ITO, CHURU V. M/s. Suraj Exports India, CHURU

ITA 545/JODH/2013

• Counselvise Citation: 54523314 RSA 2013
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 05-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Assessee Lawyers: U C JAIN
• Keywords: Rejection of books of accounts; Business income

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 545/JODH/2013 (A.Y. 2010-11) ITO, WARD-2, VS. M/S. SURAJ EXPORTS INDIA CHURU. NEAR RAILWAY STATION, SARDARSHAHAR, CHURU. PAN NO. ABBFS 8126 M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI U.C. JAIN & SHRI RAJENDRA JAIN DEPARTMENT BY : SHRI N.A. JOSHI- D.R. DATE OF HEARING : 17/02/2014. DATE OF PRONOUNCEMENT : 21/02/2014. O R D E R PER N.K. SAINI, A.M THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE OR DER DATED 16/09/2013 OF LD. CIT (A)-III, JAIPUR. THE FOLLOWI NG GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE TRADING ADDITION OF RS. 34,44,495/- BY HOLDING THAT THE REJECTION OF BOOKS OF ACCOUNTS U/S 145(3) OF THE I. T. ACT, 1961 WAS NOT 2 FAIR AND JUST, EVEN WHEN PROFIT COULD NOT BE DEDUCE D CORRECTLY FROM THE ACCOUNTS, DEFECTS IN WHICH WERE INDICATED BY TH E A.O. 2. THE CIT(A) HAS FURTHER ERRED IN TREATING DUTY D RAW BACK AS BUSINESS INCOME INSTEAD OF INCOME FROM OTHER SOURCES AS HELD BY THE A.O. 2 GROUND NO.1 RELATES TO THE DELETION OF TRADING ADD ITION AMOUNTING TO RS. 34,44,495/- MADE BY THE ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SECTION 145(3) OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT) AND GROUND NO.2 RELATES TO T HE INCOME RECEIVED ON ACCOUNT OF THE DUTY DRAWBACK AS BUSINESS INCOME. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE H AD SHOWN TOTAL SALES OF RS. 4,69,91,888/- WHICH INCLUDED DUTY DRAW BACK OF RS. 16,24,183/-. THE ASSESSEE HAD SHOWN GROSS PROF IT OF RS. 49,84,839/- WHICH GAVE THE GROSS PROFIT RATE OF 10.61%. THE AS SESSING OFFICER OBSERVED THAT IF THE DUTY DRAWBACK IS EXCLUDED FROM THE TOTAL SALES AND THE GROSS PROFIT RATE CAME TO 7.41%. HE, THEREFORE , ASKED THE ASSESSEE TO FURNISH STOCK REGISTER, INVENTORY OF OPENING & CLOS ING STOCK AND QUANTITATIVE DETAILS OF DAY TO DAY CONSUMPTION OF M ATERIAL. THE ASSESSING OFFICER FURTHER OBSERVED THAT ASSESSEE DID NOT PROD UCE STOCK REGISTER AND QUANTITATIVE DETAILS OF DAY TO DAY CONSUMPTION. HE , THEREFORE, INVOKED THE PROVISIONS OF SECTION 145(3) OF THE ACT AND WOR KED OUT THE INCOME BY 3 APPLYING THE GP RATE OF 15%. HE ALSO EXCLUDED DUTY DRAWBACK AMOUNTING TO RS. 60,24,183/- FROM THE TOTAL TURNOVER AND ACCO RDINGLY MADE A TRADING ADDITION OF RS. 34,44,495/-. THE ASSESSING OFFICER WHILE COMPUTING INCOME OF THE ASSESSEE, SEPARATELY ADDED THE DUTY DRAWBACK AND MENTIONED THAT THE PROFIT DERIVED BY WAY OF REM ISSION OF DUTY DRAWBACK DID NOT FORM PART OF THE PROFIT FOR EXEMPT ION UNDER SECTION 10BA OF THE ACT. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A), WHO DELETED THE TRADING ADDITION BY OBSERVING THAT THE SIMILAR ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) FOR THE A.Y. 2009-10 VIDE ORDER DATED 29/11/2012 WAS REVERS ED BY THE ITAT VIDE THEIR DECISION DATED 17/07/2013 IN I.T.A.NO. 38/JOD H/2013. AS REGARDS TO THE DUTY DRAWBACK, THE LD. CIT(A) OBSERVED THAT THE ITAT VIDE ORDER DATED 17/07/2013 IN I.T.A.NO. 38/JODH/2013 CLEARLY HELD THAT THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION UNDER SECTION 1 0BA OF THE ACT IN RESPECT OF PROFITS FROM SALE OF DEPB AND DUTY DRAWB ACK. THE LD. CIT(A) REPRODUCED THE SAID DECISION AT PAGES 26 TO 30 OF T HE IMPUGNED ORDER, FOR COST OF REPETITION, THE SAME IS NOT REPRODUCED HERE IN. NOW THE DEPARTMENT IS IN APPEAL. 4 5. LEARNED D.R. ALTHOUGH SUPPORTED THE ORDER OF THE ASSESSING OFFICER, BUT COULD NOT REBUT THE FINDINGS OF THE LD. CIT(A). 6 . IN HIS RIVAL SUBMISSIONS, LEARNED COUNSEL FOR THE ASSESSEE STRONGLY SUPPORTED THE ORDER OF LD. CIT(A) AND FURTHER SUBMI TTED THAT SINCE THE ISSUES UNDER CONSIDERATION HAVE BEEN DECIDED BY THE LD. CIT(A) BY FOLLOWING THE DECISION OF THE ITAT IN ASSESSEES OW N CASE IN THE PRECEDING ASSESSMENT YEAR I.E. A.Y. 2009-10, THEREFORE, THE I MPUGNED ORDER DESERVES TO BE UPHELD. 7 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE LD. CIT(A) DE CIDED THE ISSUES UNDER CONSIDERATION IN FAVOUR OF THE ASSESSEE BY FOLLOWIN G THE DECISION OF ITAT IN I.T.A.NO. 38/JODH/2013 FOR THE A.Y. 2009-10, ORD ER DATED 17/07/2013 IN ASSESSEES OWN CASE AND IT IS NOT A CASE OF THE DEPARTMENT THAT THE FACTS OF THE PRESENT CASE ARE NOT SIMILAR TO THE FA CTS INVOLVED IN THE PRECEDING ASSESSMENT YEAR 2009-10. WE, THEREFORE, DO NOT SEE ANY VALID GROUND TO INTERFERE WITH THE FINDINGS OF THE LD. CI T(A) GIVEN IN THE IMPUGNED ORDER BY FOLLOWING THE EARLIER ORDER OF TH E TRIBUNAL IN 5 ASSESSEES OWN CASE FOR THE PRECEDING YEAR. IN THA T VIEW OF THE MATTER, WE DO NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPAR TMENT. 8 . IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMIS SED. (ORDER PRONOUNCED IN THE COURT ON 21 ST FEBRUARY, 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 21 ST FEBRUARY, 2014. VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.