Assistant Commissioner Of Income Tax, Khandwa V. M/s Rajshree Fibers, , Khandwa

ITA 550/Ind/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9057 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 25-07-2019
• Assessment Year: 2010-2011
• Appeal Filed On: 03-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MAHESH AGRAWAL A RS
• Assessee Lawyers: ASHIMA GUPTA
• Keywords: Reopening of assessment; Difference of opinion; Corroborative evidences; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 201; 147; 148; 6; 139

Judgement Text

[ITA NOS.550 & 567/IND/2017] [M/S. RAJSHREE FIBERS, KHARGONE (M.P.)] , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.550/IND/2017 ASSESSMENT YEAR: 2010-11 ACIT KHANDWA / VS. M/S. RAJSHREE FIBERS BISTAN ROAD KHARGONE (M.P.) (APPELLANT) (REVENUE ) P.A. NO. AAHFR4352B ITA NO.567/IND/2017 ASSESSMENT YEAR: 2010-11 M/S. RAJSHREE FIBERS BISTAN ROAD KHARGONE (M.P.) / VS. ACIT KHANDWA ( APPELLANT ) ( REVENUE ) APPELLANT BY S/SHRI KUNAL AGRAWAL & MAHESH AGRAWAL, A.RS RESPONDENT BY SMT. ASHIMA GUPTA, D.R. DATE OF HEARING: 25.07.2019 DATE OF PRONOUNCEMENT: 27.09.2019 [ITA NOS.550 & 567/IND/2017] [M/S. RAJSHREE FIBERS, KHARGONE (M.P.)] 2 / O R D E R PER KUL BHARAT, J.M: THESE TWO APPEALS BY THE ASSESSEE AND REVENUE ARE DIRECTED AGAINST ORDER OF THE CIT(A) DATED 4.5.2017 PERTAINING TO THE ASSESSMENT YEAR 2010-11. FIRST WE T AKE UP THE REVENUES APPEAL IN ITA NO.550/IND/2017. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) IS JUSTIFIED IN HOLDING THE REASSESSMENT PROCEEDINGS AS INVALID AND QUASHING THE REASSESSMENT PROCEEDINGS OBSERVING THAT THE REOPENING WAS BASED ON CHARGE OF OPINION. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE LD. CIT(A) IS JUSTIFIED IN RESTRICTING THE ADDITION ON ACCOUNT OF NET PROFIT @ 2.6% ONLY ON TURNOVER OF RS.14,63,08,751/- AS AGAINST THE ADDITION MADE @5% ON SALE OF RS.96,10,44,645/- BY THE ASSESSING OFFICER KEEPING IN VIEW THE DECISION OF H ON'BLE ITAT, INDORE BENCH IN THE CASE OF SHRI AMAR AGRAWAL, SENDHWA IN ITA NO.611/IND/201 2 DATED 20.8.2013. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE LD. CIT(A) IS JUSTIFIED IN RESTRICTING ADDITION TO RS.14,77,718/- ONLY OUT OF TOTAL ADDITION OF RS.3,58,90,976/- IGNORING THE FINDINGS IN THE ASSESSMENT ORDER. 4. THE APPELLANT CRAVES LEAVE TO ADD TO OR DEDUCT FROM OR OTHERWISE AMEND THE ABOVE GROUNDS OF APPEAL. 2. THE FACTS GIVING RISE TO THE PRESENT APPEAL ARE THAT CASE OF THE ASSESSEE WAS REOPENED FOR ASSESSMENT AND THE ASSESSMENT U/S 147 R.W.S. 143(3) OF THE INCOME TAX A CT, 1961 (HEREINAFTER CALLED AS THE ACT) WAS FRAMED VIDE ORDER [ITA NOS.550 & 567/IND/2017] [M/S. RAJSHREE FIBERS, KHARGONE (M.P.)] 3 DATED 28.12.2016. THE BASIS OF REOPENING OF THE ASSESSMENT WAS THAT ON ENQUIRY BY DDIT (INV.)-II, INDOR E, IT WAS REVEALED THAT ENTRIES REGARDING PURCHASE OF GOODS AND ITS PAYMENT TO FARMERS HAVING BEEN RECORDED IN THE BO OKS OF ACCOUNTS WERE NOT FOUND SATISFACTORY. THE A.O. WHI LE FRAMING THE ASSESSMENT ADOPTED THE NET PROFIT @ 5% REL YING ON THE ORDER OF THE TRIBUNAL RENDERED IN THE CASE OF AJAY KUMAR AGRAWAL IN ITA NO.611/IND/2012. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT( A), WHO AFTER CONSIDERING THE SUBMISSIONS PARTLY ALLOWED T HE APPEAL. THEREBY, THE LD. CIT(A) QUASHED THE ACTION OF REOPENING OF THE ASSESSMENT AND ON MERIT RESTRICTED T HE ADDITION TO THE EXTENT OF RS.14,77,718/-. AGGRIEVED BY THIS, BOTH REVENUE AND ASSESSEE HAVE CHALLENGED THE FINDING O F THE LD. CIT(A). 3. GROUND NO.1 OF THE REVENUES APPEAL IS AGAINST FINDI NG OF LD. CIT(A) HOLDING THAT REOPENING OF ASSESSMENT AS BAD [ITA NOS.550 & 567/IND/2017] [M/S. RAJSHREE FIBERS, KHARGONE (M.P.)] 4 IN LAW BEING BASED UPON PURELY ON THE REPORT BY THE DDIT (INV.). LD. CIT(DR) MS. ASHIMA GUPTA VEHEMENTLY ARGUE D THAT THE FINDING OF THE LD. CIT(A) IS NOT CORRECT. LD. D.R. SUBMITTED THAT AS PER SECTION 147 OF THE ACT, THE A.O . WOULD BE WELL WITHIN THE AMBIT OF POWER AS CONFERRED ON HIM BY THE ACT, IF HE HAS REASON TO BELIEVE THAT ANY I NCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR. LD. D.R. TOOK US THROUGH THE PROVIS IONS OF LAW.LD. D.R. FURTHER CONTENDED THAT AS PER THE ASSESSMENT ORDER, THE A.O. NOTICED THAT BOOKS OF ACCOU NTS DO NOT GIVE TRUE AND FAIR PICTURE OF PROFIT AS DECLARED BY THE ASSESSEE. HENCE, THE A.O. HAD REASON TO BELIEVE THAT TH E INCOME OF RS.1,98,92,774/- HAD ESCAPED ASSESSMENT. LD. D.R.FURTHER SUBMITTED THAT UNDER THE IDENTICAL FACTS, COORDINATE BENCH OF THIS TRIBUNAL IN ITA NO.611/IND/2 012 VIDE ORDER DATED 20.8.2013 HAD APPLIED NET PROFIT RATE AT 5%. LD. CIT(DR) SUBMITTED THAT DECISION OF THE TRIB UNAL [ITA NOS.550 & 567/IND/2017] [M/S. RAJSHREE FIBERS, KHARGONE (M.P.)] 5 RENDERED IN THE CASE OF AMAR AGGARWAL WAS NOT AVAILABLE WHEN THE ORIGINAL ASSESSMENT WAS FRAMED WHICH CAME TO NOTICE OF THE A.O. SUBSEQUENTLY. FURTHER, THE DIT(I NV.) REPORTED THAT PAYMENTS MADE TO THE FARMERS ARE NOT FOUN D TO BE SATISFACTORY. 4. ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE OPPO SED THE SUBMISSIONS AND SUPPORTED THE FINDING OF THE LD. CIT(A). LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT REOPENING OF THE ASSESSMENT IS EX-FACIE CONTRARY TO TH E PROVISIONS OF LAW AS WELL AS THE JUDICIAL PRONOUNCEMEN TS IN THIS REGARD. HE SUBMITTED THAT ADMITTEDLY, THE REOPE NING IS AFTER A LAPSE OF MORE THAN FOUR YEARS FROM THE END OF TH E RELEVANT ASSESSMENT YEAR. THERE IS NO ALLEGATION THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUC H ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN U/S 139 OF THE ACT OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION [ITA NOS.550 & 567/IND/2017] [M/S. RAJSHREE FIBERS, KHARGONE (M.P.)] 6 142 OR SECTION 148 OF THE ACT OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR REASSESSMENT FOR THAT ASSESSMENT YEAR. HE SUBMITTED THAT ALL MATERIAL FACTS WE RE DULY DISCLOSED BEFORE THE A.O. DURING THE ORIGINAL PROCEEDINGS. IT IS NOT THE CASE WHERE THE ASSESSEE H AD CONCEALED ANY MATERIAL FACTS FROM THE ASSESSING OFFICER. LD. COUNSEL SUBMITTED THAT THE REOPENING IS BASED UPON PU RELY ON THE GROUND THAT DDIT (INV.) HAD DOUBTED ABOUT THE PAYMENTS TO THE FARMERS AND APPLIED THE DECISION OF T HIS TRIBUNAL RENDERED IN THE CASE OF AMAR AGGARWAL IN ITA NO.611/IND/2012 DATED 20.8.2013, IN WHICH THE TRIBUN AL WAS PLEASED TO APPLY NET PROFIT AT 5%. HE SUBMITTED TH AT FACTS OF THE SAID DECISION ARE COMPLETELY DIFFERENT AS IN THAT CASE, THERE WAS LOWER TURNOVER COUPLED WITH THE FINDI NG THAT PAYMENTS TO THE FARMERS WAS MADE OUT OF UNDISCLOS ED SOURCES AND THIS IS NOT SO IN THE PRESENT CASE. HE SUBMITTED THAT A.O. COMPLETELY LOST SIGHT OF THE FACT S THAT [ITA NOS.550 & 567/IND/2017] [M/S. RAJSHREE FIBERS, KHARGONE (M.P.)] 7 IN THE PRESENT CASE, MAJOR PURCHASES HAVE BEEN MADE FRO M REGISTERED DEALERS FOR WHICH VARIOUS INDIRECT TAXES I N THE FORM OF VAT, CST AND ENTRY TAX WERE PAID. IT IS FURT HER SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE THAT TH E A.O. FAILED TO APPRECIATE THE FACT THAT OUT OF TOTAL PURCHASES, THE PURCHASE OF RICE FOR RS.32,18,061/-, COTTON SEED OF RS.1,89,81,014/- AND KAPAS OF RS.4,36,01,838/- WAS TAX PAID AND THE PURCHASES WERE NOT MADE FROM THE MANDI COMMITTEE BUT WERE PURCHASED FROM TRADERS FOR WHICH PAYMENT WAS MADE THROUGH BANKING CHANNELS. UNDER THESE UNDISPUTED FACTS, THE LD. CIT(A) WAS JUSTIFIED IN COMING TO THE CONCLUSION THAT THE REOPENING IS BASED ON THE CHANGE OF OPINION AS SUCH SAME IS NOT PERMISSIBLE UNDER THE LAW. HE FURTHER CONTENDED THAT LAW IS WEL L SETTLED THAT IF THERE IS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE THE RELEVANT MATERIAL, THE ASSESSMENT CANNOT BE REOPENED AFTER A LAPSE OF FOUR YEARS. IN SUPPORT OF TH IS, THE [ITA NOS.550 & 567/IND/2017] [M/S. RAJSHREE FIBERS, KHARGONE (M.P.)] 8 LD. COUNSEL FOR THE ASSESSEE RELIED ON THE VARIOUS CAS E LAWS. LD. COUNSEL HAS RELIED UPON THE JUDGEMENT OF THE JURISDICTIONAL HIGH COURT RENDERED IN THE CASE OF PRI NCIPAL CIT VS. M/S. BALAJI NEEMUCH INFRASTRUCTURE PVT. LTD. (2019) 34 ITJ 504 (M.P.). 5. IN THE REJOINDER, LD. D.R. ALSO PLACED RELIANCE ON THE JUDGEMENT OF THE HON'BLE MADRAS HIGH COURT RENDERED I N THE CASE OF A. SRIDEVI VS. ITO IN WRIT PETITION NO.2 0625 OF 2016 AND ALSO THE JUDGEMENT OF THE HON'BLE MADRAS HIG H COURT RENDERED IN THE CASE OF SUN DIRECT TV PVT. LTD . VS. ACIT (2018) 98 TAXMANN.COM 201 (MADRAS). FURTHER RELIANCE IS PLACED ON THE JUDGEMENT OF HON'BLE HIGH C OURT OF GUJARAT RENDERED IN THE CASE OF JAYANT SECURITY & FINANCE LIMITED VS. ACIT (2018) 91 TAXMANN.COM 181 (GUJ.) RELIANCE IS FURTHER PLACED ON THE JUDGEMENT O F THE HON'BLE GUJARAT HIGH COURT RENDERED IN THE CASE OF [ITA NOS.550 & 567/IND/2017] [M/S. RAJSHREE FIBERS, KHARGONE (M.P.)] 9 AISHWARYA DYING MILLS PVT. LTD. VS. DCIT (CENTRAL)-1 ( 2018) 94 TAXMAN.COM 430 (GUJ.). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSMENT WAS REOPENE D BY THE A.O. ON THE BASIS OF THE ENQUIRY CONDUCTED BY TH E DDIT (INV.)-2, INDORE. WE FIND THAT THE A.O. HAS OBSERVED THAT A DETAILED ENQUIRY HAS BEEN CONDUCTED BY THE DDIT (INV.) -2, INDORE AGAINST STR NO.1000017305 IN THE PRESENT CASE. A REPORT ON THE BASIS OF ENQUIRY SENT TO THE OFFICE OF THE A.O. VIDE OFFICE LETTER FILE NO.DDIT (INV.)/IND/FIU- IND/100017305/14-15/3502 DATED 23.3.2015. FROM THE REPORT, IT IS FOUND THAT THERE ARE HIGH VOLUME OF CASH TRANSACTIONS IN CASH CREDIT ACCOUNT DONE IN THE ACCOUNT MAINTAINED BY THE ASSESSEE AT KHARGAON BRANCH. IT IS FURTHER OBSERVED BY THE A.O. THAT IN THE STATEMENT PAR TNER OF THE ASSESSEE FIRM SHRI NILESH GANDHI STATED THAT THE [ITA NOS.550 & 567/IND/2017] [M/S. RAJSHREE FIBERS, KHARGONE (M.P.)] 10 CASH WAS DRAWN FOR PAYMENT TO FARMERS FROM WHOM COTTON WAS TO BE PURCHASED AND WHEN COTTON WAS NOT AVAILABLE IN THE MARKET OR THE PAYMENT COULD NOT BE MADE TO THE FARMERS, THE SAME WITHDRAWN CASH WAS DEPOSITED BACK IN THE BANK ACCOUNT. IT WAS FURTHER OBSERVED THAT IN FEW CASES, ASSESSEE FIRM HAD NEITHER MADE PAYMENT TO FARMERS ON THE DAY OF ACTUAL PURCHASE OF COTTON, WHICH IS MANDATORY AS PER KRISH UPAJ MANDI ACT NOR MADE ADDITIONAL PAYMENT @ 1% PER DAY OF THE AGRICULTURAL PRODUCE PAYABLE TO THE SELLER BETWEEN THE PERIOD OF PURCHASE AND ACTUAL PAYMENT. IT WAS FURTHER OBSERVED TH AT SHRI NILESH GANDHI DURING THE STATEMENT ADMITTED THAT CASH IS PAID TO THE FARMERS ON THE SAME DAY OR WITHIN 3 TO 4 DAYS BUT WITHIN A MAXIMUM TIME LIMIT OF 15 DAYS. HE STATED THAT NO INTEREST AS SUCH WAS PAID TO THE FARMERS F OR DELAYED PAYMENT. FURTHER, THE A.O. OBSERVED THAT TH E TOTAL TURNOVER REFLECTED IN THE BOOKS OF ACCOUNTS DURING THE YEAR [ITA NOS.550 & 567/IND/2017] [M/S. RAJSHREE FIBERS, KHARGONE (M.P.)] 11 UNDER CONSIDERATION IS RS.71,73,13,479/- AND IN THE JUDGEMENT OF ITAT IN THE CASE OF SHRI AMAR AGRAWAL (SUPRA), NET PROFIT WAS DETERMINED AT 5% OF TOTAL TURNO VER. THEREFORE, THE A.O. WAS OF THE VIEW APPLYING THE SAME RATE OF NET PROFIT, EXCESS INCOME OF RS.1,98,92,774/- HA S BEEN ESCAPED ASSESSMENT. NOW IT IS TO BE DETERMINED WHETH ER THE ASSESSMENT HAS BEEN RIGHTLY REOPENED OR NOT. THE RE IS NO DISPUTE WITH REGARD TO THE FACT THAT THERE WAS NO OT HER MATERIAL BEFORE THE A.O. EXCEPT THE REPORT OF THE DDI T (INV.) AND OBSERVATION MADE THEREIN. ANOTHER FACT THAT COMPEL LED THE A.O. WAS DECISION OF THIS TRIBUNAL RENDERED IN TH E CASE OF AMAR AGRAWAL (SUPRA). WE FIND THAT LD. CIT(A) HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDI NG THAT THE A.O. FAILED TO BRING ANY FRESH EVIDENCE FOR INFOR MATION REGARDING ESCAPEMENT OF INCOME. WE DO NOT FIND ANY FAULT IN THIS FINDING OF THE LD. CIT(A) AS ADMITTEDLY, IN ORIGINAL PROCEEDINGS, THE A.O. HAS EXAMINED THIS ISSUE. MOREO VER, [ITA NOS.550 & 567/IND/2017] [M/S. RAJSHREE FIBERS, KHARGONE (M.P.)] 12 THE REOPENING IS AFTER LAPSE OF FOUR YEARS AS LAW IS NO W WELL SETTLED WHETHER ASSESSMENT IS REOPENED AFTER A LAPSE OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR , THIS CAN ONLY BE DONE, IF IT IS BROUGHT ON RECORD TH AT THERE IS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FU LLY AND TRULY ALL MATERIAL FACTS. THERE IS NOTHING ON RECORD SUGGESTING THAT THE ASSESSEE FAILED TO DISCLOSE FULLY AND TRULY MATERIAL FACTS. THEREFORE, WE AFFIRM THE VIEW OF THE LD. CIT(A) ON THIS ISSUE. THIS GROUND OF THE REVEN UES APPEAL IS DISMISSED. 7. GROUND NOS.2 & 3 ARE INTER-CONNECTED AND AGAINST RESTRICTING THE ADDITION TO THE EXTENT OF RS.14,77,7 18/- OUT OF TOTAL ADDITION OF RS.3,58,90,976/-. LD. CIT(DR) AT THE OUTSET SUPPORTED THE ASSESSMENT ORDER AND SUBMITTED T HAT THE LD. CIT(A) WAS NOT JUSTIFIED IN REDUCING THE ADDI TION. LD. CIT(DR) SUBMITTED THAT BEFORE A.O., THE ASSESSEE FAILED TO PRODUCE BOOKS OF ACCOUNTS AND SUPPORTING EVIDENCES . [ITA NOS.550 & 567/IND/2017] [M/S. RAJSHREE FIBERS, KHARGONE (M.P.)] 13 THEREFORE, THE A.O. WAS JUSTIFIED IN MAKING THE ADDITI ON BY FOLLOWING THE DECISION OF THE TRIBUNAL RENDERED IN T HE CASE OF AMAR AGRAWAL (SUPRA). 8. PER CONTRA, LD. AUTHORISED REPRESENTATIVE OPPOSED THESE SUBMISSIONS AND SUBMITTED THAT ALL EVIDENCES WER E FILED BEFORE A.O. INCLUDING THE ORIGINAL ASSESSMENT T HE ASSESSEE HAS FURNISHED ALL EVIDENCES AND SATISFIED THE QUERIES AS MADE BY THE A.O. DURING THE ORIGINAL ASSESSMENT. HE FURTHER SUBMITTED THAT THE A.O. HAS MECHANICALLY APPLIED THE RATIO OF DECISION OF THE TRIBU NAL RENDERED IN THE CASE OF AMAR AGRAWAL (SUPRA). 9. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER S OF THE AUTHORITIES BELOW. WE FIND THAT THE LD. CIT(A) H AS ELABORATELY DISCUSSED THE ISSUE AS UNDER IN HIS ORDER: [ITA NOS.550 & 567/IND/2017] [M/S. RAJSHREE FIBERS, KHARGONE (M.P.)] 14 [ITA NOS.550 & 567/IND/2017] [M/S. RAJSHREE FIBERS, KHARGONE (M.P.)] 15 [ITA NOS.550 & 567/IND/2017] [M/S. RAJSHREE FIBERS, KHARGONE (M.P.)] 16 10. WE DO NOT FIND ANY FAULT IN THE FINDINGS ARRIVED AT BY THE LD. CIT(A) AS THE LD. CIT(A) HAS APPLIED ADDITION AL NET PROFIT ON THE PURCHASES MADE THROUGH MANDI. THEREFORE , THIS GROUND OF THE REVENUES APPEAL ALSO DESERVES TO B E REJECTED. 11. NOW WE TAKE UP THE ASSESSEES APPEAL IN ITA NO.567/IND/2017 FOR THE A.Y. 2010-11. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1.00 THAT, ON THE FACT & CIRCUMSTANCES OF THE CASE, HON' BLE CIT(A) HAS ERRED IN LAW BY ESTIMATING THE NET PROFIT AT 2.60% EVEN THOUGH REASSESSMENT PROCEEDINGS GERMANE TO THE ADDITIONS H AVE BEEN HELD TO BE INVALID BY THE HON'BLE CIT(A) HIMSELF. 1.01 THAT, ASSESSMENT ORDER PASSED BY THE LD. A.O. ON 28 TH DECEMBER, 2016 WAS PURSUANT TO THE NOTICE ISSUED UN DER SECTION 148 AND SINCE THE HON'BLE CIT(A) HIMSELF, THE ASSES SMENT FRAMED ON 28 TH DECEMBER, 2016, ITSELF WAS ILLEGAL AND INVALID AND SHOULD BE QUASHED. 12. GROUND NO.1.00 AND 1.01 ARE AGAINST ESTIMATING THE NET PROFIT @ 2.60%. GROUND NO.2 IS GENERAL IN NATURE NEEDS NO SEPARATE ADJUDICATION. THEREFORE, THE ONLY EFFECTIVE GROUND IS AGAINST APPLYING THE NET PROFIT AT 2.60%. [ITA NOS.550 & 567/IND/2017] [M/S. RAJSHREE FIBERS, KHARGONE (M.P.)] 17 LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT LD. CIT(A ) HAD DECIDED THE ISSUE OF REOPENING OF ASSESSMENT IN FAVOU R OF THE ASSESSEE, WHEREIN THE LD. CIT(A) HELD THAT THE REOPENING IS BAD IN LAW. LD. COUNSEL SUBMITTED THAT ONCE THE PROCEEDING IS HELD TO BE BAD IN LAW, ANY ADDITION MADE WOULD NOT SURVIVE AS THE REASSESSMENT PROCEEDINGS GERMANE TO THE ADDITIONS HAVE BEEN HELD TO BE INVALID BY LD. CIT(A) HIMSELF. 13. PER CONTRA, LD. D.R. OPPOSED THESE SUBMISSIONS AN D SUPPORTED THE ORDER OF THE LD. CIT(A). 14. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER S OF THE AUTHORITIES BELOW. WE HAVE DECIDED TO UPHOLD THE ORDER OF THE LD. CIT(A) ON THE ISSUE OF VALIDITY OF REASSES SMENT IN REVENUES APPEAL BY OBSERVING AS UNDER:- [ITA NOS.550 & 567/IND/2017] [M/S. RAJSHREE FIBERS, KHARGONE (M.P.)] 18 9. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD. CIT(A) HAS ELABORATELY DISCUSSED THE ISSUE AS UNDER IN HIS ORDER: [ITA NOS.550 & 567/IND/2017] [M/S. RAJSHREE FIBERS, KHARGONE (M.P.)] 19 10. WE DO NOT FIND ANY FAULT IN THE FINDINGS ARRIVE D AT BY THE LD. CIT(A) AS THE LD. CIT(A) HAS APPLIED ADDITIONAL NET PROFIT ON THE PURCHASES MADE THROUGH MANDI. THEREFORE, THIS GROU ND OF THE REVENUES APPEAL ALSO DESERVES TO BE REJECTED. [ITA NOS.550 & 567/IND/2017] [M/S. RAJSHREE FIBERS, KHARGONE (M.P.)] 20 15. WE FIND MERIT IN THE CONTENTION OF THE ASSESSEE THAT WHEN THE PROCEEDING ITSELF IS HELD TO BE BAD IN LAW , ANY ADDITION MADE THEREIN WOULD NOT SURVIVE. WE HOLD ACCORDINGLY, THEREFORE, THE A.O. IS DIRECTED TO DELE TE THESE ADDITIONS. GROUND RAISED BY THE ASSESSEE IS ALLOWED. 16. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO.550/IND/2017 FOR THE A.Y. 2010-11 IS DISMISSED AN D THE APPEAL FILED BY THE ASSESSEE IN ITA NO.567/IND/201 7 FOR THE A.Y. 2010-11 IS ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 27.9 .2019. SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBER JUDICIALMEMBER INDORE; DATED : 27/09/2019 VG/SPS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE