MANDAKINI FASHIONS, MUMBAI V. ITO WD 17(2)(1), MUMBAI

ITA 3011/MUM/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3424 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-01-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 19-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V S JADHAVDR
• Keywords: Gross profit estimation
• Section: 234B

Judgement Text

, - , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI , ! ' , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, ITA NO.3011/MUM/2015 ASSESSMENT YEAR: 2010-11 MANDAKINI FASHIONS, 126, WADAL UDYOG BHAVAN, NAIGAON CROSS ROAD, WADALA, MUMBAI-400031 / VS. ITO, WARD NO.17(2)(1), PIRAMAL CHAMBERS, MUMBAI-400012 / ASSESSEE / REVENUE P.A. NO. AAPFM9389R $ % & / ASSESSEE BY NONE $ % & / REVENUE BY SHRI V.S. JADHAV-DR / DATE OF HEARING 21/01/2016 & / DATE OF ORDER: 01/02/2016 & / O R D E R THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 19/02/2015 OF THE LD. FIRST APPELLATE AUTHORI TY, MUMBAI. THE ONLY GROUND RAISED IN THIS APPEAL PERT AINS TO UPHOLDING DISALLOWANCE OF RS.5,81,293/- ON ACCOUNT OF LOW GROSS PROFIT MARGIN WITHOUT ASSIGNING ANY REASON AN D ITA NO.3011/MUM/2015 MANDAKINI FASHIONS 2 FURTHER UPHOLDING LEVY OF INTEREST U/S 234B AND 234 C OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT). 2. DURING HEARING OF THIS APPEAL, NOBODY WAS PRESENT FOR THE ASSESSEE, IN SPITE OF ISSUANCE OF R EGISTERED AD NOTICE ISSUED ON 10/11/2015 AND 31/12/2015. THE REGISTERED AD NOTICE ISSUED FOR 15/12/2015 WAS DULY RECEIVED BY THE ASSESSEE AS IS EVIDENT FROM POSTAL ACKNOWLEDGMENT RETURNED BY THE POSTAL AUTHORITIES. THE ASSESSEE DID NOT APPEAR AND THE APPEAL WAS ADJOURNE D TO 23/12/2015. ON THAT DATE ALSO, THE ASSESSEE DID NOT APPEAR, THEREFORE, AGAIN REGISTERED NOTICE WAS SENT TO THE ASSESSEE FOR TODAY I.E. 21/01/2016. THE ASSESSEE NE ITHER REPRESENTED ITSELF NOR MOVED ANY ADJOURNMENT PETITI ON. IT SEEMS THAT THE ASSESSEE IS NOT INTERESTED TO PURSUE ITS APPEAL. IT CANNOT BE KEPT PENDING FOR WANT OF PROSE CUTION FOR INDEFINITE PERIOD, THEREFORE, I HAVE NO OPTION TO PROCEED EX-PARTE, QUA THE ASSESSEE, AND TEND TO DISPOSE OF THE APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD . 2.1. ON THE OTHER HAND, THE LD. DR, SHRI V.S. JADH AV, DEFENDED THE ADDITION OF THE IMPUGNED AMOUNT BY CONTENDING THAT FOR A.Y. 2009-10, THE GROSS PROFIT WAS 32.06%, WHEREAS, FOR THE CURRENT ASSESSMENT YEAR, T HE ASSESSEE SHOWED THE G.P. AT 28.98% AGAINST WHICH TH E LD. ASSESSING OFFICER ESTIMATED THE G.P. AT 30%. THE C RUX OF THE ARGUMENT BY THE LD. DR IS IN SUPPORT TO THE ADD ITION. ITA NO.3011/MUM/2015 MANDAKINI FASHIONS 3 2.2. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE FIRM IS MANUFACTURER AND EXPO RTER OF READYMADE GARMENTS, FABRICS AND LOCAL SALES. THE A SSESSEE DECLARED INCOME OF RS.2,13,190/- IN ITS RETURN FILE D ON 13/10/2010. THE CASE OF THE ASSESSEE WAS SELECTED F OR SCRUTINY, THEREFORE, THROUGH NOTICES, THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS. THE ASSESSEE RESPONDE D TO THE NOTICES AND FILED THE DETAILS FOR VERIFICATION. COP Y OF AUDITED ACCOUNT, PROFIT & LOSS ACCOUNT AND BALANCE SHEET WA S ALSO FURNISHED BY THE ASSESSEE AS IS EVIDENT FROM PAGE-1 OF THE ASSESSMENT ORDER ITSELF. THE ASSESSEE DECLARED TOTA L TURNOVER OF RS.5,69,89,515/- RESULTING INTO GROSS P ROFIT OF RS.1,65,13,566/-. THE ASSESSEE WAS ASKED TO EXPLAIN THE REASON OF LOW G.P. AS IN A.Y. 2009-10, THE GROSS PR OFIT WAS SHOWN AT RS.32.06%. THE ASSESSEE EXPLAINED THAT TH E DECREASE WAS DUE TO INCREASE IN THE TURNOVER. HOWEV ER, THE LD. ASSESSING OFFICER ESTIMATED THE GROSS PROFIT AT 30% WHICH RESULTED INTO ADDITION OF RS.5,81,293/-. ON A PPEAL, BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) , THE ADDITION WAS CONFIRMED. THE ASSESSEE IS IN APPEAL B EFORE THIS TRIBUNAL. IF THE OBSERVATION MADE IN THE ASSESSMENT ORDER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYZED, UNDER THE FACTS NARRATE D ITA NO.3011/MUM/2015 MANDAKINI FASHIONS 4 HEREINABOVE, THERE IS ON DISPUTE TO THE FACT THAT T HE ADDITION HAS BEEN MADE ON THE BASIS OF ESTIMATION. IT IS ALSO NOTED THAT THE ASSESSEE NEITHER PRODUCE ANY EV IDENCE FOR CLAIM OF LOW G.P. AND MERELY EXPLAINED THAT IT IS DUE TO INCREASE IN THE TURNOVER. AT THE SAME TIME, THE REA SON OF ESTIMATION, THOUGH SEEMS TO BE PLAUSIBLE BUT THE TO TALITY OF FACTS, THAT MANUFACTURING EXPENSES ALSO INCREASE FR OM 38.61% TO 42.61%, THEREFORE, TO PUT AN END TO THE L ITIGATION AND BY TAKING A LENIENT VIEW, THE GROSS PROFIT IS R EDUCED TO 29.5% IN PLACE OF 30% ESTIMATED BY THE LD. ASSESSIN G OFFICER AND CONFIRMED BY LD. COMMISSIONER OF INCOME TAX (APPEALS), THUS, THE APPEAL OF THE ASSESSEE IS PART LY ALLOWED. FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED. THIS ORDER WAS PRONOUNCED IN THE OPEN IN THE PRESENCE OF LD. DR AT THE CONCLUSION OF THE HEARING ON 21/01/2016. SD/- (JOGINDER SINGH) ! ' / JUDICIAL MEMBER MUMBAI; DATED : 01/02/2016 F{X~{T? P.S / ! & $ )!*+ ,&+-* / COPY OF THE ORDER FORWARDED TO : 1. '#$%& / THE APPELLANT 2. '(%& / THE RESPONDENT. 3. ) ) * ( '#$ ) / THE CIT, MUMBAI. ITA NO.3011/MUM/2015 MANDAKINI FASHIONS 5 4. ) ) * / CIT(A)- , MUMBAI 5. -./ ' , ) '#$ ' 1 , / DR, ITAT, MUMBAI 6. /2 3$ / GUARD FILE. & / BY ORDER, (-# ' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI