MAMTA SOGANI, Jaipur V. ITO, Jaipur

ITA 696/JPR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4887 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 05-07-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: POONAM RAI D DHK
• Assessee Lawyers: MUKESH GOYAL

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 696/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 SMT. MAMTA SOGANI 99, DHULESHWAR GARDEN C-SCHEME,JAIPUR CUKE VS. THE ITO WARD- 1(2) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AGWPS 9210 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY:SHRI MUKESH GOYAL, CA JKTLO DH VKSJ LS@ REVENUE BY :SMT. POONAM RAI, DCIT-DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 30/11/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 02/12/2016 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDE R OF THE LD. CIT(A)-1, JAIPUR DATED 18-04-2016 FOR THE ASSESSME NT YEAR 2010-11 RAISING THEREIN FOLLOWING GROUNDS OF APPEAL:- 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW I N CONFIRMING THE REJECTING THE BOOKS OF ACCOUNT AND A PPLYING THE PROVISION OF SECTION 145(3) OF THE ACT, 1961 MA DE BY THE AO. ITA NO. 696/JP/2016 SMT.MAMTA SOGANI VS. ITO, WARD- 1(2), JAIPUR . 2 2. THE LD. CIT(A) HAS ERRED IN FACTS AND IN LAW IN CONFIRMING THE TRADING ADDITION ON LUMPSUM BASIS OF RS. 2.00 LACS AS AGAINST THE GROSS PROFIT @ 22.96% DECL ARED BY THE APPELLANT IN THE BUSINESS OF 09 TO 09 BAZAR (RE TAIL SHOP AT READYMADE GARMENTS). 2.1 APROPOS GROUND NO. 1 AND 2 OF THE ASSESSEE, BRI EF FACTS OF THE CASE ARE THAT THE ASSESSEE WAS DERIVING INCOME FROM THRE E PARTNERSHIP CONCERNS NAMELY M/S. PEACE INTERNATIONAL, M/S. PEACH INTERNA TIONAL (SEZ) AND M/S. 9 TO 9 BAZAR. IT IS NOTED THAT THE AO ACCEPTED THE DECLARED PROFITS OF M/S. PEACE INTERNATIONAL, M/S. PEACH INTERNATIONAL (SEZ) . HOWEVER, IN RESPECT OF 9 TO 9 BAZAR, THE AO NOTED THAT THE ASSESSEE IS NOT MAINTAINING DAY TODAY STOCK REGISTER AND INVENTORY OF THE CLOSING S TOCK WAS NOT MAINTAINED IN A PROPER MANNER AND IDENTIFIABLE DETAILS WERE NO T RECORDED. IN THE ABSENCE OF THE SAME, TRADING RESULTS COULD NOT BE V ERIFIED AND HE REJECTED THE BOOKS OF ACCOUNT BY INVOKING THE PROVISIONS OF SECTION 145(3) OF THE ACT AND MADE AN ADDITION OF RS. 5,32,159/- BY APPLY ING A GROSS PROFIT RATE OF 25% ON THE TOTAL TURNOVER OF RS. 2,62,94,681/- AS AGAINST GROSS PROFIT RATE OF 22.97% DECLARED BY THE ASSESSEE. 2.2 IN FIRST APPEAL, THE LD. CIT(A) CONSIDERED THE PLEADINGS OF THE ASSESSEE AND UPHELD THE REJECTION OF BOOKS OF ACCO UNT FOR THE REASON THAT ASSESSEE HAS NOT PRODUCED DAY TODAY STOCK REGISTER (QUALITY AND ITA NO. 696/JP/2016 SMT.MAMTA SOGANI VS. ITO, WARD- 1(2), JAIPUR . 3 QUANTITYWISE). THEREFORE, IN THE ABSENCE OF THE SAM E, THE BASIS OF VALUATION OF CLOSING STOCK AND TRADING RESULTS DECL ARED BY THE ASSESSEE WERE NOT SUBJECT TO VERIFICATION. THUS THE LD. CIT( A) UPHELD THE REJECTION OF BOOKS OF ACCOUNT OF THE ASSESSEE AND FURTHER ASK ED THE ASSESSEE AS TO WHY SHE HAS NOT PRODUCED THE DAY TODAY STOCK REGIST ER (QUALITY AND QUANTITYWISE). THE ASSESSEE SUBMITTED THAT THE STOC K IS RECORDED IN THE TAILOR MADE SOFTWARE WHERE PURCHASES, SALES AND STO CK OF GARMENTS (INWARD AND OUTWARD) ARE ENTERED IN TERMS OF PIECE S AND THE SALES ARE MADE THROUGH BAR CODE SYSTEM. SINCE THE ASSESSEE FA ILED TO CONTROVERT THE FINDINGS OF THE AO, THEREFORE, THE LD. CIT(A) CONFI RMED THE REJECTION OF BOOKS OF ACCOUNT U/S 145(3) OF THE ACT AND RESTRICT ED THE ADDITION TO THE EXTENT OF RS. 2.00 LACS LOOKING TO THE FACTS AND CI RCUMSTANCES OF THE CASE. 2.3 AFTER HEARING BOTH THE SIDES AND LOOKING TO THE FACTUAL ASPECTS OF THE CASE THAT THE ASSESSEE IS MAINTAINING THE ACCOU NTS ON TALLY SYSTEM BUT IT IS NOT FULLY ESTABLISHED THAT ALL THE SALES AND PURCHASES OF THE STOCK (QUALITY AND QUANTITYWISE) OF THE ASSESSEE WERE MA INTAINED THROUGH BAR CODE SYSTEM. IN THE ABSENCE OF THESE DETAILS, CERTA IN DISALLOWANCES ARE NECESSARY TO PLUG THE LOOPHOLES FOR THE REASON THAT THE ASSESSEE HAS NOT PRODUCED THE STOCK REGISTER (QUALITY & QUANTITYWISE ) BEFORE THE AUTHORITIES ITA NO. 696/JP/2016 SMT.MAMTA SOGANI VS. ITO, WARD- 1(2), JAIPUR . 4 BELOW. HENCE LOOKING TO THE FACTS OF THE CASE, I SU STAIN THE ADDITION TO THE EXTENT OF RS. 1.00 LAC ONLY. THUS THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 02/12/2 016 SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 02/12/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. MAMTA SOGANI, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- 1(2), JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 696/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR