The Asstt.Commissioner of Income-tax, Jalandhar V. M/s. Tiruptati Footwears Pvt. Ltd, Jalandhar

ITA 315/ASR/2012

• Counselvise Citation: 31520914 RSA 2012
• Duration Of Justice: 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 26-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRIK CHAND
• Assessee Lawyers: SANDEEP VIJ

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.315(ASR)/2012 ASSESSMENT YEAR:2006-07 PAN :AACT5594P ASSTT. COMMR. OF INCOME-TAX, VS. M/S. TIRUPATI FOOT WEARS PVT. LTD. RANGE-1, JALANDHAR. JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. AMRIK CHAND, DR RESPONDENT BY:SH.SANDEEP VIJ, CA DATE OF HEARING:19/09/2012 DATE OF PRONOUNCEMENT:24/09/2012 ORDER PER BENCH ; THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER O F THE CIT(A), JALANDHAR, DATED 07.05.2012 FOR THE ASSESSMENT YEAR 2006-07. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL: 1. THAT, ON THE FACT AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.15. 27 LAC. 2. THAT IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THAT OF THE A.O. RESTORED. 3. THE BRIEF FACTS IN THE GROUNDS OF THE REVENUE AR E THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND SALE O F HAWAI CHAPPALS AND ITA NO.315(ASR)/2012 2 CANVAS SHOES. DURING THE YEAR ASSESSEE HAD TURNOVER OF RS.3,55,05,688/- AND HAD GROSS PROFIT RS.49,47,132/- WITH THE G.P. R ATE 13.93% AS AGAINST PRECEDING YEAR 16.31%. THE AO OBSERVED THAT THE RE PLY OF THE ASSESSEE DOES NOT SHOW ANY INDICATION OF CONSUMPTION OF PARTICULA R RAW MATERIAL FOR PRODUCING A PARTICULAR FINISHED PRODUCT AND AS SUC H THE ASSESSEES TRADING RESULTS ARE NOT OPEN FOR VERIFICATION. THE AO ACCOR DINGLY REJECTED THE BOOKS OF ACCOUNT. THE A.O. AS PER PARA 2(E) OF HIS ORDER ESTIMATED THE AVERAGE RATE OF RAW MATERIAL CONSUMED AND ACCORDINGLY WORKED OU T THE CONSUMPTION OF RAW MATERIAL INCREASED AS COMPARED TO THE PRECEDING YEAR AND BY APPLYING THE GP RATE OF 17.5% WORKED OUT THE GROSS PROFIT A T RS.64.75 LACS AND ACCORDINGLY MADE AN ADDITION OF RS.15.27 LACS TO TH E INCOME OF THE ASSESSEE. 4. BEFORE THE LD. CIT(A), THE ASSESSEE SUBMITTED TH E SAID EXPLANATION SUBMITTED BEFORE THE AO WHICH WAS FORWARDED TO THE AO FOR COMMENTS AND IN TURN THE AO RELIED UPON THE FINDINGS GIVEN IN TH E ASSESSMENT ORDER. THE LD. CIT(A) VIDE PARAS 5, 5.1, 5.2 & 6 OF HIS ORDER BY ACCEPTING THE EXPLANATION OF THE ASSESSEE REVERSED THE ORDER OF T HE A.O. AND ALLOWED THE APPEAL OF THE ASSESSEE. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE H AD FURNISHED THE STATEMENT OF CONSUMPTION OF RAW-MATERIAL, WHICH INCLUDED THE PARTICULARS OF THE OPENING STOCK, PURCHASES, CONSUMPTION AND CLOSING S TOCK, BOTH IN QUANTITY ITA NO.315(ASR)/2012 3 AND IN VALUE. THE RETURN OF INCOME ALSO CONTAINED SIMILAR INFORMATION AND SUCH INFORMATION WAS PLACED BEFORE THE AUTHORITIES BELOW. THE AO HAS NOT POINTED OUT ANY DEFECT IN THE BOOKS OF ACCOUNT OR IN THE STOCK, QUANTITY OR QUALITY-WISE. THE ASSESSEE HAS ALSO SUBMITTED THE E XPLANATION FOR THE FALL OF G.P. RATE WHICH IS A MATTER OF RECORD VIDE LETTER D ATED 09.09.2008. THEREFORE, THE AO IS NOT JUSTIFIED IN REJECTING THE BOOKS OF A CCOUNT IN THE ABSENCE OF ANY DEFECT IN THE BOOKS OF ACCOUNT. THEREFORE, IN T HE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND NO INFIRMITY IN THE FINDINGS G IVEN BY THE LD. CIT(A) IN PARAS 5, 5.1, 5.2 & 6 OF HIS ORDER, WHICH IS A WEL L REASONED ORDER. THUS, ALL THE GROUNDS OF THE REVENUE ARE DISMISSED. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I N ITA NO.315(ASR)/2012 IS DIMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24T SEPTEMBER, 2012. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 24TH SEPTEMBER, 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:TIRUPATI FOOTWARDS PVT. LTD. 2. THE ACIT R-1, JALANDHAR. 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER