SUPREME MOTORS, Jaipur V. ITO, Jaipur

ITA 433/JPR/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5164 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 03-06-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAGHUVEER SINGH DAGUR DHK
• Keywords: Rejection of books of accounts

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO.433/JP/14 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 M/S SUPREME MOTORS, A-25, ASSAM MANSION, TRANSPORT NAGAR, JAIPUR CUKE VS. THE INCOME TAX OFFICER, WARD 5(3), JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAMFS 7610L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAGHUVEER SINGH DAGUR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16.06.2016 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 22/06/2016. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-II, JAIPUR DATED 03.04.2014 WHEREIN THE ASSESSEE HAS TA KEN THE FOLLOWING TWO GROUNDS OF APPEAL. (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE PROVISIONS OF SE CTION 145(3) AND FURTHER ERRED IN CONFIRMING TRADING ADDITION OF RS. 2,94,107/- BY APPLYING G.P. RATE OF 5% AS AGAINST 1.18.% DECLARED BY THE ASSESSEE IN RESPECT OF TRADING IN MOTOR CYCLE SPAR E PARTS WITHOUT APPRECIATING THE EVIDENCES ON RECORD, THUS THE ADDI TION OF RS.2,94,107/- SUSTAINED DESERVES TO BE DELETED. (II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) HAS GROSSLY ERRED IN SUSTAINING A LUMP SUM DISALLOW ANCE OF RS. 1,00,000/- OUT OF THE DISCOUNT EXPENSES IN THE PROF IT AND LOSS ITA NO. 433/JP/14 M/S SUPREME MOTORS, JAIPUR VS. ITO WARD 5(3), JAIPU R 2 ACCOUNT TOTALLING TO RS. 31,29,429/- ARBITRARILY TH US THE DISALLOWANCE SO MADE DESERVES TO BE DELETED. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE IS ENGAGED IN TRADING OF MOTOR CYCLE AND SPARE PARTS AND IS ALSO RUNNING SER VICE STATION. FOR THE YEAR UNDER CONSIDERATION, THE AO REJECTED THE APPELLANT S BOOK RESULTS IN RESPECT OF SPARE PARTS DIVISION ON THE GROUND THAT STOCK REGIS TER WAS NOT MAINTAINED BY THE APPELLANT APART FROM OTHER ACCOUNTING MISTAKES. AFTER REJECTING THE BOOK RESULTS, THE AO ESTIMATED APPELLANTS GROSS PROFIT RATE AT 5% AS AGAINST 1.18% DECLARED BY THE APPELLANT IN RESPECT OF SPARE PARTS DIVISION. WHILE APPLYING THE G.P.RATE OF 5%, THE AO LOOKED AT THE G.P. RATE DECL ARED BY THE APPELLANT IN THE PAST YEARS AND STATED THAT THE GROSS PROFIT RATE IN SPARE PARTS DIVISION WAS RANGING FROM 4.91% TO 5.82% DURING THE A.Y. 2006-07 AND 2007-08 AND TURNOVER WAS MORE OR LESS SAME. FURTHER IN A.Y. 200 8-09 BOOKS OF THE ASSESSEE WAS REJECTED AND GROSS PROFIT RATE OF 5% IN SPARE P ARTS DIVISION WAS APPLIED. THUS, DURING THE PRECEDING YEARS, GROSS PROFIT RATE AROUND 5% WAS EITHER DISCLOSED BY THE ASSESSEE OR APPLIED BY THE DEPARTM ENT AND TURNOVER IN ALL THE YEARS WAS ALSO MORE OR LESS SAME. HENCE, BEING THE IDENTICAL FACTS DURING THE YEAR UNDER CONSIDERATION, IT WILL BE JUSTIFIABLE AN D FAIR TO APPLY GROSS PROFIT RATE OF 5% IN SPARE PARTS DIVISION ON TOTAL TURNOVER OF RS. 77,02,502/- WHICH WILL RESULT INTO TRADING ADDITION OF RS. 2,94,107/- (385 125-91018) AND THE SAME WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 2.1 THE LD. CIT(A) CONFIRMED THE REJECTION OF BOOKS OF ACCOUNTS AS WELL AS THE ESTIMATION OF GROSS PROFIT RATE AT 5% IN VIEW OF TH E IDENTICAL FACTS AND CIRCUMSTANCES OF THE CASE AS PREVAILING IN THE EARL IER YEARS. ITA NO. 433/JP/14 M/S SUPREME MOTORS, JAIPUR VS. ITO WARD 5(3), JAIPU R 3 2.2 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOTED THAT SIMILAR ISSUES IN TERM S OF REJECTION OF BOOKS OF ACCOUNTS AS WELL AS ESTIMATION OF GROSS PROFIT RATE CAME UP FOR CONSIDERATION BEFORE THE CO-ORDINATE BENCHES FOR A.Y. 2005-06, 20 06-07 AND 2007-08. THE CO-ORDINATE BENCHES HAVE CONSISTENTLY TAKEN A VIEW AND UPHELD THE REJECTION OF BOOKS OF ACCOUNTS U/S 145(3) OF THE I.T. ACT. WE SEE NO REASON TO DEVIATE FROM THE SAID CONSISTENT DECISION TAKEN BY THE CO- ORDINATE BENCH AND WE ACCORDINGLY CONFIRM THE REJECTION OF BOOKS OF ACCOU NT U/S 145(3) OF THE ACT FOR THE YEAR UNDER CONSIDERATION. 2.3 AS REGARDS THE ESTIMATION OF G.P. RATE, IT IS N OTED THAT IN A.Y. 2006-07 THE ASSESSEE HAS DECLARED G.P. RATE OF 4.91% IN RESPECT OF SPARE PARTS DIVISION WHICH WAS CONFIRMED BY THE CO-ORDINATE BENCH VIDE D ECISION DATED 30.07.2010 IN ITA NO.807 & 799/JP/2009. SIMILARLY IN A.Y. 200 7-08 THE CO-ORDINATE BENCH HAS CONFIRMED THE G.P. RATE OF 5.82% DECLARED BY T HE ASSESSEE VIDE ITS ORDER DATED 11.02.2011 IN ITA NO.1053/JP/2010. DURING TH E YEAR UNDER CONSIDERATION, THE ASSESSEE HAS DECLARED THE G.P. R ATE OF 1.18%. THE AO TAKEN INTO CONSIDERATION ASSESSEES OWN DECLARED G.P. RAT E FOR THE PAST YEARS WHICH WAS RANGING FROM 4.91% TO 5.82% HAS APPLIED A G.P. RATE OF 5% AS AGAINST 1.18% DECLARED BY THE APPELLANT. THE COURTS HAVE H ELD FROM TIME TO TIME THAT THE ASSESSEES PAST RESULTS SHALL ACT AS BEST GUIDE FOR ESTIMATING THE G.P. WHERE THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES O F THE CASE. IN THE INSTANT CASE, THE TURNOVER OF THE PAST YEARS IS MORE OR LES S ON THE SAME LINES AS IN THE YEAR UNDER CONSIDERATION AND FURTHER NOTHING HAS BE EN BROUGHT TO OUR NOTICE WHICH SUGGESTS ANY CHANGES IN THE FACTS AND CIRCUMS TANCES OF THE CASE. IN VIEW OF THE IDENTICAL FACTS AND CIRCUMSTANCES OF THE CA SE, WE ARE OF THE VIEW THAT THE AO HAS FOLLOWED THE RIGHT APPROACH IN TERMS OF ESTIMATING THE G.P. RATE AT 5% BASED ON THE ASSESSEES PAST RECORDS. WE ACCORD INGLY SEE NO REASON TO ITA NO. 433/JP/14 M/S SUPREME MOTORS, JAIPUR VS. ITO WARD 5(3), JAIPU R 4 INTERFERE WITH THE ORDER OF LD. CIT(A) WHO HAS RIGH TLY CONFIRMED THE ORDER OF THE AO. HENCE GROUND NO.1 TAKEN BY THE ASSESSEE IS DIS MISSED. 2.3 REGARDING GROUND NO.2 THE LD. CIT(A) HAS SUSTAI NED THE DISALLOWANCE OF RS.1,00,000/- OUT OF TOTAL DISCOUNT EXPENSES OF RS. 31,29,429/-, FOLLOWING THE EARLIER ORDERS OF CO-ORDINATE BENCH IN ASSESSEES O WN CASE. IN VIEW OF THE IDENTICAL FACTS AND CIRCUMSTANCES OF THE CASE, WE D O NOT SEE ANY REASON TO DEVIATE FROM THE EARLIER ORDERS OF THE CO-ORDINATE BENCHES, HENCE THIS GROUND OF APPEAL IS DISMISSED. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22/06 /2016. SD/- SD/- ( KUL BHARAT ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 22/ 06 /2016 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S SUPREME MOTORS, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD 5(3), JAIPUR 3. VK;DJ VK;QDR@ CIT II, JAIPUR 4. VK;DJ VK;QDRVIHY@ THE CIT(A)-II, JAIPUR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.433 /JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR.