Ravinder Kumar Jain, Delhi V. ACIT, New Delhi

ITA 6322/DEL/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69224 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 20-08-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 21-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHIM SINGH
• Keywords: Rejection of books of accounts; Depreciation
• Section: 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SHRI R. P. YADAV, JUDICIAL MEMBER & SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 6322/DEL/2012 ASSESSMENT YEAR: 2008-09 RAVINDER KUMAR JAIN VS. ACIT PROP. M/S. RR METAL CRAFT ENTERPRISES CIRCLE- 34(1) C-60, X-IV, DILSHAD GARDEN, DELHI NEW DELHI AAFPJ7207F (APPELLANT) (RESPONDENT) APPELLANT BY : SH. RAJESH JAIN, C.A. RESPONDENT BY : SHRI BHIM SINGH, SR. DR ORDER PER SHAMIM YAHYA, A.M : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORD ER OF CITA DATED 19.9.2012 AND PERTAINS TO ASSESSMENT YEAR 2008-09. THE GROUNDS OF APPEAL READ AS UNDER :- 1) THAT THE LD. CIT (APPEAL) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE REJECTION OF BOOKS OF ACCOU NTS OF THE ASSESSEE. 2) THAT THE LD. CIT(APPEAL) HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE ADOPTION OF GP RATE AT 6% A S COMPARED TO 2.36% SHOWN BY THE ASSESSEE. 3) THAT THE LD. CIT(APPEAL) HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE ADDITION OF RS. 33,31,107/- ON ACCOUNT OF GP RATE. 4) THAT THE LD. CIT(APPEAL) HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE AD-HOC DISALLOWANCE OF 20% OF ITA NO. 6322/DEL/2012 2 EXPENSES OUT OF TELEPHONE, VEHICLE REPAIR AND MAINTENANCE, VEHICLE DEPRECIATION AND INSURANCE. 5) THAT THE IMPUGNED APPELLATE ORDER IS ARBITRARY, ILLEGAL, BAD IN LAW AND IN VIOLATION OF RUDIMENTARY PRINCIPLES OF CONTEMPORARY JURISPRUDENCE. 6) THAT THE APPELLANT CRAVES LEAVE TO ADD/ALTER ANY /ALL GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 2. IN THIS CASE, ASSESSMENT WAS FRAMED U/S 143(3 ) OF THE IT ACT. ASSESSING OFFICER NOTICED SEVERAL DEFECTS IN THE AC COUNTS OF BOOKS MAINTAINED BY THE ASSESSEE. ACCORDINGLY, HE HELD TH AT HE WAS SATISFIED THAT BOOKS OF ACCOUNTS ARE NOT RELIABLE AND AS SUCH HE I NVOKED THE PROVISIONS OF SECTION 145 OF THE IT ACT AND REJECTED THE BOOKS OF ACCOUNTS OF THE ASSESSEE. 3. ASSESSING OFFICER FURTHER NOTED THAT THE GP RATIO AS ON 31.3.2007 WAS 8%, WHICH DECREED FOR THE RELEVANT ASSESSMENT YEAR TO 2.5 3 % AS ON 30.9.2007. ASSESSING OFFICER COMPUTED THE GROSS PRO FIT FOR THE RELEVANT ASSESSMENT YEAR AT 6%. ACCORDINGLY, DIFFERENCE OF 3 3,31,107/- WAS ADDED BACK TO THE INCOME OF THE ASSESSEE. 4. ASSESSING OFFICER FURTHER OBSERVED THAT A SSESSEE WAS NOT MAINTAINING LOG BOOK FOR CAR / VEHICLE EXPENSE AND CALL REGISTER IN RESPECT OF TELEPHONE EXPENSE. HE HELD THAT PERSONAL ELEMENT CA NNOT BE RULED OUT IN DEBITING OF THESE EXPENSES. HENCE, ASSESSING OFFIC ER MADE DISALLOWANCE OF RS. 73,929 (20%) OF THESE EXPENSES. ITA NO. 6322/DEL/2012 3 5. UPON ASSESSES APPEAL LD. CIT(A) CONFIRMED THE ACCESS OF ASSESSING OFFICER. AGAINST ABOVE ORDER, ASSESSEE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED TH E RECORDS, LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT HE IS NOT DISPUTING THE ASSESSING OFFICERS ACTION IN REJECTING THE BOOKS OF ACCOUNTS. HOWEVER, HE CLAIMED THAT ASSESSING OFFICER COMMITTED MISTAKE IN COMPUTING TH E GROSS PROFIT RATE OF THE ASSESSEE FOR EARLIER PERIOD. HE FURTHER SUBMITT ED THAT ASSESSING OFFICER HAS NOT ALSO POINTED OUT GP RATE IN THE COMPARATIVE BUSINESS OF THE ASSESSEE. HE SUBMITTED THAT THE MATTER MAY BE REMIT TED TO THE FILES OF THE ASSESSING OFFICER SO THAT APPROPRIATE G.P. RATE MAY BE APPLIED IN THIS CASE. LD. DR ON THE OTHER HAND SUPPORTED THE ORDERS OF TH E AUTHORITIES BELLOW. 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSION S, WE FIND THAT IN THIS CASE BOOKS OF ACCOUNTS HAVE BEEN REJECTED. ASSESSIN G OFFICER HAS REFERRED TO THE GP RATES OF THE ASSESSEE IN EARLIER PERIODS AND ADOPTED 6% AS ESTIMATED GP RATE FOR THE PRESENT ASSESSMENT YEAR. HOWEVER, LD. COUNSEL OF THE ASSESSEE HAS SUBMITTED THAT THE GP RATE OF T HE ASSESSEE, AS APPLIED OF THE ASSESSING OFFICER FOR EARLIER PERIOD IS NOT CORRECT. IN OUR CONSIDERED OPINION, INTEREST OF JUSTICE WILL BE SERVED IF THE MATTER IS REMITTED TO THE FILES OF THE ASSESSING OFFICER. ASSESSING OFFICER SHALL C ONSIDER THE APPLICATION OF ESTIMATED RATE OF GP AFRESH AFTER TAKING INTO ACCOU NT ALL THE RELEVANT ITA NO. 6322/DEL/2012 4 CIRCUMSTANCES AND CORRECT FIGURES. THE ASSESSEE IN THIS REGARD MAY SUBMIT BEFORE THE ASSESSING OFFICER THE CORRECT GP RATES O F THE ASSESSEE IN EARLIER PERIODS. 8. AS REGARDS THE DISALLOWANCE OF THE 20% EXPEN SE OUT OF TELEPHONE, VEHICLE REPAIR DEPRECIATION ETC. WE FIND THAT WE HA VE ALREADY REMITTED THE MATTER OF COMPUTATION OF GP RATE TO THE FILES OF TH E ASSESSING OFFICER. HENCE, ASSESSING OFFICER SHALL TAKE UP THE OTHER IS SUES ALSO AFRESH. 9. IN THE RESULT, THIS APPEAL FILED BY THE ASSE SSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23 AUGUST, 20 13. SD/- SD/- (R.P.YADAV) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED 23 AUGUST, 2013 B.RUKHAIYAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT (ITAT), NEW DELHI