SHREENOX SYNTHETICS, BHIWANDI V. ITO 1(4), KALYAN

ITA 3148/MUM/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5808 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 11-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR SONI
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO. 3148/MUM/2018 ASSESSMENT YEAR : 2010-11 M/S. SHREENOX SYNTHETICS, H.NO. 548, AASBIBI, KALYAN ROAD, KHADI MACHINE ROAD, BHIWANDI, [PAN : ABFFS4088N] VS. INCOME TAX OFFICER-1(4), KALYAN (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VIMAL PUNMIYA, AR RESPONDENT BY : SHRI VIJAY KUMAR SONI, DR DATE OF HEARING : 31-01-2019 DATE OF PRONOUNCEMENT : 01-02-2019 O R D E R THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCO ME TAX(APPEALS)-2, THANE, DATED 28-02-2018 FOR THE AY. 2010-11. 2. ALTHOUGH SEVERAL GROUNDS WERE RAISED BY THE ASSES SEE BUT AT THE TIME OF HEARING OF THIS APPEAL, IT WAS SUBMI TTED BY THE LEARNED AR OF THE ASSESSEE BEFORE THE BENCH THAT GR OUND RAISED ON MERIT MAY BE DECIDED AND OTHER GROUNDS MAY BE ITA NO. 3148/MUM/2018 : 2 : REJECTED AS NOT PRESSED. ACCORDINGLY, ALL GROUNDS E XCEPT GROUND NO. 6 ARE REJECTED AS NOT PRESSED. GROUND NO . 6 IS REPRODUCED HEREUNDER: 6. THE LD. CIT(A) ERRED IN CONFIRMING AND TREATING RS. 3,71,263/- BEING PURCHASES MADE FROM M/S. SHREEJEE COMMERCIAL CORPORATION AS BOGUS NON-GENUINE EXPENDITURE AND THEREBY ERRED IN ADDING THE SAME TO THE TOTAL INCOME OF THE ASSESSEE UNDER SECT ION 69C OF THE INCOME TAX ACT, 1961. 3. REGARDING GROUND NO. 6 WHICH IS IN RESPECT OF THE ADDITION MADE BY THE AO OF RS. 3,71,263/-, IT WAS SUBM ITTED BY THE LD. AR OF THE ASSESSEE THAT SIMILAR ISSUE WAS D ECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE AY. 20 11-12 IN ITA NO. 3973/MUM/2015, DT. 14-07-2016. A COPY OF THE SAME WAS ALSO SUBMITTED. HE DREW MY ATTENTION TO PARA NO. 6 OF THE SAID ORDER OF THE TRIBUNAL AND POINTED OUT THAT IN THIS PARA, IT WAS NOTED BY THE TRIBUNAL THAT GP DISCLOSED BY THE ASSES SEE IN THE AY. 2009-10 WAS 4.73% AND IN AY. 2010-11, IT W AS 3.72%, BUT THERE IS INCREASE OF 33% IN THE SALES AMOUN T DURING THE AY. 2011-12 BEFORE THE TRIBUNAL IN THAT CASE . HE FURTHER POINTED OUT THAT IT WAS NOTED BY THE TRIBUNAL THAT SALES INCREASED FROM RS. 16.62 CRORES TO RS. 21.83 C RORES DURING THE AY. 2011-12. THEREAFTER, HE POINTED OUT TH AT IT WAS HELD BY THE TRIBUNAL THAT THERE WAS INCREASE IN NP MAR GINS ITA NO. 3148/MUM/2018 : 3 : SLIGHTLY. HE FURTHER POINTED OUT THAT IN THAT YEAR, THE TRIBUNAL HELD THAT GP RATE SHOULD BE ADOPTED AT 3.50% AS AGAINST 3.44%, SHOWN BY THE ASSESSEE. AT THIS JUNCTURE, IT WAS OBSERVED BY THE BENCH THAT IN THE PRESENT YEAR, THE TURNOV ER OF ASSESSEE IS RS. 16.62 CRORES AS AGAINST RS. 21.83 CRORES IN AY. 2011-12. THE BENCH POINTED OUT THAT IN AY. 2011-12 , THE TRIBUNAL HAD ACCEPTED GP PERCENTAGE OF 3.50% AND IT IS ALSO HELD THAT THERE IS FALL IN GP RATE IF THE TURNOVER GOES U P. THE BENCH OBSERVED THAT SINCE THE TURNOVER IS LESSER IN THE PRESENT YEAR AS COMPARED THE TURNOVER OF RS. 21.83 CRORES IN AY. 2011-12, THE PERCENTAGE OF GP IN THE PRESENT YEAR IS R EQUIRED TO BE ADOPTED AT A HIGHER FIGURE AS PER THIS TRIBUNAL ORDER AS COMPARED TO 3.5% ADOPTED IN A. Y. 2011 - 12. 4. IN REPLY, THE LD. AR OF THE ASSESSEE SUBMITTED THAT BENCH MAY DECIDE THE PERCENTAGE OF GP TO BE ADOPTED IN THE PRESENT YEAR. 5. LD. DR FOR THE REVENUE SUPPORTED THE ORDER OF THE L D. CIT(A). 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND TH AT AS PER THE CHART REPRODUCED BY LD. CIT(A) AT PG. NO. 16 O F THE IMPUGNED ORDER, ASSESSEE WAS HAVING A TURNOVER OF ITA NO. 3148/MUM/2018 : 4 : RS. 10.19 CRORES IN AY. 2008-09 AND IN THAT YEAR, THE ASSESSEE REPORTED GP PERCENTAGE AT 5.20%. IN AY. 20 11-12, THE TURNOVER REPORTED BY THE ASSESSEE IS RS. 21.83 CRO RES AND ASSESSEE DISCLOSED GP RATE AT 3.44% AND THE TRIBUNAL AD OPTED GP RATE OF 3.50% IN THAT YEAR. GOING BY THESE FACTS AND THE BASIS ADOPTED BY THE TRIBUNAL IN THAT YEAR THAT WHEN THE TURNOVER GOES UP, GP RATE GOES DOWN SLIGHTLY. CONSIDE RING ALL THESE FACTS AND ON THE BASIS OF THE TRIBUNALS ORDER AN D THE BASIS OF THE DECISION AS DISCUSSED ABOVE, I FEEL IT PROPER TO ADOPT GP RATE OF 3.84% BEING AVERAGE OF GP RATE DECLA RED BY THE ASSESSEE AT 3.73% AND GP RATE OF 3.95% AFTER CONS IDERING THE ADDITION MADE BY THE AO. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST DAY OF FEBRUARY, 2019 SD/- (A.K. GARODIA) /ACCOUNTANT MEMBER /MUMBAI; /DATED : 1 ST FEBRUARY, 2019 TNMM ITA NO. 3148/MUM/2018 : 5 : / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. ' ! / THE RESPONDENT 3. # $ ( ) / THE CIT(A), MUMBAI 4. # $ / CIT, MUMBAI 5. '()*+ , #-*+#. , / DR, ITAT, MUMBAI 6. )/01 / GUARD FILE # / BY ORDER, ' //TRUE COPY// /# (DY./ASST. REGISTRAR) #-*+#., / ITAT, MUMBAI