M/s. Nova Publication, Jalandhar V. The Addl. Commissioner of Income-tax, Jalandhar

ITA 463/ASR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8798 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 11-02-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 14-07-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S S KANWAL
• Assessee Lawyers: R D SHARMA
• Keywords: Rejection of books of accounts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.S. KAPOOR, HONBLE ACCOUNTANT MEMBER [ I.T.A NO.463(ASR)/2014 ASSESSMENT YEAR: 2007-08 M/S NOVA PUBLICATION FOCAL POINT EXTENSION, JALANDHAR. PAN:AABFN1358B VS. ADDL. CIT, RANGE-II, JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. R.D. SHARMA (CA.) RESPONDENT BY: SH. S. S. KANWAL (DR.) DATE OF HEARING: 11.02. 2016 DATE OF PRONO UNCEMENT: 04.03.2016 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LEARNED CIT(A), DATED 9.05. 2014, FOR ASST. YEAR 2007-08. 2. THE GROUNDS OF APPEAL TAKEN BY ASSESSEE ARE REPR ODUCED BELOW. (I) LEARNED CIT(A), JALANDHAR IS NOT JUSTIFIED IN CONFIRMING AN ADDITION OF RS.5,00,000/- ON ACCOUNT OF NON MAINTEN ANCE OF STOCK DETAILS ETC ON ARBITRARY AND EXTRANEOUS CONSIDERATI ONS WITHOUT REJECTION OF BOOKS OF ACCOUNTS & WITHOUT POINTING O UT ANY SPECIFIC DEFECTS IN BOOKS OF ACCOUNT AND HAS THUS ERRED IN L AW AS WELL. (II) LEARNED CIT(A), JALANDHAR IS NOT JUSTIFIED IN CONFIRMING A DIS- ALLOWANCE OF RS.76,700/-. OUT OF EXPENSES ON ACCOUN T OF CARRIAGE INWARD, WAGES, ADVERTISEMENT & PUBLICITY, BUILDING REPAIR, COMPUTER EXPENSES, ELECTRIC REPAIR, ENTERTAINMENT, MACHINERY REPAIR, OFFICE REPAIR MAINTENANCE, PRINTING AND STATIONERY, TOUR A ND TRAVELING, VEHICLE REPAIR ETC ON ARBITRARY & EXTRANEOUS CONSID ERATION & WITHOUT POINTING OUT ANY SPECIFIC INSTANCE/S &WITHOUT PLACI NG ANY MATERIAL ON RECORDS AND HAS THUS ERRED IN LAW AS WELL. ITA NO.463 (ASR)/2014 ASST. YEAR:2007-08 2 3. THE BRIEF FACTS OF THE CASE AS NOTED IN THE ASSE SSMENT ORDER ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PUB LICATION OF CHILDREN SCHOOL BOOKS. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER M ADE FOLLOWING TWO ADDITIONS (I) ON ACCOUNT OF NON-MAINTENANCE OF STOC K RECORDS RS.5,00,000/- (II) ON ACCOUNT OF DISALLOWANCE OUT OF EXPENSES BEING NON- VERIFIABLE RS.76,700/-. 4. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE LEARN ED CIT(A), WHO FOLLOWING THE EARLIER ORDER PASSED BY HIM AND CONFI RMED BY ITAT, UNDER SIMILAR FACTS AND CIRCUMSTANCES CONFIRMED THE ADDIT IONS. 5. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LEARNED AR SUBMITTED THAT THE ASSESSEE HAD R ELIED UPON THE ORDER OF M/S OM OVERSEAS FOR THE PROPOSITION THAT M ERE NON- MAINTENANCE OF STOCK RECORDS DO NOT LEAD TO REJECTI ON OF BOOKS OF ACCOUNTS. 7. THE LD. DR SUBMITTED THAT CASE OF THE ASSESSEE I S COVERED AGAINST ASSESSEE AS IN EARLIER YEAR UNDER SIMILAR FACTS AND CIRCUMSTANCES THE HONBLE ITAT HAD CONFIRMED THE SIMILAR ADDITIONS. 8. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT IN ASST. YE AR 2006-07, SIMILAR ADDITIONS WERE MADE BY ASSESSING OFFICER AND IT WAS CONFIRMED BY ITA NO.463 (ASR)/2014 ASST. YEAR:2007-08 3 LEARNED CIT(A) AND WHICH WERE FURTHER CONFIRMED BY HONBLE ITAT VIDE ORDER DATED 29 TH NOV. 2012. THE FINDINGS OF THE TRIBUNAL AS CONTAIN ED IN PARA 10 & 11 ARE REPRODUCED BELOW. 10. AS REGARDS THE ESTIMATION OF INCOME, THE AO HA S PREPARED A CHART OF ALL THE THREE UNITS OF THE ASSESSEE, WHICH IS AVAIL ABLE AT PAGE 8 OF THE ORDER AND THE AO HAS ANALYZED THE SAME AT PAGE 9 OF HIS O RDER WHERE IT APPEARS THAT THE ASSESSEE HAS MANIPULATED GP RATE BY SUBSTI TUTING FIGURES OF CLOSING STOCK WITH PRE-CONCEIVED FIGURE OF GP RATE WHICH HAS BEEN MANIPULATED AND FIXED IN THE PROFIT & LOSS ACCOUNT. THOUGH THE AO HAS NOT MENTIONED OR HAS NOT GIVEN ANY BASIS FOR QUANTUM OF ADDITION OF RS. 5 LACS BUT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEAKAGE OF REVENUE CANNOT BE RULED OUT. WHEN ASKED FROM THE ID. COUNSE L FOR THE ASSESSEE WITH REGARD TO THE GP RATE MAINTAINED BY THE ASSESS EE IN THE PRECEDING YEARS, NOTHING WAS BROUGHT ON RECORD SPECIFICALLY E VEN BEFORE US. AS MENTIONED EARLIER HEREINABOVE, THAT THOUGH THE AO H AS NOT GIVEN ANY BASIS BUT THE ADDITION OF RS. 5 LACS IN THE FACTS AND CIR CUMSTANCES OF THE PRESENT CASE AND POSSIBILITY OF LEAKAGE OF REVENUE, ADDITIO N OF RS. 5 LACS HAS RIGHTLY BEEN MADE BY THE AO, WHICH HAS RIGHTLY BEEN CONFIRMED BY THE ID. CIT(A). 11. AS REGARDS THE DISALLOWANCE OF STAFF WELFARE, M ISCELLANEOUS EXPENSES AND VEHICLE EXPENSES ETC; NO VOUCHERS HAVE BEEN PRODUCED FOR VERIFICATION BEFORE THE AO AND ALL THE EXPENSES HAV E BEEN INCURRED IN CASH. THEREFORE, THE GENUINENESS OF THE EXPENDITURE CLAIM ED HAS NOT BEEN PROVED BY THE ASSESSEE. THEREFORE, LEAKAGE OF REVENUE CAN NOT BE RULED OUT. THE AO IN VIEW OF THE FACTS AND CIRCUMSTANCES HAS VERY REASONABLY DISALLOWED APPROXIMATELY 10% OF THE EXPENDITURE CLAIMED AT RS. 1,30,000/-, WHICH HAS RIGHTLY BEEN CONFIRMED BY THE LD. CIT(A). WE FI ND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). THUS, GROUND NOS.1 & 2 OF THE ASSESSEE ARE DISMISSED. ITA NO.463 (ASR)/2014 ASST. YEAR:2007-08 4 WE FIND THAT IN THE PRESENT YEAR THE FACTS AND CIRC UMSTANCES ARE SIMILAR AND ASSESSING OFFICER HAS MADE THE ADDITIONS ON SIM ILAR GROUNDS AS WERE IN ASST. YEAR 2006-07. THEREFORE, RESPECTFULLY FOLL OWING THE EARLIER ORDER OF TRIBUNAL IN THE CASE OF ASSESSEE ITSELF, THE APP EAL FILED BY ASSESSEE IS DISMISSED. 9. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE AS SESSEE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH MARCH, 2016. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT ME MBER DATED: 04.03.2016. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.