DUE TO THE FOLLOWING REASONS:- (I) THERE WAS FALL IN GROSS PROFIT TO THE EXTENT O F 5.88% ON THE TURNOVER OF RS.8,24,42,558/-. (II) THE ASSESSEE HAD NOT MAINTAINED STOCK REGISTER OF RAW MATERIALS. (III) THE ASSESSEES 50% OF THE TURNOVER WAS MADE T O ASSOCIATE CONCERNS. (IV) THE ASSESSEE HAD NOT INCREASED ITS SALE PRICE TO VARIOUS ENTITIES TO COVER UP THE INCREASE IN COST OF PRODUC TION. 5. THE ASSESSEE HAD EXPLAINED BEFORE THE LEARNED AO THAT THE FALL IN GROSS PROFIT WAS DUE TO INCREASE IN COST OF RAW MATERIALS WHICH ACCOUNTS FOR 5.66% OF THE FALL IN GROSS PROFIT. 6. WHEN THE MATTER WAS CARRIED BEFORE THE LEARNED C IT(A), THE LEARNED CIT(A) AGREEING TO THE EXPLANATION TO THE A SSESSEE AND ITA NO.2418/AHD/2010 (AY: 2007-08) DCIT, CIR-5, AHMEDABAD VS PROMENS INDIA PVT. LTD. 3 FURTHER VERIFYING THAT THE ASSESSEE WAS MAINTAINING STOCK REGISTER ALONG WITH QUANTITATIVE DETAILS DELETED THE ADDITIO N. 7. BEFORE US NONE APPEARED ON BEHALF OF THE ASSESSE E. THE NOTICE OF HEARING SERVED ON THE ASSESSEE FIXING THE DATE O F HEARING ON 05- 03-2013 HAS BEEN RETURNED BY THE POSTAL AUTHORITIES WITH THE REMARKS LEFT. THE ASSESSEE HAS ALSO NOT INTIMATED ANY CHA NGE OF ITS ADDRESS. SINCE THE ISSUE INVOLVED IS SIMPLE, IT WAS DECIDED BY THE BENCH TO ADJUDICATE THE CASE AFTER HEARING THE LEARNED DR. T HE LEARNED DR ARGUED IN SUPPORT OF THE ORDER OF THE LEARNED AO AN D PRAYED THAT THE SAME MAY BE RESTORED. 8. AFTER HEARING THE LEARNED DR AND PERUSING THE MA TERIALS ON RECORD, WE DO NOT FIND IT NECESSARY TO INTERFERE WI TH THE ORDER OF THE LEARNED CIT(A) BECAUSE THE REVENUE COULD NOT CONTRO VERT TO THE FINDINGS OF THE LEARNED CIT(A) WITH ANY COGENT EVID ENCE OR MATERIALS. THEREFORE, WE HEREBY CONFIRM THE ORDER OF THE LEARN ED CIT(A) ON THIS ISSUE. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10-05-2013 SD/- SD/- (G. C. GUPTA) VICE PRESIDENT (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ ITA NO.2418/AHD/2010 (AY: 2007-08) DCIT, CIR-5, AHMEDABAD VS PROMENS INDIA PVT. LTD. 4 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER A SST. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: DIRECT ON COMPUTER 02-05-2013 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 02-05-2013 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR.P.S ./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: