Shri Rajendra Bansal, Indore V. The ITO WARD 4(3), Indore

ITA 39/IND/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5861 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-01-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 10-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S GAUTAM
• Assessee Lawyers: K C AGRAWAL

Judgement Text

ITA NO.39 OF 2014 RAJENDRA BANSAL 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE SMC BENCH, INDORE BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.39/IND/2014 A.Y. 2009-10 RAJENDRA BANSAL, INDORE PAN ABSPB 5579 Q :: APPELLANT VS ITO-WARD-4(3), INDORE :: RESPONDENT ASSESSEE BY SHRI K.C. AGRAWAL, CA RESPONDENT BY SHRI G.S. GAUTAM, DR DATE OF HEARING 12.1.2016 DATE OF PRONOUNCEMENT 12.1.2016 O R D E R THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING THE ORDER OF LD. CIT(A)-II, INDORE, DATED 20.9.2013 ON THE GROUND THAT LD. CIT(A) HAS ERRED IN ADOPTING THE G.P. RATE AT 3.50% AS AGAINST THE SAME IS ESTIMATED BY THE AO AT 4% WHEREAS THE G.P. RATE SHOWN BY THE ASSESSEE WAS AT 3.03%. THE ASSESSEE HAS ALSO FI LED ADDITIONAL GROUND WITH REGARD TO REJECTION OF BOOKS OF ACCOUNT U/S 145(3) OF THE I.T. ACT. ITA NO.39 OF 2014 RAJENDRA BANSAL 2 2. FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS ENGAGE D IN THE BUSINESS OF TRADING OF COALS. ON SCRUTINY OF THE DE TAILS, IT WAS OBSERVED BY THE AO THAT THE ASSESSEE HAS SHOWN TOTA L SALES OF RS.6,28,18,942/- ON WHICH G.P. HAS BEEN SHOWN AT RS .19,03,193/- @3.03%. THE AO ASKED THE ASSESSEE TO EXPLAIN THE RE ASON FOR THE DECREASE IN G.P. AS COMPARED TO PRECEDING YEARS AS IN THE YEAR 2007-08 & 2008-09, THE G.P. RATES WERE 4.03% & 4.37 %, RESPECTIVELY, WHEREAS IN THE PRESENT YEAR I.E. 2009 -10, THE G.P. RATE IS 3.03%. THE ASSESSEE FURNISHED REPLY BUT THE AO C ONCLUDED THAT CONSIDERING THE FACTS, G.P. AT RS.25,12,757/- @4% I S JUSTIFIED. ASSESSEE HAS ALREADY SHOWN G.P. AT RS.19,03,193/- @ 3.03%. THEREFORE, THE AO MADE AN ADDITION OF RS.6,09,564/- , THE DIFFERENCE OF G.P. AMOUNTS. ASSESSEE WENT IN APPEAL BEFORE LD. CIT(A), WHO RESTRICTED THE G.P. RATE @3.5%. THE RELEVANT PORTIO N OF THE ORDER OF THE LD. CIT(A) IS REPRODUCED HEREUNDER: IT IS OBSERVED THE THERE IS A MULTIFOLD INCRE ASE OF TURNOVER FROM 2.98 CRORES TO 6.28 CRORES AND MARGIN AL FALL IN G.P. RATE B Y 1%. THE AO HAS NOT GIVEN ANY FINDING AND NO MATERIAL HAS BEEN BROUGHT ON RECORD TO JUSTIFY THE APPLICATION OF G.P. RATE OF 4%. THEREFORE, AFTER CONSIDERING TH E REPLY OF THE APPELLANT, PARTICULARLY ON THE ISSUE OF ANOMALY IN RECORDING ITA NO.39 OF 2014 RAJENDRA BANSAL 3 OF CLOSING STOCK, THE INCREASE IN TURNOVER AND FACT S AND CIRCUMSTANCES OF THE CASE, IT SHALL BE REASONABLE T O ADOPT G.P. RATE OF 3.5% WHICH SHALL BE NEARER TO AVERAGE OF G. P. RATE FOR THE A.Y. 07-08 & 08-09 AND ALSO SHALL TAKE CARE OF INCREASE IN TURNOVER DURING THE YEAR UNDER CONSIDERATION. ACCOR DINGLY, APPELLANT GETS RELIEF OF RS.3,14,094/-. 3. STILL AGGRIEVED, THE ASSESSEE HAS APPROACHED ITA T. BEFORE ME, LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT THE AO WAS NOT RIGHT IN MAKING THE ADDITION AND THE LD. CIT(A) WAS ALSO NOT RIGHT IN SUSTAINING REMAINING ADDITION. HE FURTHER SUBMIT TED THAT THE DISCREPANCIES POINTED OUT BY THE AO WERE COMPLIED W ITH. A PERUSAL OF PAGE NOS.33 TO 46 OF THE PAPER BOOK WILL REVEAL THE FACT THAT THE DISCREPANCIES POINTED OUT BY THE AO WERE EXPLAINED. THUS, THE AO IS NOT RIGHT IN CONTENDING THAT NO EXPLANATION HAS BEEN FURNISHED. THE AO AND LD. CIT(A) HAVE IGNORED THE TREND AND MO DUS-OPERANDI OF BUSINESS, WHICH WAS DESCRIBED IN DETAIL. IT IS A WELL ESTABLISHED TREND IN THE BUSINESS THAT GOVT. COLLIERIES RAISE B ILLS AT THE LAST DAY OF EACH MONTH, WHEREAS LIFTING AS PER DELIVERY ORDER I S DONE ALL THROUGH THE MONTH. THEREFORE, IN ACCOUNTS, ALL PURCHASES AR E ACCOUNTED AT THE END OF THE MONTH BUT, SALES ARE SHOWN ON REGULA R BASIS. A ITA NO.39 OF 2014 RAJENDRA BANSAL 4 PERUSAL OF PAGE NOS. 26 TO 30 OF THE PAPER BOOK IND ICATES THAT THERE IS VARIATION OF ONLY 0.30 MT IN BILLING ON ACCOUNT OF SHORTAGE/EXCESS. BUT, ALL PURCHASES AND SALES ARE PROPERLY RECORDED. MOST OF THE PURCHASES ARE THROUGH GOVT. COLLIERIES AND SALES AR E REALIZED MAINLY THROUGH CHEQUES. SO FAR AS ALLEGED DIFFERENCE OF 32 .41 MT OF EXCESS SALE IS CONCERNED, IT IS SUBMITTED THAT A PE RUSAL OF PAGE NO.4 OF THE PAPER BOOK WILL REVEAL THAT THERE IS A SALES RETURN OF 16.22 MT, WHICH HAS RESULTED IN VARIATION IN STOCK OF 32. 41 MT, THUS, THE AO HAS COMMITTED CALCULATION MISTAKE. THEREFORE, TH E AO WAS NOT RIGHT TO INVOKE PROVISIONS OF SECTION 145(3) OF THE I.T. ACT. EVEN, NO SHOW-CAUSE NOTICE WAS ISSUED FOR REJECTION OF BOOKS OF ACCOUNT. ACCORDINGLY, THE LEARNED COUNSEL FOR THE ASSESSEE S UBMITTED THAT BOOK RESULTS MAY BE ACCEPTED AND THE ADDITION SUSTA INED BY THE LD. CIT(A) MAY BE DELETED. ON THE OTHER HAND, THE LD. D R RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES. 4. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE OR DERS OF LOWER AUTHORITIES. I FIND THAT IN VIEW OF THE FACTS AND S UBMISSIONS THEREOF, AS NARRATED ABOVE, THE MATTER REQUIRES RECONSIDERAT ION AT THE LEVEL OF THE AO. THE ASSESSEE HAS FILED A PAPER BOOK RUNN ING INTO 46 PAGES ALONG WITH WRITTEN SUBMISSION, WHEREIN, THE R ELEVANT ITA NO.39 OF 2014 RAJENDRA BANSAL 5 DOCUMENTS HAVE BEEN ANNEXED. ASSESSEE HAS, WITH THE HELP OF THE DOCUMENTARY EVIDENCES AS NARRATED ABOVE, AGITATED T HAT AO HAS COMMITTED CALCULATION MISTAKE AND THE AO/LD. CIT(A) HAVE IGNORED THE TREND AND MODUS-OPERANDI OF BUSINESS, WHICH WAS DESCRIBED IN DETAIL. THEREFORE, ALL THESE REQUIRE CONSIDERATION OF THE AO IN THE LIGHT OF THE ABOVE DISCUSSION AND ASSESSEES SUBMIS SIONS. THEREFORE, THE ISSUE ALONG WITH THE ISSUE OF REJECT ION OF BOOKS OF ACCOUNT IS RESTORED BACK TO THE FILE OF THE LD. AO. THE AO SHALL DECIDE THE MATTER AFTER GIVING DUE OPPORTUNITY OF H EARING TO THE ASSESSEE. THE ASSESSEE SHALL BE AT LIBERTY TO FILE ANY FURTHER EVIDENCE, IF ANY, IN SUPPORT OF THE CLAIM. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 12.1.2016 . SD/- (B.C. MEENA) ACCOUNTANT MEMBER DATED : 12.1.2016 !VYS! COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR, INDORE