ACIT, New Delhi V. M/s. Rathi Bars Ltd, New Delhi

ITA 3003/DEL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 9722 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 20-01-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 26-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `F : NEW DELHI) BEFORE SHRI K.D. RANJAN, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ITA NO.3003/DEL./2009 (ASSESSMENT YEAR : 2001-02) ACIT, CIRCLE 15(1), VS. M/S RATHI BARS LTD., NEW DELHI. 6, SADHANA ENCLAVE, NEW DELHI-110017. (PAN/GIR NO.AAACR0737N) (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SMT. SUNITA SINGH, SR.DR ORDER PER K.D. RANJAN: AM THIS APPEAL BY THE ASSESSEE FOR AY 2001-02 ARISES O UT OF ORDER OF CIT(A)-XVIII, NEW DELHI. IN THIS CASE, ASSESSEES LD.COUNSEL MOV ED ADJOURNMENT APPLICATION WHICH WAS REJECTED HAVING REGARD TO THE ISSUE INVOLVED AN D THE APPEAL IS DECIDED EX-PARTE AFTER HEARING THE LD.SR.DR. 2. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT A SEARCH WAS CONDUCTED BY THE SALES- TAX DEPARTMENT, JAIPUR AT THE FACTORY OF THE ASSESS EE AT KHUSHKHEDA. TAPOKARA, DISTRICT ALWAR. IN SALES-TAX ASSESSMENT ORDER DATED 8.10.20 04 PASSED BY THE ASSISTANT COMMISSIONER (ANTI EVASION), RAJASTHAN CIRCLE III, JAIPUR, IT WAS OBSERVED THAT FOR KHUSHKHEDA UNIT, THE ASSESSEE DECLARED SALES OF RS. 40,45,70,504/- IN ITS ORIGINAL RETURN WHEREAS THE SALES WERE DETERMINED BY THE SALES-TAX AUTHORITY FOR THE PERIOD 1.4.2000 TO 31.3.2001 AT RS.58,64,02,751/-. THIS UNACCOUNTED S ALES TO THE EXTENT OF RS.18,18,32,245/- DETECTED WERE RECORDED IN THE BO OKS OF ACCOUNT OF THE ASSESSEE COMPANY. ON THE BASIS OF THIS INFORMATION, THE AO INITIATED RE-ASSESSMENT PROCEEDINGS U/S 147 WITH THE PRIOR APPROVAL OF CIT, DELHI-V, NE W DELHI. THE COPY OF REASONS RECORDED FOR REOPENING THE CASE WAS PROVIDED TO THE LD.COUNSEL OF THE ASSESSEE. THE AO ON THE BASIS OF SALES-TAX ASSESSMENT TREATED THE SA ME AT RS.18,18,32,245/- AS UNACCOUNTED I.T.A. NO.3003/DEL./2009 A.Y. : 2001-02) 2 SALES ON WHICH GROSS PROFIT @ 4.34% WAS APPLIED WHI CH WAS IN LINE WITH THE AUDIT REPORT FILED BY THE ASSESSEE. THIS RESULTED IN ADDITION O F RS.78,91,519/-. 3. ON APPEAL, IT WAS SUBMITTED BY THE ASSESSEE THAT SALES-TAX ASSESSMENT ORDER DATED 9.2.2007 WHICH FORMED THE BASIS OF REOPENING OF ASS ESSMENT WAS QUASHED BY RAJASTHAN TAX BOARD AT AJMER VIDE ITS ORDER DATED 26.7.2008 A ND ACCORDINGLY THE MATTER STOOD DECIDED IN FAVOUR OF THE ASSESSEE. THE CIT(A) ON C ONSIDERATION OF THE ABOVE FACTS DELETED THE ADDITION BY OBSERVING AS UNDER: I HAVE GONE THROUGH THE RIVAL POSITION CAREFULLY. IN THIS CASE THE ORDER OF AC(ANTI EVASION), RAJASTHAN, CIRCLE III, JAIPUR WAS PASSED AFTER SURVEY WAS CONDUCTED ON THE ASSESSEE. IN THE SAID ORDER THE SALES TAX AUTHORITIES DETERMINED THE SALES AT RS.58,64,02,751/- INSTEAD OF DECLARED SALES RS.40,45,70,504/- BY THE ASSESSEE AT KUSHKHEDA UNIT THEREBY ESTIMATING THE U NACCOUNTED SALES AT RS.18,18,32,245/-. THE SAID ORDER WAS PARTLY CONFI RMED BY DY. COMMISSIONER (APPEALS) VIDE ORDER DATED 7.8.2007 REGARDING TAX D EMAND AND PENALTY. HOWEVER, THE RAJASTHAN TAX BOARD, AJMER IN APPEAL NO.1528/20 07/ALWAR IN ITS ORDER DATED 26.7.2008 ACCEPTED THE APPEAL OF THE APPELLANT AND QUASHED THE ASSESSMENT ORDER DATED 9.2.2007 AND THE C.D.(APPEALS) ORDER DATED 7. 8.2007. AS DISCUSSED ABOVE, THE ORDER OF SALES TAX DEPTT., ON THE BASIS OF WHICH THE A.O. HAD MADE THE ADDITION OF RS.18,18,32,245/- STANDS QUASHED BY THE ORDER OF THE HONBLE RAJASTHAN TAX BOARD. THERE IS NOTHI NG ON RECORD TO SHOW THAT THE ORDER OF THE RAJASTHAN TAX BOARD HAS BEEN APPEALED IN THE HIGHER COURT I.E. IN THE RAJASTHAN HIGH COURT. SINCE THE ORIGINAL ORDER OF THE SALES TAX AUTHORITIES ON THE BASIS OF WHICH THE LD.A.O. HAS MADE THE ADDITION IT SELF STANDS DELETED, IN MY CONSIDERED OPINION, THE ADDITION MADE BY LD.A.O. HA S NO BASIS. THEREFORE, THE APPEAL OF THE APPELLANT ON THIS GROUND IS ALLOWED. THE A.O. IS DIRECTED ACCORDINGLY. 4. WE HAVE HEARD THE LD.SR.DR AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. FROM THE ABOVE FACTS, IT IS CLEAR THAT THE VERY BAS IS ON WHICH THE ASSESSMENT WAS REOPENED DOES NOT SURVIVE AS ON THE DATE. IN OTHER WORDS, T HE SALES-TAX ASSESSMENT ORDER WHEREIN THE ADDITION OF UNACCOUNTED SALES OF RS.18,18,32,24 5/- WAS MADE HAS BEEN DELETED BY THE RAJASTHAN TAX BOARD, AJMER. SINCE THE VERY BASIS O F ADDITION DOES NOT SURVIVE, THE ADDITION MADE UNDER INCOME-TAX PROCEEDINGS ON THE B ASIS OF ESTIMATED GROSS PROFIT ON ESTIMATED SALES DETERMINED BY THE SALES-TAX DEPARTM ENT HAS TO BE DELETED. ACCORDINGLY, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION. HENCE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE CIT(A) DELETING THE ADDITIO N OF RS.78,91,519/-. I.T.A. NO.3003/DEL./2009 A.Y. : 2001-02) 3 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. 6. ORDER PRONOUNCED IN OPEN COURT AFTER THE CONCLUS ION OF THE HEARING OF THE APPEAL ON 20.01.2010. SD/- SD/- (GEORGE MATHAN) (K.D. RANJAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, JANUARY 20, 2010. SKB COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XVIII, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR/ITAT