The ITO, Ward-8(1), Ahmedabad V. Tej Food Pvt.Ltd., Ahmedabad

ITA 2671/AHD/2010

• Counselvise Citation: 267120514 RSA 2010
• Duration Of Justice: 3 year(s) 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 05-06-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 13-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJNISH K VOHRA
• Assessee Lawyers: PF JAIN

Judgement Text

, , , , C, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, C BENCH . .. . . .. . , !' !' !' !', , , , #$ #$ #$ #$ # ## #. .. .# ## #. . . . % % % %, , , , &' ( & ' &' ( & ' &' ( & ' &' ( & ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND N.S. SAINI, ACCOUNTANT MEMBER) ITA NO.2671/AHD/2010 [ASSTT.YEAR : 2007-2008] THE ITO, WARD-8(1) AHMEDABAD. /VS. TEJ FOOD P. LTD. C/O. MAHESHKUMAR TRIKAMLAL PADHYAR 19, TULSIAN SOCIETY JIVRAJ PARK, AHMEDABAD. PAN : AABCT 4617 J ( (( (*+ *+ *+ *+ / APPELLANT) ( (( (,-*+ ,-*+ ,-*+ ,-*+ / RESPONDENT) ( . / &/ REVENUE BY : SHRI RAJNISH K. VOHRA, SR.DR 12 . / &/ ASSESSEE BY : SHRI P.F. JAIN 3 . 24'/ DATE OF HEARING : 5 TH JUNE, 2014 567 . 24'/ DATE OF PRONOUNCEMENT : 4.7.2014 &8 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEAR 2007-2008 IS DIRECTED AGAIN ST THE ORDER OF THE CIT(A). 2. THE GROUND NO.1 OF THE APPEAL OF THE REVENUE IS AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN REDUCING THE ADDITION OF RS.10,00,565/- TO RS.3,20,000/- ON ACCO UNT OF SHORTFALL IN GROSS PROFIT. ITA NO.2671/AHD/2010 -2- 3. THE LEARNED DR HAS RELIED ON THE ORDER OF THE AO . THE LEARNED COUNSEL FOR THE ASSESSEE HAS RELIED ON THE ORDER OF THE CIT(A). 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE GP ADDITION OF RS .10,00,565/- WAS MADE BY THE AO AND IN APPEAL IT WAS REDUCED TO RS.3,20,000/ - BY THE CIT(A), AGAINST WHICH ASSESSEE HAS NOT PREFERRED ANY APPEAL, AND TH E REVENUE HAS PREFERRED APPEAL BEFORE THE TRIBUNAL. WE FIND THAT THAT THER E WAS A SHORTFALL IN THE GP RATE OF THE ASSESSEE IN FOOD KING DIVISION FROM 8.85% IN IMMEDIATELY PRECEDING YEAR TO 4.95% DURING THE RELEVANT YEAR. THE CIT(A) HAS RECORDED THAT THE ASSESSEE HAS RECORDED A HIGH TURNOVER AND THE AO HA S TAKEN THE GP RATE OF EARLIER TWO UN-COMPARABLE YEARS. THE CIT(A) HAS FU RTHER RECORDED THAT THE AO HAS NOT GIVEN ANY COMPARABLE CASES BEFORE ESTIMATIO N OF GP. THE CIT(A) HAS AFTER RECORDING THE REASONS ESTIMATED THE GP AS THA T OF IMMEDIATELY PRECEDING YEAR ASSTT.YEAR 2006-2007 AT 8.85%, AND WORKED OUT THE GP ADDITION TO RS.3.20 LAKHS, AND THE BALANCE GP ADDITION WAS DELETED. TH ERE BEING NO MISTAKE IN THE ORDER OF THE CIT(A), AND HIS ACTION IN ADOPTING THE GP RATE OF IMMEDIATELY PRECEDING ASSTT.YEAR BEING JUSTIFIED, WE HOLD THAT NO INTERFERENCE IN THE ORDER OF THE CIT(A) ON THIS ISSUE IS CALLED FOR, WHICH IS CO NFIRMED AND THE GROUND NO.1 OF THE REVENUE IS DISMISSED. 5. THE GROUND NO.2 OF THE REVENUE IS AS UNDER: 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.4,67,299/-MADE BY THE AO ON ACCOUNT OF UNPROVED CREDITORS. 6. THE LEARNED DR HAS RELIED ON THE ORDER OF THE AO. THE LEARNED COUNSEL FOR THE ASSESSEE HAS RELIED ON THE ORDER OF THE CIT(A). 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THERE WERE CERTAIN OU TSTANDING LIABILITIES IN THE ITA NO.2671/AHD/2010 -3- BALANCE SHEET OF THE ASSESSEE WITH REGARD TO THREE CREDITOR PARTIES TOTALING TO RS.4,67,299/-. WE FIND THAT THE CIT(A) HAS RECORDE D THAT FROM THE PARTICULARS OF THE ACCOUNT OF THESE CREDITOR PARTIES, IT WAS CLEAR LY ESTABLISHED THAT ASSESSEE PURCHASED GOODS FORM THESE PARTIES ON CONSIGNMENT B ASIS FOR WHICH IT RECEIVED COMMISSION ALSO. FURTHER, IT IS VERIFIABLE FROM TH E COPY OF THE ACCOUNTS OF THE PARTIES THAT THE ASSESSEE HAS SETTLED ITS ACCOUNT T HROUGH BANKING CHANNEL AND TRANSACTIONS ARE ON REGULAR BASIS, AND THAT IT HAS BEEN CLAIMED BY THE ASSESSEE THAT ACCOUNTS OF THESE THREE CREDITOR PARTIES WERE SETTLED IN THE SUBSEQUENT YEARS. THE CIT(A) HAS FURTHER RECORDED THAT THESE PARTIES ARE RELATED TO FOOD KING DIVISION FOR WHICH THE AO HAS MADE SEPARATE ADDITIO N, AND THEREFORE, ONCE AGAIN MAKING ADDITION FOR THESE CREDITORS AMOUNTS T O DOUBLE ADDITION IN RESPECT OF THE SAME ISSUE. IN THESE FACTS OF THE CASE, WE ARE OF THE VIEW THAT THERE IS NO MISTAKE IN THE ORDER OF THE CIT(A) ON THIS ISSUE IN DELETING THE ADDITION MADE ON ACCOUNT OF UNPROVED CREDITORS, AND ACCORDINGLY, THE ORDER OF THE CIT(A) ON THIS ISSUE IS CONFIRMED, AND THE GROUND NO.2 OF THE APPE AL OF THE REVENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( # ## #. .. .# ## #. . . . % % % % /N.S.SAINI) &' ( &' ( &' ( &' ( /ACCOUNTANT MEMBER ( . .. . . .. . /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 ITA NO.2671/AHD/2010 -4- 1. DATE OF DICTATION : 05-06-2014 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER. : 06-06-2014 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P.S./P.S : 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT. : 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER : 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P.S./P.S. : 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK. : 4.7.2014 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK. : 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER. : 10. DATE OF DESPATCH OF THE ORDER :