Shri Ajay C.Panchal, Ahmedabad V. The Income tax Officer,Ward-6(4), Ahmedabad

ITA 367/AHD/2009

• Counselvise Citation: 36720514 RSA 2009
• Duration Of Justice: 2 year(s) 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 19-10-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 04-02-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P R GHOSH
• Keywords: Rejection of books of accounts; Cost of acquisition; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, AHMEDABAD BEFORE SHRI T. K. SHARMA , JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO. 367/ AHD/2009 (ASSESSMENT YEAR 2005-06) SHRI AJAY C. PANCHAL, SHIV INDUSTRIES COMPOUND, OPP. LUCAS SERVICE STATION, NR. L.K. PATEL TIMBER MARKET, NAROL, AHMEDABAD VS. CIT(A) XI, AHMEDABAD PAN/GIR NO. : AGDPP3528M (APPELLANT) .. (RESPONDENT) APPELLANT BY: WRITTEN SUBMISSION RESPONDENT BY: SHRI P.R. GHOSH, SR. DR DATE OF HEARING: 19.10.2011 DATE OF PRONOUNCEMENT: 25-10-2011 O R D E R PER SHRI A. K. GARODIA, AM:- THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORD ER OF LD. CIT(A) XI, AHMEDABAD DATED 04.12.2008 FOR THE ASSESSMENT Y EAR 2005-06. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE RUNNING I NTO FOUR PAGES BUT THE ONLY GRIEVANCE OF THE ASSESSEE IS REGARDING CON FIRMATION OF ADDITION ON ACCOUNT OF LOW G.P. TO THE EXTENT OF RS.2,01,223 /- OUT OF TOTAL ADDITION MADE BY THE A.O. ON THIS ACCOUNT OF RS.4,02,445/- A ND FOR CONFIRMING THE 2 ND ADDITION MADE BY THE A.O. OF RS.630/- ON ACCOUNT O F DIFFERENCE IN CASH BOOK. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE ON THE A PPOINTED DATE OF HEARING BUT WRITTEN SUBMISSION OF THE ASSESSEE DATE D 14.05.2011 IS I.T.A.NO.367 /AHD/2009 2 AVAILABLE ON RECORD IN WHICH IT AHS BEEN REQUESTED THAT THE APPEAL MAY BE DECIDED AFTER CONSIDERING THESE WRITTEN SUBMISSIONS OF THE ASSESSEE AND HENCE, WE PROCEED TO DECIDE THE APPEAL OF THE ASSES SEE AFTER HEARING LD. D.R. OF THE REVENUE AND AFTER CONSIDERING THESE WRI TTEN SUBMISSIONS OF THE ASSESSEE. LD. D.R. OF THE REVENUE SUPPORTED THE OR DERS OF AUTHORITIES BELOW. 4. IN THE WRITTEN SUBMISSIONS OF THE ASSESSEE, IT W AS SUBMITTED BY THE ASSESSEE THAT RELIANCE WAS PLACED ON THE JUDGMENT O F HONBLE RAJASTHAN HIGH COURT IN THE CASE OF JAIMAL RAM & PARTY VS CIT AS REPORTED IN 172 TAXMAN 228. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW AND THE JUDGEMENT CITED BY THE ASSESSEE IN HIS WRITTEN SUBM ISSIONS. WE FIND THAT IT IS NOTED BY THE A.O. IN PARA 3.1 OF THE ASSESSME NT ORDER THAT DURING THIS YEAR, THE ASSESSEE HAS DECLARED G.P. @ 10.20% AS AG AINST 17.21% IN THE PRECEDING YEAR I.E. ASSESSMENT YEAR 2004-05. THE A .O. ASKED THE ASSESSEE TO EXPLAIN THE REASON FOR FALL IN G.P. WIT H SUPPORTING DOCUMENTARY EVIDENCE. THE A.O. FURTHER NOTED IN PA RA 3.2 OF THE ASSESSMENT ORDER THAT THE ASSESSEE VIDE LETTER DATE D 20.11.2007, HAS SIMPLY STATED THAT THE G.P. RATIO IS DECREASED DUE TO DECLINE IN SALES TURNOVER AND INCREASE IN PURCHASE COST OF RAW MATER IAL. THE A.O. FURTHER CONFRONTED THE ASSESSEE ON THIS ISSUE AND AS PER TH E LETTER DATED 04.12.2007, THE ASSESSEE FURNISHED SOME PURCHASE BI LLS FOR THE PRESENT YEAR AND COMPARATIVE RATES FOR THE LAST YEAR TO SUB STANTIATE THE CLAIM OF INCREASE IN COST OF PURCHASES BUT WITH REGARD TO RE DUCTION IN SALE PRICE OF THE PRODUCTS MANUFACTURED BY THE ASSESSEE, ASSESSEE DID NOT FURNISH ANY SUPPORTING EVIDENCE. THE A.O. WAS NOT SATISFIED WI TH THE SUBMISSIONS OF THE ASSESSEE AND HE REJECTED THE BOOKS OF ACCOUNTS U/S 145(3) OF THE ACT I.T.A.NO.367 /AHD/2009 3 AND ADOPTED THE SAME G.P. RATE OF 17.21% WHICH WAS SHOWN BY THE ASSESSEE IN THE PRECEDING YEAR AND ON THIS BASIS, H E MADE ADDITION OF RS.4,02,445/-. BEING AGGRIEVED, THE ASSESSEE CARRI ED THE MATTER IN APPEAL BEFORE LD. CIT(A). IT WAS DECIDED BY THE LD. CIT(A ) THAT IN THE ABSENCE OF STOCK REGISTER, HE IS OF THE OPINION THAT REJECT ION OF BOOKS OF ACCOUNT DOES NOT CALL FOR ANY INTERFERENCE BUT REGARDING TH E ADDITION MADE BY THE A.O., HE UPHELD THE ADDITION OF RS.2,01,223/- ONLY TO THE EXTENT OF 50% OF THE ADDITION MADE BY THE A.O. NOW, BEFORE US, THE ONLY ARGUMENT OF THE ASSESSEE IS THE RELIANCE ON THE JUDGMENT OF HONBLE RAJASTHAN HIGH COURT RENDERED IN THE CASE OF JAIMAL RAM & PARTY (SUPRA). WE FIND THAT RELIANCE HAS BEEN WRONGLY PLACED BY THE ASSESSEE ON THIS JUDGMENT OF HONBLE RAJASTHAN HIGH COURT BECAUSE THIS JUDGEMENT IS AGAINST THE ASSESSEE. IN THAT CASE, IT WAS HELD BY HONBLE RAJ ASTHAN HIGH COURT THAT WHEN NET PROFIT OF THE ASSESSEE IN THE IMMEDIATELY PRECEDING YEAR WAS QUITE HIGH IN COMPARISON TO NET PROFIT RATE SHOWN B Y THE ASSESSEE IN THE RELEVANT YEAR AND ALTHOUGH THE ASSESSEE PRODUCES BO OKS OF ACCOUNTS BUT THE ASSESSEE ADMITTEDLY DID NOT PRODUCE STOCK REGIS TER AND SALE BILLS, TRADING ADDITION OF RS.22 LACS CANNOT BE SAID TO BE UNJUSTIFIED OR ARBITRARY. HENCE, THIS JUDGMENT IS OF NO HELP TO THE ASSESSEE IN THE PRESENT CASE RATHER IT COVERS THE ISSUE AGAINST THE ASSESSEE BEC AUSE IN THE PRESENT CASE ALSO, THE ASSESSEE HAS NOT PRODUCED STOCK REGISTER AND ALSO DID NOT PRODUCE SALE BILLS TO ESTABLISH THAT THE SALE PRICE IN THE PRESENT YEAR IS LOWER AS COMPARED TO THE PRECEDING YEAR. IN THE GR OUNDS OF APPEAL ALSO, THE ASSESSEE HAS PLACED RELIANCE ON SEVERAL JUDGMEN TS BUT THESE JUDGEMENTS ARE ALSO OF NO HELP TO THE ASSESSEE IN T HE PRESENT CASE BECAUSE THE FACTS ARE DIFFERENT. IN THOSE CASES, IT WAS HE LD THAT ARBITRARY ADDITION STRAIGHTFORWARD ON THE GROUND OF LOW PROFIT IS NOT PERMISSIBLE BUT IN THE PRESENT CASE, THE A.O. HAS GIVEN REASONING IN ADDIT ION TO THE FACT THAT THE I.T.A.NO.367 /AHD/2009 4 G.P. RATE SHOWN BY THE ASSESSEE IS LESSER AND THE A .O. HAS NOTED THAT THE ASSESSEE DID NOT MAINTAIN STOCK REGISTER AND DID NO T PRODUCE ANY EVIDENCE TO SUBSTANTIATE THIS CONTENTION THAT THE SALE PRICE IN THE PRESENT YEAR IS LOWER AS COMPARED TO THE PRECEDING YEAR. IN VIEW O F THIS FACTUAL FINDING OF THE A.O., WHICH COULD NOT BE CONTROVERTED BY THE ASSESSEE BEFORE THE LD. CIT(A) OR BEFORE US, VARIOUS JUDGMENTS CITED BY THE ASSESSEE IN THE GROUNDS OF APPEAL ARE ALSO OF NO HELP TO THE ASSESS EE IN THE PRESENT CASE. WE, THEREFORE, DECLINE TO INTERFERE IN THE ORDER OF LD. CIT(A). 6. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS DIS MISSED. 7. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH OCT., 2011. SD/- SD/- (T.K. SHARMA) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED : 25-10-2011 SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 19.10 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 20.10 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.S. 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 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. ..