Manoj Gupta, Lucknow V. Asstt. Commissioner of Income Tax, Lucknow

ITA 732/LKW/2013

• Counselvise Citation: 73223714 RSA 2013
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 11-11-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P K DEY
• Assessee Lawyers: YOGESH AGARWAL

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.732/LKW/2013 A.Y.:2010 - 2011 SHRI MANOJ GUPTA, B - 1/76, SECTOR - K, ALIGANJ, LUCKNOW. PAN:AEOPG7740K VS. A.C.I.T., RANGE - III, LUCKNOW. (APPELLANT) (RESPONDENT) APPELLANT BY SHRI YOGESH AGARWAL, ADVOCATE RESPONDENT BY SHRI P. K. DEY, D.R. DATE OF HEARING 08/01/2014 DATE OF PRONOUNCEMENT 3 0 /01/2014 O R D E R PER A. K. GARODIA, A.M. THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORDER OF LEARNED CIT ( A) - I, LUCKNOW DATED 03/09/2013 FOR THE ASSESSMENT YEAR 2010 - 11. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - I, LUCKNOW [HEREINAFTER REFERRED TO AS THE LD CIT (A)] ERRED ON FACTS AND IN LAW IN ALLOWING ONLY PART RELIEF TO THE APPELLANT AND APPLYING A N.P. RATE OF 6.5% WHEREAS IN SIMILAR NATURE OF TRADE THE N.P. RATE IN SOME CASES DECIDED BY THE HON'BLE JURISDICTIONAL TRIBUNAL WAS ADOPTED AT 5% AND IN SOME CASES EVEN LOSS RETURNS HAVE BEEN ACCEPTED. 2. IN PARTLY CONFORMING THE ORDER OF THE ASSESSING OFFICER THE LD. CIT (A) CHOSE TO IGNORE OR RATHER FAILED TO APPRECIATE THE FACT THAT IN THE PRESENT CASE ALSO THE BOOKS OF ACCOUNTS, VOUCHERS, DOCUMENTS ETC. WERE MAINTAINED AND PRODUCED AND DESPITE THIS FACT ADDITION HAD BEEN MADE 2 AND THUS THE ADDITION SO CONFIRMED SHOULD BE ORDERED TO BE DELETED. 3. IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT IN THE PRESENT YEAR , THE TURNOVER OF THE ASSESSEE IS RS.247.70 LAC S AND THE NET PROFIT REPORTED BY THE AS SESSEE IS RS.10.98 LAC S , WHICH IS 4.43% OF THE GROSS TURNOVER. HE FURTHER SUBMITTED THAT AS NOTED BY LEARNED CIT ( A) ON PAGE 4, NET PROFIT RATE WAS 5.99% IN ASSESSMENT YEAR 2008 - 09 AND 6.89% IN ASSESSMENT YEAR 2009 - 2010 BUT THIS HAS TO BE CONSIDERED THAT THE TURNOVER IN THE PRESENT YEAR IS ALMOST THREE TIMES OF THE TURNOVER IN THESE PRECEDING YEARS AND, THEREFORE, THE NET PROFIT IN THE PRESENT YEAR IS BOUND TO BE LOWER. REGARDING GROSS PROFIT RATE, HE SUBMITTED THAT AS PER PAGE 7 OF THE PAPER BOOK, THE GR OSS PROFIT IS 14.20% IN ASSESSMENT YEAR 2008 - 09, 15.6% IN ASSESSMENT YEAR 2009 - 10 AND 13.7% IN PRESENT YEAR. HE SUBMITTED THAT THE ENTIRE ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY CIT ( A) SHOULD BE DELETED. 4. LEARNED D.R. OF THE REVENUE S UPPORTED THE ORDER OF LEARNED CIT ( A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT ADMITTEDLY, THE TURNOVER OF THE ASSESSEE IN THE PRESENT YEAR IS ALMOST THREE TIMES OF THE PRECEDING THREE YEARS. WE ARE OF THE CONSIDERED OPINION THAT FOR C OMPARING T HE BOOK RESULT OF THE PRESENT YEAR; WE HAVE TO COMPARE THE GROSS PROFIT RATE AND NOT THE NET PROFIT RATE. WHEN WE COMPARE THE GR OSS PROFIT OF THE PRESENT YEAR WITH AVERAGE OF PRECEDING THREE YEARS GROSS PROFIT RATE INCLUDING THE PRESENT YEAR, WE FIND THAT SUCH AVERAGE RATE COMES TO 14.51% AS AGAINST 13.70% DECLARED BY THE ASSESSEE IN THE PRESENT YEAR. THIS GOES TO SHOW THAT THE GROSS PROFIT RATE IN THE PRESENT YEAR IS LOWER BY 0.81% AS COMPARED TO THIS AVERAGE RATE OF GROSS PROFIT FOR THE THREE YEARS PERIOD INCLUDING PRESENT YEAR. WE ALSO FEEL THAT IN ANY CASE, THE ADDITION IN THE PRESENT YEAR CANNOT EXCEED 0.81% OF THE GROSS RECEIPTS. BUT AT THE SAME TIME , WE ALSO FEEL THAT 3 SINCE THE TURNOVER IN THE PRESENT YEAR IS ALMOST THREE TIMES, THE ADDITION OF 0.81% IS NOT JUSTIFIED. IN OUR CONSIDERED OPINION, IF THE NET PROFIT RATE OF 5% IS CONFIRMED IN THE PRESENT YEAR, IT WILL AMOUNT TO ADDITION OF 0.57% OF THE GROSS RECEIPTS AS AGAINST THE MAXIMUM POS SIBLE ADDITION OF 0.81% ON THE BASIS OF AVERAGE GROSS PROFIT RATE OF THE THREE YEARS PERIOD INCLUDING PRESENT YEAR. AFTER CONSIDERING ALL THESE FACTS, WE HOLD THAT ENDS OF JUSTICE WILL BE MET IF IN THE PRESENT YEAR THE NET PROFIT IS DETERMINED AT 5% OF TH E GROSS RECEIPTS. WE ORDER ACCORDINGLY. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 3 0 T H JANUARY, 2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR