Sh. Moti Jain, New Delhi V. ITO, New Delhi

ITA 647/DEL/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6931 (ITAT-DELHI)
• Duration Of Justice: 2 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 27-01-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 05-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANIMA BARNWAL SENIOR
• Keywords: Gross profit estimation

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 G GG G : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT AND AND AND AND SHRI CHANDRA MOHAN GARG SHRI CHANDRA MOHAN GARG SHRI CHANDRA MOHAN GARG SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 647/DEL/2014 647/DEL/2014 647/DEL/2014 647/DEL/2014 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2007 2007 2007 2007 - -- - 08 0808 08 SHRI MOTI JAIN, SHRI MOTI JAIN, SHRI MOTI JAIN, SHRI MOTI JAIN, PROP. BABA TRADING CO., PROP. BABA TRADING CO., PROP. BABA TRADING CO., PROP. BABA TRADING CO., C/O KAPIL G C/O KAPIL G C/O KAPIL G C/O KAPIL GOEL, ADVOCATE, OEL, ADVOCATE, OEL, ADVOCATE, OEL, ADVOCATE, A AA A- -- -1/25, SECTOR 1/25, SECTOR 1/25, SECTOR 1/25, SECTOR- -- -15, 15, 15, 15, ROHINI, ROHINI, ROHINI, ROHINI, DELHI DELHI DELHI DELHI 110 085. 110 085. 110 085. 110 085. PAN : AAJPJ5998B. PAN : AAJPJ5998B. PAN : AAJPJ5998B. PAN : AAJPJ5998B. VS. VS. VS. VS. INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -39(1), 39(1), 39(1), 39(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KAPIL GOEL, ADVOCATE. RESPONDENT BY : SMT. ANIMA BARNWAL, SENIOR DR. DATE OF HEARING : 27.01.2016 27.01.2016 27.01.2016 27.01.2016 DATE OF PRONOUNCEMENT : 05.02.2016 05.02.2016 05.02.2016 05.02.2016 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 ASSESSEE FOR THE ASSESSMENT YEAR 2007-0 8 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-XXVIII , NEW DELHI DATED 1 ST OCTOBER, 2013. 2. THE ASSESSEE HAS RAISED VARIOUS GROUNDS. THE FIRST GROUN D OF APPEAL IS WITH REGARD TO ADDITION OF `10,33,445/- ON ACCOUNT OF LOW GROSS PROFIT RATE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PER USED THE RELEVANT MATERIAL PLACED BEFORE US. THE ASSESSEE DERIVE S INCOME FROM THE BUSINESS OF DIFFERENT TYPES OF HOSIERY ITEMS. FOR TH E YEAR UNDER ITA-647/DEL/2014 2 CONSIDERATION, ON THE TURNOVER OF `1.78 CRORES, THE G ROSS PROFIT DISCLOSED WAS `15.10 LAKHS. THE GROSS PROFIT RATE WAS 8.4 7% AS COMPARED TO THE GROSS PROFIT RATE OF PRECEDING TWO YE ARS WHICH WAS 22.56% AND 26.26% FOR ASSESSMENT YEAR 2005-06 AND 2006- 07 RESPECTIVELY. IT WAS EXPLAINED BY THE LEARNED COUNSEL THAT DUE TO INCREASED COST OF PURCHASES AND COMPETITION IN THE MARK ET, THERE WAS FALL IN THE GROSS PROFIT. IT WAS ALSO STATED THAT IN TH E SUBSEQUENT YEAR, THE SIMILAR GROSS PROFIT IS ACCEPTED. 4. LEARNED DR, ON THE OTHER HAND, STATED THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE DID NOT PRODUCE THE BOOKS OF ACCOUNT AND SUPPORTING BILLS, VOUCHERS ETC. AND, THEREFORE, THE RE JECTION OF BOOKS OF ACCOUNT AND APPLICATION OF GROSS PROFIT RATE OF 14.23 % BY THE ASSESSING OFFICER IS QUITE FAIR AND JUSTIFIED. THE SAME SHOULD B E SUSTAINED. 5. IN THE REJOINDER, IT IS STATED BY THE LEARNED COUN SEL THAT THE GROSS PROFIT RATE APPLIED IS TOO HIGH SPECIALLY IN THE LIGH T OF THE RESULT OF THE SUBSEQUENT YEARS WHICH HAS BEEN ACCEPTED BY THE REVENUE . 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTION S AND HAVE PERUSED THE RELEVANT MATERIAL PLACED BEFORE US. AFTE R CONSIDERING THE FACTS OF THE CASE AND ARGUMENTS OF BOTH THE SIDES, IN OU R OPINION, IT WOULD MEET THE ENDS OF JUSTICE IF THE LUMP SUM ADDITIO N OF `5,00,000/- IS MADE TO THE TRADING RESULT AS AGAINST `10,33,445/- M ADE BY THE ASSESSING OFFICER. WE ORDER ACCORDINGLY. 7. GROUND NOS.2 & 3 ARE AGAINST THE ADHOC DISALLOWANCE OUT OF CAR, TELEPHONE, TRAVELLING AND OTHER EXPENSES. AFTER CON SIDERING THE FACTS OF THE CASE AND ARGUMENTS OF BOTH THE SIDES, WE DO NOT FIND ANY MERIT IN THESE GROUNDS OF APPEAL. IT IS A CASE OF AN INDIVI DUAL AND SOME ITA-647/DEL/2014 3 PERSONAL USE OF TELEPHONE, CAR ETC. CANNOT BE RULED O UT. THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS QUITE REASON ABLE. ACCORDINGLY, THE SAME IS SUSTAINED AND GROUND NOS.2 & 3 ARE REJECTED. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWE D. DECISION PRONOUNCED IN THE OPEN COURT ON 05.02.2016. SD/- SD/- (CHANDRA MOHAN GARG (CHANDRA MOHAN GARG (CHANDRA MOHAN GARG (CHANDRA MOHAN GARG ) )) ) ( (( ( 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 VK. COPY FORWARDED TO: - 1. APPELLANT : SHRI MOTI JAIN, PROP. BABA TRADI NG CO., SHRI MOTI JAIN, PROP. BABA TRADING CO., SHRI MOTI JAIN, PROP. BABA TRADING CO., SHRI MOTI JAIN, PROP. BABA TRADING CO., C/O KAPIL GOEL, ADVOCATE, C/O KAPIL GOEL, ADVOCATE, C/O KAPIL GOEL, ADVOCATE, C/O KAPIL GOEL, ADVOCATE, A AA A- -- -1/25, SECTOR 1/25, SECTOR 1/25, SECTOR 1/25, SECTOR- -- -15, ROHINI, DELHI 15, ROHINI, DELHI 15, ROHINI, DELHI 15, ROHINI, DELHI 110 085. 110 085. 110 085. 110 085. 2. RESPONDENT : INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -39(1), NEW DELHI. 39(1), NEW DELHI. 39(1), NEW DELHI. 39(1), NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR