M/s Shiv Om Prints, Amritsar. V. The Income Tax Officer, Amritsar.

ITA 329/ASR/2015

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 9219 (ITAT-AMRITSAR)
• Duration Of Justice: 7 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 21-06-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SATBIR SINGH
• Keywords: Bogus purchase
• Section: 143(3); 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No. 329/Asr/2015 Assessment Year: 2003-04 M/s Shiv Om Prints, Ajnala Road, Amritsar [PAN: AAJFS 5133K] Vs. The Income Tax Officer, Ward 5(4), Amritsar (Appellant) (Respondent) Appellant by : None Respondent by: Sh. Satbir Singh, Sr. DR Date of Hearing: 12.05.2022 Date of Pronouncement: 08.07.2022 ORDER Per Dr. M. L. Meena, AM: This appeal has been filed by the assessee against the impugned order dated 09.12.2014 passed by the Ld. Commissioner of Income Tax (Appeals)-2, Amritsar in respect of the Assessment Year 2003-04 where the assessee has raised the following grounds of appeal: “1. That the Commissioner of Income Tax (Appeals), Amritsar has grossly erred in confirming the addition of Rs.29,68,431/- made by the Income Tax Officer Ward-5(4), Amritsar by enhancing the G.P. rate to 7.75% on estimate basis instead of G.P. rate of 6.42% offered by the assessee. ITA No. 329/Asr/2015 Shiv Om Prints v. ITO 2 2. That the Commissioner of Income Tax (Appeals), Amritsar has grossly erred in not appreciating that the G.P. rate offered by the assessee was quite reasonable in view of increase in the turnover. 3. That the Commissioner of Income Tax (Appeals), Amritsar has failed to appreciate that the G.P. rate of the assessee could not be disturbed because all the alleged bogus purchase were duly recorded in the excise records.” 2. None appeared for the assessee. This matter is being restored to the file of the CIT appeal by the Hon’ble Punjab and the High Court and being an old appeal of 2015, it is decided to hear the learned DR on merits and dispose off the appeal in the interest of justice. The CIT appeal has passed the impugned order in compliance to the judgement of the Hon’ble Punjab & Haryana High Court where it is directed vide order- dated 21.10.2010 that the CIT(Appeals) is required to re-examine afresh each purchase and sundry creditors party concern by observing as under: “The finding recorded by C(T(A) regarding bogus purchases without discussing regarding each party/concern cannot, be legally sustained and requires to be re- examined by the CIT(A) afresh. The sundary creditors to the extent of RS. 12,38,898/- have been held to be ingenuine but have been adjusted in the GP rate adopted by the CIT(A). It was the case of the assessee before CIT(A)A that in case additions as made by the Assessing Officer are sustained, then it would lead to unrealistic gross profit rate of 19.42% which is impossibility in the trade of the assessee. We are of the view that matter needs to be remanded to the CIT(A)A for fresh decision on the issues involved. Accordingly, we allow these appeals and after setting aside impugned, orders of the Tribunal and CIT(A), remand the matter to CIT(A) for fresh decision on merits in accordance with law”. 3. The CIT appeal has considered the written submission of the assessee and has sustained GP rate of 7.75% as against 6.42% shown by the assessee. The learned CIT appeal stated that the Hon’ble Bench also confirmed the application of GP rate of 10.5% by my predecessor as ITA No. 329/Asr/2015 Shiv Om Prints v. ITO 3 against 9.38% declared by the appellant because the appellant failed to identify its seller party and to furnish their complete addresses. He has considered the arguments made before him by the appellant in view of the comparative chart GP rate which is as under:- Asstt. Year Sale in lacs Gross profit in lacs Gross profit in percentage Assessed 2000-01 302.57 27.91 9.22% U/s 143(3) 2001-02 471.02 44.22 9.38% U/s 143(3) 2002-03 948.91 71.29 7.51% U/s 143(1) 2003-04 1,150.54 73.86 6.42% U/s 143(3) 2004-05 895.66 60.91 6.80% U/s 143(3) 2005-06 511.91 25.02 4.89% U/s 143(3) 4. The CIT appeal has also considered the fact that the appellant declared GP rate of 4.89% in A.Y. 2005-06 and the department made an addition of Rs. 1,64,144/- while making assessment u/s 143(3) and that the profit margins decreased during A.Y. 2003-04 because the sales of the appellant has increased from. 471.02 lacs in A.Y. 2001-02 to 1150.54 lacs in A.Y. 2003-04 and further because of the fact that the GP rale of 7.51% declared in A.Y. 2002-03 was not disturbed although the case was processed u/s 143(1). 5. Considering the trading patterns of the appellant assessee and the factual matrix of the case, learned CIT appeal has estimated that the GP at the rate of 7.75% and confirmed the consequential addition of 1,530,222/-in the return income of the appellant assessee. 6. For estimation of the income of the assessee, it is settled principle of law and guide to adopt average of the gross profit rate of the last three years that is the past history of the trading account of the assessee. If, we ITA No. 329/Asr/2015 Shiv Om Prints v. ITO 4 go by the past history of the assessee, the applicable GP rate is computed acts 8.7% (9.22+9.38+7.51=26.11/3). However, the learned CIT appeal has adopted the GP rate of 7.75% and therefore, we are of the considered view that the learned CIT appeal has adopted a just fair and reasonable GP rate in the case of the appellant assessee in the case of the appellant assessee. 7. In view of the matter, we find no infirmity, perversity or error in the order of the CIT appeal and accordingly, finding no merit in substance in the appeal of the assessee, the impugned order is hereby sustained. 8. In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on 08.07.2022. Sd/- Sd/- (Anikesh Banerjee) (Dr. M. L. Meena) Judicial Member Accountant Member *GP/Sr.PS* Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(Appeals) (4) The CIT concerned (5) The Sr. DR, I.T.A.T True Copy By Order