The ITO, Ward-7(3), Surat V. Shri Rajesh Agiwal, Surat

ITA 3248/AHD/2011

• Counselvise Citation: 324820514 RSA 2011
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 09-04-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 23-12-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Assessment record

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' BEFORE SHRI A K GARODIA ACCOUNTANT MEMBER AND SHRI KUL BHARAT JUDICIAL MEMBER ITA NO.3248/AHD/2011 (ASSESSMENT YEAR:-2008-09) THE INCOME-TAX OFFICER, WARD-7(3), ROOM NO.624, 6 TH FLOOR, AAYAKAR BHAVAN, MAJURA GATE, SURAT V/S SHRI RAJESH AGIWAL, 7/3764, KESHRINANDAN APARTMENT, FLAT NO.203, 3 RD FLOOR, CHORATHIYA SHERI, RUGHNATHPURA, SURAT-395007 PAN: AHYPA 9019 N [APPELLANT] [RESPONDENT] REVENUE BY :- SHRI VINOD TANWANI, SR. DR ASSESSEE BY:- NONE DATE OF HEARING:- 09-04-2012 DATE OF PRONOUNCEMENT:- 13-04-2012 O R D E R PER KUL BHARAT (JM) :- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST AN ORDER DATED 03-08-2011 PASSED B Y THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-V, [HEREINAFTE R REFERRED TO AS THE LEARNED CIT(A)] SURAT FOR ASSESSMENT YE AR (AY) 2008-09. THE GROUNDS RAISED BY THE REVENUE IN THIS APPEAL READ AS UNDER:- [1] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.1,82,54,206/- BEING G.P. @ 3% OF THE TURNOVER. 2 2 [2] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE AO HAS WRO NGLY REJECTED THE BOOK OF A/C. U/S 145(3) OF THE ACT. 2 AT THE OUTSET, NONE APPEARED ON BEHALF OF THE ASS ESSEE. HOWEVER, WE HAVE DECIDED TO DISPOSE OF THE APPEAL A FTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE AS THE NOTI CE OF HEARING HAS BEEN DULY SERVED UPON THE ASSESSEE. 3 THE BRIEF FACTS OF THE CASE AS EMERGED FROM THE O RDER OF THE LEARNED CIT(A) ARE THAT DURING THE COURSE OF ASSESS MENT PROCEEDINGS, THE AO REQUESTED THE ASSESSEE TO PRODU CE THE BOOKS OF ACCOUNT, BUT THE SAME WAS NOT PRODUCED BEFORE HI M IN SPITE OF SEVERAL REMINDERS. THEREAFTER, THE AO ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE ASKING HIM TO PRODUCE BOOKS OF ACCO UNT STATING THEREBY THAT FAILURE TO ATTEND OR FURNISH THE REQUI SITE DETAILS WOULD ENFORCE HIM TO ADD 25% OF PURCHASES AND EXPEN SES WOULD BE DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. IN RESPONSE TO THE ABOVE, THE A.R. OF THE ASSESSEE ATT ENDED THE OFFICE OF THE AO AND FURNISHED SOME DETAILS IN RESP ECT OF PURCHASES AND SALES ALONG WITH CONFIRMATION ACCOUNT S OF SOME OF THE PARTIES. ON VERIFICATION OF THE DETAILS FILED B Y THE ASSESSEE, IT WAS NOTICED BY THE AO THAT THE ASSESSEE HAD NOT FUR NISHED COMPLETE DETAILS AS CALLED FOR. HENCE THE AO ISSUED A SECOND SHOW CAUSE NOTICE TO THE ASSESSEE, IN WHICH RESPONS E THE ASSESSEE HIMSELF ATTENDED AND PRODUCED CERTAIN DETAILS IN RE SPECT OF BANK ACCOUNT, ETC. BUT THE AO DID NOT CONSIDER THE SAME STATING THAT THE ASSESSEE DID NOT COMPLY WITH NECESSARY PROCEDUR E. KEEPING IN MIND THE ABOVE DISCUSSION, THE AO REJECTED THE B OOK RESULTS 3 3 U/S. 145(3) OF THE ACT AND MADE AN ESTIMATED ADDITI ON OF RS.1,82,54,206/- BEING 3% OF TURNOVER TO THE TOTAL INCOME OF THE ASSESSEE. 4 AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE TH E FIRST APPELLATE AUTHORITY. THE LEARNED CIT(A) HAS DEALT W ITH THE ISSUE AS UNDER:- 5 DURING THE COURSE OF APPELLATE PROCEEDINGS BEFOR E ME, DETAILED SUBMISSION AND ARGUMENTS WERE MADE ON BEHALF OF THE APPELLANT ARE REPRODUCED, THE GIST OF WHICH IS AS UNDER: DURING THE ASSESSMENT PROCEEDINGS, ALL THE RELEVANT DETAILS WERE PRODUCED EXCEPT A FEW CONFIRMATIONS OF PURCHASE PAR TIES WHICH WERE ASKED BY THE A.O. AT THE FAG AND OF THE ASSESSMENT PROCEEDINGS. THE BOOKS OF ACCOUNT WERE AUDITED. THIS DISALLOWANCE WA S MADE WITHOUT CONSIDERING EARLIER YEARS' RESULTS OR WITHOUT COMPA RING THE RESULTS OF OTHER ASSESSEES ENGAGED IN THE SIMILAR BUSINESS. NO DEFECTS IN THE BOOKS OF ACCOUNT HAVE BEEN POINTED OUT BY THE A.O. ON SUCH GROUND BOOKS CANNOT BE REJECTED. THE A.R. OF THE APPELLANT HAS ALSO SUBMITTED THE PERCENTAGE OF GROSS PROFIT RATIO IN FEW OTHER C ASES TOO. DECISION: 6 I HAVE CAREFULLY CONSIDERED BOTH THE POSITIONS. F ROM THE SUBMISSION OF THE AR AS WELL AS THE ORAL ARGUMENTS BEFORE ME, I AM OF THE OPINION THAT THE AO HAS WRONGLY REJECTED THE BO OKS OF ACCOUNT AS HE HAS MEASURABLY FAILED TO POINT OUT EVEN A SINGLE MISTAKE IN THE BOOKS OF ACCOUNT. IF AT ALL THE ESTIMATION WAS WARR ANTED HE SHOULD HAVE LOOKED INTO THE PAST ASSESSMENT RECORDS OF THE ASSESSEE. ACCORDINGLY, THE ESTIMATED ADDITION IS UNJUSTIFIED AND IS HEREBY DELETED AND THE APPEAL IS ALLOWED. 5 BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A ), THE REVENUE IS IN APPEAL BEFORE US. THE LEARNED DR SUPP ORTED THE ORDER OF THE AO. 4 4 6 WE HAVE HEARD THE LEARNED DR AND PERUSED THE MATE RIAL AVAILABLE ON RECORD. THE LEARNED DR HAS DRAWN OUR A TTENTION TO THE ASSESSMENT ORDER WHEREIN AO HAS POINTED OUT CER TAIN DEFECTS INTO BOOKS OF ACCOUNTS. THE OBSERVATION OF AO IS RE PRODUCED HEREUNDER:- 5 DEFECTS IN BOOKS OF ACCOUNTS : DURING THE ASSESSMENT PROCEEDINGS, THE FOLLOWING DE FECTS ARE OBSERVED FROM THE SUBMISSIONS MADE BY THE ASSESSEE: (I) THE ASSESSEE HAS NOT FURNISHED BOOKS OF ACCOUNTS F OR VERIFICATION BEFORE THE OFFICE OF THE UNDERSIGNED. (II) THE ASSESSEE HAS CLAIMED VARIOUS EXPENSES DURING TH E YEAR HOWEVER, HE HAS NOT FURNISHED COGENT DOCUMENTARY EVIDENCES TO PROVE GENUINENESS OF THE SAME. (III) THE ASSESSEE HAS FAILED TO FURNISH CONFIRMATION ACC OUNTS AND TO PROVE THE IDENTITY AND CREDIT WORTHINESS OF SOME OF THE CREDITORS. (IV) THERE IS A DIFFERENCE IN THE CLOSING BALANCE OF M/S .R. RISHAB & CO. (PURCHASE PARTY) OF AN AMOUNT OF RS.82,45,842 /-, AS COMPARED TO THE CONFIRMATION ACCOUNT FILED BY M/S. R. RISHAB & CO. (V) THE ASSESSEE HAS NOT FURNISHED PARTY WISE DETAILS I N RESPECT OF ENTIRE PURCHASES SHOWN DURING THE YEAR I.E. INCO MPLETE DETAILS HAVE BEEN FILED BY THE ASSESSEE. WE FIND THAT THE LEARNED CIT(A) HAS IGNORED THE AFO REMENTIONED OBSERVATION. IN VIEW OF THIS MATTER, THE MATTER IS REMITTED BACK TO THE FILE OF LEARNED CIT(A) TO DECIDE AFRESH AFTER G IVING OPPORTUNITY OF HEARING TO THE CONCERNED PARTIES. 5 5 7 THE APPEAL OF REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT TODAY ON 13-04-2012 SD/- SD/- (A K GARODIA) ACCOUNTANT MEMBER (KUL BHARAT) JUDICIAL MEMBER DATE : 13-04-2012 COPY OF THE ORDER FORWARDED TO: 1. SHRI RAJESH AGIWAL, 7/3764, KESHRINANDAN APARTME NT, FLAT NO.203, 3 RD FLOOR, CHORATHIYA SHERI, RUGHNATHPURA, SURAT-395007 2. THE INCOME-TAX OFFICER, WARD-7(3), ROOM NO.624, 6 TH FLOOR, AAYAKAR BHAVAN, MAJURA GATE, SURAT 3. CIT CONCERNED 4. CIT(A)-V, SURAT 5. DR, ITAT, AHMEDABAD BENCH-C, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD