Shri Padambhai Babulal Jain, Surat V. The ACIT.,Circle-2, Surat

ITA 3261/AHD/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60290 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 24-04-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 07-12-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , !', #$ # % BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ I.T.A. NO.3261/AHD/2009 ( ( ( ( ( / / / / ASSESSMENT YEAR : 2006-07) SHRI PADAMBHAI BABULAL JAIN S-1, SHANKHESHWAR COMPLEX OPP.RAYMOND SHOW ROOM KAILASHNAGAR, SURAT / VS. THE ACIT CIRCLE-2 SURAT ) #$ ./*+ ./ PAN/GIR NO. : AASPJ 2941 D ( ), / // / APPELLANT ) .. ( -.), / RESPONDENT ) ), / # / APPELLANT BY : NONE (WRITTEN SUBMISSION) -.), 0 / # / RESPONDENT BY : SHRI SAMIR TEKRIWAL, SR.D.R. 1 0 '$ / / / / DATE OF HEARING : 24/04/2012 23( 0 '$ / DATE OF PRONOUNCEMENT : 27/04/12 #4 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE W HICH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-II, SURAT DATED 27/10/2009 AND THE SOLITARY GROUND READS AS UNDER:- 1) THE LEARNED CIT(A) GROSSLY ERRED IN CONFIRMING THE ADDITION OF RS.10,47,496/- ( REVISED AMOUNT RS.85,709/- ) INSTEAD OF NET LOSS OF RS.7,99,511/- AS PER THE PROFIT AND LOS S ACCOUNT ITA NO.3261/AHD /2009 SH.PADAMBHAI BABULAL JAIN VS. ACIT ASST.YEAR -2006-07 - 2 - FILED WITH THE RETURN OF INCOME. THE APPEAL IS DIS MISSED AS PER PARA 5 OF THE APPEAL ORDER. 2. AT THE OUTSET, WE HAVE NOTICED THAT ITAT B BEN CH AHMEDABAD VIDE ITA NO.3261/AHD/2009 FOR A.Y. 2006-07 VIDE AN ORDER DATED 26/05/2011 HAD DISMISSED THE APPEAL DUE TO NON-APPE ARANCE ON THE PART OF THE APPELLANT. LATER ON, THAT ORDER WAS RECALLE D IN MA NO.100/AHD/2011 (ARISING OUT OF ITA NO.3261/AHD/200 9) DATED 13/01/2012). WHILE RECALLING, IT WAS FOUND THAT A WRITTEN SUBMISSION WAS PLACED GIVING THE REASONS OF NON-APPEARANCE AND CON SIDERING THE REQUEST, THAT EX-PARTE JUDGEMENT WAS RECALLED AND APPEAL WAS FIXED FOR HE ARING ON 24/04/2012. TODAY ALSO, NO ONE HAS APPEARED. O NLY A WRITTEN SUBMISSION IS ON RECORD. WE HAVE PERUSED THE WRI TTEN SUBMISSION AND DECIDED TO PROCEED ACCORDINGLY AFTER HEARING THE LD .DR. 3. FACTS IN BRIEF AS EMERGED FORM THE CORRESPONDIN G ASSESSMENT ORDER PASSED U/S.143(3) DATED 12/12/2008 WERE THAT THE AS SESSEE IN INDIVIDUAL CAPACITY IS ENGAGED IN THE TRADING OF TILES. DURI NG THE YEAR, THE ASSESSEE HAD SHOWED A LOSS OF RS.7,99,512/-. THE SALES WERE OF RS.2,31,843/- AS AGAINST THE VALUE OF THE OPENING STOCK OF RS.8,91,8 66/-. THERE WAS NO PURCHASE DURING THE YEAR. THE ASSESSEE EXPLAINED THAT THE LOSS WAS INCURRED ON THE SALE OF OLD STOCK WHICH WAS ALSO OF INFERIOR QUALITY. IN ORDER TO GET-RID-OFF THE OLD STOCK, THE ASSESSEE HA D SOLD THE SAME AT A DISCOUNT AMOUNT. THE ASSESSING OFFICER REJECTED TH E ASSESSEES EXPLANATION, OBSERVING THAT THE ASSESSEE HAD CONTIN UED IN THE SAME BUSINESS AND THEREFORE THE QUESTION OF DISPOSING OF F THE OLD STOCK RESULTING IN SUCH SUBSTANTIAL LOSS, DID NOT ARISE. THE ENTIRE SALES WERE ITA NO.3261/AHD /2009 SH.PADAMBHAI BABULAL JAIN VS. ACIT ASST.YEAR -2006-07 - 3 - MADE IN CASH AND NO SALE BILLS WERE ISSUED. NO STO CK REGISTER WAS MAINTAINED NOR ANY BOOKS OF ACCOUNT, BILLS OR VOUCH ERS PRODUCED. THE ASSESSING OFFICER THEREFORE TOOK THE VIEW THAT THE ACCOUNTS FURNISHED WITH THE RETURN OF INCOME WAS NOT RELIABLE, AND CON SEQUENTLY, HE REJECTED THE SAME U/S.145(3) OF THE IT ACT. THE ASSESSING OFFICER THEN APPLIED THE GROSS PROFIT RATIO @ 17.45% BEING THE GROSS PRO FIT DISCLOSED IN THE IMMEDIATELY PRECEDING YEAR. THE ASSESSING OFFICER THEREFORE ADOPTED THE SALES FIGURE OF RS.10,47,496/- AND AFTER ALLOWI NG FOR STORE EXPENSES OF RS.3,370/-, WORKED OUT THE GROSS PROFIT AT RS.10,44 ,126/-. HE ALSO DISALLOWED THE VATAV KASAR EXPENSES OF RS.51,592/- AND FINANCIAL EXPENSES OF RS.3,543/- IN THE ABSENCE OF ANY SUPPOR TING EVIDENCE. THE ASSESSING OFFICER THUS ARRIVED AT THE NP OF RS.9,88 ,991/- WHICH SHE ADDED TO THE ASSESSEES TOTAL INCOME. 4. WHEN THE MATTER REACHED BEFORE THE LD.CIT(A), IT WAS INTIMATED THAT THERE WAS AN ERROR IN ESTIMATING THE TURNOVER. IT WAS INFORMED THAT THE ASSESSING OFFICER ERRED IN ESTIMATING THE TURNOVER AT RS.10,47,496/- AND ALSO ESTIMATING THE GP RATIO AT 17.45%. ACCORDIN G TO THE ASSESSEE, THERE WAS A MISTAKE IN CALCULATING THE GP WHICH OU GHT TO HAVE BEEN WORKED OUT TO RS.1,82,788/- BEING 17.45% OF RS.10,4 7,496/-. THE ASSESSEE HAD FILED AN APPLICATION U/S.154 OF THE IT ACT AND THE ADDITION WAS REVISED TO RS.85,709/-. OTHERWISE, THE ASSESSE E HAS REITERATED THE SUBMISSIONS AS WERE MADE IN ASSESSMENT PROCEEDINGS IN EXPLAINING THE LOSS BOOKED BY THE ASSESSEE. ITA NO.3261/AHD /2009 SH.PADAMBHAI BABULAL JAIN VS. ACIT ASST.YEAR -2006-07 - 4 - 5. HAVING HEARING THE SUBMISSIONS, LD.CIT(A) HAS DI RECTED TO GIVE PART RELIEF AS FOLLOWS:- 5. I HAVE CAREFULLY CONSIDERED BOTH THE POSITIONS . TO BEGIN WITH, THE VERY FACT THAT THE ASSESSEE HAD CONTINUED IN TH E SAME LINE OF BUSINESS CLEARLY SHOWED THAT THE BUSINESS WAS STILL PROFITABLE. THE STOCK WAS LESS THAN A YEAR OLD AND THEREFORE, COULD NOT HAVE BEEN OF SUCH A QUALITY OR CONDITION, SO AS TO RESULT IN SUCH A HEAVY LOSS. MOST IMPORTANTLY, THE ASSESSEE DID NOT MAINTAIN ANY STOCK BOOK, NOR ANY OTHER BOOKS OF ACCOUNT. NO BILLS OR VOUCHE RS WERE PRODUCED. AS A RESULT, THE ASSESSEE WAS NOT IN A P OSITION TO SUBSTANTIATE THE BOOK RESULTS AND CONSEQUENTLY THE LOSS CLAIMED. THE AO THEREFORE WAS FULLY JUSTIFIED IN REJECTING THE BOOK RESULTS U/S.145(3) OF THE IT ACT. SHE WAS ALSO JUSTIFIED I N APPLYING THE GP RATIO OF THE IMMEDIATELY PRECEDING YEAR, ESPECIALLY SINCE NO INFORMATION OR DATA WAS OTHERWISE MADE AVAILABLE TO HER. THE ADDITION MADE THEREFORE WAS FULLY JUSTIFIED. HOWEV ER, IT HAS BEEN CLAIMED BY THE AR THAT THE ADDITION WAS RECTIFIED U /S.154 OF THE IT ACT TO RS.85,709. THIS ADDITION THEREFORE WILL STA ND CONFIRMED. THE AR HAS NOT MADE ANY SUBMISSION WITH REGARD TO THE DISALLOWANCE OF VATAV KASAR AND FINANCIAL EXPENSES TOTALING RS.55,135 WHICH WILL ALSO STAND CONFIRMED. 6. ON CAREFUL PERUSAL THE ORDERS OF THE REVENUE AU THORITIES AND THE WRITTEN SUBMISSIONS MADE BEFORE US, WE ARE OF THE C ONSIDERED VIEW THAT THE NECESSARY RECTIFICATION HAS ALREADY BEEN MADE B Y THE REVENUE AUTHORITIES AND NO FURTHER RELIEF IS ELIGIBLE TO TH IS ASSESSEE. UNDISPUTEDLY, THE SALES WERE MADE IN CASH AND THOSE SALES REMAINED UNVERIFIED. FACTS HAVE ALSO REVEALED THAT THE ASSE SSEE HAD FAILED TO FURNISH THE REQUISITE EVIDENCES AS ALSO THE ACCOUNT S. ONE OF THE MOST GLARING FEATURE OF THIS APPELLANT IS HIS NON-COOPER ATIVE ATTITUDE. IN ADDITION TO THAT, THIS APPELLANT HAS ALSO FAILED T O PLACE ON RECORD ANY CORROBORATIVE EVIDENCE TO ESTABLISH THAT THE STOCK IN QUESTION WAS OF ITA NO.3261/AHD /2009 SH.PADAMBHAI BABULAL JAIN VS. ACIT ASST.YEAR -2006-07 - 5 - LOWER QUALITY, HENCE SOLD AT LOSS. SINCE THE ASSES SEE HAS FAILED DISCHARGE HIS PRIMARY ONUS, THEREFORE WE HAVE NO OPTION BUT T O CONFIRM THE FINDINGS OF THE LD.CIT(A). RESULTANTLY, THIS GROUND IS HERE BY DISMISSED. 7. IN THE RESULT, ASSESSEES APPEAL IS DISMISS ED. SD/- SD/- ( !' ) ( ) #$ ( ANIL CHATURVEDI ) ( MUKU L KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 27/ 4 /2012 5'.., .../ T.C. NAIR, SR. PS #4 0 -6 7#6( #4 0 -6 7#6( #4 0 -6 7#6( #4 0 -6 7#6(/ COPY OF THE ORDER FORWARDED TO : 1. ), / THE APPELLANT 2. -.), / THE RESPONDENT. 3. 8 / CONCERNED CIT 4. 8() / THE CIT(A)-II, SURAT 5. 6;< - , , / DR, ITAT, AHMEDABAD 6. <= >1 / GUARD FILE. #4 #4 #4 #4 / BY ORDER, .6 - //TRUE COPY// ? ?? ? / // / * * * * ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION..24.4.12 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 24.4.12 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S27.4.12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 27.4.12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER