ITO, Jaipur V. M/S SUPRA CRAFT PACKAGING PVT. LTD., Alwar

ITA 532/JPR/2011

• Counselvise Citation: 53223114 RSA 2011
• Duration Of Justice: 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 31-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K MEENA

Judgement Text

1 ITA 532-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR. ( BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ) ITA NO. 532/JP/2011 ASSTT. YEAR : 2005-06. THE INCOME-TAX OFFICER, VS. M/S. SUPRA CRAFT PACK AGING P. LTD., WARD 2(3), E-94, INDL. AREA, BHIWADI, ALWAR. ALWAR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI D.K. MEENA RESPONDENT BY : SHRI P.C. PARWAL DATE OF HEARING : 18.01.2012. DATE OF PRONOUNCEMENT : 30.01.2012. ORDER DATED : 30/01/2012. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY DEPARTMENT AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2005-06. 2. FIRST GROUND IS AGAINST RESTRICTING THE TRADING ADDITION OF RS. 14,84,580/- TO RS. 2,18,200/-. 3. DURING THE ASSESSMENT PROCEEDINGS, THE AO NOTICE D THAT GP RATE SHOWN BY ASSESSEE HAS BEEN SHOWN ON LOWER SIDE I.E. AT 19.05 %. THE AO APPLIED GP RATE AT 25% WHICH WERE WORKED OUT THE COST PER BOX INCLUDING M ANUFACTURING EXPENSES TO RS. 4.61 AND SALE PRICE PER BOX TO RS. 6.12 AND ACCORDINGLY WORKED OUT GP RATE AT 35.50%. IT IS ALSO MENTIONED BY THE AO THAT ASSESSEE HAS NOT FURN ISHED ANY QUANTITATIVE DETAILS, BOOKS 2 OF ACCOUNT HAVE NOT BEEN PRODUCED. STOCK REGISTER HAS ALSO NOT BEEN PRODUCED. PURCHASE AND SALE VOUCHERS ARE ALSO NOT PRODUCED TO VERIFY T HE SALE AND VALUATION MADE BY THE ASSESSEE OF ITS CLOSING STOCK. ACCORDINGLY, HE REJ ECTED THE BOOKS OF ACCOUNT AND INVOKING PROVISIONS OF SECTION 145(3), HE MADE A TRADING ADD ITION OF RS. 14,84,580/- BY APPLYING GP RATE OF 25%. IT WAS SUBMITTED BEFORE LD. CIT (A ) THAT ASSESSEE VIDE LETTER DATED 25.8.2007 FILED COMPLETE DETAILS BEFORE THE AO. IN PARA 1 IT IS MENTIONED THAT BOOKS OF ACCOUNT OF ASSESSEE CONSISTING OF CASH BOOK, LEDGER , STOCK REGISTER, PURCHASE AND SALE EXPENSES VOUCHERS ARE BEING PRODUCED BEFORE THE AO FOR EXAMINATION. IN PARA 2 OF THE REPLY IT HAS BEEN MENTIONED THAT DETAILS OF ALL THE BANK ACCOUNT WITH THE RECONCILIATION CERTIFICATE ARE BEING ENCLOSED HEREWITH. SIMILARLY , IN PARAS 3 TO 9 ALL THE DETAILS REQUIRED BY THE AO WERE ENCLOSED. ACCORDINGLY IT WAS SUBMIT TED BEFORE LD. CIT (A) THAT IT IS WRONG ON THE PART OF THE AO TO MENTION THAT ASSESSE E HAS NOT PRODUCED ANY BOOKS OF ACCOUNT OR SALE OR PURCHASER VOUCHERS. IT WAS SUBM ITTED THAT THE GP RATE SHOWN BY ASSESSEE IS BETTER AND THERE IS NO DEFECT IN THE BO OKS OF ACCOUNT. AFTER CONSIDERING THE SUBMISSIONS AND TAKING INTO CONSIDERATION THE GP OF LAST TWO YEARS THAT WAS 19.30% AND 19.93% RESPECTIVELY, THE LD. CIT (A) APPLIED GP RAT E OF 20% WHICH RESULTED IN TRADING ADDITION OF RS. 2,18,200/-. IN THIS WAY REMAINING ADDITION OF RS. 12,66,350/- WAS DELETED BY LD. CIT (A). 4. THE LD. D/R PLACED RELIANCE ON THE ORDER OF AO. 5. ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSESS EE PLACED RELIANCE ON THE ORDER OF LD. CIT (A). 6. AFTER CONSIDERING THE ORDERS OF THE AO AND LD. C IT (A) WE FIND NO INFIRMITY IN THE FINDING OF LD. CIT (A). THE LD. CIT (A) HAS TAKEN INTO CONSIDERATION THE VARIOUS DETAILS 3 FILED BEFORE THE AO WHICH WERE NOT CONSIDERED BY HI M AND TAKING INTO CONSIDERATION THE PAST HISTORY OF THE CASE THEN HE APPLIED GP RATE OF 20% AGAINST 19.05% DECLARED BY ASSESSEE. NO MAJOR DEFECT WAS FOUND IN THE BOOKS O F ACCOUNT. THE BOOKS OF ACCOUNT ARE SUBJECT TO AUDIT AND ALSO SUBJECT TO EXAMINATION OF EXCISE AUTHORITIES. IN OUR VIEW, THE LD. CIT (A) WAS JUSTIFIED IN REDUCING THE TRADING ADDIT ION BY RS. 12,66,380/-. ACCORDINGLY, WE CONFIRM HIS ORDER ON THIS ISSUE. 7. SECOND GROUND RELATES TO RESTRICTING THE DISALLO WANCE MADE BY AO FROM RS. 3,53,648/- TO RS. 1,00,000/-. 8. THE AO DISALLOWED 10% OF EXPENSES ON ACCOUNT OF VARIOUS EXPENSES SUCH AS ADMINISTRATIVE EXPENSES, FINANCIAL EXPENSES, SELLIN G AND DISTRIBUTION EXPENSES ETC. BEFORE LD. CIT (A) IT WAS SUBMITTED THAT THE EXPENSES INCU RRED BY ASSESSEE AS COMPARED TO EARLIER YEAR ARE LESS. COMPARATIVE CHART WAS ALSO FILED WH ICH IS REPRODUCED AT PAGE 9 OF CIT (A)S ORDER. AFTER CONSIDERING THESE SUBMISSIONS, THE LD. CIT (A) FOUND THAT DISALLOWANCE MADE BY AO IS ON HIGHER SIDE. THEREFORE, HE RESTRIC TED THE DISALLOWANCE TO RS. 1,00,000/- AND REMAINING AMOUNT WAS DELETED. 9. AFTER CONSIDERING THE ORDERS OF THE AO AND LD. C IT (A), AGAIN WE FIND NO INFIRMITY IN THE FINDING OF LD. CIT (A) WHO AFTER ASCERTAININ G THE FACTUAL ASPECTS THAT COMPLETE BOOKS OF ACCOUNT, VOUCHERS ETC. RESTRICTED THE DISA LLOWANCE. THE BOOKS OF ACCOUNT WERE AUDITED. THE EXPENSES INCURRED IN THE YEAR UNDER CO NSIDERATION WERE NOT MORE OR EXORBITANTLY HIGH AS COMPARED TO EARLIER YEAR. THE REFORE, HE RESTRICTED THE DISALLOWANCE TO RS. 1,00,000/- JUST TO COVER THE LEAKAGE OF REVE NUE, IF ANY AND WE FIND THAT HE WAS JUSTIFIED IN DELETING THE DISALLOWANCE OF RS. 2,53, 648/- OUT OF TOTAL DISALLOWANCE MADE BY AO. ACCORDINGLY WE CONFIRM HIS ORDER IN THIS RESPE CT ALSO. 4 10. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISM ISSED. 11. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30 .01.2012. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/ COPY FORWARDED TO :- THE ITO WARD 2(3), ALWAR. M/S. SUPRA CRAFT PACKAGING PVT. LTD., BHIWADI. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 532/JP/2011) BY ORDER, AR ITAT JAIPUR.