DAUJI & CO, MUMBAI V. ITO 16(3)(1), MUMBAI

ITA 2489/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49027 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 09-05-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 30-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDEEP DAHIYA
• Assessee Lawyers: VIJAY MEHTA
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D, MUMBAI BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER & SMT. ASHA VIJAYRAGHAVAN, JUDICIAL MEMBER. I.T.A. NO. 2489/MUM/2010. ASSESS MENT YEAR : 2006-07. M/S DAUJI & CO., THE INCOME-TAX OFFICER, 818, PRASAD CHAMBERS, VS. 16(3)(1), MUMBAI. OPERA HOUSE, MUMBAI 400007. PAN : AAAFD0646F, APPELLANT. RESPONDENT. APPELLANT BY : SHR I VIJAY MEHTA. RESPONDENT BY : SHRI SANDEEP DAHIYA. O R D E R PER P.M. JAGTAP, A.M. : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LEARNED CIT(APPEALS)-27, MUMBAI DATED 28 TH JANUARY, 2010 AND THE SOLITARY ISSUE ARISING OUT OF THE SAME RELATES TO THE TRADING ADDITION MAD E BY THE AO AND CONFIRMED BY THE LEARNED CIT(APPEALS). 2. THE ASSESSEE IN THE PRESENT CASE IS A PARTNERSHI P FIRM WHICH IS ENGAGED IN THE BUSINESS OF TRADING IN POLISHED DIAMONDS AS WELL AS PURCHASING THE ROUGH DIAMONDS AND SELLING THE SAME AFTER GETTING POLISHED. THE RE TURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY THE ASSESSEE ON 30-10-20 06 DECLARING THE TOTAL INCOME OF RS.8,82,259/-. FROM THE PROFIT AND LOSS ACCOUNT FILED BY THE ASSESSEE ALONG WITH 2 ITA NO.2489/MUM/2010 ASSTT. YEAR : 2006-07. THE SAID RETURN, IT WAS NOTICED BY THE AO THAT THE ASSESSEE HAS SHOWN A GROSS PROFIT OF RS.69.97 LAKHS ON THE TOTAL TURNOVER OF RS.14.85 LAKHS FOR THE YEAR UNDER CONSIDERATION GIVING A GP OF 4.71%. AS THE GP RATE DISCLOSED BY THE ASSESSEE IN THE IMMEDIATELY PRECEDING YEAR WAS 5.78%, THE ASSES SEE WAS CALLED UPON BY THE AO TO EXPLAIN THE FALL IN GP RATE DURING THE YEAR U NDER CONSIDERATION. ALTHOUGH THE ASSESSEE MADE AN ATTEMPT TO OFFER ITS EXPLANATION F OR THE FALL IN GP RATE IN THE YEAR UNDER CONSIDERATION AS COMPARED TO THE IMMEDIATELY PRECEDING YEAR, THE SAME WAS NOT FOUND TO BE SATISFACTORY BY THE AO. ACCORDING T O HIM, THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO PRODUCE ALL THE JANGAD SLIP S AND IN THE ABSENCE OF THE SAME AS WELL AS DAY TO DAY STOCK SUMMARY FURNISHED BY TH E ASSESSEE, THE EXPLANATION OF THE ASSESSEE REGARDING FALL IN GP RATE DURING THE Y EAR UNDER CONSIDERATION COULD NOT BE VERIFIED. HE, THEREFORE, REJECTED THE EXPLANATIO N OF THE ASSESSEE AND DETERMINED ITS INCOME FOR THE YEAR UNDER CONSIDERATION BY APPL YING THE HIGHER GP RATE OF 6.33% AS AGAINST 4.71% SHOWN BY THE ASSESSEE WHICH RESULTED IN THE TRADING ADDITION OF RS.24,06,627/-. ON APPEAL, THE LEARNED CIT(APPEALS) CONFIRMED THE SAID ADDITION AND AGGRIEVED BY THE SAME, THE ASSESS EE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE MATERIAL ON RECORD. AS POINTED OUT BY THE LEARNED COUNSEL FO R THE ASSESSEE FROM THE COPY OF LETTER DATED 12-12-2008 SUBMITTED BEFORE THE AO DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS, COPIES OF ONLY THREE JANGAD SLIPS AND BILLS CORRESPONDING THERETO WERE FILED BY THE ASSESSEE AS REQUIRED BY THE AO. HE HAS SUBMITTED THAT COPIES OF OTHER JANGAD SLIPS WERE NEVER ASKED BY THE AO FROM THE AS SESSEE AND THIS FACT WAS BROUGHT TO THE NOTICE OF THE AO BY A LETTER DATED 7 TH JAN., 2009 FILED BY THE ASSESSEE WITH THE OFFICE OF THE AO IMMEDIATELY AFTER RECEIPT OF THE ASSESSMENT ORDER. HE HAS FILED THE COPIES OF THE SAID JANGAD SLIPS ALONG WIT H CORRESPONDING BILLS AT PAGE NO. 3 ITA NO.2489/MUM/2010 ASSTT. YEAR : 2006-07. 57 TO 79 OF HIS PAPER BOOK AND HAS FILED AN APPLICA TION SEEKING ADMISSION THEREOF AS ADDITIONAL EVIDENCE ON THE GROUND THAT NO OPPORT UNITY WAS AFFORDED EITHER BY THE AO OR BY THE LEARNED CIT(APPEALS) TO THE ASSESSEE T O SPECIFICALLY PRODUCE THE SAME. HE HAS ALSO SUBMITTED THAT THE QUANTITATIVE T ALLY OF STOCK HAS ALREADY BEEN SUBMITTED BY THE ASSESSEE DURING THE COURSE OF ASSE SSMENT PROCEEDINGS AND THE SAME IS AVAILABLE ON RECORD. THE LEARNED DR HAS STR ONGLY OBJECTED TO THE APPLICATION FILED BY THE ASSESSEE SEEKING ADMISSION OF ADDITIONAL EVIDENCE AND SUBMITTED THAT THE ASSESSEE HAS FAILED TO PRODUCE T HE SAME BEFORE THE AO AS WELL AS BEFORE THE LEARNED CIT(APPEALS) DESPITE SUFFICIENT OPPORTUNITY AFFORDED TO IT IN THIS REGARD. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THE ADDITIONAL EVID ENCE FILED BY THE ASSESSEE IN THE FORM OF JANGAD SLIPS AND CORRESPONDING BILLS DESERV ES TO BE ADMITTED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. AS POINTED OUT BY TH E LEARNED COUNSEL FOR THE ASSESSEE FROM THE LETTER DATED 12 TH MAY, 2008, THE COPIES OF ONLY THREE JANGAD SLIPS ALONG WITH CORRESPONDING BILLS WERE APPARENTLY CALL ED FOR BY THE AO FOR VERIFICATION AND THERE IS NOTHING ON RECORD TO SHOW THAT THE ASSESSEE WAS GIVEN A PROPER AND SUFFICIENT OPPORTUNITY TO PRODUCE THE CO PIES OF OTHER JANGAD SLIPS AND CORRESPONDING BILLS SPECIFICALLY EITHER BY THE AO O R BY THE LEARNED CIT(APPEALS). MOREOVER THIS DOCUMENTARY EVIDENCE, IN OUR OPINION, IS VERY RELEVANT TO DECIDE THE ISSUE RELATING TO THE TRADING ADDITION INVOLVED IN THE PRESENT CASE INASMUCH AS THE EXPLANATION OF THE ASSESSEE IN RESPECT OF FALL IN G P RATE FOR THE YEAR UNDER CONSIDERATION CAN BE VERIFIED ONLY FROM THE SAID EV IDENCE. WE, THEREFORE, DEEM IT FAIR AND PROPER AND IN THE INTEREST OF JUSTICE, TO ADMIT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE IN THE FORM OF JANGAD SLIPS AND COR RESPONDING BILL AND RESTORE THE 4 ITA NO.2489/MUM/2010 ASSTT. YEAR : 2006-07. MATTER TO THE FILE OF THE AO WITH A DIRECTION TO DE CIDE THE SAME AFRESH IN THE LIGHT OF THE SAID ADDITIONAL EVIDENCE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 20 TH DAY OF MAY, 2011. SD/- SD/- (ASHA VIJAYRAGHAVAN) (P.M. JAG TAP) JUDICIAL MEMBER ACCO UNTANT MEMBER MUMBAI, DATED: 20 TH MAY, 2011. WAKODE COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, D-BENCH. (TRUE COPY) BY ORDE R ASSTT. REGI STRAR, ITAT, MUMBAI BEN CHES, MUM BAI.