Shri Mehul C. Mehta, Ahmedabad V. The Dy.CIT.,Circle-10, Ahmedabad

ITA 373/AHD/2010

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6948 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 12-11-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 05-02-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ROOP CHAND SR DR
• Assessee Lawyers: S N DIVETIA

Judgement Text

, , , , D, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, D BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) ' )* + ) ' )* + ) ' )* + ) ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO.373/AHD/2010 [ASSTT.YEAR : 2006-2007] SHRI MEHUL C. MEHTA PROP: M.C. MACHINE & HARSH ENTERPRISE 408, SARTHIK-2, OPP: RAJPATH CLUB S.G. HIGWAY, AHMEDABAD 380 015. /VS. THE DCIT, CIR.10 AHMEDABAD. ( (( ( -. -.-. -. / APPELLANT) ( (( ( /0-. /0-. /0-. /0-. / RESPONDENT) 1& 2 3 ) / ASSESSEE BY : SHRI S.N. DIVETIA + 2 3 ) / REVENUE BY : SHRI ROOPCHAND, SR.DR 5 2 &(* / DATE OF HEARING : 12 TH NOVEMBER, 2014 678 2 &(* / DATE OF PRONOUNCEMENT : 12/12/2014 )9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE ASSESSEE FOR THE ASSTT.YEAR 2006-2007 IS DIRECTED AGAINST THE OR DER OF THE CIT(A). 2. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE IS REGARDING GROSS PROFIT ADDITION OF RS.11,04,669 BY APPLYING FLAT RATE OF G P AT 17% ON THE TURNOVER OF THE ASSESSEE. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS MANUFACTURER OF CABLE AND HAS SHOWN GP AT 14.04% DURING THE RELEVANT PERIOD. HE SUBMITTED THAT NO D EFECT COULD BE POINTED OUT BY THE AO IN THE ACCOUNT BOOKS OF THE ASSESSEE, AND EVEN OTHERWISE, ITA NO.373/AHD/2010 -2- THE GP APPLIED AT 17% IS TOO HIGH. THE LEARNED DR OPPOSED THE SUBMISSIONS OF THE LEARNED COUNSEL OF THE ASSESSEE. HE SUBMITTED THAT THERE WERE DEFECTS IN THE ACCOUNT BOOKS OF THE ASSE SSEE AND GP RATE APPLIED AT 17% WAS QUITE REASONABLE. HE RELIED ON THE ORDE RS OF THE AO AND THE CIT(A). 3. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THERE WERE CERTAIN DISCREPANCIES POINTED OUT BY THE AO IN THE RECORD MAINTAINED BY THE ASSES SEE. HOWEVER, DISCREPANCIES POINTED OUT BY THE AO WERE NOT SUFFIC IENT TO APPLY A HIGH GP RATE OF 17% ON THE TURNOVER OF THE ASSESSEE. THE A SSESSEE IS IN THE BUSINESS OF MANUFACTURING OF CABLE AND HAS DECLARED GP RATE OF 14.04% ON THE TURNOVER OF RS.3.73 CRORES IN M/S.HARSH ENTERPR ISE. THE ASSESSEE HAS DECLARED ALMOST SIMILAR TURNOVER AS IT WAS IN THE I MMEDIATELY PRECEDING ASSTT.YEAR 2005-06. IN THE ASSTT.YEAR 2004-05, THE TURNOVER OF THE ASSESSEE WAS COMPARATIVELY VERY LESS AT RS.2.27 CRO RES, AS AGAINST RS.3.73 CRORES DURING THE RELEVANT PERIOD. CONSIDERING THE NATURE OF BUSINESS OF THE ASSESSEE AND ENTIRETY OF THE FACTS AND CIRCUMST ANCES OF THE CASE, WE ARE OF THE VIEW THAT ENDS OF JUSTICE SHALL BE MET, IF T HE GP RATE OF 15% IS APPLIED ON THE TURNOVER OF RS.3,73,31,696/- OF THE ASSESSEE IN M/S. HARSH ENTERPRISES, AS AGAINST 14.04% SHOWN BY THE ASSESSE E AND 17% APPLIED BY THE CIT(A). ACCORDINGLY, THE GROUNDS OF THE APPEAL OF THE ASSESSEE ARE PARTLY ALLOWED. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT