ITO.-4(2), Agra V. M/s J.R.Marbles (P) Ltd., Agra

ITA 349/AGR/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6935 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 20-07-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 02-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 349/AGRA/2009 ASSTT. YEAR : 2004-05 INCOME-TAX OFFICER, VS. M/S. J.R. MARBLES (P) LTD., 4(2), AGRA. A-1, KAILASH VIHAR, BYE PASS ROAD, AGRA. (PAN : AAACJ 4954 B). C.O. NO. 05/AGRA/2010 (IN ITA NO. 349/AGRA/2009) ASSTT. YEAR : 2004-05 M/S. J.R. MARBLES (P) LTD., VS. INCOME-TAX OFFI CER, A-1, KAILASH VIHAR, 4(2), AGRA. BYE PASS ROAD, AGRA. (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI A.K. SHARMA, JR. D.R. FOR ASSESSEE : SHRI K.K. JAIN, ADVOCATE. ORDER PER P.K. BANSAL, A.M. : THE APPEAL AS WELL AS THE CROSS OBJECTION HAVE BE EN FILED AGAINST THE ORDER OF THE CIT(A) DATED 10.06.2009. THE REVENUE IN ITS APPEAL HAS CH ALLENGED THE REDUCTION OF THE ADDITION BY THE CIT(A) FROM RS.18,27,636/- TO RS.7,58,260/- WHILE T HE ASSESSEE IN ITS CROSS OBJECTION HAS CHALLENGED THE PROCEEDINGS INITIATED U/S. 147 OF TH E INCOME-TAX ACT TO BE BAD IN LAW AND FACTS OF THE CASE. SINCE THE ASSESSEE HAS TAKEN LEGAL GROUND IN ITS CROSS OBJECTION, THEREFORE, WE HAVE TO DISPOSE OF THE CROSS OBJECTION FIRST. 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE PROCEED INGS U/S. 147 WERE INITIATED FOR THE ASSESSMENT YEAR ON THE BASIS OF THE SURVEY CONDUCTE D BY THE TRADE TAX DEPARTMENT ON 12.11.2003 AT THE PREMISES OF THE ASSESSEE. BEFORE THE TRADE TAX AUTHORITIES, THE ASSESSEE SUBMITTED THAT THE BOOKS OF ACCOUNT DID NOT BELONG TO THE ASSESSEE. THE ASSESSING OFFICER ON THE BASIS OF THE SURVEY REPORTED RECORDED THE REASONS W HICH ARE APPEARING AT PAGE 9 & 10 OF THE PAPER BOOK AND INITIATED THE PROCEEDINGS U/S. 147. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) AND SUBMITTED THAT THE PROCEEDINGS U/S. 147 WERE VA GUELY INITIATED. THE REASONS RECORDED FOR THE ASSESSMENT YEAR 2003-04 AND 2004-05 ARE SIMILARLY W ORDED AND THE FIGURES NOTED THEREIN ARE ALSO COMMON. THERE CANNOT BE SIMILARITY BETWEEN THE FIGU RES IN BOTH THE YEARS. THEREFORE, IT WAS CONTENDED THAT THERE WAS NO APPLICATION OF MIND. TH E ASSESSEE FILED THE OBJECTION, BUT THE ASSESSING OFFICER DISMISSED THE SAME. THE CIT(A) CO NFIRMED THE INITIATION OF PROCEEDINGS TO BE VALID. 3. BEFORE US, THE LD. AR VEHEMENTLY CONTENDED BY RE FERRING TO THE REASONS TO BELIEVE APPEARED AT PAGE 9 OF THE PAPER BOOK THAT THE ASSES SING OFFICER HAS RELIED ON THE UNDISCLOSED SALES FOR THE ASSESSMENT YEAR 2003-04 FOR REOPENING THE ASSESSMENT FOR THE ASSESSMENT YEAR 2004-05. THEREFORE, THE REASONS RECORDED ARE NOT BO NA FIDE AND THE PROCEEDINGS MUST BE ANNULLED. 4. THE LEARNED DR, ON THE OTHER HAND, RELIED ON THE ORDER OF THE CIT(A). 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. WE NOTED THAT THE ASSESSING OFFICER HAS RECORDED THE REASONS ON THE BASIS OF THE SURVEY CONDUCTED ON 12.11.2003 BY THE TRADE TAX 3 DEPARTMENT AT THE PREMISES OF THE ASSESSEE. IN THE REASONS RECORDED, THE ASSESSING OFFICER HAS REFERRED TO THE SURVEY REPORT. THIS SURVEY REPORT T ALKS OF ANNEXURE 1 AND 2 RELATING TO THE PERIOD RELEVANT TO THE ASSESSMENT YEAR 2004-05. SINCE THE REASONS CONTAINED THE INFORMATION FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THEREFORE, IN OUR OPINION, THE INITIATION OF THE PROCEEDINGS IS VALID AND THE REASONS CANNOT BE REGARDED TO BE VAGU E. SUFFICIENCY OF REASONS CANNOT BE LOOKED INTO BY THIS TRIBUNAL. THE TRIBUNAL CAN ONLY LOOK I NTO WHETHER THERE IS MATERIAL RELEVANT TO THE ASSESSEE OR NOT. WE, THEREFORE, DO NOT FIND ANY ILL EGALITY IN INITIATION OF THE PROCEEDINGS U/S. 147. WE ACCORDINGLY, DISMISS THE CROSS OBJECTION OF THE ASSESSEE. 6. NOW COMING TO THE APPEAL FILED BY THE REVENUE, T HE ONLY GROUND RELATES TO THE REDUCTION OF ADDITION FROM RS. 18,27,636/- TO RS.7,58,260/-. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER ESTIMATED THE SALES AT RS.2,21,00 ,000/- AS AGAINST RS.1,00,68,165/- SHOWN BY THE ASSESSEE AND BY APPLYING THE G.P. RATE MADE ADD ITION OF RS. 18,27,636/-. THE ASSESSING OFFICER ESTIMATED THE SALES AT RS.2,21,00,000/- ON THE BASIS OF ESTIMATE OF SALES MADE BY THE TRADE TAX OFFICER. WHEN THE MATTER WENT BEFORE THE CIT(A), THE CIT(A) NOTED THAT THE HONBLE TRADE TAX TRIBUNAL BENCH-III, AGRA REDUCED THE ESTI MATE OF THE SALES TO RS.1,50,60,000/- VIDE ORDER DATED 24.01.2009. THEREFORE, THE CIT(A) REDUC ED THE ADDITION ON ACCOUNT OF GROSS PROFIT IN THE FOLLOWING MANNER : 3.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE AR, F ACTS OF THE CASE AND HONBLE TRADE TAX TRIBUNAL DECISION. I AM OF THE VI EW THAT THE REASSESSMENT WAS COMPLETED BY ESTIMATING SALES AS ESTIMATED BY THE T RADE TAX OFFICER WHILE FRAMING TRADE TAX ASSESSMENT. AS THE HONBLE TRADE TAX TRIBUNAL REDUCED THE SALES ESTIMATED BY THE TRADE TAX OFFICER, THEREFORE , THERE IS NO REASON TO DEVIATE FROM THE ORDER OF THE HONBLE TRADE TAX TRIBUNAL. I N VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ADDITION ON FINALLY ESTIMATED SALES SUSTAINED AT RS.1,50,60,000/- BY THE HONBLE TRADE TAX TRIBUNAL AS AGAINST RS.1,00,68,165/- 4 DISCLOSED BY THE APPELLANT BY APPLYING DISCLOSED GP AT 15.19% WORKS OUT TO RS.7,58,260/-. THE AO IS DIRECTED TO MODIFY THE ADD ITION ACCORDINGLY TO RS.7,58,260/-. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y CONSIDERED THE SAME ALONGWITH THE ORDER OF THE TAX AUTHORITIES BELOW. WE NOTED THAT I N THIS CASE, THE ASSESSING OFFICER MADE THE ADDITIONS BY ESTIMATING THE SALES AND BY APPLYING G .P. RATE TO THE SALES SO ESTIMATED. THE ASSESSEE HAS RETURNED THE SALES AT RS.1,00,68,165/- WHILE IT WAS ESTIMATED TO RS.2,21,00,000/- BY THE ASSESSING OFFICER. THE BASIS OF THE ESTIMATION OF THE SALE BY THE ASSESSING OFFICER WAS THE ORDER PASSED BY THE TRADE TAX OFFICER. THE ASSESSE E HAS CHALLENGED THE ORDER OF THE TRADE TAX OFFICER AND WENT BEFORE THE TRADE TAX TRIBUNAL. THE TRADE TAX TRIBUNAL, SUBSEQUENTLY, VIDE ITS ORDER DATED 24/.01.2009 REDUCED THE ESTIMATION OF T HE SALES TO RS.1,50,60,000/-. THE CIT(A) ACCORDINGLY DIRECTED THE ASSESSING OFFICER TO REDUC E THE SALES SO ESTIMATED BY THE ASSESSING OFFICER ON THE BASIS OF THE ESTIMATE AS HAS BEEN WO RKED OUT BY THE TRADE TAX TRIBUNAL. THE GROSS PROFIT @ 15.19% WAS APPLIED TO THE SALES IN EXCESS OF WHAT WAS ESTIMATED BY THE TRIBUNAL OVER THE SALES AS RETURNED BY THE ASSESSEE AND, THEREFOR E, THE ADDITION WAS REDUCED. WE NOTED THAT THE DEPARTMENT DOES NOT HAVE ANY EVIDENCE TO ESTIMATE T HE SALES AT RS.2,21,00,000/- EXCEPT THAT ORDER OF THE TRADE TAX OFFICER. THAT ORDER, IN OUR VIEW, IS NO MORE IN EXISTENCE AS GOT MERGED IN THE ORDER OF THE TRADE TAX TRIBUNAL AND THE TRIBUNAL HA S REDUCED THE SALES TO RS.1,50,60,000/-. NO COGENT MATERIAL OR EVIDENCE RELATING TO THE ESTIMAT E OF THE SALES MADE BY THE ASSESSING OFFICER OTHER THAN THAT ESTIMATED BY THE TRADE TAX TRIBUNAL WAS BROUGHT TO OUR NOTICE BY THE LEARNED DR. THE ASSESSING OFFICER CANNOT ESTIMATE THE SALES WIT HOUT BRINGING ANY EVIDENCE ON RECORD. THE ESTIMATE MUST BE BASED ON THE MATERIAL AVAILABLE ON RECORD. SINCE THE TRADE TAX TRIBUNAL REDUCED THE SALES TO RS.1,50,60,000/-, THEREFORE, I N OUR OPINION, THE CIT(A) HAS RIGHTLY REDUCED THE ADDITION IN RESPECT OF THE ESTIMATION OF THE SA LES. THEREFORE, WE ARE OF THE VIEW THAT NO 5 INTERFERENCE IS CALLED FOR IN THE ORDER OF THE CIT( A). WE ACCORDINGLY CONFIRM THE ORDER OF THE CIT(A). 8. IN THE RESULT, THE APPEAL OF THE REVENUE AND CRO SS OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.07.11. SD/- SD/- (H.S. SIDHU) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 28 TH JULY, 2011 *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE ASSISTANT REGISTRAR TRUE COPY