DCIT, Jaipur V. GEM INDIA EXPORT, Jaipur

ITA 283/JPR/2011

• Counselvise Citation: 28323114 RSA 2011
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 31-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K MEENA
• Assessee Lawyers: G G MUNDRA

Judgement Text

1 ITA 283(2)-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 283 & 284/JP/2011 ASSTT. YEAR : 2003-04 & 2004-05. THE DCIT, CIRCLE-2, VS. M/S. GEM INDIA EXPORT, JAIPUR. 4780, KGB KA RASTA, JAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI D.K. MEENA RESPONDENT BY : SHRI G.G. MUNDRA ORDER DATE OF ORDER : 28/07/2011. PER BENCH : THE DEPARTMENT IS OBJECTING IN DELETING THE PENALT Y OF RS. 6,45,058/- AND RS. 5,80,385/- LEVIED BY AO UNDER SECTION 271(1)(C) FOR ASSESSMENT YEARS 2003-04 AND 2004- 05 RESPECTIVELY. 2. ON ACCOUNT OF UNVERIFIABLE PURCHASE THE TRADING ADDITIONS OF RS. 34,12,657/- AND RS. 21,63,184/- WERE MADE BY THE AO FOR ASSESSMENT YEARS 2003-04 AND 04-05 RESPECTIVELY. NOTICE UNDER SECTION 271(1)(C) WAS AL SO ISSUED. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE AO WAS NOT SATISFI ED AS IN HIS VIEW THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS TO CONCEAL THE INC OME, THEREFORE, HE LEVIED THE IMPUGNED ADDITION FOR BOTH THE YEARS. IT WAS CONTENDED BEFO RE LD. CIT (A) THAT THE ADDITION WAS MADE BY INVOKING PROVISIONS OF SECTION 145(3) AND T HE AO APPLIED 31% AND 26% GROSS PROFIT RATE AS AGAINST 27.47% AND 23.22% DECLARED BY THE ASSESSEE FOR ASSESSMENT YEARS 2 2003-04 AND 2004-05 RESPECTIVELY. IN SECOND APPEAL GROSS PROFIT RATE OF 31% WAS REDUCED TO 28% AND GROSS PROFIT RATE OF 26% WAS RED UCED TO 24% RESPECTIVELY. IT WAS SUBMITTED THAT ASSESSEE HAS NOT CONCEALED ANY FACTS OR PARTICULARS AS COMPLETE DETAILS OF UNVERIFIABLE PURCHASES I.E. PURCHASE VOUCHERS, PAYM ENT PROOF WERE FILED. THE NAME AND ADDRESS OF THE PARTIES SHOWING THEIR PAN NUMBER WAS FILED. THEREFORE, THIS IS NOT A CASE OF FURNISHING INACCURATE PARTICULARS. THE LD. CIT (A) AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, FOUND THAT THE TRADING ADDITION HAS BEEN REDUCED TO 28% AND 24% FOR BOTH THE YEARS RESPECTIVELY. NOTHIN G HAS BEEN BROUGHT ON RECORD THAT WHICH INACCURATE PARTICULARS FURNISHED BY THE ASSES SEE. ALL THE DETAILS IN RESPECT TO PURCHASES WERE FILED AND TRADING ADDITION MADE ON E STIMATE BASIS DOES NOT ATTRACT PENALTY PROCEEDINGS, THEREFORE, HE CANCELLED THE LEVY OF PE NALTY FOR BOTH THE YEARS. 3. NOW THE DEPARTMENT IS IN APPEAL HERE BEFORE THE TRIBUNAL FOR BOTH THE YEARS. 4. THE LD. D/R PLACED RELIANCE ON THE ORDER OF A.O. 5. ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSEE P LACED RELIANCE ON THE ORDER OF LD. CIT (A). FURTHER, BRIEF NOTE IN THE SHAPE OF WRITT EN SUBMISSIONS WAS ALSO FILED. 6. AFTER CONSIDERING THE ORDERS OF THE AO AND LD. C IT (A) AND SUBMISSIONS, WE FIND THAT THERE IS NO INFIRMITY IN THE ORDER OF LD. CIT (A). ADDITION SUSTAINED IS ONLY ON ACCOUNT OF ENHANCING THE GROSS PROFIT AGAINST GROSS PROFIT RATE DECLARED BY THE ASSESSEE. IT\ MEANS THE ADDITION HAS BEEN SUSTAINED ON ESTIMATION BASIS. ALL THE DETAILS RELATING TO THE PURCHASES WERE FILED. THEREFORE, WE ARE OF THE VIE W THAT LD. CIT (A) WAS JUSTIFIED IN CANCELING THE LEVY OF PENALTY. SIMILAR VIEW HAS BE EN EXPRESSED IN THE CASE OF PURNIMA DEVI GUPTA, 3 SOT 753 AND IN CASE OF AVON CRANES P. LTD., 1 SOT 607. THEREFORE, IN VIEW OF THESE FACTS AND CIRCUMSTANCES AND IN VIEW OF THE REASONING GIVEN BY LD. CIT (A) 3 WHICH REMAINED UNCONTROVERTED, WE CONFIRM THE CANC ELLATION OF PENALTY FOR BOTH THE YEARS. 7. IN THE RESULT, APPEALS OF THE DEPARTMENT ARE DIS MISSED. 8. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 28. 7.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/- COPY FORWARDED TO :- THE DCIT, CIRCLE-2, JAIPUR. M/S. GEM INDIA EXPORT, JAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 283(2)/JP/2011) BY ORDER, AR ITAT JAIPUR.