ITO, RAJSAMAND V. M/s. Karnawat International, RAJSAMAND

ITA 495/JODH/2010

• Counselvise Citation: 49523314 RSA 2010
• Duration Of Justice: 1 year(s) 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 21-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G R KOKANI
• Assessee Lawyers: DEVENDRA MEHTA
• Keywords: Unexplained cash credit; Additional evidence
• Section: 68

Judgement Text

1 ITA 495-10(JD) IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH JODHPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 495/JODH/2010 ASSTT. YEAR : 2007-08. THE INCOME-TAX OFFICER, VS. M/S. KARNAWAT INTERNA TIONAL, WARD-1, RAJSAMAND. KALPANA KUNJ, DIST. RAJSAMAN D. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G.R. KOKANI RESPONDENT BY : SHRI DEVENDRA MEHTA DATE OF HEARING : 16.12.2011. DATE OF PRONOUNCEMENT : 19.01.2011. ORDER DATE OF ORDER : 19/01/2012. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY DEPARTMENT AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2007-08. 2. THE DEPARTMENT IS OBJECTING IN DELETING THE TRAD ING ADDITION OF RS. 50,000/- AND DELETING ADDITION OF RS. 16,50,000/- MADE UNDER SEC TION 68 BY THE AO. 3. THE ASSESSEE FILED RETURN SHOWING GROSS PROFIT O F RS. 1,20,472/- GIVING GP RATE OF 6.39% AGAINST 2.95% SHOWN IN EARLIER YEAR. THE AO OBSERVED THAT THOUGH THE GP RATE IS BETTER, HOWEVER, HE FOUND THAT PROVISIONS OF SECTIO N 145(3) ARE APPLICABLE AS ASSESSEE HAS NOT MAINTAINED STOCK REGISTER AND FAILED TO PRODUCE DOCUMENTARY EVIDENCE RELATING TO 2 PAYMENT OF WAGES. ACCORDINGLY, HE MADE AN ADDITION OF RS. 50,000/- ON ADHOC BASIS. THE LD. CIT (A) DELETED THE ADDITION. 4. AFTER CONSIDERING THE ORDERS OF THE AO AND LD. C IT (A), WE FIND NO INFIRMITY IN THE FINDING OF LD. CIT (A). ONLY ON ACCOUNT OF NON -MAINTENANCE OF STOCK REGISTER, IN OUR VIEW, PROVISIONS OF SECTION 145(3) CANNOT BE INVOKE D. THERE WAS NO DEFECT OF ANY KIND POINTED OUT BY THE AO IN MAINTAINING THE BOOKS OF A CCOUNT. THEREFORE, WE HOLD THAT LD. CIT (A) WAS JUSTIFIED IN DELETING THE ADDITION. 5. REGARDING SECOND ISSUE, THE AO NOTICED THAT ASSE SSEE HAS RECEIVED ADVANCES AGAINST SUPPLY FROM 12 PARTIES OF RS. 16,50,000/-. THE ASSESSEE WAS REQUIRED TO FILE CONFIRMATION LETTER OF THESE PARTIES ALONG WITH PAN . AS PER ORDER OF AO, THE ASSESSEE DID NOT FILE THESE DETAILS, ACCORDINGLY, HE MADE ADDITI ON OF RS. 16.50 LACS UNDER SECTION 68. DETAILED SUBMISSIONS WERE FILED BEFORE LD. CIT (A). 6. AFTER CONSIDERING THE SUBMISSIONS, THE LD. CIT ( A) FOUND THAT AO WAS NOT JUSTIFIED IN TREATING THE ADVANCES RECEIVED FROM CU STOMERS AS UNEXPLAINED CREDIT AND MAKING ADDITION UNDER SECTION 68. ACCORDINGLY, ADD ITION WAS DELETED. 7. AFTER CONSIDERING THE ORDERS OF THE AO AND LD. C IT (A), AGAIN WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT (A). THE LD. CIT (A) HAS ASCERTAINED THE FACTUAL ASPECTS THAT IN THE YEAR UNDER CONSIDERATION THE ADVANCES W ERE RECEIVED FROM VARIOUS PARTIES AGAINST SUPPLY OF MATERIAL. THE MATERIAL HAS BEEN SUPPLIED IN SUBSEQUENT YEAR. SUPPORTING INVOICES EVIDENCING SALE OF GOODS IN SUB SEQUENT YEAR WERE FILED BEFORE LD. CIT (A) AND IT WAS FOUND THAT ASSESSEE HAD SUPPLIED THE MATERIAL AGAINST ADVANCES RECEIVED IN THE YEAR UNDER CONSIDERATION. THESE FA CTUAL ASPECTS COULD NOT BE CONTROVERTED BY LD. D/R. THEREFORE, WE DO NOT SEE ANY UNREASONA BLENESS IN THE ORDER OF LD. CIT (A). 3 7.1. REGARDING PLEA OF THE DEPARTMENT THAT LD. CIT (A) WAS NOT JUSTIFIED IN ENTERTAINING THE ADDITIONAL DETAILS, WHICH WERE NOT PRODUCED BEF ORE THE AO, IT IS SEEN THAT ASSESSEE HAS NOT FILED THESE DETAILS BUT THEY WERE REQUIRED TO B E FILED BEFORE LD. CIT (A) AS PER DIRECTION OF LD. CIT (A). THEREFORE, THIS IS NOT A CASE OF ADMITTING ADDITIONAL EVIDENCE FILED UNDER RULE 46A. IN VIEW OF THESE FACTS AND C IRCUMSTANCES, WE CONFIRM THE FINDING OF LD. CIT (A) ON THIS ISSUE ALSO. 8. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMI SSED. 9. THE ORDER IS PRONOUNCED ON 19.01.2012. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/- COPY FORWARDED TO :- THE ITO WARD-1, RAJSAMAND. M/S. KARNAWAT INTERNATIONAL, RAJSAMAND. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 495/JODH/2010) BY ORDER, AR ITAT JODHPUR.