SHRI HARI PRAKASH GOKULKA, SIKAR V. INCOME TAX OFFICER, WARD, NEEM KA THANA

ITA 724/JPR/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6184 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 26-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: POONAM ROY DCIT DHK
• Assessee Lawyers: SATISH KUMAR GUPTA
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH HKKXPAN] YS[KK LNL; ,OA JH DQY HKKJR ] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM & SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 724/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13 HARI PRAKASH GOKULKA, PROP.- M/S HARI OM ENTERPRISES, ANAJ MANDI, SRIMADHOPUR, SIKAR (RAJ) CUKE VS. INCOME TAX OFFICER, WARD- NEEM KA THANA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ACFPG 0451 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SATISH KUMAR GUPTA, (CA) JKTLO DH VKSJ LS@ REVENUE BY : SMT. POONAM ROY (DCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 09/04/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 10/04/2018 VKNS'K@ ORDER PER: KUL BHARAT, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 07/08/2017 PASSED BY THE LD. CIT(A)-3, JAIPUR FOR T HE A.Y. 2012-13. THE GROUNDS TAKEN BY THE ASSESSEE IN APPEAL ARE AS UNDE R:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW, LD. LOWER AUTHORITIES GROSSLY ERRED IN REJECTING THE BOOKS OF ACCOUNT BY INVOKING THE PROVISIONS OF SECTION 145(3) OF THE IN COME TAX ACT, 1961. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) GROSSLY ERRED IN APPLYING G.P. RATE OF @ 1.40% AS AGAINST D ECLARED G.P. ITA 724/JP/2017_ HARI PRAKASH GOKULKA VS ITO 2 RATE OF 1.13% AND THEREBY MAKING AND CONFIRMING ADD ITION OF RS. 6,31,040/- IN THE TRADING RESULTS. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. LOWER AUTHORITIES GROSSLY ERRED IN MAKING AND CONFIRMING LUMP SUM DIS ALLOWANCE OF 10% IS PALDARI EXPENSES, CAR EXPENSES, TELEPHONE EX PENSES, TRAVELLING EXPENSES AND SHOP EXPENSES WITHOUT SPECI FYING ANY UNVOUCHED/PERSONAL EXPENSES. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE CA SE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESS MENT U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS TH E ACT) WAS FRAMED VIDE ORDER DATED 04/12/2014. WHILE FRAMING THE ASSE SSMENT, THE A.O. REJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE AND E STIMATED THE G.P. RATE @ 1.50% THEREBY HE MADE ADDITION OF RS. 8,50,071/-. THE ASSESSING OFFICER ALSO FURTHER MADE OTHER AD HOC DISALLOWANCES IN RESPECT OF CAR EXPENSES, TELEPHONE EXPENSES, TRAVELLING EXPENSES A ND SHOP EXPENSES. 3. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A), WHO AFTER CON SIDERING THE SUBMISSIONS, RESTRICTED THE G.P. RATE @ 1.40% AND AL SO CONFIRMED THE DISALLOWANCES RELATED TO THE OTHER EXPENSES @ 10%. TH US, THE LD. CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 4. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE ITAT. GROUNDS NO. 1 AND 2 OF THE APPEAL A RE AGAINST RESTRICTING ITA 724/JP/2017_ HARI PRAKASH GOKULKA VS ITO 3 THE G.P. RATE @ 1.40% AND REJECTION OF BOOKS OF ACCO UNT. THE LD AR OF THE ASSESSEE VEHEMENTLY ARGUED THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN REJECTING THE BOOKS OF ACCOUNT. THE BO OKS OF ACCOUNT HAVE BEEN REJECTED ON THE BASIS OF WHIMS AND FANCIES. THE LD AR FURTHER SUBMITTED THAT THE ASSESSEE HAD FURNISHED ALL DETAI LS REQUIRED BY THE ASSESSING OFFICER. THEREFORE, HE PRAYED TO ALLOW THE APPEAL. 5. ON THE CONTRARY, THE LD DR HAS OPPOSED THE SUBMI SSIONS MADE BY THE ASSESSEE. SHE HAS SUBMITTED THAT THE ASSESSING OFFICER HAS NOTICED THAT THE ASSESSEE WAS NOT MAINTAINING STOCK REGISTE R AND QUALITY WISE DETAILS. FURTHER IT WAS NOTICED BY THE ASSESSING OFF ICER THAT THE G.P. OF THE ASSESSEE HAS GONE DOWN IN COMPARISON TO THE LAST YEA R. SO THESE WERE THE SUFFICIENT GROUND FOR REJECTION OF BOOKS OF ACC OUNT. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON THE RECORD AND ALSO GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. AFTER CONSIDERING THE TOTALIT Y OF THE FACTS AND MATERIAL PLACED BEFORE THE BENCH, WE ARE OF THE CONS IDERED VIEW THAT THE LD. CIT(A) HAS ERRED IN ADOPTING THE G.P. RATE @ 1.40 %. THE LAW IS WELL SETTLED BY THE DECISION OF THE HONBLE JURISDICTION AL HIGH COURT THAT THE PAST HISTORY IS THE BEST INDICATOR WHERE THE BOOKS O F ACCOUNT ARE REJECTED AND THE PROFIT IS REQUIRED TO BE ESTIMATED BY THE A SSESSING OFFICER. IT IS ITA 724/JP/2017_ HARI PRAKASH GOKULKA VS ITO 4 CONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE THAT IF THE PAST HISTORY OF THE LAST FOUR YEARS IS ADOPTED, THE AVERAGE OF THE SAME WOULD BE LESSER THAN WHAT THE ASSESSEE HAS DECLARED, THEREFORE, WE D EEM IT PROPER TO ADOPT THE G.P. RATE @ 1.20% AND WE DIRECT ACCORDINGLY TO THE ASSESSING OFFICER. HENCE, GROUNDS NO. 1 AND 2 OF THE APPEAL A RE DISPOSED OFF IN TERMS OF THE FINDING HEREINABOVE. 7. GROUND NO. 3 OF THE APPEAL IS AGAINST CONFIRMING LUMP SUM DISALLOWANCE OF 10% IN VARIOUS EXPENSES. WE HAVE HEA RD BOTH THE SIDES ON THIS ISSUE AND FIND THAT THE LD. CIT(A) HAS RIGHT LY RESTRICTED THE DISALLOWANCES @ 10% OF THE EXPENSES UNDER THE VARIOUS HEADS WHICH DOES NOT REQUIRE ANY INTERFERENCE. HENCE, THIS GROU ND OF ASSESSEES APPEAL IS DISMISSED. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10/04/2018. SD/- SD/- HKKXPAN DQY HKKJR (BHAGCHAND) (KUL BHARAT) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 10 TH APRIL, 2018 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI HARI PRAKASH GOKULKA, SIKAR. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD- NEEM KA THANA ITA 724/JP/2017_ HARI PRAKASH GOKULKA VS ITO 5 3. VK;DJ VK;QDR @ CIT - 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 724/JP/2017) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR