The ACIT, Circle-7(2), Ahmedabad V. M/s. Japan International, Ahmedabad

ITA 2775/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5795 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 05-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

, *CK *CK*CK *CKH HH H* ** * IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER I.T.A. NO.2775/AHD/2015 ( / ASSESSMENT YEAR : 2011-12) ACIT, CIR 7(2), AHMEDABAD. VS. M/S. JAPAN INTERNATIONAL, RANJIT HOSIERY MILLS COMPOUND, NR. BANSHIDHAR MILLS, NARODA ROAD, AHMEDABAD 382 330 ! PAN/GIR NO. : AABFJ 3465 H ( ' / APPELLANT ) .. ( #' RESPONDENT ) '$ APPELLANT BY : SHRI MUDIT NAGPAL, SR.D.R. #'%$ / RESPONDENT BY : SHRI BANDISH SOPARKAR, A.R. & ' (%) * / DATE OF HEARING 22/03/2018 +,-. %) * / DATE OF PRONOUNCEMENT 27/03/2018 / O R D E R PER MAHAVIR PRASAD, JUDICIAL MEMBER : THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE APPELLATE ORDER OF THE COMMISS IONER OF INCOME TAX(APPEALS)-7, AHMEDABAD [CIT(A) IN SHORT] VIDE APPEAL NO.CIT(A)-7/317/14-15 DATED 30/07/2015 ARISING IN THE ASSESSMENT ORDER PASSED UNDER S.143(3) OF THE INCOM E TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') DATED 28/03 /2014 RELEVANT TO ASSESSMENT YEAR (AY) 2011-12. ITA NO.2775/AHD /2015 M/S. JAPAN INTERNATIONAL ASST.YEAR 2011-12 - 2 - 2. FOLLOWING GROUNDS HAVE TAKEN BY THE ASSESSEE: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.59,33,577/- MADE U/S.145(3) OF THE A CT IGNORING THE REASONS GIVEN BY THE AO IN SUPPORT OF THE DISAL LOWANCE. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION AS ABOVE IN (1) AND HIMSELF HELD THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN REJECTING THE BOOKS OF ACCOUNTS OF THE APPELLANT U/S.145(3). 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- IN THIS CASE, THE ASSESSEE IS A FIRM ENGAGED IN TH E BUSINESS OF MANUFACTURING OF HOSIERY GOODS UNDER THE BRAND NAME 'RANJIT . THE FIRM HAS ITS BRANCH/WORKS AT TIRUPAR ALSO. THE FIRM HAS ALSO RECEIVED INTEREST INCOME ON THE BANK FIXED DEPOSITS. ASSESSE E PURCHASES ITS YARN AND CONVERTS IT INTO GREY CLOTH WHICH SUBSEQUENTLY UNDERGOES THE PROCESS OF KNITTING AND BLEACHING ETC. ASSESSEE IS KEEPING THE STOCK RECORDS IN TERMS OF WEIGHT I.E. KILOGRAM TILL IT GOES FOR CUTT ING AND THEN IT GETS CONVERTED TO UNITS I.E. IN TERMS OF DOZENS. 4. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER, AFTER A DETAILED DISCUSSION IN THE ASSESSMENT ORDER FROM PA GE NO.2 TO PAGE 6, REJECTED THE BOOK RESULTS OF THE ASSESSEE U/S.145 O F THE ACT AND ADDED THE AMOUNT OF RS.59,33,577/- I.E. 15% OF THE SALES TURN OVER OF RS.39,55,71,853/- TO THE TOTAL INCOME OF THE ASSESS EE. ITA NO.2775/AHD /2015 M/S. JAPAN INTERNATIONAL ASST.YEAR 2011-12 - 3 - 5. AGAINST THE SAID ORDER ASSESSEE PREFERRED FIRST STATUTORY APPEAL BEFORE THE LD. CIT(A) WHO ALLOWED THE APPEAL OF THE ASSESSEE. 6. NOW DEPARTMENT IS BEFORE US. 7. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMP UGNED ORDER. THE ISSUE BEFORE US WHETHER ADDITION OF RS.59,33,57 7/- MADE U/S.145(3) OF THE ACT WAS CORRECTLY DELETED BY THE LD. CIT(A) OR NOT. AS WE CAN SEE THAT DURING THE APPELLATE PROCEEDINGS BEFORE THE LD . CIT(A), ASSESSEE MADE DETAILED SUBMISSION ALONGWITH DOCUMENTARY EVID ENCES WITH REGARD TO INPUT/OUTPUT RATIO HAD BEEN FURNISHED AND ASSESS EE ALSO PRODUCED BEFORE THE LD. AO. FURTHER PROCEEDS FROM SALE OF WA STE DURING THE YEAR HAS BEEN ACCOUNTED FOR BY THE APPELLANT AND HAS BEE N INCLUDED AS INCOME FOR THE YEAR. DETAILS OF STOCK HAVE ALSO BEEN FURNI SHED SHOWING THE GENERATION OF WASTE. IT CAN ALSO BE SEEN FROM THE R ECORD THAT THERE IS NO CHANGE IN THE NATURE OF BUSINESS OF ACCOUNTING METH ODS OR IN THE WAY THE BOOKS OF ACCOUNTS ARE MAINTAINED DURING THE YEAR VI S--VIS EARLIER YEARS. IT IS ALSO WORTHWHILE TO MENTION HERE THAT THE GP D URING THE YEAR UNDER CONSIDERATION IS HIGHER THAN THAT IN EARLIER YEARS. LD. AO MADE ADDITION PURELY ON THE BASIS OF AN ESTIMATION I.E 1.5% OF TO TAL TURNOVER. NO JUSTIFICATION OR REASONS HAS BEEN GIVEN FOR ADOPTIN G THIS FIGURE. NO COMPARABLES HAVE BEEN DISCUSSED OR HAVE BEEN REFERR ED TO BY THE AO TO ARRIVE AT THE FIGURE OF 1.5%. APART FROM THIS NO R EASON FOR REJECTING THE BOOKS RESULTS OF THE ASSESSEE WAS THE NON COLLECTIO N OF TCS. THERE WAS NO COMPLIANCE OF PROVISIONS OF SECTION 206C FOR TAX COLLECTION AT SOURCE ITA NO.2775/AHD /2015 M/S. JAPAN INTERNATIONAL ASST.YEAR 2011-12 - 4 - ON SALE OF WASTE OR SCRAP AND SAME IS NOT JUSTIFIAB LE REASON TO REJECT THE BOOKS OF ACCOUNT OF THE ASSESSEE. 8. LD. AR CITED AN ORDER OF APEX COURT IN THE MATTE R OF COMMISSIONER OF INCOME TAX, BIHAR & ORISSA V/S. S.P . JAIN (87 ITR 370)(SUPREME COURT), WHEREIN IT HAS BEEN HELD THAT FAILURE TO TAKE INTO ACCOUNT RELEVANT MATERIAL SUBMITTED ON RECORD AND A CTING WITHOUT ANY EVIDENCES AND CONCLUSION BASED ON CONJECTURES AND S URMISES REQUIRES INTERFERENCE AND ISSUE BE SETTLED IN THE SPIRIT OF LAW. 9. IN THE MATTER OF ACIT VS. ITD CEMENTATION (1) LT D., (2013) (36 TAXMANN.COM 74) (MUMBAI - TRIBUNAL), WHEREIN IT IS HELD THAT WHERE BOOKS OF ACCOUNTS OF THE ASSESSEE WERE AUDITED AND AUDITOR HAD NOT GIVEN ANY ADVERSE COMMENTS IN MAINTENANCE OF BOOKS OF ACC OUNTS OR STOCK REGISTER, IT WAS APPARENT THAT ASSESSEE HAS MAINTAI NED PROPER BOOKS OF ACCOUNTS AND IT WAS WRONG ON THE PART OF ASSESSING OFFICER TO REJECT BOOKS OF ACCOUNTS. 10. IN VIEW OF THE ABOVE SAID DISCUSSION, WE ARE NO T INCLINE TO INTERFERE IN THE ORDER PASSED BY THE LD. CIT(A). IN OUR CONSI DERED OPINION, LD. CIT(A) HAS PASSED DETAILED AND REASONED ORDER. ITA NO.2775/AHD /2015 M/S. JAPAN INTERNATIONAL ASST.YEAR 2011-12 - 5 - 11. IN THE RESULT, APPEAL FILED BY THE DEPARTMENT I S DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 27 / 0 3 /201 8 SD/- SD/- IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LNL; L; L; L; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; (PRAMOD KUMAR) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 27/03/2018 PRITI YADAV, SR.PS !'# $#! COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #' / THE RESPONDENT. 3. 012) & 3) / CONCERNED CIT 4. & 3) 45 / THE CIT(A)- 7, AHMEDABAD. 5. 67 8)'12 *12. 0 / DR, ITAT, AHMEDABAD 6. 8 9: ( GUARD FILE. % & / BY ORDER, # 6)) //TRUE COPY// '/ & () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 23/03/2018(DICTATION-PAD 3 PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 26/03/2018 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 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 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER