Shri Chandi Marbles Pvt. Ltd., RAJSAMAND V. ACIT, UDAIPUR

ITA 355/JODH/2014

• Counselvise Citation: 35523314 RSA 2014
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-09-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 02-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 355 /JODH/2014 (A.Y. 200 6 - 07 ) M/S. CHANDI MARBLES PVT. LTD., N . H - 8, RAJASMAND . VS. ACIT, CIRCLE - 2 , UDAIPUR. PAN NO. AABCC 6955 G (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AMIT KOTHARI . DEPARTMENT BY : SHRI MAHESH KUMAR - D.R. DATE OF HEARING : 1 2 / 0 9 /201 4 . DATE OF PRONOUNCEMENT : 16 /0 9 /201 4 . O R D E R PER N.K. SAINI, A.M TH IS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 03 /03/201 4 OF L D . CIT(A), J ODHPUR . THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN HOLDING THAT THE ASSESSING OFFICER HAS PASSED THE ASSESSMENT ORDER AFTER PROVIDING THE PROPER AND REASONABLE OPPORTUNITY TO THE APPELLANT. 2. THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE FACT S AND CIRCUMSTANCES OF THE CASE IN CONFIRMING THAT THE ASSESSING OFFICER WAS JUSTIFIED IN 2 REJECTING THE BOOKS OF ACCOUNTS OF THE APPELLANT APPLYING THE PROVISIONS OF SECTION 145(3) OF THE ACT. 3. THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE FACTS AND CIRC UMSTANCES OF THE CASE IN CONFIRMING THE ADDITION OF TRADING PROFIT OF RS. 1,84,253/ - TO THE RETURNED INCOME OF THE APPELLANT. 4. THE APPELLANT RESERVES THE RIGHT TO ADD TO THE ABOVE GROUNDS OF APPEAL AND/OR TO AMEND, MODIFY AND TO DELETE ANY OF THEM ON OR BEFORE THE HEARING OF APPEAL. 2 FROM THE ABOVE GROUNDS, IT IS GATHERED THAT THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO THE SUSTENANCE OF TRADING ADDITION OF RS. 1,84,253/ - . 3. FACTS RELATING TO THIS CASE, IN BRIEF, ARE THAT THE ASSESSEE WAS ENGAGED IN CUTTING OF MARBLE BLO CK S AND MANUFACTURING OF SLABS AND TILES. THE ASSESSEE FILED THE RETURN OF INCOME ON 15/11/2006 DECLARED NIL INCOME . LATER ON, THE CASE WAS SELECTED FOR SCRUTINY . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD DEC L ARED GROSS PROFIT RATE OF 13.61% ON THE TURNOVER OF RS. 1,32,74,692/ - AS AGAINST GROSS PROFIT RATE OF 13. 32% ON THE TOTAL TURNOVER OF RS. 2,19,93,224/ - IN THE IMMEDIATELY PRECEDING YEAR . THE ASSESSING OFFICER POINTED OUT CERTAIN DEFECTS IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE AND REJECTED THE SAME BY INVOKING THE PROVISIONS OF SECTION 145(3) OF THE ACT . THE ASSESSING OFFICER POINTED OUT THA T THE GROSS PROFIT RATE DECLARED IN THE COMPARABLE CASE WAS BETTER 3 THA N THE GROSS PROFIT RATE DECLARED BY THE ASSESSEE AS PER THE FOLLOWING DETAILS: - S.NO. NAME OF THE COMPANY G.P. RATE TURNOVER 1 MURAWATIA MARBLES PVT. LTD., RAJSAMAND 18.82% RS. 81,80,876/ - 2 BHOLENATH MARBLES PVT. LTD., RAJSAMAND 19.00% RS. 98,90,854/ - 3 MARUTINANDAN MARBLES PVT. LTD. RAJSAMAND 20.04% RS. 98,42,585/ - 4 MECSON MARBLES PVT. LTD. RAJSAMAND 24.30% RS. 92,21,488 / - 5 SHRI BALAJI WHITE MARMO STONE PVT. LTD. RAJSAMAND 25.88% RS. 54,44,815 / - THE ASSESSING OFFICER APPLIED GROSS PROFIT RATE OF 20% AND MADE THE TRADING ADDITION OF RS. 8,48,452/ - . 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) , WHO SUSTAINED THE ADDITION OF RS. 1,84,253/ - BY ESTIMATING THE GROSS PROFIT RATE AT 15% INSTEAD OF 20% ESTIMATED BY THE ASSESSING OFFICER. THE LD. CIT(A) HELD THAT THE ASSESSING OFFICER HAD ONLY COMPARED THE GROSS PROFIT RATE DECLARED BY OTHER CONCERNS WHEREA S AS A GENERAL RULE, THE ASSESSING OFFICER SHOULD HAVE COMPARED ALL THE FACTS LIKE TURNOVER , CAPITAL EMPLOYED , LOCALITY ETC. AND NOT A PICK & CHOOSE MANNER AS DONE IN THE 4 CASE OF THE ASSESSEE. HE ALSO POINTED OUT THAT THE TURNOVER OF ALL THE COMPARABLE CASES WAS MUCH BELOW THE TURNOVER OF THE ASSESSEE. NOW THE ASSESSEE IS IN APPEAL. 5. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE COMPARABLE CASES RELIED BY THE ASSESSING OFFICER WERE NOT COMPARABLE AT ALL BECAUSE THEY WERE HAVING LOW TURNOVER IN COMPARISON TO THE TURNOVER IN ASSESSEES CASE AND WERE COMPARATIVELY NEW UNITS. IT WAS FURTHER SUBMITTED THAT THE GROSS PROFIT RATE AS WELL AS NET PROFIT RATE DECLARED BY THE ASSESSEE WERE BETTER IN COMPARISON TO THE PRECEDING YEAR AND EVEN IF THE BOOKS OF ACCOUNTS WE RE TO BE REJECTED, PAST HISTORY OF THE ASSESSEES OWN CASE WAS TO BE CONSIDERED WHILE APPLYING THE GROSS PROFIT RATE. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: - 1) CIT VS. GOTAN LIME KANIJ UDYOG (2001) 169 CTR (RAJ.) 2. CIT VS. SANJAY OIL CAKE IN DUSTRIES (2005) 197 CTR (GUJ.) 520 3. GEETANJALI WOOLENS PVT. LTD. VS. ACIT (1994) 50 TTJ (AHD.) 4. MILAP TEXTILES MILLS VS. DCIT (2004) 86 TTJ (JD.) 1125. 5. DCIT VS. ASHOK KUMAR GULSHAN RAI AND PARTY 33 TW 202 (JP.) 6. SANJEEV KUMAR LODHA VS. ITO 86 TTJ 402 (JODHPUR) 7. JCIT VS. KIRAN UDHOG 34 TW 80 (ITAT JP) 8. ACIT VS. RAM SHAY WOOL COMBERS 2 SOT 592. 9. JUPITOR TEXTILES VS. ITO 77 TTJ 735. 10. SHANKER RICE CO. VS. ITO (2000) 67 TTJ (ASR) (SB) 84. 5 6 . IN HIS RIVAL SUBMISSIONS, THE L EARNED D.R. STRONGLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND FURTHER SUBMITTED THAT BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE W ERE DEFECTIVE, THEREFORE, THE ADDITION WAS RIGHTLY MADE BY THE ASSESSING OFFICER ON THE BASIS OF THE GROSS PROFIT RAT E DECLARED BY THE COMPARABLE CASES. 7 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE GROSS PROFIT RATE DECLARED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION WAS AT 13. 61% IN COMPARISON TO THE GROSS PROFIT RATE IN THE IMMEDIATELY PRECEDING YEAR AT 13.32%. T HEREFORE, THE GROSS PROFIT RATE DECLARED BY THE ASSESSEE WAS BETTER IN THE YE AR UNDER CONSIDERATION AND EVEN IF THE BOOKS OF ACCOUNTS WERE REJECTED, NO ADDITION WAS CALLED F OR WHEN THE ASSESSEE HAS SHOWN BETTER TRADING RESULTS AND THE COMPARABLE CASES RELIED BY THE ASSESSING OFFICER WERE NOT HAVING THE SAME FACT S AS WERE INVOLVED IN THE CASE OF THE ASSESSEE PARTICULARLY THE TURNOVER WAS LESS AND THE UNITS WERE NEW IN COMPARISON TO THE ASSESSEE. THE LD. CIT(A) ALSO WHILE ESTIMATING THE GROSS PROFIT RATE AT 15% HAS NOT GIVEN ANY BASIS AND IGNORED THIS VITAL FACT THAT THE GROSS PROFI T RATE DECLARED BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION WAS BETTER IN COMPARISON TO THE IMMEDIATELY PRECEDING 6 YEAR . THEREFORE, THE TRADING ADDITION SUSTAINED BY THE LD. CIT(A) ON ACCOUNT OF GROSS PROFIT RATE WAS NOT JUSTIFIED, A CCORDINGLY, THE SAM E IS DELETED. 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ( ORDER PRONOUNCED IN THE COURT ON 16 TH SEPTEMBER , 201 4) . S D/ - SD/ - ( HARI OM MARATHA ) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 16 TH SEPTEMBER , 201 4 . VR/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD. CIT 4. THE CIT(A) 5. THE D.R SR. PRIVATE SECRETARY , ITAT, JODHPUR .