DCIT, Meerut V. M/s. Arihant Publication (India) Ltd., Meerut

ITA 3756/DEL/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3832 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 24-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUNSHI RAM BIHAGRA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCHES (CAMP AT MEERUT) BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.3756/DEL./2016 (ASSESSMENT YEAR : 2012-13) DCIT, CIRCLE 1, VS. M/S. ARIHANT PUBLICATION (INDI A) LTD., MEERUT. 26, KALINDI COLONY, T.P. NAGAR, MEERUT. (PAN : AAECA7236R) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI DEEPAK KAPOOR, ADVOCATE SHRI AJAY KUMAR, AR REVENUE BY : SHRI MUNSHI RAM BIHAGRA, SENIOR DR DATE OF HEARING : 11.01.2019 DATE OF ORDER : 04.02.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, DCIT, CIRCLE 1, MEERUT (HEREINAFTER REFERRED TO AS THE REVENUE) BY FILING THE PRESENT APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 28.03.2016 PASSED BY LD. C IT (APPEALS), MEERUT QUA THE ASSESSMENT YEAR 2012-13 O N THE GROUNDS INTER ALIA THAT :- 1. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND FACT IN DIRECTING THE ASSESSIN G ITA NO.3756/DEL./2016 2 OFFICER TO APPLY GROSS PROFIT RATE OF 23% IN PLACE OF 25% AS ESTIMATED BY THE AO IGNORING THE FACT THAT N O STOCK REGISTER WAS MAINTAINED BY THE ASSESSEE AND W HEN THERE WAS NO QUANTITATIVE TALLY OF OPENING STOCK AN D PURCHASES WITH SALES AND CLOSING STOCK, THE BEST CO URSE LEFT WITH THE ASSESSING OFFICER WAS TO REJECT THE B OOKS OF ACCOUNTS U/S 145(2) OF THE IT ACT, 1961, AND TO EST IMATE THE GROSS PROFIT ON THE BASIS OF GROSS PROFIT DECLA RED BY OTHER PERSONS ENGAGED IN SIMILAR BUSINESS AND IN TH E SAME MARKET LOCATION. 2. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER OF THE LD. COMMISSIONER OF INCOME T AX APPEALS) MAY BE SET ASIDE AND THAT OF THE A.O. BE RESTORED. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ASSESSEE IS INTO PRINTING AND PUBLICATION OF BOOKS OF COMPETITIVE EXAMINATION SUCH AS ENTRANC E EXAMINATION, GUIDE BOOKS, EDUCATIONAL BOOKS, JOURNALS, MAGAZINES ETC. AND OTHER BOOKS AND HAS BEEN MAINTAINING REGULAR BOOKS OF ACC OUNTS AUDITED UNDER SECTION 44AB OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT). ASSESSING OFFICER MADE ADDITION OF RS.2,94, 38,818/- BY ESTIMATING THE GROSS PROFIT RATE @ 25% ON TURNOVER OF RS.76,26,63,673/- AS AGAINST THE GDP RATE OF 21.14% SHOWN BY THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS FAILED TO PRODUCE THE STOCK REGISTER. 3. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (A) WHO HAS REGISTERED THE GROSS PROFIT TO RS.17,54,12,645/- ITA NO.3756/DEL./2016 3 @ GP RATE OF 23% BY PARTLY ALLOWING THE APPEAL. FE ELING AGGRIEVED, THE REVENUE HAS COME UP BEFORE THE TRIBU NAL BY WAY OF FILING THE PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. UNDISPUTEDLY, AUDITED BOOKS OF ACCOUNT HAVE NOT BEEN DISPUTED BY THE ASSESSING OFFICER WHO HAS PROCEEDED TO ESTIMATE THE GROSS PROFIT @ 25% ON THE SOLE GROUND THAT STOC K REGISTER HAS NOT BEEN PRODUCED BY THE ASSESSEE. IT IS THE CASE O F THE ASSESSEE THAT THE FALL IN THE GDP RATE WAS DUE TO INCREASE IN THE TURNOVER AND COMPETITIVE MARKET. IT IS FURTHER CASE OF THE ASSES SEE THAT ASSESSEE DOES NOT MAINTAIN THE STOCK RECORDS TO SHOW THE QUA NTITATIVE DETAILS AND THE MANAGEMENT CARRIES OUT PHYSICAL VERIFICATIO N IN A PERIODIC INTERVALS AS WELL AS AT YEAR END TO WORK OUT THE CL OSING STOCK POSITION. 6. LD. CIT(A) AFTER TAKING INTO ACCOUNT THE FACT TH AT WHEN ASSESSEE IS ADMITTEDLY IN THE BUSINESS OF PUBLICATI ON AND SALE OF BOOKS WHICH ARE PRINTED AND SOLD IN NUMBERS AND ROY ALTY IS ALSO PAID TO AUTHORS ON A NUMBER OF COPIES PRINTED, IT I S NOT DIGESTIBLE THAT THE ASSESSEE HAS NOT MAINTAINED STOCK RECORDS. IN THESE ITA NO.3756/DEL./2016 4 CIRCUMSTANCES, LD. CIT (A), BY RELYING UPON THE DEC ISIONS RENDERED BY THE HONBLE DELHI HIGH COURT, HONBLE PUNJAB AND HARYANA HIGH COURT, HONBLE KERALA HIGH COURT AND HONBLE J URISDICTIONAL ALLAHABAD HIGH COURT, REACHED THE CONCLUSION TO EST IMATE THE GP RATE BY MAKING COMPARISON WITH OTHER PUBLICATIONS A T 23% AS AGAINST GP RATE OF 21.14% SHOWN BY THE ASSESSEE AND 25% ESTIMATED BY THE AO. SO, IN THESE CIRCUMSTANCES, FI NDING NO ILLEGALITY OR PERVERSITY IN THE IMPUGNED ORDER, PRE SENT APPEAL FILED BY THE REVENUE IS HEREBY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 4 TH DAY OF FEBRUARY, 2019. SD/- SD/- (N.S. SAINI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 4 TH DAY OF FEBRUARY , 2019 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), MEERUT. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.