The ACIT, Central Circle-4, Surat V. Shri Nagindas T.Kapadia, Surat

ITA 598/AHD/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80454 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 10-09-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 23-02-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIMALENDU VERMA
• Assessee Lawyers: RAJESH SHAH
• Section: 40A(3)

Judgement Text

, , , , D, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, D BENCH . .. . . .. . , !' !' !' !', , , , #$ #$ #$ #$ # ## #. .. .# ## #. . . . % % % %, , , , &' ( & ' &' ( & ' &' ( & ' &' ( & ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND N.S. SAINI, ACCOUNTANT MEMBER) ITA NO.598/AHD/2010 [ASSTT.YEAR : 2006-2007] ACIT, CENT.CIR.4 SURAT. /VS. SHREE NAGINDAS T. KAPADIA 3/1810, GHALAWAD, SHERI NO.1 SALABATPURA, SURAT. PAN : AAUPK 4395 E ( (( ( *+ *+ *+ *+ / APPELLANT) ( (( ( ,-*+ ,-*+ ,-*+ ,-*+ / RESPONDENT) ( . / & / REVENUE BY : SHRI VIMALENDU VERMA, CIT-DR 12 . / & / ASSESSEE BY : SHRI RAJESH SHAH 3 . 24' / DATE OF HEARING : 11 TH SEPTEMBER, 2014 567 . 24' / DATE OF PRONOUNCEMENT : 17.10.2014 &8 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE REVENUE FOR THE ASSTT.YEAR 2006-07 IS DIRECTED AGAINST THE ORDER OF THE CIT(A). 2. THE GROUNDS OF THE APPEAL OF THE REVENUE ARE AS UNDER: (I) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.20,46,600/- U/S.40A(3) OF THE ACT WH EN THE AO HAD ALREADY GRANTED TELESCOPING BENEFIT TO THE ASSESSEE ON ACCOUNT OF CASH EXPENSES FOR ACCOUNTED SALES. ITA NO.598/AHD/2010 -2- (II) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT THE PROVISION OF SECTION 40A(3) O F THE ACT WERE CLEARLY ATTRACTED IN RESPECT O THESE EXPENSES AND T HE DISALLOWANCE WAS NOT IN RESPECT OF UNACCOUNTED PURCHASES BUT THE CASH PURCHASES/EXPENSES INCURRED FOR ACCOUNTED SALES FOR WHICH THE AO HAD ALREADY GIVEN THE TELESCOPING BENEFIT. 3. THE LEARNED DR SUBMITTED THAT THE DISALLOWANCE W AS MADE FOR CASH PURCHASE UNDER SECTION 40A(3) OF THE ACT. HE SUBMI TTED THAT THE CIT(A) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND DELETED THE ADDITION ON THE PLEA THAT THE AO HAS TAXED THE GROSS PROFIT ON UNDISCLOSED SALES AND ALSO MADE ADDITION FOR UNEXPLAINED PURCHASES, AND T HEREFORE, THERE COULD NOT BE ANY SEPARATE ADDITION ON ACCOUNT OF DISALLOW ANCE UNDER SECTION 40A(3) OF THE ACT. HE SUBMITTED THAT IN APPEAL OF THE ASSESSE FOR THE RELEVANT ASSTT.YEAR 2006-07 IN ITA NO.126/AHD/2010 THE ASSESSEE HAS AGREED FOR RESTORING THE ISSUE OF GP ADDITION AS WE LL AS ADDITION FOR UNEXPLAINED PURCHASES TO THE FILE OF THE AO AND IN THAT EVENTUALITY, THIS ISSUE OF DISALLOWANCE UNDER SECTION 40A(3) SHOULD A LSO BE RESTORED TO THE FILE OF THE AO. THE LEARNED COUNSEL FOR THE ASSESS EE COULD NOT CONTROVERT THE SUBMISSIONS OF THE LEARNED DR. 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS CAREFULLY A ND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE ISSUE OF ADDITION ON ACCOUNT OF GP ON UNDISCLOSED SALES AND ADDITION FOR UNEXPLAINED PURCHASES HAS BEEN RESTORED TO THE FILE OF THE AO W HILE DISPOSING OF THE APPEAL OF THE ASSESSEE FOR THE RELEVANT ASSTT.YEAR 2006-07 IN ITA NO.126/AHD/2010 VIDE ORDER OF EVEN DATE, AND THEREF ORE, IT SHALL BE JUSTIFIED TO RESTORE THE ISSUE OF DISALLOWANCE UNDE R SECTION 40A(3) OF THE ACT TO THE FILE OF THE AO WITH DIRECTION TO DECIDE THE SAME DE NOVO IN ITA NO.598/AHD/2010 -3- ACCORDANCE WITH LAW AFTER ALLOWING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. WE DIRECT ACCORDINGLY. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( # ## # . .. . # ## # . . . . % % % % /N.S.SAINI) &' ( &' ( &' ( &' ( /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD