DEEPAK GOPALDAS BAJAJ, MUMBAI V. ITO 14(2)(1), MUMBAI

ITA 6319/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71398 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 08-10-2013
• Assessment Year: 1998-1999
• Appeal Filed On: 13-09-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Keywords: Reassessment proceedings
• Section: 144

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - D BENCH. . .. . . .. . , ,, , !'# !'# !'# !'# , ' ' ' ' BEFORE S/SH. I.P. BANSAL,JUDICIAL MEMBER & RAJENDRA ,ACCOUNTANT MEMBER /. ITA NO.6319/MUM/2011 , $ $ $ $ % % % % / ASSESSMENT YEAR-1998-99 DEEPAK GOPALDAS BAJAJ 114, OLD HANUMAN LANE, KALBADEVI ROAD, MUMBAI-400002 VS. ITO 14(2)(1) MUMBAI. PAN:ADWPB0735C ( &' / APPELLANT) ( ()&' / RESPONDENT) &' &' &' &' * * * * ' '' ' / APPELLANT BY : NONE ()&' + * ' / RESPONDENT BY : SHRI S.K. SINGH $ $ $ $ + ++ + , , , , / DATE OF HEARING : 08-10-2013 -.% + , / DATE OF PRONOUNCEMENT : 15-10-2013 $ $ $ $ , 1961 + ++ + 254(1) ' '' ' ,/, ,/, ,/, ,/, '0 '0 '0 '0 ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM CHALLENGING THE ORDER DATED 10-08-2011OF THE CIT(A) -25,MUMBAI ASSESSEE HAS FILED FOLLOWING GROUNDS OF APPEAL: 1).THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS AND UPHELD AN AD-HOC ADDITION ON ACCOUNT OF SUPPRESSED GROSS PROFIT TAKE N AT 5% (ADDITION OF RS. 4,30,324/-) INSTEAD OF 0.7 % IN THE CASE OF SEASONS INTERNATIONAL AND 5% (ADDITION OF RS. 2,47,479/-) INSTEAD OF 2.58% IN THE CASE OF SONU TEXTILES, THE TWO PROPRIETARY CONCERNS OF THE APPELLANT. 2).THE APPELLANTS CRAVE LEAVE TO ADD TO, ALTER, MOD IFY, SUBSTITUTE OR SUPPLEMENT THE AFORESAID GROUNDS AT OR BEFORE THE TIME OF HEARING. 2. ASSESSEE,AN INDIVIDUAL,ENGAGED IN THE BUSINESS OF T RADING IN TEXTILE, HAD FILED HIS ORIGINAL RETURN OF INCOME ON 02.11.1998 DECLARING TOTAL INCO ME OF RS.72,100/-.MATTER WAS RESTORED BACK TO THE AO BY THE ITAT,MUMBAI FOR FRESH ADJUDICATION .EFFECTIVE GROUND OF APPEAL PERTAINS TO THE ADDITION MADE BY THE ASSESSING OFFICER (AO)ON ACCOU NT OF RATE OF GROSS PROFIT(GP). BRIEF FACTS: THE IMPUGNED ASSESSMENT IS A RESULT OF THE ORDER OF ITAT,SETTING ASIDE THE ORIGINAL ASSESSMENT. DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDING S,THE ASSESSEE DID NOT FURNSH NECESSARY DETAILS AS CALLED FOR,BY THE AO.ACCORDINGLY, THE AO HAD COMPLETED THE ASSESSMENT REJECTING THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND APPLIED THE G .P. RATE AT 5% AND MADE AN ADDITION ON ACCOUNT OF VARIATION IN G.P. RATE OF BOTH THE PROPR IETARY CONCERNS NAMELY M/S.SONU TEXTILES AND M/S.SEASONS INTERNATIONAL WHICH RESULTED IN TOTAL A DDITION OF RS, 6,77,803/-.BEING AGGRIEVED WITH THE ASSESSMENT ORDER,ASSESSEE HAD PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA).AFTER CONSIDERING THE ARGUMENTS AND EVIDENCES FURNISHED BY THE ASSESSEE,THE THEN FAA 2 ITA NO. 6319/MUM/2011 DEEPAK GOPALDAS BAJAJ DIRECTED THE AO TO ADOPT THE G.P.@ 1.5% IN THE CASE OF M/S. SEASONS INTERNATIONAL AND G.P. @ 3% IN RESPECT OF M/S.SONU TEXTILES.NOT BEING SATISF IED WITH THE ORDER OF THE FAA,HE PREFERRED AN APPEAL BEFORE THE TRIBUNAL.DECIDING THE APPEAL,I TAT HELD THAT ADDITIONS WERE MADE WITHOUT PROPER VERIFICATION AND IT RESTORED BACK THE MATT ER TO THE AO FOR DECIDING THE ISSUE AFRESH AFTER CONSIDERING THE RELEVANT MATERIALS/INFORMATION.AS T HE ASSESSEE DID NOT APPEAR BEFORE THE AO,HE, COMPLETED THE ASSESSMENT U/S.144 R.W.S.254 OF THE A CT TAKING G.P.@5% IN CASE OF M/S. SONU TEXTILES AND M/S.SEASONS INTERNATIONAL AS TAKEN DUR ING THE COURSE OF ORIGINAL PROCEEDINGS. 2.1. BEFORE THE FAA,DURING THE COURSE OF APPELLATE PROCE EDING,AR SUBMITTED THAT THE G.P. RATE DISCLOSED BY THE ASSESSEE SHOULD BE ACCEPTED I.E.@ 0.7% AND 2.58% IN THE CASE OF M/S.SEASONS INTERNATIONAL AND M/S. SONU TEXTILES RESPECTIVELY.A LTERNATIVELY,HE SUBMITTED THAT G.P. RATE AS DETERMINED BY THE THEN FAA I.E.1.5% AND 3% SHOULD B E ACCEPTED AS THE MATTER WAS OLD AND TO FURNISH NECESSARY DETAILS AS TO CONFIRMATION ETC. W OULD NOT BE POSSIBLE AFTER 10 YEARS.AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE ASSESSMENT ORDER HE HELD THAT THE ASSESSED HAD NOT COMP1IED WITH THE NOTICES ISSUED BY THE AO AND COMPELLED THE AO TO MAKE AN ASSESSMENT U/S. 144 OF THE ACT,THAT THE ASSESSEE CO ULD NOT BE ALLOWED TO BE ENRICHED BY HIS ACT OF OMISSION OR DELINQUENCY BECAUSE THE EX-PARTY ASSESS MENT HAD ITS OWN LIMITATIONS,THAT THE EX- PARTY ASSESSMENT HAD TO BE COMPLETED ON THE BASIS O F MATERIAL ON RECORDS ONLY,THAT IN EX PARTY ASSESSMENT THE AO HAD NO OPPORTUNITY OR CHANCE TO V ERIFY THE CASH CREDITS/INVESTMENTS,VALUATION OF STOCKS, GENUINENESS OF PURCHASES OR EXPENSES,OUTSTANDING SUNDRY CREDITO RS,OTHER CLAIMS ETC,THAT THE G.P. RATE ADOPTED AT 5% BY THE AO WAS REASONABLE.FINALLY,HE UPHELD THE ORDER OF THE AO. 2.2. BEFORE US, NO ONE APPEARED ON BEHALF OF THE ASSESSE E.DEPARTMENTAL REPRESENTATIVE(DR) SUBMITTED THAT THE ASSESSEE HAD NOT COOPERATED WITH THE AO EVEN DURING THE REASSESSMENT PROCEEDINGS,THAT RATE OF GROSS PROFIT ADOPTED BY TH E AO AND CONFIRMED BY THE FAA WAS JUSTIFIABLE. 2.3. WE HAVE HEARD THE SUBMISSIONS OF THE DR AND PERUSED THE MATERIAL ON RECORD.WE FIND THAT AY INVOLVED IN 1998-99 AND MATTER IS BEING DELIBERA TED UPON AT VARIOUS FORUMS FOR LAST MORE THAN A DECADE.THE ONLY ISSUE TO BE DECIDED IS THE G P RATE OF THE TWO PROPRIETARY CONCERNS,OWNED BY THE ASSESSEE,FOR THE YEAR UNDER CONSIDERATION.WE FIND THAT FAA,WHILE DECIDING THE ORIGINAL APPEAL HAD FIXED GP RATE AT A CERTAIN PERCENT FOR B OTH THE PROPRIETARY CONCERNS AND HIS DECISION WAS CHALLENGED BY THE HIM BEFORE THE TRIBUNAL.AO HA D NOT FILED ANY APPEAL AGAINST THE SAID ORDER OF THE FAA.RATE OF GROSS PROFIT IS NOT AN ISS UE WHICH REQUIRES VOLUMINOUS LEGAL DISCUSSION-IT IS A FACTUAL THING AND MAY VARY YEAR TO YEAR.CONSIDERING THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE UNDER CONSIDERATION,WE AR E OF THE OPINION THAT GP RATE FIXED BY THE FAA,DURING FIRST ROUND OF APPEAL I.E.1.5% AND 3%,WA S REASONABLE.WE FIND THAT DURING THE SECOND ROUND OF APPELLATE PROCEEDINGS BEFORE THE FA A,AR OF THE ASSESSEE HAD MADE AN ALTERNATE SUBMISSION IN THIS REGARD. SO,PARTLY ALLOWING THE A PPEAL FILED BY THE ASSESSEE,WE HOLD THAT GP RATE FOR THE PROPRIETARY CONCERNS SHOULD BE TAKEN @ 1.5% AND 3% IN THE CASES OF M/S.SEASONS INTERNATIONAL AND M/S. SONU TEXTILES RESPECTIVELY.E FFECTIVE GROUND OF APPEAL IS DECIDED IN FAVOUR OF THE ASSESSEE IN PART. AS A RESULT, APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED. 1 2 $1, 3 4 !5 + !, 67. ORDER PRONOUNCED IN THE OP EN COURT ON 15 TH OCTOBER,2013. '0 + -.% ' 8 9: 5 9: 5 9: 5 9: 5 15 , ,, , 2013 . + /. 3 ITA NO. 6319/MUM/2011 DEEPAK GOPALDAS BAJAJ SD/- SD/- ( . .. . . .. . , ,, , / I.P.BANSAL ) ( !'# !'# !'# !'# / RAJENDRA) / JUDICIAL MEMBER ' ' ' ' /ACCOUNTANT MEMBER / MUMBAI, ;$ /DATE: 15.10 .2013 SK '0 '0 '0 '0 + ++ + (,< (,< (,< (,< ='<%, ='<%, ='<%, ='<%, / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / &' 2. RESPONDENT / ()&' 3. THE CONCERNED CIT(A)/ > ? , 4. THE CONCERNED CIT / > ? 5. DR D BENCH, ITAT, MUMBAI / <@/ (,$ . , . . . 6. GUARD FILE/ / A )<, (, //TRUE COPY// '0$ / BY ORDER, B / 6 ! DY./ASST. REGISTRAR , /ITAT, MUMBAI