Rajiv Kumar, Ahmedgarh. V. ITO, Malerkotla

ITA 408/CHANDI/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9197 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 17-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 21-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MITTALDR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 408/CHD/2014 ASSESSMENT YEAR: 2009-10 SHRI RAJIV KUMAR, VS THE ITO, S/O PAWAN KUMAR GOYAL, WARD IV(4), CINEMA ROAD, MALERKOTLA. NEAR JANTA COLLEGE, AHMEDGARH. PAN: ACJPK6964A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI S.K.MITTAL,DR DATE OF HEARING : 05.08.2016 DATE OF PRONOUNCEMENT : 10.08.2016 O R D E R THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST T HE ORDER OF LD. CIT(APPEALS)-2, LUDHIANA DATED 14.02.2 014 FOR ASSESSMENT YEAR 2009-10 CHALLENGING THE ADDITION OF RS. 3,33,107/-. 2. EARLIER THIS APPEAL WAS DISMISSED IN DEFAULT VID E ORDER DATED 17.06.2015, HOWEVER, THE SAID ORDER WAS RECAL LED BY ALLOWING MISCELLANEOUS APPLICATION OF THE ASSESSEE AND APPEAL WAS RE-FIXED FOR HEARING ON MERIT. 3. THE BRIEF FACTS AS NOTED IN THE IMPUGNED ORDER A RE THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE WERE REJE CTED AND ASSESSING OFFICER MADE ADDITION OF RS. 8,56,562/- B Y 2 APPLYING GP RATE OF 4.18%. THIS ADDITION WAS CHALL ENGED BEFORE LD. CIT(APPEALS). THE FACTS ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSING OFFICER NOTED THAT ASSESSEE HAD SHOWN A GROSS TURNOVER OF RS. 4.3 2 CRORE AND DECLARED GP RATE OF 8.09% WHICH WAS LESS BY 1.0 3% FROM PRECEDING ASSESSMENT YEAR. THE ASSESSING OFFI CER FURTHER NOTED THAT ASSESSEE HAD DEBITED ALL THE MANUFACTURING EXPENSES TO THE PROFIT & LOSS ACCOUNT . THE ASSESSING OFFICER, ACCORDINGLY, RECOMPUTED THE GP A ND NOTED THAT GP WORKED OUT TO 2.22% AND WAS LESS BY 0 .77% FROM THE PREVIOUS YEAR UNDER SIMILAR CIRCUMSTANCES. THE ASSESSING OFFICER EXAMINED THE BOOKS OF ACCOUNT OF THE ASSESSEE AND NOTED MANY DISCREPANCIES WHICH ARE HIGHLIGHTED IN THE IMPUGNED ORDER. THE ASSESSING O FFICER, THEREFORE, APPLYING HIGHER GP RATE OF 4.18% MADE TH E ADDITION OF RS. 8,56,562/-. 3(I) THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD . CIT(APPEALS) AND DETAILED SUBMISSIONS OF THE ASSESS EE ARE NOTED IN THE IMPUGNED ORDER. THE LD. CIT(APPEALS) IN PRINCIPLE, CONFIRMED THE REJECTION OF BOOKS OF ACCO UNT BY CONSIDERING VARIOUS REASONS GIVEN BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER FOR REJECTION OF THE BOOKS OF ACCOUNT. THE LD. CIT(APPEALS), HOWEVER, DID NOT ACC EPT VERSION OF ASSESSING OFFICER IN COMPARING THE ASSES SEE'S CASE WITH THE CASE OF SHAKTI INDUSTRIES. THE LD. CIT(APPEALS) FOUND THAT ASSESSING OFFICER HAS COMPA RED GP RATE SHOWN BY ASSESSEE DURING CURRENT YEAR WITH GP RATE SHOWN BY THE ASSESSEE DURING IMMEDIATE PRECEDING YE AR 3 AND POINTED OUT THAT GP WAS LESS BY 0.77%. THE LD. CIT(APPEALS), THEREFORE, CONSIDERING THE FACTS AND CIRCUMSTANCES FOUND IT FAIR AND REASONABLE TO ESTIM ATE THE GP RATE OF CURRENT YEAR AT THE SAME GP RATE AS SHOW N BY THE ASSESSEE DURING THE IMMEDIATE PRECEDING YEAR I. E. @ 2.97%. THE ADDITION WAS, THEREFORE, WORKED OUT TO RS. 3,33,107/-. THIS GROUND WAS, THEREFORE, PARTLY ALL OWED. 4. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PAR TIES AND PERUSED FINDINGS OF AUTHORITIES BELOW. THE LD. COUNSEL FOR THE ASSESSEE DID NOT CHALLENGE THE REJECTION OF BOOKS OF ACCOUNT WHICH IS ALSO NOT CHALLENGED IN THE GROUND OF APPEAL BEFORE TRIBUNAL. MOREOVER, ASSESSING OFFICE R HAS GIVEN VARIOUS REASONS IN THE ASSESSMENT ORDER FOR R EJECTION OF THE BOOKS OF ACCOUNT AND VIEW OF THE ASSESSING O FFICER HAVE BEEN CONFIRMED BY THE LD. CIT(APPEALS). THERE FORE, IN THE ABSENCE OF ANY CHALLENGE TO THESE FINDINGS OF T HE AUTHORITIES BELOW, I PROCEED TO DECIDE THE ISSUE OF ADDITION IN QUESTION. 4(I) THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THA T ADDITION IS STILL EXCESSIVE BECAUSE GP RATE WAS FOU ND LESS ONLY BY 0.77%. I, ON THE EXAMINATION OF THE ORDERS OF THE AUTHORITIES BELOW FOUND THAT ADDITION IS STILL ON E XCESSIVE SIDE. THE AUTHORITIES BELOW DESPITE REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE ALSO MADE DISALLOWANCE OF 1 /5 TH OF THE EXPENSES AND MADE ADDITION OF RS. 25,829/-. TH E LD. CIT(APPEALS) CONFIRMED THE ADDITION. IT IS WELL SE TTLED LAW WHEN BOOKS OF ACCOUNT REJECTED, NO FURTHER EXPENSES 4 SHOULD BE DISALLOWED SEPARATELY. SINCE THE ADDITIO N OF RS. 25,829/- HAVE BEEN MAINTAINED AND IS NOT IN SUBJECT MATTER, BUT THIS ADDITION IS AVAILABLE TO ASSESSEE TO PROVE THAT THE ADDITION ON ACCOUNT OF GP RATE IS EXCESSIV E. IT MAY ALSO BE NOTED HERE THAT DESPITE NOTING VARIOUS DEFECTS BY THE AUTHORITIES BELOW, ULTIMATELY THE GROSS PROF IT RATE WAS FOUND LESS BY 0.77% WHICH IS VERY NEGLIGIBLE. THE LD. COUNSEL FOR THE ASSESSEE ALSO STATED THAT IN EARLIE R YEAR, THE LD. CIT(APPEALS) DELETED THE ADDITION AND ITAT CONFIRMED THE ORDER OF LD. CIT(APPEALS) VIDE ORDER DATED 22.06.2012, COPY OF THE ORDER IS FILED IN THE PAPER BOOK AT PAGE 53 WHEREBY DEPARTMENTAL APPEAL WAS DISMISSED. THEREFORE, CONSIDERING HISTORY OF THE ASSESSEE AND EARLIER ORDER OF THE TRIBUNAL AND THAT SEPARATE ADDITION ON ACCOUNT OF DISALLOWANCE OF EXPENDITURE HAVE BEEN MA DE WITHOUT ANY JUSTIFICATION, I REDUCE THE ADDITION OF RS. 3,33,107/- TO RS. 1 LAC ONLY. THE ORDERS OF AUTHOR ITIES BELOW TO THAT EXTENT ARE MODIFIED AND I RESTRICT TH E ADDITION TO RS. 1 LAC AS AGAINST ADDITION F RS. 3,33,107/-. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED: 10 TH AUGUST,2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH