Jain Bulk Pack, Ahmedabad V. The ITO, Ward-5(3)(4), Ahmedabad

ITA 2846/AHD/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 4605 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 03-10-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 15-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NK GOEL
• Assessee Lawyers: RUCHIKA NAGAR
• Keywords: Depreciation
• Section: 143(3); 244A; 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER JAIN BULK PACK, 229, NEW CLOTH MARKET, O/S. RAIPUR GATE, RAIPUR, AHMEDABAD PAN: AAHFJ6069M (APPELLANT) VS THE IT O , WARD - 5 ( 3 )(4) , AHMEDABAD (RESPONDENT) REVENUE BY : S H RI N.K. GOEL , SR. D . R. ASSESSEE BY: MS. RUCHIKA NAGAR , A.R. DATE OF HEARING : 03 - 10 - 2 019 DATE OF PRONOUNCEMENT : 14 - 11 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2014 - 15 , ARI SES FROM ORDER OF THE CIT(A), AHMEDABAD - 5, DATED 15 - 11 - 2 017 , IN PROCEEDINGS UNDER SECTION 1 4 3(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE HAS RAISED FOLLOWING GROUND OF APPEAL: - 1. THE LD. CIT(A) - 5 HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE NET PROFIT OF THE APPELLANT AT 0.25% OF THE TOTAL TURNOVER AS AGAINST 0.5% ESTIMATED BY THE AO. 2. THE LD. CIT(A) - 5 HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS. 14,638/ - ON THE GROUND THAT INT EREST U/S 244A OF THE ACT HAS BEEN RECEIVED AND NOT OFFERED FOR TAXATION BY THE APPELLANT. 3. THE LD. CIT(A) - 5 HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF THE AO OF DISALLOWING A SUM OF RS. 31,274/ - U/S 36(1 )(VA) OF THE ACT ON ACCOUNT OF DELAYED PAYMENTS OF PF / ESIC. I T A NO . 2846 / A HD/20 17 A SS ESSMENT YEAR 2014 - 15 I.T.A NO. 2846 /AHD/20 17 A.Y. 2014 - 15 PAGE NO JAIN BULK PACK VS. IT O 2 4. THE LD. CIT(A) - 5 HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF CLAIM OF DEPRECIATION OF RS. 28,380/ - MADE BY THE AO. 5. WITHOUT PREJUDICE TO ABOVE, THE LD. CIT(A) - 5 HAS ERRED IN LAW AND ON FACTS IN RE JECTING THE ALTERNATE PLEA THAT NO OTHER ADDITION/ DISALLOWANCE CAN BE MADE IN THE EVENT OF ESTIMATION OF NET PROFIT. 3. THE ASSESSEE HAS FILED RETURN OF INCOME DECLARING INCOME AT RS. 2 , 43 , 577/ - ON 30 TH SEP, 2014. THE CASE WAS SUBJECT TO SCRUTINY A SSESSMENT AND ORDER U/S. 143(3) OF THE ACT WAS PASSED ON 4 TH NOV, 2016. THE ASSESSEE HAS FILED TH E AFORESAID GROUNDS OF APPEAL AGAINST THE VARIOUS ADDITION S AND THE SAME ARE ADJUDICATED AS UNDER: - GROUND NO. 1 (CONFIRMING NET PROFIT AT 0.25%) 4. DURI NG T HE C OU RSE OF ASSESSMENT PROCEE DINGS, THE ASSESSING OFFICER ASKED THE ASSESSEE TO JUSTIFY THE LOW NET PROFIT AND LOW INCOME RECORDED DURI NG THE YEAR UNDER CONSIDERATION. T HE ASSESSEE HAS SUBMITTED THE COMPARATIVE DETAIL OF MAJOR EXPENSES FOR FINANCIAL YEAR 2012 - 13 AND 2013 - 14 AND ASSE SSMENT YEAR 2014 - 15. T HE ASSESSING OFF ICER OBSERVED THAT THE TURN - OVER OF THE ASSESSEE HAS DECLINED FROM RS. 92.48 CRORE TO RS. 29.88 CRORE FROM PRECEDIN G ASSESSMENT YEAR, HOWEVER, THE CORRESPONDENCE EXPENSES HAS NOT DECR EASED . THE ASSESSING OFFICER HAS WORKED OUT THE INC R EASE IN EXPENSES TO 19 1% AND D ECREASE IN THE TURN OVER TO 209% COMPARED TO THE PRECEDING YEAR . THE ASSESSING OFFICER STATED THAT ASSESSEE HAS NOT PRODUCED THE ENTIRE BOOKS OF ACCOUNT AND LEDGER ACCOUNT AND SUPPORTING BILL AND VOUCHER , THEREFORE, THE NET PROFIT OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION WAS ESTIMATED AT 0. 5 0 % OF THE TOTAL TURNOVER AS AGAINST THE NET PROFIT OF 0.07% SHOWN BY THE ASSESSEE. ACCORDINGLY , AN ADDITION O F RS. 12 , 94 , 398/ - WAS MADE TO THE TOTAL INCOME OF THE ASSESSEE. I.T.A NO. 2846 /AHD/20 17 A.Y. 2014 - 15 PAGE NO JAIN BULK PACK VS. IT O 3 5. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). T HE LD. CIT(A) HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY RESTRICTING THE ADDITION TO 0.25% AS AGAINST 0.5% ESTIMATED BY THE ASSESSING OF FICER. 6. WE HAVE HEARD THE RIVAL CONTENTION ON THIS ISSUE. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER HAS ESTIMATED THE NET PROFIT OF THE ASSESSEE AT 0.5% ON ACCOUNT OF LOW TURNOVER AND INCREASE OF EXPENSES COMPARED TO THE PRECEDING YE AR. IN THIS REGARD, THE ASSESSEE HAS EXPLAINED THAT THE TURNOVER OF THE ASSESSEE HAS BEEN DECREAS ED FROM 92 CRORE TO 29 CRORE, H OWEVER, FIXED NATURE OF EXPENSES REMAINED SAME AND BECAUSE OF FIXED COST THERE WAS FALL IN THE GROSS PROFIT. IT IS ALSO BROUG HT TO OUR NOTICE THAT IN THE EARLIER YEAR , THE NET PROFIT @ 0.16% WAS ACCEPTED BY THE ASSE SSING OFFICER IN THE ASSESSMENT COMPLETED U/S. 143(3) OF THE ACT . IT IS ALSO CONTENDED THAT ALL THE MAJOR INCOME AND EXPENSES ALONG WITH SUPPORTING MATERIALS WERE P RODUCED BEFORE TH E ASSESSING OFFICER HOWEVER THE SAME WAS NOT OBJECTIVELY CONSIDERED BY THE ASSESSING OFFICER. CONSIDERING THE ABOVE FACTS AND CIRCUMSTANCES , WE ARE OF THE VIEW THAT IT WILL BE REASONABLE TO ESTIMATE THE NET PROFIT OF THE ASSESSEE @ 0.16% OF THE TURN - OVER. ACCORDINGLY , THE ASSESSING OFFICER IS DIRECTED TO ESTIMATE THE NET PROFIT @ 0. 1 6% AS AGAINST 0.25% ESTIMATED BY THE LD. CIT(A), THEREFORE, THIS GROUND OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. GROUND NO . 2(C ONFIRMING ADDITION OF RS. 14 ,638/ - U/S. 244 A OF THE ACT) 7. DURING THE COURSE OF ASSES SMENT, THE ASSESSING OFFICER NOTICED THAT ASSESSE E HAS RECEIVED INTEREST U/S. 244 A TO THE AMOUNT OF RS. 14 , 588/ - . THE ASSESSING OFFICER WAS OF THE VIEW THAT ASSESSEE HAS NOT OFFERED THIS INT EREST I.T.A NO. 2846 /AHD/20 17 A.Y. 2014 - 15 PAGE NO JAIN BULK PACK VS. IT O 4 INCOME IN THE YEAR UNDER CONSIDERATION, THEREFORE, THE SAME WAS ADDED TO THE TOTAL INCOME OF THE ASSSESSEE OF THE ASSESSEE. 8. AGGRIEVED ASSESSEE HAS FILED APPEAL B E FORE THE LD. CIT(A). T HE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASESSEE. 9. WE HAVE HEARD THE RIVAL CONTENTION ON THIS ISSUE. THE LD. COUNSEL HAS CONTENDED THAT ASSESSEE HAS INCLUDED THE AFORESAID INTEREST AMOUNT OF REFUND IN THE INTEREST INCOME SHOWN UNDER THE HEAD OTHER INCOME IN THE P & L ACCOUNT FOR THE YEAR ENDING 3 1 ST MARCH, 2014. WITH THE ASSISTANCE OF LD. REPRESENTATIVES, WE HAVE GONE THROUGH THE PAPER BOOK FILED BY THE ASSESSEE AND NOTICED THAT AT PAGE NO. 21, THE ASSESSEE HAS SHOWN SCHEDULE NO.11 WHICH IN CLUDE INTEREST INCOME OF RS. 15 , 188/ - AND FURTHER ON PAGE NO. 38 OF THE PAPER BOOK, THE ASSESSEE HAS GIVEN THE DETAILED INTEREST INCOME INCLUDING INCOME TAX REFUND OF RS. 14 , 638/ - . CONSIDERING THE AFORESAID UNDISPUTED FACT, THE APPEAL OF THE ASSESSEE IS ALLOWED ON THIS ISSUE. GROUND NO. 3 (DISALLOWANCE OF RS. 31 , 274/ - U/S. 36(1)(VA) ON ACCOUNT OF DELAYED PAYMENT OF PF & ESIC) 10. DURING THE COURSE OF ASSES SMENT, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS NOT DEPOSITED THE EMPLOYEE S CONTRIBUTION TOWARDS PF AND OTHER FUNDS WITHIN THE STIPULATED TIME, T HEREFORE, AN AMOUNT OF RS. 31 , 274/ - IN RESPECT OF EMPLOYEE S PROVIDENT FUND CONTRIBUTION WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE U/S. 2(24)(X ) R.W.S. 36(1)(VA) OF THE ACT. 11. ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HA S DISMISSED THE APPEAL OF THE ASSESSEE. I.T.A NO. 2846 /AHD/20 17 A.Y. 2014 - 15 PAGE NO JAIN BULK PACK VS. IT O 5 12. WE HAVE HEARD THE RIVAL CONTENTION ON THIS ISSUE. IT IS UNDISPUTED FACT THAT ASSESSEE HAS NOT DEPOSITED THE EMPLOYEE S CONTRIBUTION TOWARDS PF TO THE GOVERNMENT ACCOUNT WITHIN THE DUE DATE PRESCRIBED UNDER T HE PROVIDENT FUND ACT, THEREFORE, CONSIDERING THE DECISION OF HON BLE G UJARAT HIGH C OURT IN THE CASE OF CIT VS. GUJARAT STATE ROAD TRANSPORT CORPORATION TAX APPEAL NO. 637 OF 2013, WE DO NOT FIND ANY SUBSTANCE IN THIS GROUND OF APPEAL OF THE ASSESSEE, THER EFORE , THE SAME STANDS DISMISSED. GROUND NO. 4(DISALLOWANCE OF CLAIM OF DEPRECIATION OF RS. 28 , 380/ - ) 13. DURING THE COURSE OF ASSESSMENT , THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS FAILED TO PRODUCE SUPPORTING BILL AND VOUCHER FOR PURCHASE OF N EW ASSETS, THEREFORE, THE C LAIM OF THE DEPRECIATION ON THE NEW ASSETS TO THE AMOUNT OF RS. 28 , 3 80/ - WAS DISALLOWED AS UNDER: - SR. NO. NEW ASSETS AMOUNT BLOCK OF % DEPRECIATION HYDRAULIC HAND PALLET TRUCK 32345 15 4,852 2 PUMP MOT OR 16100 15 2,415 3 SEWING MACHINE 14497 15 2,174 4 S.S. TABLE 53857 15 8,078 5 STAND TABLE 22176 15 3,326 6 INK MIXER 23628 15 3,544 7 ELEC. INSTALLATION 26607 15 3,991 TOTAL 28,380 14. THE ASSESSEE HAS FI L E D APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL. 15. WE HAVE HEAD RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. DURING TH E COURSE OF ASSES SMENT, THE ASSESSING OFFICER NOTICED THAT ASSESSEE I.T.A NO. 2846 /AHD/20 17 A.Y. 2014 - 15 PAGE NO JAIN BULK PACK VS. IT O 6 HAS CLAIMED DEPRECIATION OF RS. 28 ,38 0 ON THE NEWLY PURCHASE D ASSET S , H OWEVER , THE ASSESSEE HAS FAILED TO FURNISH CORRESPONDING BILL AND VOUCHER, T HEREFORE, THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF DEPRECIATION OF RS. 28,3 8 0 / - . CONSIDERING THE ABOVE UNDISPUTED FACT THA T ASSESSEE HAS FAILED TO PRODUCE THE PRIMARY DOCUMENT I.E. BILL AND VOUCHER FOR PURCHASE OF ASSETS BEFORE THE LOWER AUTHORITIES AND EVEN DURING THE COURSE OF APPELLATE P ROCEEDINGS BEFORE US, WE DO NOT FIND ANY FORCE IN THE APPEAL OF THE ASSESSEE AND THE S AME STANDS DISMISSED. 16. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 14 - 1 1 - 201 9 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 14 /1 1 /2019 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,