Smt. Savita Goel, Muzaffarnagar V. ITO, Muzaffarnagar

ITA 3794/DEL/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6572 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 27-10-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 28-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-1, NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER ITA NO.1666/DEL/2013 ASSESSMENT YEAR : 2009-10 SAVITA GOEL AOP, 444, BHRAMPURI, MUZAFFARNAGAR (UP). VS. INCOME TAX OFFICER, WARD-1(1), MUZAFFARNAGAR PAN : AACAS 1442 B (APPELLANT) (RESPONDENT) ITA NO.3794/DEL/2016 ASSESSMENT YEAR : 2009-10 SAVITA GOEL, 444, BRAHMPURI, MUZAFFARNAGAR (UP). VS. INCOME TAX OFFICER, WARD-2(3), MUZAFFARNAGAR PAN : AACAS 1442 B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PREM PRAKASH, ADV. SHRI ASHISH AGARWAL, ADV. RESPONDENT BY : SHRI S. K. JAIN, SR. DR DATE OF HEARING : 27-10-2016 DATE OF PRONOUNCEMENT : 01-12-2016 O R D E R PER S.V. MEHROTRA, A.M : BOTH THE CAPTIONED APPEALS HAVE BEEN PREFERRED BY T HE SAME ASSESSEE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY TH IS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2 ITA NO.1666/DEL/2013 ITA NO.3794/DEL/2016 ITA NO.1666/DEL/2013 (A.Y. 2009-10): 2. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AG AINST THE ORDER DATED 13.12.2012 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS), MUZAFFARNAGAR, U/S 143(3) OF THE INCOME TAX ACT, 19 61 (IN SHORT THE ACT) RELATING TO A.Y. 2009-10. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FI LED HER RETURN OF INCOME DECLARING INCOME OF RS.1,73,190/- IN THE STATUS OF AOP. THE ASSESSEE WAS ENGAGED IN THE PURCHASE AND SALE OF COUNTRY LIQUOR. THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAD PURCHASED AND SOLD THE CO UNTRY LIQUOR HAVING CONCENTRATION OF 36% V/V WHICH WERE 180 ML. SIZE, 2 00 ML. SIZE, 375 ML. SIZE AND 750 ML. SIZE. HE NOTED THAT THE ASSESSEE PRODUCED BOOKS OF ACCOUNT BUT SALES WERE NOT VOUCHED. HE FURTHER NOTED THAT ASSESSEE IN HIS REPLY DATED 13.10.2011 STATED THAT M.R.P. OF COUNTRY LIQUOR SOL D WAS AS UNDER :- I) M.R.P. OF 180 ML. RS.33/- II) M.R.P. OF 200 ML. RS.37/- III) M.R.P. OF 375 ML. RS.66/- IV) M.R.P. OF 750 ML. RS.131/- 4. HE FURTHER NOTED THAT THE PURCHASE PRICE OF THE AFORESAID ITEMS WERE AS UNDER :- I) PURCHASE PRICE OF 180 ML. RS.26.17 II) PURCHASE PRICE OF 200 ML. RS.28.61 III) PURCHASE PRICE OF 375 ML. RS.51.87 3 ITA NO.1666/DEL/2013 ITA NO.3794/DEL/2016 IV) PURCHASE PRICE OF 750 ML. RS.99.31 5. THUS, HE CONCLUDED THAT THE AVERAGE G.P. ON THES E FOUR ITEMS WAS MUCH HIGHER THAN THE G.P. SHOWN BY THE ASSESSEE. H E REQUIRED THE ASSESSEE TO SHOW-CAUSE AS TO WHY THE BOOKS OF ACCOUNT MAY NO T BE REJECTED U/S 145(3) AS THE SALES WERE NOT VOUCHED. AFTER CONSID ERING THE ASSESSEES SUBMISSIONS, THE ASSESSING OFFICER REJECTED THE BOO KS OF ACCOUNT AND TOOK G.P. AT 21% OF TOTAL PURCHASES AND RE-DRAFTED THE T RADING AND PROFIT & LOSS ACCOUNT AND ARRIVED AT NET PROFIT OF RS.6,23,965/- AFTER DISALLOWING 25% OF TRAVELLING AND LOADING AND UNLOADING EXPENSES. HE FURTHER DISALLOWED RS.20,000/- FROM SHOP RENT CLAIMED AT RS.27,000/- B Y ASSESSEE. LD. CIT(A) CONFIRMED THE ADDITION OF RS.6,23,970/- INTER-ALIA OBSERVING AS UNDER :- THE APPELLANTS CONTENTION THAT THE AO HAD NOT POI NTED OUT ANY DEFECTS IN BOOKS OF ACCOUNT HAS NO FORCE PARTICULARLY IN ABSENCE OF SALE VOUCHERS, THE BOOKS WERE INCOMPLETE AND AS SUCH, THE AO WAS FULLY JUSTIFIED IN REJECTING THE SAME. THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDIN GS AND APPELLATE PROCEEDINGS AND UTTERLY FAILED TO SUBSTANTIATE HER CLAIM OF SAL ES AFFECTED AT LESS THAN M.R.P. BY SUPPORTING DETAILS AND EVIDENCES. ON THE OTHER HAN D IN THE LIGHT OF THE FACTS AS DISCUSSED ABOVE IT IS NOT A CASE OF MAKING SALES AT LESS THAN M.R.P. THE AO IN THE ASSESSMENT ORDER AS WELL AS REMAND REPORT HAS C OGENTLY DISCUSSED THE IMPUGNED ISSUE WHICH IS NOT REPEATED HERE FOR THE S AKE OF BREVITY. THE APPELLANT HAS UTTERLY FAILED IN REBUTTING THE FINDINGS OF THE AO AS MENTIONED IN THE REMAND REPORT. THUS IT IS HELD THAT THE AO WAS PERFECTLY JUSTIFIED IN ESTIMATING GP @ 21% OF TOTAL PURCHASES AT RS.21,36,863/- AND THEREB Y DETERMINING NET PROFIT AT RS.6,23,970/-. THE ACTION OF THE AO IS CONFIRMED O N THIS ASPECT. GROUNDS OF APPEAL NOS.2 TO 9 ARE DISMISSED. 4 ITA NO.1666/DEL/2013 ITA NO.3794/DEL/2016 6. LD. CIT(A) PARTLY ALLOWED THE ASSESSEES APPEAL. BEING AGGRIEVED WITH THE ORDER OF LD. CIT(A), THE ASSESSEE IS IN AP PEAL BEFORE THE TRIBUNAL AND HAS TAKEN FOLLOWING GROUNDS OF APPEAL :- 1. APPELLATE ORDER AS COMPLETED IS WRONG, ILLEGAL AND AGAINST THE FACTS. 2. THAT THE L'D C.I.T. (A) SHOULD NOT HAVE CONFIRME D THE REJECTION OF ACCOUNT & APPLICATION OF HIGHER G.P., AS DONE BY L'D A.O. I N ASSESSMENT ORDER. 3. THAT THE APPELLANT HAS MAINTAINED THE PROPER ACC OUNTS INCLUDING STOCK REGISTER. THE L'D A.O. HAS REJECTED THE ACCOUNTS FO R WANT OF SALES VOUCHER WITHOUT CONFRONTING ANY CASE, WHERE THE SEL LING RATE IS HIGHER THEM APPELLANT. ON THE OTHER HAND THE APPELLANT AOP FILED THE COMPA RABLE CASE OF THE SAME YEAR, PASSED U/S 143(3) OF THE I.T.ACT 196 1 WHERE THE G.P. & SELLING RATE ARE LESSER THEN APPELLANT'S G.P. AND A PPELLANTS SELLING RATE. THE APPELLANT HAS ALSO FILED THE JUDGEMENT OF HON'B LE HIGH COURT & HON'BLE ITAT BUT LD C.I.T. (A) HAS NEITHER GIVEN A NY IMPORTANCE TO THE COMPARABLE CASE & HAS IGNORED THE JUDGEMENT OF HON' BLE HIGH COURT & HON'BLE ITAT. THE L'D CIT(A) HAS NOT CONFRONTED ANY OTHER CASE WHERE G.P. SHOWN IS BETTER THAN APPELLANT CASE. IN THE CIRCUMSTANCES, L'D CIT(A) IS NOT JUSTIFIED T O CONFIRM THE REJECTION OF ACCOUNT. 4. THAT THE L'D C.I.T. (A) HAS ALSO CONFIRMED THE R ATE OF G.P. APPLIED BY A.O. IN ASSESSMENT ORDER ON THOSE GROUNDS WHICH ARE NOT EXISTED IN THE CASE OF APPELLANT AOP. IN FACT, L'D CIT(A) HAS CONFIRMED TH E APPLICATION OF HIGHER RATE ON THE BASIS OF CONJUNCTURE & SURMISES. 5. THAT THE L'D A.O. IS TOTALLY FAIL TO CONFRONT AN Y OTHER CASE WHERE G.P. IS BETTER THEN APPELLANT'S G.P. EVEN IN COMPARABLE CAS E OF THE SAME YEAR, WHOSE RESULTS ARE ACCEPTED BY A.O. IN THE ORDER U/S 143(3) OF THE I.T. ACT, FILED BEFORE L'D CIT (A} IS TOTALLY IGNORED. THE L' D A.O. HAS NOT SUMMON THE OTHER DEALER OF NEARBY PALACES FOR ENQUIRING TH EIR G.P. & N.P. SHOWN BY THEM, AFTER MAKING THE REQUEST OF APPELLANT. IN THESE CIRCUMSTANCES THE L'D CIT (A) SHOULD HAVE NOT CONFIRMED THE APPLICATI ON OF HIGHER RATE OF G.P. 6. THAT THE G.P. APPLIED BY A.O. IS VERY VERY EXCES SIVE WHEN THE APPELLANT FILED THE COMPARABLE CASE & DECISION OF HONBLE HIG H COURT & HONBLE ITAT IN SUPPORT OF G.P. SHOWN BY HIM. IN THE APPEL LATE ORDER, THE LD CIT(A) SHOULD HAVE ACCEPTED THE G.P. SHOWN BY THE A PPELLANT AFTER CONSIDERING THE COMPARABLE CASES & OTHER JUDGEMENTS OF HIGHER COURTS. 7. THE LD CIT(A) SHOULD HAVE NOT CONFIRMED THE ENH ANCEMENT OF THE SALES ON THE BASIS OF CONJUNCTURE & SURMISES. 5 ITA NO.1666/DEL/2013 ITA NO.3794/DEL/2016 7. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSE SSEES BOOKS OF ACCOUNT HAD BEEN REJECTED SOLELY ON THE GROUND THAT SALES WERE NOT DULY VOUCHED. HE RELIED UPON THE DECISION OF HONBLE AL LAHABAD HIGH COURT IN THE CASE OF CIT VS. PRAYAG WINES WHEREIN HONBLE HI GH COURT HAS HELD AS UNDER :- 7. HAVING HEARD THE LEARNED COUNSEL FOR THE PARTIE S, WE ARE OF THE VIEW THAT IT IS NOT NECESSARY THAT A CASH MEMO IS REQUIRED TO BE ISSUED FOR EACH AND EVERY SALE AND CONSEQUENTLY, BOOKS OF ACCOUNTS COULD NOT BE REJECTED ON THE SOLE GROUND THAT ONLY ONE CONSOLIDATED CASH MEMO WAS ISS UED AT THE END OF THE DAY. 8. IN RAMJI LAL AND SONS VS. COMMISSIONER SALES TAX , 50 STC 344 THE ALLAHABAD HIGH COURT HAS HELD THAT NO ADVERSE INFER ENCE AGAINST THE VERACITY OF THE ACCOUNT MAINTAINED BY THE ASSESSEE COULD BE DRA WN NOR THE ASSESSEE'S ACCOUNT BOOKS COULD BE REJECTED ON THE GROUND OF NO T ISSUING SEPARATE CASH MEMO IN RESPECT OF PETTY SALES AND IN ISSUING A CONSOLID ATED CASH MEMO AT THE END OF THE DAY. THE SAME VIEW WAS REITERATED BY THE ALLAHABAD HIGH COURT IN THE CASE OF COMMISSIONER OF SALES TAX VS. VISHNBU CHANDRA VIPIN CHANDRA, 51 STC 345, WHEREIN THE COURT HELD THAT FAILURE TO ISSUE CASH M EMOS BY ITSELF WAS INSUFFICIENT TO REJECT THE BOOKS OF ACCOUNT, WHERE THE BOOKS WER E OTHERWISE VERIFIABLE. 9. IN THE LIGHT OF THE AFORESAID, THE ORDER OF THE ASSESSING OFFICER REJECTING THE BOOKS OF ACCOUNT UNDER SECTION 145(3) OF THE AC T AND CONSEQUENTLY, MAKING AN ADDITION OF THE INCOME ON ESTIMATE BASIS WAS REV ERSED BY THE TRIBUNAL. FURTHER, SUCH ADDITION MADE ON ESTIMATE BASIS IS A QUESTION OF FACT AS HAS BEEN HELD IN COMMISSIONER (CUSTOM VS. STONEMAN MARBLE, ( 2011) 2 SCC 758, VIJAY K.TALWAR VS. CIT, (2011) 1 SCC 673, NEW PLAZA RESTA URANT VS. ITO, 309 ITR 259 (HP) AND SANJAY OIL CAKE VS. CIT, 316, ITR 274 (GUJRAT).' 8. IN THE CASE OF PRAYAG WINES (SUPRA), THE HONBLE ALLAHABAD HIGH COURT RELIED UPON THE DECISION IN THE CASE OF COMMI SSIONER OF SALES TAX VS. VISHNBU CHANDRA VIPIN CHANDRA, 50 STC 345, WHEREIN THE COURT HELD THAT FAILURE TO ISSUE CASH MEMOS WAS INSUFFICIENT TO REJ ECT THE BOOKS OF ACCOUNT, WHERE THE BOOKS WERE OTHERWISE VERIFIABLE. IN THE PRESENT CASE, THE ASSESSEE 6 ITA NO.1666/DEL/2013 ITA NO.3794/DEL/2016 IN ITS REPLY DATED 31.10.2011 NOTED AT PAGE 2 OF TH E ASSESSMENT ORDER HAD CLEARLY STATED THAT STOCK REGISTER WAS MAINTAINED B Y ASSESSEE WHICH GAVE ALL THE DETAILS OF OPENING STOCK, PURCHASES AND SALES Q UANTITY-WISE. THE ASSESSEE HAD ALSO FILED MONTH-WISE DETAILS OF PURCH ASES, SALES AND CLOSING STOCK WHICH HAS BEEN NOTED AT PAGE 3 OF THE ASSESSM ENT ORDER. THUS, IN THE PRESENT CASE ALSO, IT CANNOT BE SAID THAT THERE WER E NO DETAILS MAINTAINED BY THE ASSESSEE IN REGARD TO SALES. THEREFORE, THE DE CISION RELIED UPON BY LD. COUNSEL FOR THE ASSESSEE IS SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE AND, THEREFORE, RESPECTFULLY FOLLOWING THE SAM E, IT IS HELD THAT THE REJECTION OF BOOKS OF ACCOUNT SOLELY ON THE BASIS O F NON-MAINTENANCE OF SALES VOUCHERS WAS NOT JUSTIFIED. ACCORDINGLY, THE ADDITION MADE BY THE ASSESSING OFFICER, AS CONFIRMED BY LD. CIT(A), IS D ELETED. 9. IN THE RESULT, THE ASSESSEES APPEAL IN ITA NO.1 666/DEL/2013 FOR ASSESSMENT YEAR 2009-10 IS ALLOWED. ITA NO.3794/DEL/2016 (A.Y. 2009-10): 10. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER DATED 17.03.2016 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS), MUZAFFARNAGAR, U/S 271(1)(C) OF THE ACT RELATING TO A.Y. 2009-10. 11. THE ASSESSING OFFICER HAD INITIATED PENALTY PRO CEEDINGS U/S 271(1)(C) IN RESPECT OF ADDITION MADE IN ASSESSMENT ORDER. S INCE I HAVE DELETED THE 7 ITA NO.1666/DEL/2013 ITA NO.3794/DEL/2016 ADDITION IN THE QUANTUM APPEAL, THEREFORE, THE PENA LTY ORDER HAS NO LEGS TO SURVIVE. 12. IN THE RESULT, ASSESSEES APPEAL IN ITA NO.3794 /DEL/2016 FOR ASSESSMENT YEAR 2009-10 IS ALSO ALLOWED. 13. RESULTANTLY, BOTH THE CAPTIONED APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 01 ST DAY OF DECEMBER, 2016. SD/- SD/- (SUDHANSHU SRIVASTAVA) (S.V. MEHROTRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 01-12-2016. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT; 2) THE RESPONDENT; 3) THE CIT; 4) THE CIT(A)-, NEW DELHI; 5) THE DR, I.T.A.T., NEW DELHI; BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI