ITO 25(2)(2), MUMBAI V. YOGESH RAJENDRA SANCHETI, MUMBAI

ITA 2771/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88541 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 11-02-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 09-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PAVAN KUMAR BEER LA
• Section: 133(6); 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI , ,, , !' !' !' !' '''# '''# '''# '''#$ $$ $ % % % % BEFORE SHRI B R BASKARAN, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITAS NO. : 2771 & 2772/MUM/2013 (ASSESSMENT YEARS: 2008-09 & 2009-10) INCOME-TAX OFFICER-25(2)(2), C-11, BLDG., ROOM NO. 106, PRATYAKSHKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA(E), MUMBAI-400020 VS SHRI YOGESH RAJENDRA SANCHETI, PRATAMESH TOWER, 1603, 16 TH FLOOR, NEW LINK ROAD, OPP. DON BOSCO SCHOOL, BORIVALI- WEST, MUMBAI -400 092 .: PAN: AHEPS 6566 L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PAVAN KUMAR BEERLA RESPONDENT BY : SHRI RAKESH JOSHI ! ' #$ /DATE OF HEARING : 11-02-2015 %&' ' #$ / DATE OF PRONOUNCEMENT : 04-03-2015 & & & & ORDER '''# '''# '''# '''# , , , , : :: : PER VIVEK VARMA, JM: THE TWO APPEALS ARE FILED BY THE DEPARTMENT AGAINST THE ORDERS OF CIT(A) 35, MUMBAI, BOTH THE ORDERS DATED 22.01.2013. 2. SINCE BOTH THE IMPUGNED ORDERS ARE GERMANE TO SOLITARY ISSUE, THE CASES ARE TAKEN UP TOGETHER. WE, THEREFORE, AR E DISPOSING OFF BOTH THE CASES THROUGH THIS CONSOLIDATED AND COMMON ORDER, FOR THE SAKE OF CONVENIENCE AND BREVITY. ITA NO. 2771/MUM/2013 : 3. THE FOLLOWING GROUNDS ARE TAKEN: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN RESTRICTING THE NET PROFIT SHRI YOGESH RAJENDRA SANCHETI ITAS 2771 & 2772 /MUM/2013 2 ADDITION @ 1% TO GROSS PROFIT ADDITION @ 0.40% WITH OUT GIVING ANY COGENT REASON FOR DOING SO. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CI T(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO B E RESTORED. 3. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND. 4. THE FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND IS TRADING IN DIAMONDS AND GOLD UNDER THE NAME M/S RATAN EXPORTS. 5. IN THE ASSESSMENT PROCEEDINGS, THE AO ESTIMATED THE GP RATE OF 1% ON TOTAL TURNOVER ON ADHOC BASIC AND ESTIMATED THE ASSESSEE GP AT RS. 58,50,265/-. 6. IN THE APPEAL BEFORE THE CIT(A), THE CIT(A) RESTRICTED T HE GP AT .40% IN PLACE OF 1%, ALLOWING PART RELIEF. IN THE APPEAL BEFORE THE ITAT, WE FIND, THAT THE CIT(A) IN FACT FOLLOWED THE DECISION OF HIS PREDECESSOR IN PRECEDING YEAR, IN ASSESSMENT YEAR 2007-08. THIS CASE WAS TAKEN TO THE ITAT BY THE DEPARTMENT AND IN ITA NO. 8053/MUM/2010, THE COORDINATE BENCH AT MUMBA I IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2007-08 HELD, AFTER CAREFULLY CONSIDERING THE RELEVANT FINDINGS OF THE AO AND THE CIT(A), WE FIND THAT SO FAR AS REJECTION OF BOOKS OF ACCOUNT AND INVOKING OF SECTION 145 IS CONCERNED, THE CIT(A) HAS RIGHTLY UPHELD THE CONCLU SION OF THE AO. HOWEVER, HE HAS REDUCED THE ESTIMATION O F G.P RATE FROM 1% TO 0.40% ON THE GROUND THAT IN THE EARLIER PRECEDING YEAR THE ASSESSEE HAD SHOWN GROSS PROFIT OF 0.37%. WITHOUT THEIR BEING ANY COMPARABLE CASE OR ANY ADVERSE MATERIAL BROUGHT ON RECORD BY THE DEPARTMENT REGARDING APPLICATION OF G.P RATE OF 1%, WE DO NOT FIND ANY REASON TO DEVIATE FROM THE CONCLUSI ON DRAWN BY THE CIT(A). ACCORDINGLY THE ORDER OF THE C IT(A) CONFIRMATION THE ADDITION TO THE EXTENT OF RS. 10,6 2,488/- AND DELETING THE BALANCE ADDITION IS AFFIRMED. 7. SINCE THE ISSUE AND FACTS ARE IDENTICAL, THE AR SUBMITT ED THAT THE DECISION TAKEN BY THE COORDINATE BENCH OF THE ITAT, MAY BE FOLLOWED IN THE INSTANT CASE AS WELL. 8. THE DR PLACED RELIANCE ON THE DECISION OF THE AO, HOWEVER, HE AGREED THAT THE ORDER OF THE ITAT SHOULD BE FOLLOWED. SHRI YOGESH RAJENDRA SANCHETI ITAS 2771 & 2772 /MUM/2013 3 9. AFTER GOING THROUGH THE ORDERS, AND THE ORDER OF THE ITAT, WHEREIN, THE CIT(A) IN 2007-08 SUSTAINED THE AD-HOC GP A T .40% AS DONE BY THE ITAT, WE DO NOT FIND ANY REASON TO DISTU RB THE ORDER OF THE CIT(A), WHICH WE SUSTAIN. CONSEQUENTIALLY, THE APPEAL AS FILED BY THE DEPARTMENT IS REJECTED. 10. GROUND NO. 1 IS REJECTED. 11. GROUND NO. 2 IS GENERAL. 12. AS A RESULT, THE APPEAL AS FILED BY THE DEPARTMENT IS DISMISSED. ITA NO. 2772/MUM/2013 : 13. IN THE INSTANT APPEAL/CASE, FACTS ARE IDENTICAL TO THE FACTS AS IN ASSESSMENT YEAR 2007-08 & 2008-09, BUT IN THE INS TANT YEAR. THE ASSESSEE HAD DECLARED GP AT .52%, AGAINST WHICH THE AO HAD ESTIMATED THE GP AT 1%. 14. WHILE DECIDING THE APPEAL, THE CIT(A) OBSERVED, I HAVE CONSIDERED THE SUBMISSIONS OF THE REPRESENT ATIVE AND THE STAND TAKEN BY THE AO. IT IS TRUE THAT THE APPELLANT HAS PRODUCED-PURCHASE/SALE REGISTER BEFOR E THE AO AND HAD PRODUCED THE PARTIES FROM WHOM THE NOTICES U/S 133(6) HAVE BEEN UNSERVED, ALONG WITH CONFIRMATIONS FROM THESE PARTIES. SINCE THE SALES A ND PURCHASE HAVE BEEN CONFIRMED, THE QUESTION OF CONSIDERING GROSS PROFIT @ 1% DOES NOT ARISE. THE APPELLANT HAS FILED GROSS PROFIT RATIO CHART AS WEL L AS NET PROFIT RATIO CHART FOR 3 YEARS WHICH IS REPRODU CED HERE AS UNDER: SR.NO. ASST. YEAR GROSS PROFIT RATIO NET PROFIT RATIO 1 2009 - 2010 0.52% 0.10% 2 2008 - 2009 0.12% 0.07% 3 200 7 - 2008 0.24% 0.04% FROM THE TABLE IT IS SEEN THAT THE GROSS PROFIT RAT IO IN THE PRESENT CASE IS 0.52% AS COMPARED TO AY 2007-08 WHE RE IT WAS 0.24% AND WHICH MY PREDECESSOR IN APPELLATE ORDER DATED 09.09.2010 HAD RESTRICTED THE ADDITION OF 1% GROSS PROFIT RATIO TO 0.40%. SINCE IN THE PRESENT A Y, GROSS PROFIT RATIO ITSELF IS EXCEEDING 0.40% AND HA S BEEN WORKED OUT AT 0.52%, THE QUESTION OF MAKING FURTHER SHRI YOGESH RAJENDRA SANCHETI ITAS 2771 & 2772 /MUM/2013 4 ADDITION OVER AND ABOVE THE SAME DOES NOT ARISE. FOLLOWING THE EARLIER TREND OF THE ADDITION BY THE AO AND RESTRICTION OF ADDITION BY MY PREDECESSOR, SINCE TH E GROSS PROFIT RATIO IN THE PRESENT CASE IS HIGHER, I T DOES NOT REQUIRE ANY FURTHER ADDITION. THEREFORE THE ADD ITION OF RS. 26,18,030/- MADE BY THE AO ON ESTIMATED BASI S IS DELETED. 15. THE CIT(A) DELETED THE ADDITION ON ADHOC ESTIMATION OF 1%. 16. AGAINST THIS ORDER OF THE CIT(A) THE DEPARTMENT IS IN APPEAL BEFORE THE ITAT. 17. BEFORE US THE DR RELIED ON THE ORDER OF THE AO, WHERE AS THE AR RELIED ON THE ORDER OF THE CIT(A). 18. WE HAVE HEARD THE ARGUMENTS OF THE CONTENDING PART IES AND HAVE PURSUED THE ORDERS OF THE REVENUE AUTHORITIES . ON GOING THROUGH THE ORDER OF CIT(A), WE FIND THAT THE CIT(A) HAS BASED HIS DECISION ON THE FACTS ONLY. HE CAME TO THE CON CLUSION THAT IN THE INSTANT CASE THE GP IS EVEN HIGHER THEN, WHA T HAS BEEN SETTLED AND ACCEPTED BY HIM/HIS PREDECESSOR. THE CIT(A) BASED HIS DECISION ON THE TABLE AS PREPARED BY HIM SHOWIN G TP & NP IN ASSESSMENT YEAR 2007-08, 2008-09 & 2009-10. 19. SINCE THE GP & NP HAVE BEEN DECLARED MORE THAN .40% (AS ADOPTED BY THE ITAT IN ASSESSMENT YEAR 2007-08 & 200 8-09), WE DO NOT FIND ANY REASON TO DEVIATE FROM THE FINDINGS ARRIVED AT BY THE CIT(A), WHICH WE SUSTAIN AND CONSEQUENTIALLY REJECT TH E GROUND TAKEN BY THE DEPARTMENT. 20. GROUND NO. 1 IS THEREFORE REJECTED. 21. GROUND NO. 2 IS GENERAL. 22. AS A RESULT, THE APPEAL AS FILED BY THE DEPARTMENT IS DISMISSED. SHRI YOGESH RAJENDRA SANCHETI ITAS 2771 & 2772 /MUM/2013 5 TO SUM-UP: BOTH THE APPEALS AS FILED BY THE DEPARTMENT IN ITAS NO. 2771 & 2772/MUM/2013 STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04/03/2015. SD/- SD/- ( ) ( '''# '''# '''# '''# ) + + + + ,! ,! ,! ,! + + + + (B R BASKARAN) ( VIVEK VARMA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 04/03/2015 #/ COPY TO:- 1) / THE APPELLANT. 2) / THE RESPONDENT. 3) THE CIT(A) -35, MUMBAI. 4) THE CIT-25, MUMBAI/CIT -25, MUMBAI. 5) / THE D.R. G BENCH, MUMBAI. 6) -./ 0! COPY TO GUARD FILE. 1+ / BY ORDER / / TRUE COPY / / 2 / 3 1 4' , ! DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN, SR.PS