The Income-tax Officer, Jammu V. Sh. Shamba Nand Sharma, Jammu

ITA 428/ASR/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0609 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 22-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R L CHHANALIA
• Keywords: Rejection of books of accounts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.428(ASR)/2011 ASSESSMENT YEAR:2008-09 PAN :ADCPS8088H THE INCOME TAX OFFICER, VS. SH. SHAMA NAND SHARMA, WARD 1(3), JAMMU. JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. R.L. CHHANALIA, DR RESPONDENT BY:SH. JOGINDER SINGH, CA DATE OF HEARING: 02/01/2013 DATE OF PRONOUNCEMENT:03/01/2013 ORDER PER BENCH ; THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER O F THE CIT(A), JAMMU, DATED 26.05.2011 FOR THE ASSESSMENT YEAR 200 8-09. THE SOLE GROUND OF THE REVENUE FOR OUR DECISION READS AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES, THE LD. CIT(A) HAS ERRED IN REDUCING THE G.P. RATE TO 4.5% AS AGAINST 13.97% AP PLIED BY THE AO AND ALSO BY THE ASSESSEE IN THE ASSESSMENT YEAR 2006-07 INSPITE OF THE FACT THAT AO HAS REJECTED THE BOOKS OF ACCOUNT U/S 145(3) OF THE I.T. ACT, 1961 AND ALSO NO STOCK REGI STER HAS BEEN MAINTAINED BY THE ASSESSEE. ITA NO.428(ASR)/2011 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A WHOLESALER DEALER IN CEMENT, FERTILIZER, SEEDS, PESTICIDES AND FOOD G RAINS. THE AO DURING THE PROCEEDINGS OF ASSESSMENT NOTICED THAT THE GP RATE SHOWN IS 3.87% WHERE AS IN THE ASSESSMENT YEAR 2006-07, THE G.P. RATE SHOWN WAS 13.97%. THE AO FURTHER NOTICED THAT THE ASSESSEE HAD MOST OF SALES MADE IN CASH AND MAINTAINED NO STOCK REGISTER. THE ASSESSEE CONTENDE D BEFORE THE AO THAT DUE TO NATURE OF BUSINESS OF DEALING IN NUMEROUS IT EMS IT COULD NOT MAINTAIN THE STOCK REGISTER. AS REGARDS GP IT WAS CONTENDED THAT IN ASSESSMENT YEAR 2006-07 THE ASSESSEE DEALT MAINLY IN FOOD GRAIN AND FROM ASSESSMENT YEAR 2007-08 DEALT MAINLY IN FERTILIZER, CEMENT AND PEST ICIDES AND PROFIT RATE WAS QUITE LOW IN ITEMS LIKE FERTILIZERS WHERE RATES WER E CONTROLLED BY THE GOVERNMENT. AFTER CONSIDERING THE PLEA OF THE ASSES SEE THE AO REJECTED THE BOOKS OF ACCOUNTS US 145(3) OF THE ACT AND ADOPTED A G.P. RATE OF 13.97% AS SHOWN IN ASSESSMENT YEAR 2006-07. 3. THE LD. DR RELIED UPON THE ORDER OF THE A.O. AND ARGUED THAT THE RATE OF 13.97% APPLIED BY THE A.O. IS QUITE REASONABLE A ND ON THE BASIS OF RECORDS AVAILABLE BEFORE THE A.O. ITA NO.428(ASR)/2011 3 4. THE LD. COUNSEL FOR THE ASSESSEE MR, JOGINDER SI NGH, CA, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE LD. CIT(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. WE CONCUR WITH FINDINGS OF THE LD. CIT(A) THAT THE MAIN ITEM TRADED UPTO THE ASSESSMENT YEAR 2006-07 WAS FOOD-GRAINS, WHICH IS NOT THE MAIN ITEM OF TRADING DURING THE IMPUGNED YEAR. THE LD. CIT(A) H AS WORKED OUT AVERAGE GROSS PROFIT RATE OF CEMENT, FOOD ITEMS, SEEDS AND FERTILIZER BETWEEN 1.50% TO 5% AT PAGE 7 OF HIS ORDER. THE ITEMS OF FOOD-GRA INS ARE ONLY AROUND 10% OF TOTAL SALES, YET G.P. DECLARED IS NOT MORE THAN 5% IN ANY OF THE ITEMS TRADED DURING THE IMPUGNED YEAR. THE PROFIT IN THE IMMEDIATE PRECEDING YEAR DECLARED BY THE ASSESSEE WAS 3.93%. THEREFORE, THE LD. CIT(A) KEEPING INTO CONSIDERATION THE NON-MAINTENANCE OF STOCK REGISTER , G.P. DECLARED IN THE PRECEDING AND THE G.P. DECLARED IN VARIOUS ITEMS DU RING THE IMPUGNED YEAR AND THE DECISIONS RELIED UPON IN HIS ORDER HAS RIGH TLY DIRECTED THE A.O. TO ALLOW G.P. RATE OF 4.5%, WHICH IS QUITE REASONABLE IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. WE FIND NO INFIR MITY IN THE ORDER OF THE LD. CIT(A). THUS, THE SOLE GROUND OF THE REVENUE IS DIS MISSED. ITA NO.428(ASR)/2011 4 6. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO.428(ASR)/2011 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3RD JANUARY, 2013. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 3RD JANUARY, 2013 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. SHAMA NAND SHARMA, 2. THE ITO WARD 1(3), JAMMU. 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.