The ACIT, Gandhidham Circle, GANDHIDHAM V. Shri Shailendra D. Jadeja, GANDHIDHAM

ITA 422/RJT/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 72587 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 22-08-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 29-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VILAS V SHINDE DR CE
• Keywords: Unexplained cash credit; Additional evidence

Judgement Text

6 , IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. 9 . . 3 R . . BEFORE SHRI T. K. SHARMA JM AND SHRI D. K. SRIVASTAVA AM ITA NO. 4 22 /RJT/2012 C C / ASSESSMENT YEAR 200 4 - 05. THE ASSISTANT COMMISSIONER OF INCOME - TAX, GANDHIDHAM CIRCLE, GANDHIDHAM. ( / APPELLANT) SHRI SHAILENDRASINGH D. JADEJA, PROP. SHAIL SHAKTI IMPEX, BBZ - S - 10, GANDHIDHAM. P AN : A B UPJ1342H. NN / RESPONDENT I / REVENUE BY SHRI VILAS V. SHINDE, DR CE / ASSESSEE BY SHRI VIMAL DESAI , CA / DATE OF HEARING 2 2 - 0 8 - 2013 / DATE OF PRONOUNCEMENT 13 - 09 - 2013 / ORDER 9 . . 3 , R / T. K. SHARMA, J. M. : THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DATED 04 - 04 - 2012 OF LD. CIT (A) - XX , AHMEDABAD FOR THE ASSESSMENT YEAR 200 4 - 05. 2 . BRIEFLY STATED, T HE FACTS ARE THAT THE ASSESSEE IS A N INDIVID UAL DOING BUSINESS OF SCRAP RECYCLING IN HIS PROPRIETORSHIP CONCERN VIZ. M/S. SHAIL SHAKTI IMPEX. FOR THE ASSESSMENT YEAR UNDER APPEAL, HE FILED THE RETURN OF INCOME ON 30 - 10 - 200 4 DISCLOSING INCOME OF RS. 6,98,560/ - AND AGRICULTURE INCOME OF RS.3,60,500/ - . THE AO FRAMED THE ASSESSMENT U/S.143(3) OF THE I.T. ACT ON 28 - 12 - 2006 WHEREIN HE MADE THE FOLLOWING THREE ADDITIONS: - TOTAL INCOME AS SHOWN BY ASSESSEE RS. 6,98,560/ - ADD: DISALLOWANCE ON ACCOUNT OF RS. 4,06,000/ - U NEXPLAINED DEPOSITOR S ADD: DISALLOWANCE ON ACCOUNT OF RS.12,73,098/ - UNEXPLAINED CREDITORS ADD: DISALLOWANCE ON ACCOUNT OF RS. 3,55,468/ - E STIMATION OF NET PROFIT. - - - - - - - - - - - RS.20,34,566/ - 3. ON APPEAL, IN THE IMPUGNED ORDER, THE LD. CIT (A) RESTRICTED THE ADDITION TO THE TUNE OF RS.2,06,000/ - OUT OF RS.4,06,000/ - MADE ON ACCOUNT OF UNEXPLAINED ITA 4 22 - 2012 2 DEPOSIT S , DELETED THE ADDITION OF RS.12,73,098/ - MADE BY AO IN RESPECT OF UNEXPLAINED CREDITORS AN D DELETED THE ADDITION OF RS.3,55,468/ - WHICH WAS MADE BY AO ON ACCOUNT OF ESTIMATION OF NET PROFIT. AGGRIEVED WITH THE ORDER OF LD. CIT (A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL ON THE FOLLOWING GROUNDS: - 1 . THE LD. CIT (A) HAS ERRED IN LAW AND ON F ACTS IN RESTRICTING THE ADDITION TO THE TUNE OF RS.2,06,000/ - OUT OF RS.4,06,000/ - MADE ON ACCOUNT OF UNEXPLAINED DEPOSITS. 2 . THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.12,73,098 / - MADE ON ACCOUNT OF UNEXPLAINED CREDITORS. 3 . THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.3,55,468/ - MADE ON ACCOUNT OF ESTIMATION OF NET PROFIT . 4. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF REVENUE SHRI VILAS V. SHINDE, DR APPEARED AND CONTENDED THAT WHILE ALL OWING THE RELIEF TO THE ASSESSEE WHICH IS CONTESTED BY THE REVENUE IN THE AFORESAID THREE GROUNDS, THE LD. CIT (A) HAS NOT CONSIDERED THE TWO REMAND REPORTS SENT BY AO AND ONLY AO REQUESTED THE LD. CIT (A) TO REJECT THE ASSESSEES PLEA REGARDING ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 46A OF THE INCOME TAX RULES, 1962 AND CONFIRMED THE ASSESSMENT ORDER ACCORDINGLY AS THE ASSESSEE HAD FAILED TO COMPLY WITH THE SUMMONS ISSUED U/S.131(1) FOR THE PURPOSE OF OBTAINING COMPLETE POSTAL ADDRESS AND CONTACT DETA ILS OF DEBTORS AND CREDITORS. AS AGAINST THIS, SHRI VIMAL DESAI, CA COUNSEL FOR THE ASSESSEE WITH REGARD TO GROUND NO1 POINTED OUT THAT IN THE IMPUGNED ORDER, THE LD. CIT (A) CONFIRMED THE ADDITION TO THE EXTENT OF RS.2,06,000/ - IN RESPECT OF P.N. BALI AND ALLOWED THE RELIEF IN RESPECT OF LEELAVATI JESHANG TRUST IT IS OPENING BALANCE NO NEW CREDIT DURING THE YEAR THEREFORE, NO ADDITION IN THE YEAR UNDER CONSIDERATION. IN SUPPORT OF THIS, HE DREW OUR ATTENTION TO THE FOLLOWING: - 1. LED GER ACCOUNT : ON PAGE 12 OF PAPER BOOK 2. SCHEDULE OF BALANCE SHEET AS ON 31 - 03 - 2004 ON PAGE 29 OF PAPER BOOK 3. SCHEDULE OF BALANCE SHEET AS ON 31 - 03 - 2004 ON PAGE 53 OF PAPER BOOK. WITH REGARD TO RASIK MANILAL RS.1,00,000/ - , COUNSEL OF THE ASSESSEE SUBMITTED THAT AD DRESS, CONFIRMATION AND PAN IS GIVEN ON PAGE 87 OF PAPER BOOK WHICH ITA 4 22 - 2012 3 WAS AVAILABLE TO THE AO THEREFORE VIEW TAKEN BY LD. CIT (A) IN THIS REGARD BE UPHELD. WITH REGARD TO SECOND ADDITION OF RS.12,73,098/ - , WHICH IS CONTENDED BY THE REVENUE VIDE GROUND NO.2, COUNSEL OF THE ASSESSEE SUBMITTED THAT THIS ADDITION COMPRISE S OF FOLLOWING TWO PARTIES: - 1 . HARSHAL TRADING RS. 4,07,915 2 . DESH COM TECHNOLOGY RS .8,65,183 TOTAL RS.12,73,098 5. THE COUNSEL OF THE ASSESSEE FURTHER SUBMITTED THAT IN THE IMPUGNED ORDER, LD. CIT (A) DELETED THIS ADDITION FOR THE REASONS GIVEN IN PARA - 9.4 ON PAGE - 13 AS IN THE CASE OF M/S. HARSHA L TRADING RS.4,07,915/ - , THIS REPRESENTS OPENING BALANCE I.E. ADVANCE RECEIVED AGAINST HIM. IN SUPPORT OF THIS, LEDGER ACCOUNT IS AVAILABLE ON PAG E 14 OF THE PAPER BOOK. SCHEDULE OF BALANCE SHEET AS ON 31 - 03 - 2004 IS AVAILABLE ON PAGE - 30 OF PAPER BOOK AND 31 - 03 - 2005 - PAGE 54 OF PAPER BOOK. THIS AMOUNT IS OFFERED TO TAX NEXT YEAR WHICH IS EVIDENT ON LEDGER ON PAGE - 89 OF PAPER BOOK, CONTRACT OF SALE IS AVAILABLE ON PAGE - 88 OF PAPER BOOK, LEDGE ACCOUNT ON PAGE - 14. FINALLY, IN RESPECT OF DESH COM TECHNOLOGY RS.8,65,183/ - , THIS REPRESENT ADVANCE RECEIVED DURING THE YEAR. LEDGE R ACCOUNT IS AVAILABLE ON PAGE - 13 OF THE PAPER BOOK. THIS AMOUNT IS ALSO OFFERED T O TAX IN NEXT YEAR WHICH IS EVIDENT FROM LEDGER ACCOUNT ON PAGE - 90 OF PAPER BOOK. HE ACCORDINGLY SUBMITTED THAT KEEPING IN VIEW OF THESE FACTS, VIEW TAKEN TY LD. CIT (A) DELETING THE ADDITION OF RS.12,73,098/ - BE UPHELD. 6. FINALLY, WITH REGARD TO ESTIMA TION OF PROFIT @ 5% , THE LD. DR DREW OUR ATTENTION TO PARA - 10.4 ON PAGE - 16 OF ORDER OF LD. CIT (A) FROM WHICH IT IS CLEAR THAT AO ESTIMATED 5% AND MADE ADDITION OF RS.3,55,468/ - AS UNDER: - SCRAPE RS.1,21,85,727 NET PROFIT RS. 2,53,818 ESTIMATED @ 5% ADDITION RS. 3,55,468 HE FURTHER SUBMITTED THAT AO MERELY REJECTED THE BOOKS OF ACCOUNT ON THE GROUND THAT STOCK REGISTER IS NOT MAINTAINED. THE COUNSEL OF THE ASSESSEE FURTHER POINTED OUT THE FOLLOWING CONSPICUOUS FACTS: - ( I ) RAW MATERIALS ARE IMPORT ED CUSTOM DUTY PAID ITA 4 22 - 2012 4 ( II ) FINISHED GOODS EXCISABLE COMMODITIES QUANTITATIVE DETAILS MAINTAINED AS PER EXCISE RECORDS ( III ) NO SPECIFIC DEFECTS WAS FOUND IN BOOKS OF ACCOUNT ( IV ) BOOKS OF ACCOUNTS ARE AUDITED. 7. THE AO APPLIED NET PROFIT @ 5% WITHOUT ANY COMPARABLE CASE . BOOK RESULTS ARE BETTER THAN PROCEEDING TWO YEARS. SINCE THERE IS NO COMPARABLE CASE FOR ESTIMATING PROFIT @ 5%, VIEW TAKEN BY LD. CIT (A) DELETING ADDITION OF RS.3,55,468/ - BE UPHELD. 8. HAVING HEARD BOTH SIDES, WE HAVE CAREFULLY GONE THROUGH THE O RDERS OF AUTHORITIES BELOW. WITH REGARD TO PLEA OF LD. DR, REGARDING NON - ADMISSION OF ADDITIONAL EVIDENCES OR REMANDING THE MATTER BACK TO THE FILE OF AO, WE ARE OF THE VIEW THAT NO USEFUL PURPOSE WILL BE SERVED AS THE LD. CIT (A) HAS GIVEN COGENT REASON F OR DELETING THE ADDITION OF RS.2,00,000/ - OUT OF ADDITION OF RS.4,06,000/ - MADE U/S.68 OF THE I.T. ACT, 1961. THE GROUND NO.1 OF REVENUE APPEAL IS ACCORDINGLY REJECTED. 9. SIMILARLY, WITH REGARD TO DELETION OF ADDITION OF RS.12,73,098/ - , WE ARE OF THE VIE W THAT THE LD. CIT (A) HAS TAKEN FAIR AND REASONABLE VIEW THEREFORE, VIEW TAKEN BY LD. CIT (A) IN THIS REGARD BE UPHELD. GROUND NO.2 IS ALSO REJECTED. 10. WITH REGARD TO DELETION OF GP ADDITION OF RS.3,55,468/ - , WE ARE OF THE VIEW THAT NO SIGNIFICANT FACT IN MAINTENANCE OF BOOKS OF ACCOUNT HAS BEEN POINTED OUT BY THE AO IN THE ASSESSMENT ORDER. FURTHER, THE BOOK RESULTS OF THIS YEAR ARE BETTER THAN THE PREVIOUS TWO YEARS. IN THIS VIEW OF THE MATTER, WE ARE OF THE VIEW THAT THE LD. CIT (A) HAS GIVEN COGEN T REASON FOR DELETING THE ADDITION OF RS.3,55,468/. WE THEREFORE, DECLINED TO INTERFERE. 11. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. 1 2 . THIS O RDER IS PRONOUNCED IN OP EN COURT ON THE DATE MENTIONED HEREINABOVE. SD/ - SD/ - ( . . I . D. K. SRIVASTAVA ) ( . . C / T. K. SHARMA) / ACCOUNTANT MEMBER I / JUDICIAL MEMBER ITA 4 22 - 2012 5 U / ORDER DATE 13 - 0 9 - 2013. /RAJKOT NVA/ - RJO O / COPY OF ORDER FORWARDED TO: - 1 . / APPELLANT - THE ASSISTANT COMMISSIONER OF INCOME - TAX, GANDHIDHAM CIRCLE, GANDHIDHAM. 2 . NN /RESPONDENT - SHRI SHAILENDRASINGH D. JADEJA, PROP. SHAIL SHAKTI IMPEX, BBZ - S - 10, GANDHIDHAM 3 . 6 / CONCERNED CIT - 4 . FORW RDED - / CIT (A ) - XX, AHMEDABAD. 5 . N6 , 6 , / DR, ITAT, RAJKOT 6 . C / GUARD FILE. / BY ORDER TRUE COPY. PRIVATE SECRETARY, ITAT, RAJKOT