SHRI MANGAL KUMAR PIRODIA, Ratlam V. THE JCIT, Ratlam

ITA 394/IND/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5630 (ITAT-INDORE)
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-03-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 03-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: J P DAFARIA
• Keywords: Gross profit estimation; Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C.MEENA, ACCOUNTANT MEMBER I.T.A.NO. 394/IND/2015 A.Y. : 2012-13. SHRI MANGAL KUMAR PIRODIA, PROP. CHAMPALAL MANGAL KUMR LAKKAD PITHA, RATLAM. VS JT. CIT, RATLAM RANGE, RATLAM APPELLANT RESPONDENT PAN NO. ADHPP3744Q APPELLANTS BY : SHRI J.P.DAFARIA, C. A. RESPONDENT BY : SHRI R. A. VERMA, DR . O R D E R PER D.T.GARASIA, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A), UJJAIN, DATED 03.02.2015 FOR THE ASSESS MENT YEAR 2012-13. DATE OF HEARING : 28 . 0 3 .2016 DATE OF PRONOUNCEMENT : 28 .0 3 .2016 SHRI MANGAL KUMR PIRODIA, RATLAM VS. JT. CIT, RATLA M, I.T.A.NO. 394/IND/2015 A.Y. 2012-13 2 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL DERIVING INCOME FROM TRADING IN PLYWOOD HARDWARE AND FURNITURE ITEMS, INTEREST INCOME ETC. RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 8,50,650/- HAS BEEN F ILED ON 7.9.2012. DURING THE YEAR UNDER CONSIDERATION, ON T HE TOTAL SALES/TURNOVER WAS DECLARED AT RS. 2,30,01,412/- ON WHICH GROSS PROFIT COMES TO RS. 32,37,892/- WAS DECLARED BY GIVING GROSS PROFIT RATE OF 14.07% AS AGAINST GROSS PROFIT RATE OF 22.28 % DECLARED ON TOTAL TURNOVER OF RS. 2,08,92,730/- A ND GROSS PROFIT OF RS. 46,55,160/- WAS SHOWN BEFORE DEPRECIA TION IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR 2011-12 BY TH E ASSESSEE. IN THE CURRENT YEAR, THE ASSESSEE DECLAR ED LESSER GROSS PROFIT RATE BY 8.21 % ON INCREASED TURNOVER B Y RS. 21,08,682/- IN COMPARISON TO THE GROSS PROFIT RATE DECLARED BY THE ASSESSEE ON TOTAL TURNOVER OF RS. 2.08 CRORES D ECLARED IN THE IMMEDIATELY PRECEDING YEAR. THE AO ASKED THE AS SESSEE TO EXPLAIN AND JUSTIFY LOWER GROSS PROFIT RATE SHOWN B Y 8.21 %. THE AO ASKED THE ASSESSEE TO SUBMIT THE QUALITY-WI SE DETAILS, WHICH THE ASSESSEE HAS FAILED TO FURNISH. THE AO A DOPTED A GROSS PROFIT RATE OF 18 % ON THE DECLARED SALES OF RS. 2.30 SHRI MANGAL KUMR PIRODIA, RATLAM VS. JT. CIT, RATLA M, I.T.A.NO. 394/IND/2015 A.Y. 2012-13 3 3 CRORES. THE AO DID NOT ACCEPT THE GROSS PROFIT RATE OF 14.07% ON DECLARED TOTAL SALES OF RS. 2,30,01,412/- IN THE TRADING ACCOUNT FOR THE YEAR ENDED ON 31.3.2012. THE AO APP LIED GROSS PROFIT RATE OF 18 % ON DECLARED TURNOVER/SALE S OF RS. 2,30,01,412/- ON WHICH GROSS PROFIT COMES TO RS. 41 ,40,254/-. THE ADDITION OF RS. 9,02,362/- WAS MADE BY APPLYING A GROSS PROFIT RATE OF 18%. 3. THE LD. AUTHORIZED REPRESENTATIVE CONTENDED THAT T HE TURNOVER HAS BEEN INCREASED BY ALMOST RS. 21,08,682 /- IN THE YEAR UNDER CONSIDERATION IN COMPARISON TO THE TURNO VER DECLARED IN THE LAST ASSESSMENT YEAR 2011-12 AT RS. 2.08 CRORES BY THE ASSESSEE. THEREFORE, DECLARED TRADING RESULTS SHOULD HAVE BEEN ACCEPTED. HE ALSO CONTENDED THAT T HE BOOKS OF ACCOUNT OF THE ASSESSEE ARE AUDITED U/S 44AB OF THE INCOME-TAX ACT, 1961, AND AUDIT REPORT IN FORM NO.3 CB & 3CD DATED 25.09.2012 WERE OBTAINED AND SUBMITTED. 4. THE LD. DR RELIED UPON THE ORDERS OF THE AUTHORITI ES BELOW. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, SHRI MANGAL KUMR PIRODIA, RATLAM VS. JT. CIT, RATLA M, I.T.A.NO. 394/IND/2015 A.Y. 2012-13 4 4 WE FIND THAT DURING THE COURSE OF EXAMINATION OF TH E BOOKS, THE AO FOUND THAT THE ASSESSEE HAS DECLARED THE GRO SS PROFIT @ 14.07% ON DECLARED TOTAL SALES OF RS. 2,30,01,412/- IN TRADING ACCOUNT FOR THE YEAR ENDED ON 31 ST MARCH, 2012. WE HAVE GONE THROUGH THE ORDER OF THE ASSESSMENT AND FOUND THAT THE ASSESSEE HAS SUBMITTED THE BOOKS OF ACCOUNTS WHICH ARE AUDITED U/S 44AB OF THE INCOME-TAX ACT, 1961, AND A UDIT REPORT IN FORM NO. 3 CB AND 3CD HAVE BEEN SUBMITTED . WE FIND THAT THE AO HAS NOT REJECTED THE BOOKS OF ACCO UNTS, BUT HE HAS TAKEN THE GROSS PROFIT @ 18% AND FOR TAKING THE RATE OF 18 %, THE AO HAS CONSIDERED THE PAST HISTORY AND DE CLARED GROSS PROFIT IN ASSESSMENT YEAR 2011-12. HE APPLIED THE GROSS PROFIT @ 18% ON DECLARED SALE OF RS. 2.30 CRORES. W E FIND THAT THE AO HAS TAKEN THE GROSS PROFIT WHILE CONSIDERING THE PAST HISTORY, BUT ASSESSEE HIMSELF HAS DECLARED THE GROS S PROFIT @14.07%. THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, THE GROSS PROFIT @ 18% IS HIGHER ONE. THEREFORE, WE RED UCE IT TO 17 %. WE ORDER ACCORDINGLY. SHRI MANGAL KUMR PIRODIA, RATLAM VS. JT. CIT, RATLA M, I.T.A.NO. 394/IND/2015 A.Y. 2012-13 5 5 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 28 TH MARCH, 2016. (B.C.MEENA) ACCOUNTANT MEMBER ( D.T.GARASIA) JUDICIAL MEMBER DATED : 28TH MARCH, 2016. CPU*