ACIT, Agra V. M/s Bajwa Rubber Industries, Agra

ITA 287/AGR/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 9128 (ITAT-AGRA)
• Duration Of Justice: 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 10-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R SAHU

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, SMC, AGRA BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER ITA NO.287/AGR/2009 ASST. YEAR: 2006-07 ASSTT. C.I.T., CIRCLE-1, VS. M/S. BAJWA RUBBER INDUSTRIES, AGRA. UNIT-2, SIKANDRA INDUSTRIAL AREA, MATHURA ROAD, AGRA. (PAN : AAAFB 9650 M). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.R. SAHU, JR. D.R. RESPONDENT BY : SHRI ANIL VERMA, ADVOCATE ORDER THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A) DATED 30.04.2009 BY TAKING THE FOLLOWING EFFECTIVE GROUND S OF APPEAL :- 1. THAT THE CIT (APPEALS)-1, AGRA HAS ERRED IN LAW AND ON FACT IN DELETING ADDITION OF RS.27,65,919/- MADE ON ACCOUNT OF ESTIM ATION OF SALES ON THE BASIS OF IMPUGNED ATTENDANCE REGISTER, WITHOUT PROPERLY APPR ECIATING THE FACTS OF THE CASE; 1.(B) THAT THE CIT(APPEALS)-1, AGRA HAS ERRED IN LA W AND ON FACTS IN DELETING THE AFORESAID ADDITION SIMPLY ON THE BASIS THAT THE IMPUGNED ENTRIES IN ATTENDANCE REGISTER PERTAIN TO F.Y. 2006-07, IGNORING THE OTHE R REASONS MENTIONED IN THE ASSESSMENT ORDER FOR REJECTION OF ACCOUNT BOOKS AND ESTIMATION OF SALES. 2. THE BRIEF FACTS OF THE CASE ARE THAT SURVEY WAS CONDUCTED IN THE PREMISES OF THE ASSESSEE ON 23.08.2006. SEVERAL PAPERS WERE FOUND IN THE PR EMISES OF THE ASSESSEES SISTER CONCERN M/S. M.R. INDUSTRIES WHICH WERE INVENTORISED AND IMPOUND ED AS ANNEXURE A-16. THIS PAPERS CONSIST OF ONE NAVRANG REGISTER DENOTED AS ANNEXURE A-9 FOU ND FROM THE PREMISES OF M/S. M.R. INDUSTRIES, ON WRITTEN PAGES 1 TO 4 THEREOF, THERE WAS A LIST OF 25 EMPLOYEES AND 8 NIGHT WORKERS AS IN MAY, 2006. THE A.O. NOTED THAT IN THE RECORD THE ASSESSEE HAS SHOWN ONLY 12 WORKERS IN 2 THE IMPUGNED ASSESSMENT YEAR (A.Y.) WHILE IN THE MO NTH OF MAY 2006 IN THE ATTENDANCE REGISTER THERE WERE IN ALL 33 EMPLOYEES. HE, THEREFORE, TOO K THE VIEW THAT THE ASSESSEE HAS NOT ACCOUNTED FOR THE SALARIES OF ABOUT 20 EMPLOYEES AND ACCORDIN GLY REJECTED THE SALES AS PER THE BOOKS SHOWN BY THE ASSESSEE. THE A.O. ESTIMATED THE SALES AT R S.1 CRORE AND APPLIED A NET PROFIT RATE @ 4.77% BEING THE AVERAGE OF THE A.YS. 2003-04, 2004-05 & 2 005-06. WHILE, THE ASSESSEE HAS SHOWN A LOSS AT RS.23,01,409/-. THUS, THE INCOME OF THE AS SESSEE WAS ESTIMATED AT RS.4,77,000/-. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT (A) DELETED THE ADDITION BY OBSERVING AS UNDER :- I HAVE CONSIDERED THE RELEVANT FACTS AND RIVAL CON TENTIONS AND FIND THAT THE IMPUGNED ATTENDANCE REGISTER ON THE BASIS OF WH ICH UNRECORDED SALES HAVE BEEN ESTIMATED BY THE AO PERTAINS TO FINANCIAL YEAR 2006-07, RELEVANT TO A.Y. 2007-08. HENCE, NO INFERENCE ON THE BASIS OF SUCH DOCUMENT CAN BE DRAWN IN THE APPELLANTS CASE FOR THE PRECEDING FINANCIAL YEAR W HICH IS UNDER CONSIDERATION. FURTHER, THERE IS NO MATERIAL OR EVIDENCE ON RECORD TO SHOW THAT THE APPELLANT HAD TAXABLE INCOME OF RS.4,77,000/- AS AGAINST THE RETU RNED LOSS OF RS.22,88,919/-. UNDER THESE CIRCUMSTANCES, THE AO IS DIRECTED TO AS SESS LOSS AS PER RETURN. 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL ON RECORD. I HAVE ALSO PERUSED THE PAPERS IMPOUNDED DURING THE SEARCH, COP IES OF WHICH WERE FILED BEFORE ME. I NOTED THAT THE NAVRANG ATTENDANCE REGISTER, BEING ANNEXUR E A-9, ON THE BASIS OF WHICH THE A.O. HAS ESTIMATED THE SALES DURING THE YEAR AND REJECTED TH E EMPLOYEES OF THE ASSESSEE, RELATES TO MAY, 2006 AND DOES NOT RELATE TO THE A.Y. UNDER CONSIDER ATION. THUS, THIS REGISTER SPEAKS OF THE EMPLOYEES OF THE ASSESSEE AS 25 AND 8 NIGHT WORKERS IN THE MONTH OF MAY, 2006 AND NOT IN THE YEAR UNDER CONSIDERATION. THE SURVEY WAS TAKEN PLA CE AS ON 23.08.2006. THE PAPERS SO SEIZED DOES NOT RELATE TO THE A.Y. UNDER CONSIDERATION. U NDER THESE CIRCUMSTANCES, IN MY OPINION, NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE CIT( A) AND THE CIT(A), IN MY OPINION, HAS RIGHTLY DELETED THE ADDITION MADE BY THE A.O. I ACCORDINGL Y CONFIRM THE ORDER OF THE CIT(A). 3 ITA NO.287/AGR/2009 ASST. YEAR: 2006-07 4. IN THE RESULT, APPEAL OF THE REVENUE STANDS DISM ISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 12.02.2010). SD/- (P.K. BANSAL) ACCOUNTANT MEMBER PLACE: AGRA DATE: 12 TH FEBRUARY, 2010. PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR, ITAT, AGRA BENCH, AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE T RIBUNAL, AGRA TRUE COPY