M/S. NANDECHA BROTHERS, Khachrod V. THE ITO2(2), Ujjain

ITA 709/IND/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5737 (ITAT-INDORE)
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 30-10-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: S S DESHPANDE
• Keywords: Gross profit estimation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE (SINGLE MEMBER CASE) BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER I.T.A.NO. 709/IND/2015 A.Y. : 2009-10 M/S.NANDECHA BROTHERS, ITO, KHACHROD VS. 2(2), UJJAIN. APPELLANT RESPONDENT PAN NO. AACFN0903B A PPELLANT S BY : SHRI S.S.DESHPANDE, CA RESPONDENT BY : SHRI R.A.VERMA, DR O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A), UJJAIN, DATED 04.08.2015 FOR THE ASSESSM ENT YEAR 2009-10. 2. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE : - DATE OF HEARING : 23 .02. 20 16 DATE OF PRONOUNCEMENT : 23 .02. 201 6 M/S.NANDECHA BROTHERS, KHACHROD VS. ITO, 2(2), UJJA IN I.T.A.NO. 709/IND/2015 A.Y. 2009-10 2 2 1. THAT THE LD. CIT(A) HAS ERRED IN NOT ALLOWING THE APPEAL IN FULL. 2. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 1,57,960/- ON ACCOUNT OF LOW GROSS PROFIT RATE. THE ADDITION IS WRONG AND UNJUSTIFIED. 3. THAT THE LD. CIT(A) HAS FURTHER ERRED IN NOT ALLOWI NG THE ADDITION OF RS. 31,477/- SHOWN IN FORM 26AS OF THE FIRM. THIS INCOME IS ALREADY CONSIDERED IN ACCOUNTS BY THE APPELLANT. HENCE, THE ADDITION IS WRONG AND UNJUSTIFIED. 4. THE LD. CIT(A) HAS ERRED IN NOT ALLOWING THE FULL EXPENSES OF SALARY. THE LD. AO HAD DISALLOWED SALAR Y OF RS. 1,00,000/- WITHOUT GIVING ANY PROPER REASONS. THE ADDITION IS WRONG AND UNJUSTIFIED. 5. THE LD. CIT(A) HAS ALSO ERRED IN NOT ALLOWING THE F ULL EXPENSES REGARDING HAMMALI, SHOP EXPENSES, TELEPHONE EXPENSES ETC. THE LD. AO HAS DISALLOWED RS. 63,501/- OUT OF EXP. 176934 AS CLAIMED PROFIT AND LOSS ACCOUNT. THE ADDITION IS WRONG AND UNJUSTIFIED. M/S.NANDECHA BROTHERS, KHACHROD VS. ITO, 2(2), UJJA IN I.T.A.NO. 709/IND/2015 A.Y. 2009-10 3 3 3. THE ASSESSEE HAS SHOWN THE GROSS PROFIT @1.93 %, WHEREAS IN ASSESSMENT YEAR 2005-06 THE GROSS PROFIT RATE @ 2.26% WAS SHOWN AND IN ASSESSMENT YEAR 2004-05, TH E GROSS PROFIT RATE @ 2.79% WAS SHOWN. THE ASSESSEE COULD N OT SUBSTANTIATE ITS CLAIM REGARDING FALL IN GROSS PROF IT. THEREFORE, THE APPEAL OF THE ASSESSEE WAS DISMISSED. 4. DURING THE COURSE OF HEARING OF THE APPEAL, THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THE COPY OF THE DECISION OF THE TRIBUNAL IN ASSESSMENT YEAR 2006-07, WHEREIN THE TRIBUNAL HAS DIRECTED TO TAKE THE AVERAGE GROSS PRO FIT WHICH COMES TO 2.15 %. 5. THE TRIBUNAL, IN ITS ORDER PASSED IN I.T.A.NO. 627/IND/2015 DATED 15.12.2015 FOR ASSESSMENT YEAR 2 006-07 IN ASSESSEES OWN CASE, HELD AS UNDER :- 5. I HAVE GONE THROUGH THE ORDER OF AO. FROM THE RECORD IT WAS FOUND THAT THE ASSESSEE HAS SHOWN GROSS PROFIT RATE AT 1.4% WHEREAS IN ASSESSMENT YEA R 2005-06, GROSS PROFIT RATE WAS SHOWN AT 2.26% AND IN ASSESSMENT YEAR 2004-05, THE GROSS PROFIT RATE WAS SHOWN AT 2.79%. I FIND THAT THERE WAS M/S.NANDECHA BROTHERS, KHACHROD VS. ITO, 2(2), UJJA IN I.T.A.NO. 709/IND/2015 A.Y. 2009-10 4 4 SUBSTANTIAL INCREASE IN THE TURNOVER OF THE ASSESSE E DURING YEAR UNDER CONSIDERATION. THE TURNOVER OF TH E ASSESSEE IS DECREASED MARGINALLY IN COMPARISON TO TURNOVER OF IMMEDIATELY PRECEDING YEAR. DURING THE COURSE OF HEARING, THE ASSESSEE DID NOT GIVE ANY REASON FOR FALL IN GROSS PROFIT. THEREFORE, IN MY OPINION, THERE IS NO REASON FOR TAKING THE GROSS PR OFIT AT 1.4 %. THEREFORE, I DIRECT THE AO TO TAKE THE AVERAGE GROSS PROFIT OF THREE YEARS, WHICH COMES TO 2.15%. THEREFORE, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED AND I DIRECT THE AO TO ADOPT THE RATE OF GR OSS PROFIT AT 2.15%. 6. I, RESPECTFULLY FOLLOWING THE ABOVE DECISION, DIREC T THE AO TO TAKE THE GROSS PROFIT AT 2.15%. 7. OTHER GROUNDS TAKEN IN THIS APPEAL WERE NOT DECIDED BY THE LD. CIT(A). 8. DURING THE COURSE OF HEARING OF THE APPEAL, THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE ASSESS EE HAD TAKEN EIGHT GROUNDS BEFORE THE LD. CIT(A). THE LD. CIT(A) IN HIS M/S.NANDECHA BROTHERS, KHACHROD VS. ITO, 2(2), UJJA IN I.T.A.NO. 709/IND/2015 A.Y. 2009-10 5 5 ORDER HAS NOT DECIDED ALL THESE GROUNDS. THE LD. AU THORIZED REPRESENTATIVE FURTHER CONTENDED THAT GROUND NOS. 5 , 6, 7 & 8 THOUGH CLAIMED BEFORE THE CIT(A), IT IS NOT DECIDED BY THE LD. CIT(A). THEREFORE, THE MATTER MAY BE RESTORED TO TH E CIT(A). 9. THE LD. DR DID NOT OBJECT TO IT. 10. I HAVE GONE THROUGH THE STATEMENT OF FACTS BEFORE T HE CIT(A) AND GROUND NOS. 5,6,7 & 8 READ AS UNDER :- 05- JHEKU VK;DJ VF/KDKJH EGKSN; }KJK C;KT [KKRS ESA :I; S 8374-00 DH DEH DH TKDJ DQY VK; ESA O`F/N DH GS] TKS FD VUQFPR RFKK XY R GSA 06- JHEKU VK;DJ VF/KDKJH EGKSN; }KJK QKEZ 26 ,,L DS VK/ KKJ IJ :I;S 31477-00 DH O`F/N DQY VK; ESA DH GS] FDURQ BL LACA/K EAS DJNKRK DKSBZ MFPR VOLJ IZNKU UGHA FD;K X;K A IZK:IK 26 ,,L ESA N KKZ;H XBZ TKUDKJH DJNKRK LS LACAF/KR UGHA GSA VR% DH XBZ O`F/N FUJLR DJUS ;KSX; GSA 07- JHEKU VK;DJ VF/KDKJH EGKSN; }KJK :- 1-00 YK[K DH O` F/N OSRU[KPZ LS DEH DH TKDJ DH GS] TKS FD VUQFPR RFKK XYR GSA 08- JHEKU VK;DJ VF/KDKJH EGKSN; }KJK GEEKYH] NQDKU [KPZ ] VSYHQKSU [KPZ] OKGU [KPZ DK DQY TKSM :IK;S 176934-00 ESA LS :I;S 63501- 00 DH JKFK DQY VK; ESA LFEEFYR GSA TKS FD IW.KZR% VUQFPR RFKK XYR GSA 09- ;G FD VIHYKFKHZ VU; DKSBZ VK/KKJ C