M/S. RATAN TEXTILES, Indore V. THE ITO-2(3), Indore

ITA 732/IND/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5717 (ITAT-INDORE)
• Duration Of Justice: 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 11-12-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: C P RAWKA
• Section: 133A

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. 732/IND/2015 A.Y. : 2005-06 M/S.RATAN TEXTILES, ITO, INDORE. VS. 2(3), INDORE. APPELLANT RESPONDENT PAN NO. AADFR9347L A PPELLANT S BY : SHRI C.P.RAWKA, C. A. 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)-II, INDORE, DATED 16.10.2015 FOR THE ASSE SSMENT YEAR 2005-06. 2. THE ONLY GROUND TAKEN BY THE ASSESSEE READS AS UNDE R :- DATE OF HEARING : 24 .02. 20 16 DATE OF PRONOUNCEMENT : 02 .0 3 . 201 6 M/S.RATAN TEXTILES, INDORE V/S ITO, 2(3), INDORE I.T.A.NO. 732/IND/2016 A.Y. 2005-06 2 2 THE LD. CIT(A) ERRED IN LAW AND FACTS OF THE CASE AND CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER AND HAS FURTHER ERRED IN LAW AND WITHOUT APPRECIATING THE FACTS OF THE CASE CONFIRMED THE ADDITION OF RS. 2,24,127/- ON ESTIMATION OF GROSS PROFIT. THE ADDITION MADE IS ARBITRARY & THE ADDITI ON MADE IS WITHOUT APPRECIATING THE FACTS AND EXPLANATION, THE ADDITION THEREFORE IS LIABLE TO BE DELETED IN FULL. 3. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE I S INVOLVED IN WHOLESALE TRADING OF CLOTH. THERE WAS S URVEY U/S 133A CARRIED OUT AT THE BUSINESS PREMISES OF THE AS SESSEE AND NUMBER OF INCRIMINATING DOCUMENTS WERE IMPOUNDED DU RING THE SURVEY PROCEEDINGS. THE STATEMENTS OF PARTNERS WERE RECORDED AND KEPT ON RECORD DURING SURVEY U/S 133A. THEREFORE, THE AO REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE SALES AND GROSS PROFIT RATE AT 12 % WAS APPLIED AND AMOUNT OF RS. 2,24,127/- WAS ADDED TO THE ESTIMATIO N FROM THE PROFIT OF BUSINESS. THE AO HAS GIVEN SHOW CAUSE NOTICE AND THE AO, WAS OF THE VIEW THAT SOME OF THE INVOIC ES, BILLS ARE M/S.RATAN TEXTILES, INDORE V/S ITO, 2(3), INDORE I.T.A.NO. 732/IND/2016 A.Y. 2005-06 3 3 SENT IN THE NAME OF RATAN FAB, WHICH IS NOT IN EXIS TENCE ON THE DATE OF SURVEY. THEREFORE, THE AO ESTIMATED THE GROSS PROFIT AND MADE THE ADDITION OF RS. 2,24,127/-. 4. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) HAS CONFIRMED THE ADDITION. 5. HAVING HEARD BOTH THE PARTIES, I AM OF THE VIEW THA T THE AO, WAS JUSTIFIED IN REJECTING THE BOOKS OF ACC OUNT AND ENHANCING THE PROFIT OF RS. 2,24,127/- ON THE BASIS OF REJECTION OF BOOKS OF ACCOUNT U/S 133A. I FOUND THAT AS PER T HE STOCK, THE SHORT STOCK WAS OF RS. 30,372/- AND THE AO HAS APPLIED GROSS PROFIT RATE OF 12 % ON THE SALES. THE AO HAS ESTIMATED THE TURNOVER OF RS. 2,40,00,000/- AND APPLIED GROS S PROFIT AT 12 % AND MADE THE ADDITION. THE ASSESSEE HAS SHOWN TURNOVER OF RS. 2,31,23,429/-. I FOUND THAT THE ASS ESSEE HAS SHOWN THE GROSS PROFIT IN PREVIOUS YEAR AT 11.30% A ND THE SURVEY TEAM HAS ALSO WORKED OUT THE GROSS PROFIT BA SIS ON VALUATION OF CLOSING STOCK. THEREFORE, IN THE INTER EST OF JUSTICE AND FAIR PLAY, I ESTIMATE THAT ADDITION OF RS. 75,0 00/- IS TO BE REDUCED FROM THE PROFIT ELEMENT AND REST OF THE ADD ITION OF RS. 1,49,127/- IS CONFIRMED. M/S.RATAN TEXTILES, INDORE V/S ITO, 2(3), INDORE I.T.A.NO. 732/IND/2016 A.Y. 2005-06 4 4 6. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. THIS ORDER HAS BEEN PRONOUNCED IN THE OP EN COURT ON 2 ND MARCH, 2016, SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 2ND MARCH, 2016. CPU* 24.1