M/s Makson Pharmaceuticals (I) Pvt. Ltd., Surendranagar V. The Joint Commissioner of Income Tax, Surendranagar Circle, Surendranagar

ITA 313/RJT/2011

• Counselvise Citation: 31324914 RSA 2011
• Duration Of Justice: 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-05-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 02-08-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: J C RNPURA

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT . .. . . . . . , , , , . .. . . . . . , , , , $ $ $ $ BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K . SRIVASTAVA, AM ITA NO. 313/RJT/2011 / ASSESSMENT YEAR 2008-09 M/S MAKSON PHARMACEUTICALS (I) V. JT. CIT PVT. LTD. RAJKOT HIGHWAY SURENDRANAGAR RANGE SURENDRANAGAR SURENDRANAGAR PAN: AABCM2806L . DATE OF HEARING : 22-05-2012. DATE OF PRONOUNCEMENT : 25-05-2012. ASSESSEE BY: SHRI J. C. RNPURA, C.A. REVENUE BY: SHRI M. K. SINGH, D.R / // / ORDER . .. . . . . . /D. K. SRIVASTAVA: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 16-06-2011 BY WHICH HE HAS CONFIRMED ADDITION TO THE EXTENT OF RS.10,84,450/- MADE BY THE AO ON ACCOUNT OF LOW RATE OF GROSS PROFIT. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT A SSESSEE WAS ENGAGED IN THE BUSINESS OF MANUFACTURING VARIOUS ITEMS OF CONFECTI ONARY ON JOB WORK BASIS AS ALSO ON THE BASIS OF CONTRACT SALES TO DABUR INDIA LTD. THE ASSESSEE FILED ITS RETURN OF INCOME ON 26-09-2008 RETURNING TOTAL INCOME AT RS.2 ,93,92,550/-. AFTER PROCESSING, THE RETURN WAS SELECTED FOR SCRUTINY. DURING THE C OURSE OF SCRUTINY, THE ASSESSING OFFICER NOTICED SEVERAL DEFICIENCIES IN THE BOOKS O F ACCOUNT. HE ALSO FOUND THAT THE RATE OF GROSS PROFIT DECLARED BY THE ASSESSEE WAS L OW AS COMPARED TO EARLIER YEARS. HE THEREFORE ADDED A SUM OF RS.12,00,000/- ON ACCOU NT OF LOW RATE OF GROSS PROFIT. ON APPEAL, THE LD. CIT(A) HAS REDUCED THE ADDITION MADE BY THE AO FROM RS.12,00,000/- TO RS.10,84,450/-. AGGRIEVED BY THE AFORESAID ADDITION MADE BY THE AO AND SUSTAINED BY THE CIT(A), THE ASSESSEE IS NOW IN APPEAL BEFORE THIS TRIBUNAL. 3. IN SUPPORT OF APPEAL, THE LD. AUTHORIZED REPRESE NTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS ENGAGED IN THE BUSI NESS OF MAKING SALES TO DABUR INDIA LTD. AND THAT ALL ITS SALES WERE FULLY AMENAB LE TO VERIFICATION. HE FURTHER SUBMITTED THAT THE EXPENSES CLAIMED BY THE ASSESSEE HAVE NOT BEEN DOUBTED BY THE ASSESSING OFFICER. ACCORDING TO HIM, THE REASON FOR LOW RATE OF GROSS PROFIT IN THE YEAR UNDER APPEAL WAS THAT THE ASSESSEE HAD SUPPLIE D LARGER QUANTITY OF GOODS TO DABUR INDIA LTD. AT PRICES WHICH WERE LOWER IN THE YEAR UNDER APPEAL THAN THOSE IN EARLIER YEARS. HE REITERATED THAT PURCHASES AS WELL AS SALES AND EXPENSES WERE FULLY VERIFIABLE AND THEREFORE THERE WAS NO BASIS FOR SUS TAINING THE IMPUGNED ADDITION. 2 ITA 313/RJT/2011 4. WE HAVE HEARD BOTH THE PARTIES. THE SUBMISSIONS MADE BY THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAVE NOT BEEN REBUT TED BY THE LD. DEPARTMENTAL REPRESENTATIVE. THE ASSESSEE HAS GIVEN COGENT REASO NS FOR REDUCTION IN THE RATE OF GROSS PROFIT IN THE YEAR UNDER APPEAL. HOWEVER, THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE ARE NOT COMPLETE FOR THE REASONS DISCU SSED BY THE CIT(A) IN HIS APPELLATE ORDER. TAKING INTO ACCOUNT THE TOTALITY O F FACTS AND CIRCUMSTANCES, THE ADDITION MADE BY THE AO CANNOT BE DELETED IN ITS EN TIRETY. IN OUR VIEW, IT WOULD BE JUST AND FAIR ON THE FACTS OF THE CASE TO RESTRICT THE ADDITION TO RS.3,00,000/-. WE ORDER ACCORDINGLY. THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED TO THE AFORESAID EXTENT. ) + 25-05-2012 - ) THIS ORDER PRONOUNCED IN OPEN COURT ON 25-05-2012 SD/- SD/- ( .. / T. K. SHARMA) ( .. / D. K. SRIVASTAVA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER +/ DATE 25-05-2012. /RAJKOT ) )) ) 01 01 01 01 21 21 21 21 / COPY OF ORDER FORWARDED TO:- 1. 5 / APPELLANT-.M/S. MAKSON PHARMACEUTICALS(I) P. LTD .,SURENDRANAGAR. 2. 075 / RESPONDENT-THE JT. CIT, SURENDRANAGAR RANGE, SUR ENDRANAGAR.. 3. : / CONCERNED CIT-V, AHMEDABAD.. 4. :- / CIT (A)-XVI, AHMEDABAD.. 5. 1 0, , / DR, ITAT, RAJKOT 6. / GUARD FILE. / BY ORDER , ASSTT. REGISTRAR/ , / ITAT, RAJKOT