ITO, Muzaffarnagar V. M/s. Bhagya Shree Steels & Allloys (P) Ltd., Muzaffarnagar

ITA 6118/DEL/2012

• Counselvise Citation: 611820114 RSA 2012
• Duration Of Justice: 1 year(s) 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 25-02-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 07-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: PULAK RAJ MULLICK; SOHIL MULLICK

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH A AA A : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU, JUDICIAL , JUDICIAL , JUDICIAL , JUDICIAL MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO. .. .6118/DEL/2012 6118/DEL/2012 6118/DEL/2012 6118/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2009 2009 2009 2009- -- -10 1010 10 INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -1(2), 1(2), 1(2), 1(2), MUZAFFARNAGAR. MUZAFFARNAGAR. MUZAFFARNAGAR. MUZAFFARNAGAR. VS. VS. VS. VS. M/S BHAGY M/S BHAGY M/S BHAGY M/S BHAGYA SHREE STEELS & ALLOYS A SHREE STEELS & ALLOYS A SHREE STEELS & ALLOYS A SHREE STEELS & ALLOYS (P) LTD., (P) LTD., (P) LTD., (P) LTD., 100, SOUTH BHOPA ROAD, 100, SOUTH BHOPA ROAD, 100, SOUTH BHOPA ROAD, 100, SOUTH BHOPA ROAD, NEW MANDI, NEW MANDI, NEW MANDI, NEW MANDI, MUZAFFARNAGAR. MUZAFFARNAGAR. MUZAFFARNAGAR. MUZAFFARNAGAR. PAN : AABCB2771P. PAN : AABCB2771P. PAN : AABCB2771P. PAN : AABCB2771P. (APPELLANT) (RESPONDENT) APPELLANT BY : MS. Y. KAKKAR, SR.DR. RESPONDENT BY : SHRI PULAK RAJ MULLICK AND SHRI SOHIL MULLICK, ADVOCATES. ORDER ORDER ORDER ORDER PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP : : : : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE O RDER OF LEARNED CIT(A), MUZAFFARNAGAR DATED 31 ST AUGUST, 2012 FOR THE AY 2009- 10. 2. THE ONLY GROUND RAISED BY THE REVENUE READS AS UNDE R:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.12,22,516/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF LOW YIELD BY IGNORING THE FACT THAT THE ADDITION WAS MADE BY THE ASSESSING OFFICER ON THE BASIS OF YIELD SHOWN BY TH E ASSESSEE ITSELF IN THE IMMEDIATE PRECEDING YEAR. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE DERIVES IN COME FROM MANUFACTURING AND SALE OF MS INGOTS. DURING THE ACC OUNTING YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSING ITA-6118/DEL/2012 2 OFFICER REJECTED THE BOOKS OF ACCOUNT AND APPLIED GR OSS PROFIT RATE OF 2.60% WHICH RESULTED IN THE ADDITION OF ` 20,90,794/-. HE ALSO MADE ANOTHER ADDITION OF ` 12,22,516/- ON THE GROUND OF LOW YIELD. LEARNED CIT(A) SUSTAINED THE REJECTION OF BOOKS OF ACCOUNT AND APPLICATION OF GP RATE OF 2.60%. ACCORDINGLY, THE ADDITION OF ` 20,90,794/- WAS SUSTAINED. HE, HOWEVER, DELETED THE ADDITION OF ` 12,22,516/- MADE ON ACCOUNT OF LOW YIELD ON THE GROUND THAT ONCE THE BO OKS OF ACCOUNT ARE REJECTED AND NET PROFIT RATE IS APPLIED, NO FURTHER ADDITION IS CALLED FOR. THE RELEVANT FINDING OF LEARNED CIT(A) READS AS UNDER :- THE FACTS OF THE CASE, SUBMISSIONS MADE BY THE APPELLANT , REMAND REPORT OF THE AO AND REJOINDER OF THE APPELL ANT HAVE BEEN CAREFULLY CONSIDERED. WITHOUT GOING INTO THE MERITS OF THE IMPUGNED ISSUE IT IS OBSERVED THAT SINCE TH E NET PROFIT RATE OF 2.60% IS ALREADY APPLIED IN THE A PPELLANTS CASE AND CONSEQUENT ADDITION OF RS.20,90,294/- IN THE APPELLANTS INCOME HAS BEEN SUSTAINED, IT WOULD ALSO INCLUDE ANY SHORT COMINGS NOTICED BY THE AO IN RESPEC T OF LOW YIELD RESULTING IN ADDITION OF RS.12,22,516/-. T HUS NO FURTHER ADDITION IS REQUIRED IN RESPECT OF LOW YIELD MADE BY THE AO. IN THE LIGHT OF THE ABOVE FACTS IT IS HELD T HAT THE AO WAS NOT JUSTIFIED IN MAKING ADDITION AT RS.12,22,516/- . THE SAME IS DIRECTED TO BE DELETED. GROUND OF APPEAL NO. 4 IS PARTLY ALLOWED. 4. THE REVENUE, AGGRIEVED WITH THE ORDER OF LEARNED CIT(A), IS IN APPEAL WHILE IT HAS BEEN STATED BY THE LEARNED COUNSE L THAT THE ASSESSEE HAS ACCEPTED THE ORDER OF THE LEARNED CIT(A). 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND P ERUSED RELEVANT MATERIAL PLACED BEFORE US. AFTER CONSIDERIN G THE ARGUMENTS OF BOTH THE SIDES AND THE FACTS OF THE CASE, WE DO NOT FIN D ANY INFIRMITY IN THE ORDER OF LEARNED CIT(A). WHEN THE BOOKS OF ACCO UNT ARE REJECTED AND GROSS PROFIT RATE IS APPLIED, THEN EACH COMPONENT OF TRADING ACCOUNT IS ALREADY CONSIDERED. THAT THE ADDITION ON ACCOUNT OF LOW ITA-6118/DEL/2012 3 YIELD WOULD ALSO AFFECT THE TRADING RESULT DECLARED B Y THE ASSESSEE. THEREFORE, ONCE TRADING RESULT IS REJECTED AND GROSS P ROFIT RATE IS APPLIED, THE ADDITION MADE ON ACCOUNT OF LOW GROSS PR OFIT INCLUDES EVERY COMPONENT OF TRADING ACCOUNT INCLUDING LOW YI ELD. THEREFORE, WE ENTIRELY AGREE WITH THE LEARNED CIT(A) THAT ONCE A GROSS PROFIT RATE IS APPLIED, IT WILL TAKE CARE OF THE ADDITION FOR LOW YIELD ALSO. IN VIEW OF THE ABOVE, WE UPHOLD THE ORDER OF LEARNED CIT(A) AN D DISMISS THE REVENUES APPEAL. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED . DECISION PRONOUNCED IN THE OPEN COURT ON 8 TH AUGUST, 2014. SD/- SD/- ( (( (H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU) )) ) (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 08.08.2014 VK. COPY FORWARDED TO: - 1. APPELLANT : INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -1(2), MUZAFFARNAGAR. 1(2), MUZAFFARNAGAR. 1(2), MUZAFFARNAGAR. 1(2), MUZAFFARNAGAR. 2. RESPONDENT : M/S BHAGYA SHREE STEELS & ALLOYS (P) LT D., M/S BHAGYA SHREE STEELS & ALLOYS (P) LTD., M/S BHAGYA SHREE STEELS & ALLOYS (P) LTD., M/S BHAGYA SHREE STEELS & ALLOYS (P) LTD., 100, SOUTH BHOPA ROAD, NEW MANDI, MUZAFFARNAGAR. 100, SOUTH BHOPA ROAD, NEW MANDI, MUZAFFARNAGAR. 100, SOUTH BHOPA ROAD, NEW MANDI, MUZAFFARNAGAR. 100, SOUTH BHOPA ROAD, NEW MANDI, MUZAFFARNAGAR. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR