BALA BUX MALIRAM, Jaipur V. ACIT, Jaipur

ITA 70/JPR/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 47981 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 31-01-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ROSHANTA MEENA
• Assessee Lawyers: G G MUNDRA
• Keywords: Block assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH, A, JAIPUR (BEFORE SHRI R.K.GUPTA AND SHRI N.L.KALRA) ITA NO.70/JP/11 ASSESSMENT YEAR : 2006-07 M/S BALA BUX MALIRAM , VS. ACIT, JAIPUR. CENTRAL CIRCLE-3, JAIPUR (APPELLANT) (RESPONDENT) APPELLANT BY : SH.G.G. MUNDRA RESPONDENT BY: MISS ROSHANTA MEENA O R D E R SHRI.N.L.KALRA, A.M. 1. THE ASSESSEE HAS FILED AN APPEAL AGAINST ORDER O F LD CIT(A) CENTRAL JAIPUR DATED 01.12.2010. THE GROUND OF APPEAL RAISED BY THE ASSE SSEE IS AS UNDER: THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) IS WRONG, UNJUST AND HAS ERRED IN LAW IN CONFIRMING ADDITION OF RS.700184/- MADE TO THE INCOME OF THE APPELLANT BY THE LD. ASSESSING OFFICER BY APPLY ING G.P. RATE OF 28.08% AS AGAINST DECLARED G.P. RATE OF 26.08% EVEN THOUGH THE ASSESS ING OFFICER HAS NOT INVOKED PROVISIONS OF SEC. 145(3) OF THE I.T. ACT, 1961. 2. THE ASSESSEE IS A SWEET MAKER. THE ASSESSEE HAS SHOWN G.P. RATE OF 26.06% ON TURNOVER OF RS.3.58 CRORES. THE ASSESSEE WAS ASKED AS TO WHY AN ADDITION OF 2% IN G.P. RATE BE NOT MADE AS HAS BEEN MADE IN PAST YEARS FOR WHICH NO APPEAL AGAINST SUCH ADDITION MADE. 3. ASSESSEE HAS FILED REPLY VIDE LETTER DATED 29/08 /2008 AND THE SAME HAS BEEN REPRODUCED BY THE A.O. IN HIS ORDER AT PAGES 1 TO 3 OF ASSESSMENT ORDER. SEARCHES HAVE BEEN CONDUCTED ON 07/05/1987 AND 10.09.2004 AT THE PREMISE OF THE ASSESSEE. THE TRIBUNAL FOR THE ASSESSMENT YEARS 1987-88 TO 1990-9 1 HELD THAT PAST HISTORY IS BEST GUIDE. IN BLOCK ASSESSMENTS, TRADING ADDITION OF 2% WAS MADE FOR THE A.Y. 1999-00 TO 2005-06 AND TO AVOID LITIGATION THE ASSESSEE HAS NO T AGITATED THE ISSUE IN APPEAL, THE A.O. MADE ADDITION OF RS.7,00,184/- AFTER OBSERVING AS U NDER:- ON GOING THROUGH THE FACT OF THE CASE AND REPLY OF THE ASSESSEE AS WELL AS THE HISTORY OF THE CASE, THE ASSESSEES REP LY APPEARS TO BE PARTIALLY ACCEPTABLE I.E. TO THE EXTENT OF QUALITATIVE POINTS NARRATED BY THE ASSESSEE IN THEIR FAVOUR. IN SPITE OF THAT THE ASSESSEES PROFIT CAN NOT BE DEDUCED PROPERLY IN THE ABSENCE OF QUANTITATIVE DETAILS OF STOCK MAINTAINED . THE ASSESSEE HAS ITSELF ADMITTED THE ADDITION @ 2% IN GROSS PROFIT IN THE P AST 7 ASSESSMENT YEARS, AND NO APPEAL BEFORE THE CIT(A) HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ASSESSMENT ORDERS MAKING ADDITION ON ACCOUNT OF LOW G.P. THEREFORE IT WOULD BE REASONABLE TO APPLY A PROFIT RATE OF 28.06% AS AGAI NST 26.06% DECLARED BY THE ASSESSEE ON THE SALES MADE BY THE ASSESSEE. THIS WO ULD RESULT IN ADDITION OF RS.7,00,184/- (RS.3,58,35,538/- X 28.01% = RS.1,00, 37,534/- MINUS RS.93,37,350/-) TO THE INCOME OF THE ASSESSEE. 4. THE LD CIT(A) CONFIRMED THE ADDITION AFTER OBSER VING AS UNDER:- I HAVE CONSIDERED THE SUBMISSION OF A.R. AND HAVE P ERUSED THE MATERIAL ON RECORD. A.O. HAS SPECIFICALLY MENTIONED THAT IN ABS ENCE OF QUANTITATIVE DETAILS OF THE STOCK AS IN THE PAST YEAR, APPELLANTS PROFIT CAN N OT BE DEDUCED PROPERLY AND AS IN THE PAST YEAR, THE TRADING RESULTS ARE REJECTED. THE A. O. HAS INCREASED THE G.P. RATE DURING THIS YEAR BY 25 FORM 26.06% TO 28.06%, WHICH WAS DONE ON THE GROUND THAT IN EARLIER YEARS ALSO, THE G.P. RATE HAS BEEN INCREASE D BY 2% BY A.O. (ASSESSMENT YEAR 2002-03 TO 2006-07) AND APPELLANT HAS ACCEPTED THE DECISION BY NOT PREFERRING APPEAL. THE G.P. RATE SHOWN IN A.Y. 2006-07 WAS 26. 06% AND IN A.Y. 2004-05 WAS AGAIN 26.06% AND IN A.Y. 2003-04 WAS 26.78%, WHICH WERE INCREASED BY 2%. HENCE, INCREASE OF THE G.P. RATE OF 2% SO DONE BY THE A.O. IN THE YEAR UNDER CONSIDERATION IS JUSTIFIED AND DOES NOT CALL FOR ANY INTERFERENCE. T HIS GROUND OF THE APPEAL IS REJECTED. WE HAVE HEARD BOTH THE PARTIES. THE ASSESSEE IN HI S REPLY BEFORE THE A.O. ADMITTED THAT IT IS IMPOSSIBLE TO MAINTAIN THE RECO RD OF CONSUMPTION OF RAW MATERIAL AS THE ASSESSEE IS PREPARING A LARGE NUMBER OF VARI OUS ITEMS, FOR THE ASSESSMENT YEARS 2002-03 TO 2006-07, G.P. RATE VARIED AS 25.14 %, 26.78%, 26.08%, 26.01% AND 26.06%. TURNOVER FROM ASSESSMENT YEAR 2002-03 TO 20 06-07 HAS INCREASED FROM RS.2.75 CRORES TO 3.58 CRORES. A FIXED INCREASE IN G.P. RATE MADE IN DIFFERENT YEARS CAN NOT BE A BASIS FOR APPLYING G.P.RATE. G.P. RATE DURING THE YEAR IS BETTER AS COMPARED TO LAST YEAR THOUGH G.P. RATE OF 28.01% AP PLIED IN EARLIER YEAR. IT IS TRUE THAT A.O. HAS NOT SPECIFICALLY MENTIONING OF INVOKING PR OVISIONS OF SECTION 145(3) BUT HAS HELD THAT PROFIT CAN NOT BE DEDUCED PROPERLY. THE A .O. HAS ALSO MENTIONED THAT REPLY OF THE ASSESSEE IS PARTLY ACCEPTABLE AND STILL HE H AS APPLIED G.P. RATE OF 28.01%. LOOKING TO THE INCREASE IN TURNOVER AS COMPARED TO LAST YEAR, WE FEEL IT WILL BE FAIR AND REASONABLE TO APPLY A G.P. RATE OF 26.5%. THE A .O. WILL RECOMPUTE THE TRADING ADDITION. IN THE RESULT THE APPEAL OF ASSESSEE IS PARTLY ALL OWED. THE ORDER IS PRONOUNCED IS OPEN COURT ON 14-07-201 1. SD/- SD/- (R.K. GUPTA) (N.L. KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 14-07-2011 1. M/S. BALA BUX MALIRAM, JAIPUR. 2. ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCL E-3, JAIPUR. 3. THE CIT, 4. THE CIT (A) 5. THE D.R., ITAT, JAIPUR 6. GUARDE FILE ITA NO.70/JP/2011 BY ORDER A.R. I.T.A.T., JAIPUR