Shri Mohammed Rafiq Gulam Mohiyddin Lakdawala, Ahmedabad V. The Income tax Officer,Ward-5(3), Surat

ITA 2611/AHD/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67924 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-10-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 20-10-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHUBRATA VERMA JDIT

Judgement Text

, , , , SMC, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, SMC BENCH . .. . . .. . , !' # ' !' # ' !' # ' !' # ' BEFORE SHRI G.C. GUPTA, VICE-PRESIDENT ITA NO.2611/AHD/2011 [ASSTT.YEAR : 2007-2008] MOHAMMED RAFIQ GULAM MOHIYDDIN LAKDAWALA H.NO.8/978, KAPADIA CHAL NI GALI MOMNAWAD, GOPIPURA SURAT 395 003. PAN : ACHPL 8493 R /VS. ITO, WARD-5(3) SURAT. ( (( (%& %& %& %& / APPELLANT) ( (( ('(%& '(%& '(%& '(%& / RESPONDENT) )* + , #/ ASSESSEE BY : NONE . + , #/ REVENUE BY : SHRI SHUBRATA VERMA, JDIT / + *01/ DATE OF HEARING : 14 TH OCTOBER, 2013 234 + *01/ DATE OF PRONOUNCEMENT : 13.11.2013 #5 / O R D E R THIS APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2007-08 IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-IV, AHM EDABAD DATED 14.6.2011. 2. THE GROUNDS OF THE APPEAL OF THE ASSESSEE ARE AS UNDER: 1. THE CIT(A) HAS ERRED IN FIXING HEARING OF APPEA L AT SHORT NOTICE AND HAS PASSED ORDER WITHOUT GIVING SU FFICIENT ITA NO.2611/AHD/2011 -2- AND PROPERTY OPPORTUNITY TO YOUR APPELLANT TO MAKE SUBMISSIONS IN RESPECT OF THE GROUNDS OF APPEAL FIL ED BEFORE HIM. 2. YOUR APPELLANT SUBMITS THAT THE TOTAL INCOME OUG HT TO HAVE BEEN COMPUTED BY THE AO AS PER PROVISIONS OF SEC.44AF OF THE ACT HE BEING A RETAILER AND THAT VA RIOUS ADDITIONS MADE BY HIM WERE ARBITRARY AND WITHOUT AN Y BASE AND AGAINST PRINCIPLES OF LAW. 3. YOUR APPELLANT SUBMITS THAT PURCHASES, DIRECT EXPENSES AND ALL OTHER EXPENSES IN P&L ACCOUNT ARE INCURRED FOR THE PURPOSE OF BUSINESS AND ADHOC DISALLOWANCES THEREOF AMOUNT TO RS.2,89,708 @ ADHOC 25% OF TOTAL IS AGAINST THE PRINCIPLE OF LAW EQUITY AND FAIR PLAY AND THEREFORE THE CIT(A OUGHT TO HAVE DELETED THE S AID ADDITION. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE AT THE T IME OF HEARING OF THE APPEAL. ACCORDINGLY, THE APPEAL IS BEING DISPOSED OF EX PARTE QUA THE ASSESSEE-APPELLANT ON MERIT, AFTER HEARING THE LEARNED DR. THE LEARNED DR HAS RELIED ON THE ORDE RS OF THE ASSESSING OFFICER AND THE LEARNED COMMISSIONER OF I NCOME TAX (APPEALS). 4. WE HAVE CONSIDERED SUBMISSION OF THE LD. DR AND HAVE PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). WE FIND THAT IN THIS CASE ONLY ADDITION MADE BY THE AO WAS OF ` 2,89,708/- ON ACCOUNT OF DISALLOWANCE ON AD HOC BASIS AT THE RATE OF 25% OUT OF PURCHASES AND EXPENSES. WE FIND THAT THE SALES FIG URE OF THE ASSESSEE HAVE NOT BEEN DISTURBED BY THE AO WHILE FR AMING THE EX- PARTE ASSESSMENT ORDER IN THIS CASE. HOWEVER, THE PURCH ASE ITA NO.2611/AHD/2011 -3- AMOUNTING TO ` 11,27,006/- AND EXPENSES OF ` 34,571/- WERE NOT ACCEPTED AND ADHOC DISALLOWANCE OF 25% WAS MADE BY THE AO WHICH WAS CONFIRMED BY THE CIT(A). IN THESE FACTS OF THE CASE, WE ARE OF THE VIEW THAT SINCE THE AO HAS ACCEPTED S ALE FIGURE AS DECLARED BY THE ASSESSEE AND THE SALES COULD NOT BE EFFECTED WITHOUT MAKING CORRESPONDING PURCHASES, ENDS OF JUS TICE SHALL BE MET, IF THE DISALLOWANCE OUT OF PURCHASES AND EXPEN SES ON ACCOUNT OF UNVERIFIABLE NATURE THEREOF, IS RESTRICT ED TO 10% OF THE EXPENSES ON THESE HEADS, AND ACCORDINGLY, THE ADDIT ION IS RESTRICTED TO ` 1,16,157/- AS AGAINST ` 2,89,708/- SUSTAINED BY THE CIT(A), AND THE GROUNDS OF THE ASSESSEE ARE PARTLY ALLOWED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD