Appeal details
Counselvise Citation
[2016] 132 COUNSELVISE.COM (IT) 5175 (ITAT-JAIPUR)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 15 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
28-06-2016
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Assessment Year
2008-2009
Appeal Filed On
12-06-2014
Judgement Text
VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 459/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 SHRI LALIT KUMAR HUNDIA PROP.: M/S. MARUDHAR SALES CORPORATION A-77, RAJDHANI MANDI YARD, SIKAR ROAD, JAIPUR CUKE VS. THE ACIT (OSD) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAJPH 2053 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : NONE (WRITTEN SUBMISSION) JKTLO DH VKSJ LS@ REVENUE BY: SHRI R.A. VERMA, ADDL.CIT- DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 27/06/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 28/06/2016 VKNS'K@ ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT(A), ALWAR, DATED 21-03-2014 FOR THE ASSESSMENT YEAR 2008-09 WHEREIN THE ASSESSEE IS AGGRIEVED THAT THE LD. CIT( A) HAS ERRED IN LAW AND FACTS IN:- (I) REJECTING THE BOOKS OF ACCOUNT AND MAKING TRADI NG ADDITION OF RS. 2,01,793/- BY APPLYING THE PROVISIO N OF SECTION 145(3) OF THE ACT ITA NO. 459/JP/2014 SHRI LALIT KUMAR HUNDIA VS. ACIT (OSD),JAIPUR 2 (II) UPHOLDING THE ADHOC DISALLOWANCES OF RS. 5,000 /- OUT OF FESTIVAL EXPENSES OF RS. 21,369/- AND SHOP EXPEN SES OF RS. 29,170/- (III) UPHOLDING THE 10% ADHOC DISALLOWANCE OF RS. 1 5,464/- OUT OF TELEPHONE EXPENSES OF RS. 78,899/- AND VEHIC LE EXPENSES OF RS. 75,737/- (78899+75737= 1,54,636/-) 2.1 NONE APPEARED ON BEHALF OF THE ASSESSEE, WRITTE N SUBMISSIONS ARE FILED WITH A REQUEST TO DISPOSE OF THE APPEAL AFTER CONSIDERING THE WRITTEN SUBMISSION. CONSEQUENTLY THE APPEAL IS BEING DISPOS ED OF CONSIDERING THE SAME AND AFTER HEARING LD. DR AND MATERIAL AVAILABL E ON RECORD. 3.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S ENGAGED IN THE BUSINESS OF TRADING IN EDIBLE OILS, GHEE, MILK POWD ER ETC. AND MAINTAINS REGULAR BOOKS OF ACCOUNT WHICH ARE AUDITED. THE AO FOUND THAT THE ASSESSEE HAS DECLARED THE GROSS PROFIT RATE AT 1.10 % AS AGAINST 1.15% IN THE PRECEDING YEAR. 3.2 THE LD. DR AT THE OUTSET OF THE HEARING CONTEND S THAT GROUND NO. 1 OF THE ASSESSEE IS INCORRECT INASMUCH AS THE DISALL OWANCE MADE BY THE AO TO THE TUNE OF RS. 1,52,043/- AND NOT RS. 2,01,793/ -. THEREFORE, THIS GROUND IS NOT MAINTAINABLE. I HAVE PERUSED THE RECO RD, FOLLOWING ASSESSEES GROUND NO. 1 OF APPEAL BEFORE THE LD. CI T(A) MAKES THIS ISSUE CLEAR:- ITA NO. 459/JP/2014 SHRI LALIT KUMAR HUNDIA VS. ACIT (OSD),JAIPUR 3 1. THAT THE LD. AO ERRED IN MAKING TRADING ADDITI ON OF RS. 2,01,793/- (RS. 1,52,043/-) TRADING ADDITION AN D ADJUSTMENT OF DEBIT AND CREDIT NOTES RS. 49,750/-) WITHOUT SPECIFYING CASES OF HON'BLE HIGH COURT AND ITAT THE RE WAS NO JUSTIFICATION FOR REJECTION OF BOOKS OF ACCOUNT, HENCE THE AO ERRED IN APPLYING SECTION 145(3) WITHOUT LOOKING INTO THE GENUINENESS OF THE CASE. HENCE, THE TRADING ADD ITION OF RS. 1,52,043/- MADE ARBITRARY ON MERE SURMISES AND CONJECTURES DESERVE TO BE DELETED, HENCE THE SAME D ESERVES TO BE DELETED. THUS FROM THE ORDER OF THE LD. CIT(A), IT IS OBSERV ED THAT BEFORE CIT(A) TRADING ADDITION OF RS. 2,01,793/- (RS. 1,52,043/-) TRADING ADDITION AND ADJUSTMENT OF DEBIT AND CREDIT NOTES RS. 49,750/-) WAS CHALLENGED. THE ISSUE OF RS. 49,750/- IN RESPECT OF DEBIT AND CREDI T NOTES HAS NOT BEEN ADJUDICATED BY THE LD. CIT(A). THEREFORE, ASSESSEE' S GROUND IS CORRECT AND PROPER. IN WRITTEN SUBMISSION, IT IS CONTENDED THA T THE ASSESSEE'S BOOKS OF ACCOUNT ARE REGULARLY AUDITED AS PER SECTION 44AB O F THE ACT AND VAT AUDIT. THE AO MADE THE VAGUE COMMENTS IN THE REMAND REPORT AS UNDER:- .. IT SEEMS THAT ASSESSEE HAS PREPARED THE SAME F OR VERIFICATION ONLY. ON VERIFICATION VARIOUS DISCREPA NCIES AS MENTIONED ABOVE WAS NOTICED THEREFORE, IT CANNOT BE SAID THAT ASSESSEE MAINTAINED STOCK REGISTER AT THE TIME OF B USINESS (MENTIONED AT PAGE 7 OF THE APPEAL ORDER) 3.3 IT IS CONTENDED THAT NO SPECIFIC DEFECT HAS BEE N POINTED OUT BY THE LOWER AUTHORITIES VIS-A-VIS THE BOOK KEEPING, ONLY GENERAL AND VAGUE ITA NO. 459/JP/2014 SHRI LALIT KUMAR HUNDIA VS. ACIT (OSD),JAIPUR 4 OBJECTIONS HAVE BEEN RAISED. BY ARBITRARILY RE-COUR SING TO SEC 145(3) BASED ON MINOR REDUCTION OF 0.05% WHICH IS VERY NOM INAL, ON ESTIMATION THE BOOKS OF ACCOUNTS HAVE BEEN REJECTED AND ADDITI ON ON ACCOUNT OF GP AND CREDIT AND DEBIT NOTES HAVE BEEN MADE. THE FOLL OWING AUTHORITIES HAVE HELD THAT BOOKS OF ACCOUNTS CANNOT BE REJECTED ON SUCH VAGUE ISSUES AND BOOKS CANNOT BE REJECTED MERELY BECAUSE OF FALL IN GP. RELIANCE IS PLACED AS UNDER:- (1) ACIT VS. L.M.P. TRACTORS (P) LTD. 148 TAXMAN 52 (MAG. AHD.) (2) MALANI RAMJIVAN JAGANNATH VS. ACIT (2009) 316 I TR 120 (RAJ.) (3) ASHOK KUMAR & CO. VS. ITO (2004) 2 SOT 518(SMC AMRITSAR) (4) V PINTO & CO. VS. DCIT (2005) 3 SOT 634 (BANG .) (5) KANCHWALA GEMS VS. JCIT, 288 ITR 10 AND MUKESH OIL MILLS (P) LTD. , 96 DTR 377 (6) J.K. WOOLLLEN MANUFACTURERS VS. CIT (1969) 72 I TR 612 (SC) (7) CIT VS. DALMIA CEMENT (BHARAT) LTD. (2002) 254 ITR 377 (DEL.) THE ASSESSEE HAS ALSO RELIED ON VARIOUS OTHER JUDGE MENTS AS MENTIONED IN WRITTEN SUBMISSIONS. ITA NO. 459/JP/2014 SHRI LALIT KUMAR HUNDIA VS. ACIT (OSD),JAIPUR 5 3.4 FOR REMAINING ADDITIONS, IT IS CONTENDED THAT T HEY ARE AD HOC IN NATURE AND WITHOUT ANY BASIS. 3.5 THE LD. DR SUPPORTED THE ORDERS OF THE LOWER AU THORITIES. 3.6 I HAVE HEARD THE LD. DR AND PERUSED THE WRITTEN SUBMISSION OF THE ASSESSEE AND THE MATERIAL AVAILABLE ON RECORD. I FI ND THAT THE BOOKS OF ACCOUNT HAVE BEEN REJECTED BECAUSE OF THE SLIGHT F ALL IN GROSS PROFIT RATE I.E. TO THE EXTENT OF 0.05% AND ON SOME ASSUMPTION OF VALUATION OF CLOSING STOCK. VARIOUS JUDICIAL AUTHORITIES AS MEN TIONED ABOVE AND OTHERS MENTIONED IN THE WRITTEN SUBMISSION OF THE ASSESSEE CATEGORICALLY HELD THAT REJECTION OF BOOKS OF ACCOUNT IS A SERIOUS ACT AND CANNOT BE RESORTED MERELY FOR MARGINAL FALL IN GROSS PROFIT AND VALUAT ION OF CLOSING STOCK WHICH IS JUST AN ESTIMATE. BESIDES THE HON'BLE SUP REME COURT IN THE CASE OF CIT VS. EXCEL INDUSTRIES LTD. (2013) 358 ITR 295 HELD THAT VALUATION OF CLOSING STOCK AMOUNT AT THE MOST BECOMES POSTPON EMENT OF TAX LIABILITY WHICH SHOULD NOT BE AGITATED BY THE DEPAR TMENT. CONSIDERING THE ASSESSEE'S SUBMISSION AND JUDICIAL PRECEDENTS MENTI ONED ABOVE, I SEE NO JUSTIFICATION IN THE REJECTION OF BOOKS OF ACCOUNT AND ESTIMATION GROSS PROFIT. CONSEQUENTLY THE DISALLOWANCE OF ADDITION O F RS. 2,01,793 /- IS DELETED. THIS GROUND OF THE ASSESSEE SUCCEEDS. ITA NO. 459/JP/2014 SHRI LALIT KUMAR HUNDIA VS. ACIT (OSD),JAIPUR 6 4.1 APROPOS REMAINING GROUNDS OF THE ASSESSEE ABOUT DISALLOWANCES, I FIND THAT THE DISALLOWANCES TO BE MADE ONLY ON ADHO C BASIS WITHOUT ANY COGENT REASONS ARE NOT JUSTIFIED. HENCE, THE SAME A RE DELETED. THUS GROUND NO. 2 AND 3 OF THE ASSESSEE ARE ALLOWED. 5.0 IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 28/06/201 6. SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 28 /06/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI LALIT KUMAR HUNDIA, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT (OSD), JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 459/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR
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