Kissan Exim P.Ltd, New Delhi V. ITO, Ward-14(3), New Delhi

ITA 6288/DEL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7618 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 03-10-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: MANISH UPPAL
• Section: 13; 22; 20

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI SMC BENCH, NEW DELHI BEFORE SHRI N.K. BILLAIYA , ACCOUNTANT MEMBER ITA NO. 6 28 8 /DEL/201 8 [ASSESSMENT YEAR: 2 0 15 - 16 ] KISSAN EXIM PVT LTD VS. THE I.T.O, A 171, GROUND FLOOR W ARD 14 ( 3 ) PREET VIHAR, NEW DELHI NEW DELHI PAN: AAECK 4025 G [APPELLANT] [RESPONDENT] DATE OF HEARING : 22 . 0 4 .201 9 DATE OF PRONOUNCEMENT : 2 4 .0 4 .201 9 ASSESSEE BY : SHRI MANISH UPPAL , C A. REVENUE BY : S HRI S .L. ANURAGI , SR. DR ORDER PER N .K. BILLAIYA, ACCOUNTANT MEMBER: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX [APPEALS] 5 , DELHI DATED 19 .0 7 .2018 PERTAINING TO A.Y 20 15 - 16 . 2 2. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE CIT( A) ERRED IN CONFIRMING THE PARTIAL ADDITION IN GROSS PROFIT TO THE EXTENT OF 2.33% OF THE TURNOVER, 3. THE APPELLANT COMPANY IS ENGAGED IN THE BUSINESS OF TRADING IN COTTON FABRIC S . DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS A SKED TO FURNISH BILLS AND VOUCHERS IN SUPPORT OF SALES , P URCHASES AND EXPENSES AND TO JUSTIFY THE LOW G.P. RATE. THE ASSESSEE FURNISHED NECESSARY DETAILS , WHICH DID NOT FIND ANY FAVOUR WITH THE ASSESSING OFFICER. 4. SINCE THE ASSESSEE FAILED TO FURNISH C OMPLETE DETAILS, THE ASSESSING OFFICER ESTIMATED THE PROFIT @ 8% AND AFTER ALLOWING DEDUCTION OF THE PROFIT RETURNED BY THE ASSESSEE, ADDITION OF RS. 17,24,450/ - WAS MADE. 5 . THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) , WHO REDUCED THE RATE OF PROFI T ESTIMATED BY THE ASSESSING OFFICER TO 4.09%. 3 6. BEFORE ME, THE LD. AR STATED THAT THE CIT(A) HAS TAKEN THE AVERAGE G.P RATE OF A.YS 2013 - 14 AND 2012 - 13 , WHICH IS NOT CORRECT. IT IS THE SAY OF THE LD. AR THAT THE ASSESSEE HAS FURNISHED FIVE YEARS PROFIT RATIO , WHICH HAS BEEN COMPLETELY IGNORED BY THE CIT(A) AND HAS CONSIDERED TH E AVERAGE OF ONLY TWO YEARS. 7 . PER CONTRA, THE LD. DR STRONGLY SUPPORTED THE FINDINGS OF THE CIT(A). 8. I HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW. THE G.P. RATE OF FIVE YEARS CAN BE UNDERSTOOD FROM THE FOLLOWING CHART: SALES PURCHASE OP.STOCK CL.STOCK GROSS PROFIT PROFIT DEBTORS CREDITORS BANK LIMIT GPR NPR 10 - 11 10175101 17570978 - 7473608 77731 (32,444) 4675101 12217478 - 0.76% 0.32% 11 - 12 31687773 23691906 7473608 - 522259 22,956 5051324 5600534 - 1.65% 0.07% 12 - 13 27946770 27366052 - - 580718 27,214 32209904 37785385 - 2.08% 0.10% 13 - 14 14026870 // 13410820 239200 855250 32,342 8149124 17425550 - 6.10%* 0.23% 14 - 15 7635415 26910624 239200 94 485685 31,304 1339021 6818850 - 1.76% 0.11% 9. FROM THE ABOVE CHART, IT CAN BE SEEN THAT THE PROFIT RATE RANGES BETWEEN 0.76% TO 1.76% . ONLY IN THE YEAR 2013 - 14, RATE WAS 6.10%. 4 BUT, IT CAN BE SEEN THAT IN THAT YEAR, THE TURNOVER WAS ALMOST HALF OF THE TURNOVER OF THE EARLIER YEARS. IN FACT, THE TURNOVER OF A.Y 2012 - 13 IS ALMOST IDENTICAL TO THE TURNOVER OF A.Y 2014 - 15 AND THE PROFIT RATE IS 2.08% IN A.Y 2012 - 13 AND 1.76% IN A.Y 2014 - 15. N.P. RATE IS 0.10% AND 0.11% RESPECTFULLY. 10. BARRING THE SOLITARY YEAR 2013 - 14 , WHERE G.P. RATE IS 6.10% ON TURNOVER OF 1.40 CRORES, THE PROFITABILITY RATIO OF ALL THE YEARS ARE MORE OR LESS THE SAME. CONSIDERING THE FACTS IN TOTALITY, I AM OF THE OPINION THAT A PROFIT RATE OF 2% SHOULD BE ADOPTED. I , ACCORDINGLY , DIRECT THE ASSESSING OFFICER TO APPL Y G.P. RATE OF 2% AND RECOMPUTE THE ADDITION. 1 1 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO. 6 288 /DEL/201 8 IS PARTLY ALLOWED . THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 2 4 . 0 4 .201 9 . S D / - [N.K. BILLAIYA] ACCOUNTANT MEMBER DATED: 2 4 T H APRIL, 2019. VL/ 5 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) ASST. REGISTRAR, 5. DR ITAT, NEW DELHI DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER