The ITO, Ward-9(2), Surat V. Shri Jayesh Rameshchandra Gandhi, Surat

ITA 394/AHD/2012

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9578 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 26-05-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 10-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gross profit estimation

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ ././ ./ ITA NO. 394/AHD/2012 / ASSESSMENT YEAR: 2007-08 ITO, WARD-9(2), SURAT V/S. SHRI JAYESH RAMESHCHANDRA GANDHI, GANDHI COLONY, AK ROAD, SURAT PAN : ABKPG 0796 Q / // / (APPELLANT) / // / (RESPONDENT) REVENUE BY : SHRI NIMESH YADAV, SR. DR. ASSESSEE(S) BY : NONE !' # $%&/ // / DATE OF HEARING : 26/05/2015 '( # $%& / // / DATE OF PRONOUNCEMENT: 29/05/2015 )* )* )* )*/ // / O R D E R PER G.D. AGRAWAL, VICE PRESIDENT: THIS IS AN APPEAL FILED BY THE REVENUE AND IS DIREC TED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX(APPEALS )-V, SURAT DATED 03.10.2011, PERTAINING TO ASSESSMENT YEAR 2007-08. 2. IN THIS APPEAL BY THE REVENUE, FOLLOWING GROUNDS WERE RAISED:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.2,0 2,011/- BY CONFIRMING RS.1,00,000/- AS REASONABLE OUT OF LOW GROSS PROFIT RATIO. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.21, 35,750/- ON ACCOUNT OF 10% DISALLOWANCE OF SUNDRY CREDITORS AND SUNDRY DEB TORS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE A.O. ITA NO. 394/AHD/2012 ITO VS. SHRI JAYESH RAMESHCHANDRA GANDHI FOR AY 2007-08 2 4. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET-ASIDE AND THAT OF THE A.O. BE RESTORED.. 3. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E AND PERUSED THE MATERIAL PLACED BEFORE US. AFTER CONSIDERING THE F ACTS OF THE CASE, THE ARGUMENTS OF LD. DEPARTMENTAL REPRESENTATIVE AND TH E ORDERS OF THE AUTHORITIES BELOW, OUR FINDING IS AS UNDER:- GROUND NO.1 4. THE ASSESSEE DERIVES INCOME FROM TRADING OF GREY CLOTHS AND JOB WORK. THE ASSESSING OFFICER FOUND THAT THE GROSS PROFIT D ISCLOSED BY THE ASSESSEE WAS MUCH LESS THAN THE IMMEDIATELY PRECEDING YEAR. HE, THEREFORE, WORKED OUT THE GROSS PROFIT OF THE ASSESSEE AT THE RATE OF THE IMMEDIATELY PRECEDING YEAR I.E. 15.09%, WHICH RESULTED IN THE ADDITION OF RS.3,02,011/-. ON APPEAL, THE CIT(A) OBSERVED AS UNDER AND RESTRICTED THE GP ADDITION TO RS.1,00,000/-. :- G.P. ADDITION : THE A.O. HAS MADE ADDITION ON ACCO UNT OF LOW G.P. WITHOUT GIVING ANY VALID REASONS FOR DOING SO. HE C OULD NOT FIND OUT ANY DEFECT IN THE BOOKS OF ACCOUNT PRODUCED BEFORE HIM. DURING THE APPELLANT PROCEEDINGS, THE A.R. ALSO COULD NOT SUBMITTED ANY CONVINCING REASONS FOR FALL IN G.P. LOOKING INTO THE TOTALITY IN THE CASE , I AM OF THE VIEW THAT CONFIRMING THE ADDITION RS.1,00,000/- ON THIS ACCOU NT WILL MEET THE END OF THE JUSTICE. HENCE, THIS GROUND OF APPEAL IS PARTL Y ALLOWED. 5. FROM THE ABOVE, IT IS EVIDENT THAT THE CIT(A) CO NSIDERED ALL THE FACTS I.E. THERE WAS FALL IN GP, BUT AT THE SAME TIME HE ALSO RECORDED THAT THE ASSESSING OFFICER HAS NOT FOUND ANY DEFECT IN THE B OOKS OF ACCOUNTS. CONSIDERING THE TOTALITY OF THESE FACTS, HE REDUCED THE GP ADDITION FROM RS.3,02,011/- TO RS.1,00,000/-. THE ASSESSEE IS NO T IN APPEAL AND HAS ALSO NOT APPEARED AT THE TIME OF HEARING BEFORE US. CONSIDE RING THE TOTALITY OF THE FACTS AND ARGUMENTS OF LD. DEPARTMENTAL REPRESENTAT IVE, WE DO NOT FIND ANY ITA NO. 394/AHD/2012 ITO VS. SHRI JAYESH RAMESHCHANDRA GANDHI FOR AY 2007-08 3 JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE CI T(A) IN THIS REGARD AND THE SAME IS SUSTAINED. GROUND NO.2 6. REGARDING GROUND NO.2, WE FIND THAT THE ASSESSIN G OFFICER DISALLOWED 10% OF SUNDRY CREDITORS AS WELL AS SUNDR Y DEBTORS. THE CIT(A) DELETED THE DISALLOWANCE WITH THE FOLLOWING FINDING :- SO FAR AS ADDITION OF RS.21,35,750/- IS CONCERNED, THE A.O. HAS MADE THIS ADDITION WITHOUT ANY BASIS. HE JUST WRITES IN PARA 5 THAT FOR WANT OF VERIFICATION 10% OF SUNDRY CREDITORS & DEBTORS COMB INED IS DISALLOWED. I DO NOT UNDERSTAND IF IT COULD NOT VERIFY THEN WHY ONLY 10% HE DISALLOWED. FURTHER, THERE IS NO EVIDENCE THAT EITHER CREDITORS OR THE DEBTORS ARE BOGUS. THE VERY STARTING POINT IS THAT HE HAS EVEN DISALLO WED FROM THE DEBTORS WHICH CAN NEVER BE DONE UNDER ANY PROVISIONS OF THE ACT. THE A.O. HAS MADE THIS ADDITION TOTALLY IN ARBITRARY MANNER. 7. AFTER CONSIDERING THE ARGUMENTS OF LD. DEPARTMEN TAL REPRESENTATIVE AND THE FACTS OF THE CASE, WE DO NOT FIND ANY INFIR MITY IN THE ORDER OF THE CIT(A). THERE IS NO PROVISION UNDER THE INCOME-TAX ACT UNDER WHICH 10% OF THE SUNDRY CREDITORS/DEBTORS CAN BE DISALLOWED. THE ASSESSING OFFICER HAS ALSO NOT GIVEN ANY SECTION OF THE INCOME-TAX ACT UN DER WHICH SUCH DISALLOWANCE IS MADE. IN VIEW OF ABOVE, WE UPHOLD THE ORDER OF THE CIT(A) ON THIS POINT AND REJECT THE GROUND NO.2 OF THE REV ENUES APPEAL. 8. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE COURT ON 29 TH MAY, 2015 AT AHMEDABAD. SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER (G.D. AGRAWAL) VICE-PRESIDENT AHMEDABAD; DATED 29/05/2015 BIJU T., PS ITA NO. 394/AHD/2012 ITO VS. SHRI JAYESH RAMESHCHANDRA GANDHI FOR AY 2007-08 4 )* # $+ ,)+$ )* # $+ ,)+$ )* # $+ ,)+$ )* # $+ ,)+$/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. $ !- / CONCERNED CIT 4. !- ( ) / THE CIT(A) 5. +01 $ , , / DR, ITAT, AHMEDABAD 6. 13 4' / GUARD FILE . )*! )*! )*! )*! / BY ORDER, TRUE COPY 5 55 5/ // / 6 6 6 6 ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD