ACIT, Kota V. SHIV EDIBLES LTD., Kota

ITA 580/JPR/2013

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2039 (ITAT-JAIPUR)
• Duration Of Justice: 4 year(s) 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 30-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: MAHENDRA GARGIEYA ADV DHK
• Keywords: Rejection of books of accounts
• Section: 143(3); 14A

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA-@ ITA NO. 580/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, KOTA. CUKE VS. M/S SHIV EDIBLES LTD., 237-A, TALWANDI, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAICS 0274 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SMT. NEENA JEPH (JCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MAHENDRA GARGIEYA (ADV) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 20/02/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 26/02/2018 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS IS AN APPEAL FILED BY THE REVENUE EMANATES FRO M THE ORDER OF THE LD. CIT(A), KOTA DATED 21/03/2013 FOR THE A.Y. 2 009-10, WHEREIN THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN:- (I) HOLDING THAT THE A.O. WAS NOT JUSTIFIED IN REJE CTING BOOKS OF ACCOUNT AND ESTIMATING PROFIT WITHOUT POINTING OUT ANY SPECIFIC EFFECT; (II) DELETING THE TRADING ADDITION OF RS. 30,21,370 /- BY ADOPTING GP RATE OF 4.9%, WHICH WAS AGREED TO BY THE ASSESSEE DURING TH E COURSE OF ASSESSMENT PROCEEDINGS. ITA 580/JP/2013_ ACIT VS. M/S SHIV EDIBLES LTD. 2 (III) DELETING THE ADDITION OF RS. 7,37,336/- MADE BY THE A.O. U/S 14A R.W. RULE 8D. 2. THE ASSESSEE COMPANY IS ENGAGED IN EXTRACTION AND REFINING OF SOYABEN AND MUSTERED OIL. THE RETURN OF INCOME WAS FI LED ON 30/09/2009 DECLARING TOTAL INCOME OF RS. 8,83,52,180/-. THE CA SE WAS SELECTED FOR SCRUTINY. THE ASSESSING OFFICER HAS FINALIZED THE AS SESSMENT U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) ON 22 /12/2011 AT TOTAL INCOME OF RS. 9,16,10,710/- BY MAKING VARIOUS ADDIT IONS. THE LD. CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE. 3. BOTH THE GROUNDS OF APPEAL ARE INTERLINKED AND T HE ISSUE INVOLVED IS DELETING THE TRADING ADDITION OF RS. 30,21,370/- MADE BY THE ASSESSING OFFICER AFTER REJECTION OF BOOKS OF ACCOUNTS. THE L D. CIT(A) HAS ALLOWED THIS GROUND OF APPEAL BY HOLDING AS UNDER: I HAVE VERIFIED THE DETAILS AND IT WAS SEEN THAT A SSESSEE HAS MAINTAINED COMPLETE DETAILS OF STOCK. THE YIELD AND SHORTAGE WAS ALSO FOUND TO BE IN ACCE PTABLE RANGE. THE ASSESSING OFFICER MADE THE ADDITION WITHOUT POI NTING OUT ANY SPECIFIC DEFECT. I ALSO FOUND THAT THERE WAS DROP IN PRICE OF OIL PR ODUCTS AND THE SAME WAS REASON FOR DROP IN G.P. CONSIDERING THE ABOVE THE ASSESSING OFFICER WAS NOT JUSTIFIED IN REJECTING BOOKS OF ACCOUNTS AND ESTIMATING PROFIT. THE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADD ITION OF RS. 30,21,370/-. THIS GROUND OF APPEAL IS, THEREFORE, ALLOWED. ITA 580/JP/2013_ ACIT VS. M/S SHIV EDIBLES LTD. 3 4. NOW THE REVENUE IS IN APPEAL BEFORE THE ITAT. THE LD. DR HAS RELIED ON THE ORDER OF THE ASSESSING OFFICER. ON TH E CONTRARY, THE LD AR OF THE ASSESSEE HAS REITERATED THE ARGUMENTS AS MADE B EFORE THE LD. CIT(A) AND PRAYED TO DISMISS THE APPEAL OF REVENUE. 5. AFTER HEARING BOTH THE SIDES, THE BENCH FIND THA T THE BOOKS OF ACCOUNT OF THE ASSESSEE WERE REJECTED ON ACCOUNT OF VARIOUS DISCREPANCIES NOTED BY THE ASSESSING OFFICER ON ACC OUNT OF SHORTAGE, VALUATION OF CLOSING STOCK AND ON ACCOUNT OF LOW YIE LD. THE ASSESSING OFFICER HAS ALSO CLEARLY NOTED THAT THE CERTAIN EXP ENSES HAS BEEN INCREASED DISPROPORTIONATELY IN RELATION TO INCREAS E IN TURN OVER FOR EXAMPLE, PACKING MATERIAL EXPENSES WERE OF RS. 9,78, 779/- IN THE A.Y. 2008-09, THE SAME HAVE BEEN INCREASED TO 53,96,886/ -. THERE WAS NO CLOSING STOCK OF PACKING MATERIAL. THE TURNOVER FOR A.Y. 2008-09 WAS MORE THAN 262 CRORES WHILE THE TURNOVER FOR THE YEAR UNDER CONSIDERATION WAS AROUND 300 CRORES. THUS, THE INCREASE IN THE EXPE NDITURE ON PACKING MATERIAL IS DEFINITELY DISPROPORTIONATE AND THE SAM E HAVE NOT BEEN EXPLAINED BY THE ASSESSEE. FURTHER THERE IS VAST DI FFERENCE IN THE RATE OF OPENING STOCK, SALES AND CLOSING STOCK. SUCH DIFFER ENCES HAVE BEEN CATEGORIZED AS UNDER: QTY. SHOWN AS PER CL. STOCK (KG) RATE DIFFERENCE PER KG. TOTAL DIFFERENCE ITA 580/JP/2013_ ACIT VS. M/S SHIV EDIBLES LTD. 4 REFINED OIL 419602 13.1 7 55,26,158 CRUDE OIL 398051 13.41 53,37,863 MUSTERED OIL 251129 11.21 28,15,156 THE ASSESSEE HAS NOT EXPLAINED THIS DIFFERENCE WITH C OGENT REASONS. THEREFORE, ALL THESE FACTS CLEARLY ESTABLISH THAT TH E BOOK RESULT DECLARED BY THE ASSESSEE WERE NOT RELIABLE. THE LD. CIT(A) WITHO UT GIVING FINDING ON THESE VARIOUS SPECIFIC DISCREPANCIES NOTICED BY THE ASSESSING OFFICER HAS SIMPLY DELETED THE ADDITION, THEREFORE, THE FIN DINGS OF THE LD. CIT(A) ARE PERVERSE. WE SET ASIDE THE ORDER OF THE LD. CIT (A) AND SUSTAIN THE ORDER OF THE ASSESSING OFFICER. 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26/02/2018. SD/- SD/- FOT; IKY JKO FOT; IKY JKO FOT; IKY JKO FOT; IKY JKO HKKXPAN HKKXPAN HKKXPAN HKKXPAN (VIJAY PAL RAO) (BHAGCHAND) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 26 TH FEBRUARY, 2018 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE ACIT, CIRCLE-1, KOTA. 2. IZR;FKHZ @ THE RESPONDENT- M/S SHIV EDIBLES LTD., KOTA. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 580/JP/2013) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR