ITO, DUNGARPUR V. Shri Jitendra Kumar Mehata, DUNGARPUR

ITA 59/JODH/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5218 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 27-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L MOURYA
• Assessee Lawyers: SHRAWAN K GUPTA
• Keywords: Rejection of books of accounts
• Section: 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 59 / JODH /201 5 (ASST. YEAR : 20 1 0 - 11 ) ITO, WARD, DUNGARPUR . VS. SHRI JITENDRA KUMAR MEHATA, M/S. PANKAJ JEWELLERS, SARAFA BAZAR, DUNGARPUR. PAN NO. ABMPM 8063 A (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SHRAWAN K. GUPTA ADV. DEPARTMENT BY : S HRI S.L. MOURYA - DR DATE OF HEARING : 1 4 / 0 3 /201 6 . DATE OF PRONOUNCEMENT : 1 4 / 03 /201 6 . O R D E R PER N.S. SAINI , ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 1 , UDAIPUR , DATED 19 / 12 /201 4 . 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE READ AS UNDER: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LEARNED CIT (A), CENTRAL HAS ERRED IN: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LEARNED CIT(A) HAS ERRED IN DELETING THE TRADING ADDITION OF RS 40,18,276/ - MADE BY INVOKING THE PROVISIONS OF SECTION 145(3) OF THE I.T. ACT WITHOUT APPRECIATING THE FACT THAT ASSESSEE HAS VALUED CLOSING STOCK OF GOLD ITEMS @ RS 9,609.36/ - PER GRAM WHEREAS PURCHASES HAVE BEEN CLAIMED @ RS 14,325.50/ - PER GRAM, SIMILARLY ASSESSEE VALUED CLOSING STOCK OF SILVER ITEMS @ RS 10,342 . 09/ - PER KG. WHEREAS PURCHASES HAVE BEEN CLAIMED @ RS 15,866.43/ - PER KG. WHICH RESULTED IN DECLARATION OF LOWER GP RATE FOR THE YEAR UNDER CONSIDERATION. 2 ITA NO. 59/JODH/2015 THAT THE APPELLANT CRAVES TO ADD, AMEND, ALTER, DELETE OR MODIFY ANY OR ALL THE ABOVE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 3 . BRIEF FACTS OF THE CASE ARE THAT THAT THE ASSESSEE IS AN INDIVIDUAL AND PROPRIETOR OF M/S. PANKAJ JEWELLERS, DUNGARPUR . THE ASSESSEE IS MAINTAINING REGULAR BOOKS OF ACCOUNTS AND THERE WAS NO CHANGE IN THE METHOD OF ACCOUNTING OR METHOD OF VALUATION OF STOCK IN THE YEAR UNDER CONSIDERATION WITH COMPARISON TO THE METHOD APPLIED IN THE PRECEDING YEAR . THE ASSESSEE HAS MAIN TAINED QUANTITATIVE DETAILS OF STOCK WHICH INCLUDED QUANTITATIVE DETAILS RELATED TO OPENING STOCK, PURCHASES, SALES AND FOR CLOSING STOCK . THE ASSESSEE PRODUCED BOOKS OF ACCOUNTS AND RELATED DOCUMENTS AND VOUCHERS AT THE TIME OF ASSESSMENT PROCEEDINGS BEF ORE THE ASSESSING OFFICER. MONTH - WISE DETAILS OF PURCHASE AND SALES OF GOLD AND SILVER ORNAMENTS IN AMOUNT AND QUANTITY BOTH HA V E FURNISHED DURING THE ASSESSMENT PROCEEDINGS . THE VALUE OF THE CLOSING STOCK H A S BEEN DETERMINED AND DECLARED CONSISTENTLY ON THE BASIS OF AVERAGE PURCHASE PRICE METHOD , WHICH THE DEPARTMENT HAS BEEN AC C EP T ING SINCE PAST SO MANY YEARS. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS NOT CORRECTLY VALUED THE CLOSING STOCK AND FURTHER OBSERVED THAT THE ASSESSEE HAS DECLARED L OW PROFIT RATE . ON THE BASIS OF SUCH OBSERVATION, THE BOOKS OF ACCOUNTS WERE REJECTED IN ASSESSMENT YEAR 2009 - 10 AND THE INCOME WAS ASSESSED BY APPLYING CHANGED MET H OD OF VALUATION OF STO C K AND THAT TOO IN CLOSING STOCK ONLY . 4. THE ASSESSEE FILED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) , WHO APPLIED FIFO METHOD FOR THE PURPOSE OF VALUATION OF OPENING AND CLOSING STOCK FOR DETERMINATION O F GROSS PROFIT AND REDUCED THE ADDITION MADE BY THE ASSESSING OFFICER IN ASSESSMENT YEAR 2009 - 10 TO THAT EXTENT. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) WAS CHALLENGED BEFORE THE TRIBUNAL BY THE ASSESSEE AS WELL AS BY THE DEPARTMENT. IN THE MEANWHILE, ASSESSMENTS FOR THE YEAR UNDER CONSIDERATION HAVE BEEN COMMENCED BY THE ASSESSING OFFIC ER. THE ASSESSING OFFICER ON THE BASIS OF OBSERVA T ION IN ASSESSMENT YEAR 3 ITA NO. 59/JODH/2015 2009 - 10, REJECTED THE BOOKS OF ACCOUNTS OF THE ASSESSEE IN THE PRESENT YEAR BY INVOKING THE PROVISIONS OF SEC. 145 OF THE ACT AND ASSESSED THE INCOME BY RECASTING THE TRADING POSITION OF GOLD AND SILVER TRADING ACCOUNT S AND BY CHANGE OF VA LUATION OF CLOSING STOCK . THE ASSESSING OFFICER ESTIMATED THE CLOSING STOCK OF GOLD AT RS. 72,30,911/ - AS AGAINST RS. 48,50,405/ - SHOWN BY THE ASSESSEE ON THE BASIS OF CONSISTENT METHOD OF VA LUATION. THE ASSESSING OFFICER MADE THE ADDITION OF RS. 23,80,506/ - ON THIS ACCOUNT IN THE DECLARED INCOME. SIMILARLY, THE ASSESSING OFFICER ESTIMATED THE VALUE OF CLOSING STOC K OF SILVER AT RS.47,03,714/ - AS AGAINST RS. 30,65,984/ - DECLARED BY THE ASSESSEE ON THE BASIS OF CONSISTENT METHOD OF VALUATION . ACCORDINGLY, HE A DDED RS.16,37,770/ - TO THE DECLARED INCOME. HENCE, TOTAL INCOME HAS BEEN ASSESSED AT RS. 45,92,996/ - AS AGAINST RS. 5,7 4,720/ - DECLARED BY THE ASSESSEE. AS PER THE ASSESSING OFFICER, THE GROSS PROFIT RATE O N GOLD ORNAMENTS IS ARRIVED AT 111.5% AS AGAINST THE GROSS PROFIT RATE OF 40% DECLARED BY THE ASSESSEE. SIMILARLY , GROSS PROFIT RATE ON SILVER IS ARRIVED AT 144.56% AS AGAINST THE GROSS PROFIT RATE OF 38.13% DECLARED BY THE ASSESSEE. 5 . ON APPEAL , COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE ADDITION BY OBSERVING AS UNDER: - I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AS WELL AS THE FINDINGS OF THE LD. AO. THE ISSUE UNDER CONSIDERATION HAS BEEN DECIDED IN FAVOUR OF THE APPELLANT IN HIS OWN CASE BY THE HONBLE JURISDICTIONAL ITAT VIDE THEIR ORDER DATED 29.08.2013 IN ITA N O . 453 AND 4 35 / JODH/20 12 F OR AY 2009 - 10 , THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE FOR THE YEAR UNDER CONSIDERATION ARE ALSO SAME AND IDENTICAL TO THE CASES DECIDED BY THE HONBLE ITAT. SINCE, THE FACTS AND CIRCUMSTANCES ARE SAME IN THE APPELLANTS CASE THEREFORE, IN VIEW OF TH E ABOVE DISCUSSION, RESPECTFULLY FOLLOWING THE VARIOUS JUDICIAL PRONOUNCEMENTS INCLUDING THE HONBLE JURISDICTIONAL ITAT RELIED ON BY THE LD. AR AND THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE I AGREE WITH THE CONTENTION / SUBMISSION OF THE LD. AR THAT THE LD. AO IS NOT JUSTIFIED IN MAKING ADDITION OF RS. 23,80,506/ - IN GOLD ACCOUNT AND RS.16,37,770/ - IN SILVER ACCOUNT. ACCORDINGLY, THE ADDITIONS ARE DELETED. HENCE, THE GROUND OF APPEAL IS ALLOWED. 4 ITA NO. 59/JODH/2015 6 . DEPARTMENTAL REPRESENTATIVE SUPPOR TED THE ORDER OF THE ASSESSING OFFICER , WHEREAS THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUPPORTED THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). 7 . WE FIND THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS DELETED THE ADDITION ON THE GROUND T H A T THE ASSESSING OFFICER HAS REJECTED THE BOOKS OF ACCOUNTS AND ESTIMATED THE INCOME OF THE ASSESSEE FOR THE V ERY SAME REASONS AND ON THE VERY SAME BASIS AS IN ASSESSMENT YEAR 2009 - 10, THE TRIBUNAL IN THE CASE OF ASSESSEE ITSELF IN THE ASSESSMENT YEAR 2009 - 10 VIDE ORDER DATED 29/08/2013 IN ITA NO S . 435 & 453 /JODH/2012 , HAD DELETED THE ADDITION. DEPARTMENTAL REPRESENTATIVE COULD NOT POINT OUT ANY GOOD AND JUSTIFIABLE REASON TO NOT TO FOLLOW THE ORDER OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 2009 - 10. HENCE, WE FIND NO GOOD REASON TO INTERFERE WITH THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) , WHICH IS CON F IRMED AND THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 8 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON MONDAY , THE 1 4 TH DAY OF MARCH , 201 6 AT JODHPUR . S D / - S D / - (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER D ATED : 1 4 TH MARCH , 201 6 . VR/ - 5 ITA NO. 59/JODH/2015 COPY TO: 1. THE ASSESS E E. 2. THE REVENUE. 3. THE CIT 4. THE CIT(A) 5. THE D.R . 6. GUARD FILE. BY ORDER