Radha Damodar Rice Mill, Burdwan V. I.T.O,Ward-2(4), Burdwan

ITA 604/KOL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4529 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 13-10-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 27-03-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAYANTA KHANRA

Judgement Text

1 ITA NO. 604 /KOL/2019 RADHA DAMODAR RICE MILL, AY 2014-15 & ITA NO. 631/KOL/2019 NEW JAGAT GOURI RICE MILL (P) LTD., AY 2014-15 , C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOLKATA ( ) BEFORE . , /AND . . , ) [BEFORE SHRI J. SUDHAKAR REDDY, AM & SHRI A. T. VARKEY, JM] I.T.A. NO. 604/KOL/2019 ASSESSMENT YEAR: 2014-15 RADHA DAMODAR RICE MILL (PAN: AAJFR7904F) VS. INCOME-TAX OFFICER, WD-2(4), BURDWAN APPELLANT RESPONDENT & I.T.A. NO. 631/KOL/2019 ASSESSMENT YEAR: 2014-15 NEW JAGAT GOURI RICE MILL (P) LTD. (PAN: AAECN2691P) VS. ASSTT. COMMISSIONER OF INCOME-TAX, CIRCLE-2, BURDWAN APPELLANT RESPONDENT DATE OF HEARING (VIRTUAL) 13.10.2020 DATE OF PRONOUNCEMENT 21.10.2020 FOR THE APPELLANT SHRI SOUMITRA CHOUDHURY, ADVOCATE FOR THE RESPONDENT SHRI JAYANTA KHANRA, JCIT ORDER PER SHRI A.T.VARKEY, JM BOTH THESE APPEALS PREFERRED BY THE DIFFERENT ASSESSEES (RICE MILLS) AGAINST THE SEPARATE ORDERS OF LD. CIT(A), BURDWAN DATED 11.01.2019 AND 01.02.2019 FOR AYS 2014-15 RESPECTIVELY. 2. THE SOLE ISSUE IN BOTH THESE APPEALS WHICH ARE FILED BY THE ASSESSEE FIRM AND COMPANY RESPECTIVELY ARE AGAINST THE ACTION OF LD. CIT(A) TO DISREGARD THEIR DISCLOSED GP RATE OF 2.31% AND GP RATE OF 1.80% RESPECTIVELY ON THEIR RESPECTIVE TURNOVER AND CONFIRM GP OF 3% ON BOTH THEIR RESPECTIVE TURNOVERS. 2 ITA NO. 604 /KOL/2019 RADHA DAMODAR RICE MILL, AY 2014-15 & ITA NO. 631/KOL/2019 NEW JAGAT GOURI RICE MILL (P) LTD., AY 2014-15 3. BRIEF FACTS OF THE CASE OF ITA NO. 631/KOL/2019 ARE THAT THE AO NOTED THAT THE ASSESSEE FAILED TO GIVE DETAILS OF PURCHASES OF PADDY FOR CASH, SO HAVING REJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE, THE AO OBSERVED THAT THE GP OF 2.31% SHOWN BY ASSESSEE IS TOO LOW AND THEREAFTER COMPARED THE GP RESULTS GIVEN BY NABARD AND OTHER INSTITUTIONS WHEREIN THE AVERAGE GP COMES FROM THE BUSINESS OF RICE MILLS AT 6.2% ON THE TURNOVER OF RICE & BRAN PRODUCTION FROM PADDY AND, THEREFORE, THE AO MADE AN ADDITION OF GP AT 6.21% OF TURNOVER OF THIS ASSESSEE AND MADE AN ADDITION OF RS.2,43,61,260/-. 4. IN THE CASE OF ITA NO. 604/KOL/2019 BRIEF FACTS ARE THAT THE AO NOTED THAT THE ASSESSEE FAILED TO GIVE DETAILS OF PURCHASES OF PADDY FOR CASH, SO HAVING REJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE, THE AO OBSERVED THAT THE GP OF 1.8% SHOWN BY ASSESSEE IS TOO LOW AND THEREAFTER COMPARED THE GP RESULTS GIVEN BY NABARD AND OTHER INSTITUTIONS WHEREIN THE AVERAGE GP COMES FROM THE BUSINESS OF RICE MILLS AT 6.2% ON THE TURNOVER OF RICE & BRAN PRODUCTION FROM PADDY. HOWEVER, IN THIS CASE, THE AO MADE AN ADDITION OF GP AT 7% OF TURNOVER OF ASSESSEE AND THUS MADE AN ADDITION OF RS.1,08,86,650/-. AGGRIEVED, BOTH THE ASSESSEES PREFERRED SEPARATE APPEALS BEFORE THE LD. CIT(A), WHO WAS PLEASED TO CONFIRM GP @3% OF THEIR RESPECTIVE TURNOVER AFTER TAKING NOTE OF FIFTEEN COMPARABLE CASES AND THUS GAVE PARTIAL RELIEF TO BOTH THE ASSESSEES. AGAINST THE IMPUGNED ORDER OF LD. CIT(A) BOTH THE ASSESSEES ARE IN APPEALS BEFORE US. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT BOTH THESE RICE MILLS ARE FROM BURDWAN DISTRICT. IN BOTH THE CASES THE REVENUE/AO HAS NOT DISPUTED ABOUT THE QUANTITY OF THE GOODS SOLD AND PURCHASED DURING THE YEAR. IT IS ONLY IN RESPECT OF THE AMOUNT PAID BY ASSESSEE TOWARDS PURCHASE OF PADDY IN CASH IS SUSPECT. ACCORDING TO THE AO, DUE TO THE ASSESSEES FAILURE TO GIVE SPECIFIC DETAILS OF THE FARMERS FROM WHOM THE ASSESSEES HAVE PURCHASED THE PADDY, THE AMOUNT PAID TO THEM ARE UNVERIFIABLE. ACCORDING TO US, WHEN THE QUANTITY OF THE PADDY PURCHASED AND SOLD HAS NOT BEEN DISPUTED THE AO COULD NOT HAVE REJECTED THE BOOKS OF ACCOUNT ONLY ON THE BASIS OF SURMISES. WE NOTE THAT THE ASSESSEES ACCOUNTS ARE AUDITED AND NO DISCREPANCIES COULD BE POINTED OUT BY THE AO IN BOTH THE CASES. HOWEVER, THE ASSESSEE HAS NOT PREFERRED ANY GROUNDS OF APPEAL AGAINST THE DECISION OF THE AUTHORITIES BELOW REJECTING THE BOOKS OF ACCOUNT. THEREFORE, WE REFRAIN FROM OBSERVING ANY FURTHER ON IT. COMING TO THE ESTIMATION, 3 ITA NO. 604 /KOL/2019 RADHA DAMODAR RICE MILL, AY 2014-15 & ITA NO. 631/KOL/2019 NEW JAGAT GOURI RICE MILL (P) LTD., AY 2014-15 WE NOTE THAT IN THE FIRST CASE, WE HAVE DISCUSSED (SUPRA), THAT THE RICE MILL HAS SHOWN TO HAVE GP OF 2.31% ON ITS TURNOVER AND IN THE SECOND CASE, THE RICE MILL HAS SHOWN GP OF 1.8% OF ITS TURNOVER. HOWEVER, THE AO ON THE BASIS OF SOME STUDIES CONDUCTED BY NABARD AND OTHER INSTITUTIONS HAVE ESTIMATED BY ADOPTING GP @ 6.2% AND 7% RESPECTIVELY. HOWEVER, THE LD. CIT(A) IN BOTH THE CASES HAVE ADOPTED GP @ 3%. BEFORE US, THE LD. AR SHRI SOUMITRA CHOWDHURY, ADVOCATE CONTENDED THAT CERTAIN COMPARABLE RICE MILLS OF THE NEARBY LOCALITY AS THAT OF BOTH THE ASSESSEES HAS NOT BEEN CONSIDERED AND IF IT WAS CONSIDERED BY THE LD. CIT(A) THEN THE GP WOULD HAVE COME DOWN. BE THAT AS IT MAY BE, WE NOTE THAT IN THE FIRST CASE THE ASSESSEE HAS SHOWN GP OF 2.31% AND IN THE SECOND CASE THE ASSESSEE HAS SHOWN THE GP OF 1.8% IN THEIR RESPECTIVE ACCOUNTS WHICH ARE AUDITED. TAKING INTO CONSIDERATION THE CONTENTION OF BOTH THE PARTIES AND SINCE THE REVENUE IS NOT IN APPEAL AGAINST THE ACTION OF LD. CIT(A), FOR THE ENDS OF JUSTICE, WE DIRECT THE AO TO COMPUTE THE GP OF BOTH THE ASSESSEES AT 2.5% OF THEIR RESPECTIVE TURNOVERS. THUS, BOTH THE ASSESSEES GET PARTIAL RELIEF. 6. IN THE RESULT, BOTH THE APPEALS OF ASSESSEES ARE PARTLY ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 21ST OCTOBER, 2020. SD/- (J. SUDHAKAR REDDY) SD/-(A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 21ST OCTOBER, 2020 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT I) RADHA DAMODAR RICE MILL, ALAMGANJ, P.O. NUTANGANJ, BURDWAN-713102. II) NEW JAGAT GOURI RICE MILL PVT. LTD., MONDALGRAM PASCHIM, MONDAL GRAM, BURDWAN-713426. 2 RESPONDENT ITO, WD-2(4), BURDWAN & ACIT, CIRCLE-2, BURDWAN 3. THE CIT(A), BURDWAN (SENT THROUGH E-MAIL) 4. 5. CIT , BURDWAN DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR