Shri Pankaj K.Nandwani, Surat V. The Income tax Officer,Ward-1(4), Surat

ITA 275/AHD/2012

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2383 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 30-10-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 31-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K GUPTA SR DR RESPOND

Judgement Text

I.T.A. NO.275:/AHD/ 2012 ASSESSMENT YEAR: 2008-09 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD DBENCH, AHMEDABAD. [CORAM: PRAMOD KUMAR, AM AND S. S. GODARA,JM] I.T.A. NO. 275/AHD/2012 ASSESSMENT YEAR:2008-09 SHRI PANKAJ K. NANDWANI, 131, PARKING PROJECT, STM RING ROAD, SURAT. ....................APPE LLANT VS. INCOME-TAX OFFICER, WARD 1(4), SURAT. . .RESPONDENT PAN ABRPM 1633J APPEARANCES BY: RAMESH MALPANI............FOR THE APPELLANT R. K. GUPTA, SR.DR..........F OR THE RESPONDENT DATE OF CONCLUDING THE HEARING: 30 TH OCTOBER,2015 DATE OF PRONOUNCING THE ORDER: 18 TH JANUARY, 2016 O R D E R PER PRAMOD KUMAR, AM: THIS APPEAL CHALLENGES CORRECTNESS OF LEARNED CIT( A)S ORDER DATED 10 TH OCTOBER, 2011 FOR THE ASSESSMENT YEAR 2008-09. 2. IN THE FIRST GROUND, THE ASSESSEE IS AGGRIEVED O F CIT(A)S CONFIRMING THE DISALLOWANCE, OUT OF CASH PURCHASES OF RS.19,47,123/- ON PURE ESTIMATE B ASIS. THE DISALLOWANCE WORKS OUT TO BE RS.3,89,425/-. 3. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEED INGS, THE ASSESSING OFFICER DISALLOWED PURCHASES, TO THE EXTENT OF 20% AND ON ESTIMATE BAS IS, ON THE GROUND THAT CASH PURCHASES OF RS.19,47,123/- IS NOT PROPERLY SUPPORTED BY BILLS A ND VOUCHER. WHEN THE MATTER TRAVELLED IN APPEAL, LEARNED CIT(A) UPHELD THE ACTION OF THE ASSESSING O FFICER IN PRINCIPLE BY OBSERVING THAT THERE IS A POSSIBILITY OF MANIPULATION IN CASH PURCHASES BUT RESTRICTED THE DISALLOWANCE TO 20% OF CASH PURCHASES, RATHER THAN TOTAL PURCHASES OF RS.34,45, 506/- -AS WAS TAKEN INTO ACCOUNT BY THE ASSESSING OFFICER. THE ASSESSEE IS NOT SATISFIED AND IS IN FU RTHER APPEAL BEFORE US. 4. HAVING HEARD, THE RIVAL CONTENTIONS, AND HAVING PERUSED THE MATERIAL ON RECORD, WE ARE INCLINED TO ACCEPT THE PLEA OF THE ASSESSEE. THE DI SALLOWANCE IS ON THE BASIS OF SURMISES AND CONJECTURES, AND, THE OVERALL GP RATIO AND NP RATIO , EVEN WITHOUT TAKING INTO DISALLOWANCES, IS WELL I.T.A. NO.275:/AHD/ 2012 ASSESSMENT YEAR: 2008-09 PAGE 2 OF 3 ABOVE THE NORMAL GP RATES AND NP RATES AS DISCLOSED BY THE ASSESSEE IN THE EARLIER YEARS. A COMPARATIVE CHART OF THE TRADING AND NET RESULTS, A S PLACED AT PAPER BOOK PAGE 1, HAS BEEN PERUSED, AND IT UNAMBIGUOUSLY SUPPORTS THE ABOVE CONCLUSION. IN THE LIGHT OF THESE DISCUSSION WE DELETE THE IMPUGNED DISALLOWANCE OF RS.3,89,425/-. 5. GROUND NO.1 IS THUS ALLOWED. 6. IN THE SECOND GROUND OF APPEAL, THE ASSESSEE IS AGGRIEVED OF LEARNED CIT(A)S UPHOLDING THE DISALLOWANCE OF RS.2,52,164/- ON AD HOC BASIS @ 10% , OUT OF LABOUR CHARGES AND ADMINISTRATIVE EXPENSES. 7. DURING THE SCRUTINY ASSESSMENT PROCEEDINGS THE A SSESSING OFFICER DISALLOWED RS.5,04,329/- BEING 20% OF LABOUR CHARGES AND ADMINISTRATIVE EXPE NSE, ON AD HOC BASIS. IN APPEAL, LEARNED CIT(A) RESTRICTED THE DISALLOWANCE TO RS.2,52,164/-, I.E. 10% OF TOTAL EXPENSES UNDER THIS HEAD. IN PINRIPLE, HOWEVER, DISALLOWANCE WAS CONFIRMED. 8. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING PE RUSED THE MATERIAL ON RECORD, AND PARTICULARLY KEEPING IN MIND OUR OBSERVATION IN PAR AGRAPH 4 ABOVE, THERE IS NO REASON TO UPHOLD THIS DISALLOWANCE EITHER. IN ANY CASE, AS NOTED AT PAGE 8 OF THE CIT(A)S ORDER, IT HAS BEEN UNCONTROVERTED CLAIM OF THE ASSESSEE THAT THE BILLS IN SUPPORT WER E DULY SHOWN TO THE ASSESSING OFFICER, AND YET HE PROCEEDED WITH THE DISALLOWANCE ON THE BASIS OF INC ORRECT FACTUAL OBSERVATION. IN VIEW OF THESE DISCUSSIONS THE DISALLOWANCE OF RS.2,52,164/- IS AL SO DELETED. 9. GROUND NO.2 IS THUS ALSO ALLOWED. 10. AS WE PART WITH THIS MATTER WE MAKE IT CLEAR TH AT THIS DECISION IS ON ITS PECULIAR FACTS AND IT SHOULD NOT BE CONSTRUED AS A SUPPORT FOR THE PROPOS ITION THAT THE DISALLOWANCES ARE REQUIRED TO BE DELETED WHEN GP AND NP RATES ARE REASONABLE VIS-A-V IS THE EARLIER YEAR. 11. IN THE RESULT, THE APPEAL IS ALLOWED. PRONOUNCED TODAY ON 18 TH DAY OF JANUARY, 2016. SD/- SD/- (S. S. GODARA) PRAMOD KUMAR (JUDICIAL MEMBER) (AC COUNTANT MEMBER) AHMEDABAD, THE18TH DAY OF JANUARY, 2016 COPIES TO: (1) THE APPELLANT (2) THE RESPON DENT (3) COMMISSIONER (4 ) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD I.T.A. NO.275:/AHD/ 2012 ASSESSMENT YEAR: 2008-09 PAGE 3 OF 3 1. DATE OF DICTATION: 18/01/2016 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 18/01/2016OTHER 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: 18/1/2016 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: