SHRI PREM RAJ, BHARATPUR V. DEPUTY COMMISSIONER OF INCOME TAX, BHARATPUR

ITA 772/JPR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2232 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 16-10-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA JHA CIT DHK
• Keywords: Rejection of books of accounts

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPAN] YS[KK LNL; ] DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 772/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14 PREM RAJ, A-77, RANJEET NAGAR, BHARATPUR- 321001 (RAJ) CUKE VS. D.C.I.T., CIRCLE- BHARATPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABIPR 0663 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI RAJENDRA AGARWAL JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJENDRA JHA (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 02/01/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 04/01/2018 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATES FR OM THE ORDER OF THE LD. CIT(A), ALWAR DATED 09/08/2017 FOR THE A.Y. 2 013-14. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFA CTURING OF MUSTERED OIL AND MUSTERED CAKE AND RUNNING OF RETAI L OUTLET OF RELIANCE PETROL & DIESEL. THE RETURN OF INCOME WAS ELECTRONICA LLY FILED ON 28/09/2013 DECLARING TOTAL INCOME AT RS. 15,40,110/ -. THE CASE WAS SELECTED FOR SCRUTINY. THE ASSESSING OFFICER REJECTE D THE BOOKS OF ITA 772/JP/2017_ PREM RAJ VS DCIT 2 ACCOUNT AND MADE ADDITION OF RS. 2.00 LACS AS TRADI NG ADDITION AND ALSO MADE ADDITION OF RS. 30,000/- ON ACCOUNT OF UNDISCL OSED INTEREST INCOME. THE LD. CIT(A) HAS SUSTAINED THE ACTION TAKEN BY THE ASSESSING OFFICER. 3. NOW THE ASSESSEE IS IN APPEAL BEFORE THE ITAT BY T AKING FOLLOWING GROUNDS OF APPEAL: ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN CONFIRMING: 1. THE REJECTION OF BOOKS OF ACCOUNT BY INVOKING PR OVISION OF SECTION 145(3) OF THE IT ACT. 2. MAKING TRADING ADDITION OF RS. 2,00,000/-. 4. IN THE GROUND NO. 1 OF THE APPEAL, THE ASSESSEE HAS CHALLENGED INVOKING THE PROVISIONS OF SECTION 145(3) OF THE IN COME TAX ACT, 1961 (IN SHORT THE ACT). THE LD. CIT(A) HAS SUSTAINED THE REJECTION OF BOOKS OF ACCOUNT. 5. THE BENCH HAVE HEARD BOTH THE SIDES ON THIS ISSUE . THERE WAS A DECLINE IN THE G.P. RATE AND N.P. RATE IN COMPARISO N TO THE IMMEDIATE PRECEDING YEAR. THE ASSESSING OFFICER NOTED VARIOUS DEFECTS IN THE BOOKS OF ACCOUNT LIKE NOT MAINTAINING AND KEEPING QUANTIT ATIVE DETAILS AND STOCK REGISTER FOR VARIOUS GOODS TRADED BY THE ASSE SSEE. THE ASSESSING OFFICER ALSO NOTED THAT NO BASIS WAS PROVIDED TO VER IFY THE VALUATION OF ITA 772/JP/2017_ PREM RAJ VS DCIT 3 THE CLOSING STOCK. THE PURCHASES TO THE EXTENT OF R S. 42.00 LACS WERE NOT PROVED. THE RESULT DECLARED FOR THE YEAR UNDER C ONSIDERATION WAS NOT COMPARABLE TO THE EARLIER YEARS. THUS, THE LD. CIT(A ) HAS RIGHTLY SUSTAINED THE REJECTION OF BOOKS OF ACCOUNT. HENCE, THIS GROUND OF ASSESSEES APPEAL IS DISMISSED. 6. IN THE GROUND NO. 2 OF THE APPEAL, THE ASSESSEE HAS CHALLENGED THE TRADING ADDITION OF RS. 2.00 LACS. THE LD. CIT(A) HAS SUSTAINED THE ADDITION BY HOLDING AS UNDER:- 4.3 I HAVE CONSIDERED THE ORDER PASSED BY THE A.O AND SUBMISSIONS FILED BY THE APPELLANT. THE FOLLOWING FACTS HAVE BEEN EMERGE D; 1. THAT THE APPELLANT IS ENGAGED IN THE BUSINESS OF MUSTARD OIL & MUSTARD CAKE AND ALSO RUNNING RETAIL OUTLET OF RELIANCE PET ROL AND DIESEL. 2. THAT DURING THE YEAR UNDER CONSIDERATION THE APP ELLANT HAD DECLARED G.P. RATE OF 4.37% AS COMPARED TO 5.57% IN THE IMME DIATE PRECEDING YEAR. LIKEWISE THE N.P. RATE ALSO SHOWN AT 0.47% AS COMPARED TO 0.78% IN THE IMMEDIATE PRECEDING YEAR. 3. THAT THE A.O HAS RIGHTLY ASKED FOR JUSTIFICATION OF DECLINE OF G.P. AND N.P. RATE WHEN THE SALE PRICE OF PETROLEUM PRODUCTS AND MUSTARD OIL HAS GONE UP. 4. THAT THE A.O HAS GIVEN DETAILED JUSTIFICATION FO R THE REJECTION OF BOOKS OF ACCOUNTS U/S 145(3) OF THE ACT. THE ASSESSEE HAS NOT GIVEN CONVINCING REPLY ABOUT THE MOISTURE CONTENT, SOME OF THE VOUCH ERS HAVE NO MENTION ABOUT THE PARTIES OR DATES OF TRANSACTION BESIDES N OT ALL BILLS/VOUCHERS WERE PRODUCED. 5. THAT THE A.O HAS ESTIMATED THE TRADING ADDITION AT RS. 2 LAKHS TO COVER SUCH DISCREPANCY. ITA 772/JP/2017_ PREM RAJ VS DCIT 4 4.3.2 I HAVE CONSIDERED THE ABOVE MENTIONED FACTS O F THE CASE. I HAVE PARTICULARLY NOTED THAT THE APPELLANT HAS SHOWN STE EP DECLINE IN G.P. AND N.P. RATE AS COMPARED TO IMMEDIATE PRECEDING YE AR. THE REASONS GIVEN BY THE A.O WHILE REJECTING THE BOOKS OF ACCOU NTS UNDER SECTION 145(3) OF THE ACT IS JUSTIFIED AS THOSE REASONS HAV E THE POTENTIAL TO AFFECT THE TRADING RESULTS. THE ONUS LIES ON THE AS SESSEE TO PROVIDE ADEQUATE EVIDENCES IN SUPPORT OF THE CLAIM OF THE T RADING RESULTS. THE A.O BEING NOT CONVINCED WITH THE INADEQUACIES OF TH E EVIDENCES IS JUSTIFIED. ACCORDINGLY, THE ACTION OF THE A.O IS UP HELD AND THE TRADING ADDITION OF RS. 2 LAKHS IS SUSTAINED. APPELLANTS G ROUND OF APPEAL ON THE ISSUE IS DISMISSED. 7. THE BENCH HAVE HEARD BOTH THE SIDES ON THIS ISSUE . THE ASSESSEE HAS DECLARED TURNOVER FOR THE YEAR UNDER CONSIDERAT ION WAS 2671.61 LACS WHILE IT WAS 2171.26 LACS IN THE IMMEDIATE PRECEDING YEAR. THE G.P. RATE FOR THE YEAR UNDER CONSIDERATION DECLARED WAS 4.37% WHILE IT WAS 5.57% IN THE IMMEDIATE PRECEDING YEAR. THE AVERAGE G ROSS PROFIT FOR PRECEDING THREE YEARS I.E. FOR THE A.Y. 2010-11 , 2 011-12 AND 2012-13 COMES AT 5.41%. THE ASSESSEE HAS DECLARED ONLY GROSS PROFIT @ 4.37%. THE HONBLE RAJASTHAN HIGH COURT HELD IN THE VARIOUS CASES THAT AFTER REJECTION OF BOOKS OF ACCOUNT, THE ESTIMATION OF TH E G.P. RATE ON THE BASIS OF PAST HISTORY OF THE ASSESSEE IS THE BEST G UIDE. AFTER CONSIDERING THE SLIGHT INCREASE IN THE TURNOVER, THE ADDITION O N THE BASIS OF FALL IN THE G.P. WORKED OUT MORE THAN THE ADDITION MADE BY THE A SSESSING OFFICER. ITA 772/JP/2017_ PREM RAJ VS DCIT 5 IN VIEW OF THESE FACTS AND CIRCUMSTANCES, THE ASSES SING OFFICER WAS VERY FAIR AND REASONABLE IN MAKING THE ADDITION OF RS. 2 .00 LACS AND THE LD. CIT(A) WAS JUSTIFIED IN SUSTAINING THE SAME. ACCORDIN GLY, THE BENCH UPHOLD THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04/01/2018. SD/- HKKXPAN (BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 04 TH JANUARY, 2018 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI PREM RAJ, BHARATPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE DCIT, CIRCLE- BHARATPUR. 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. 772/JP/2017) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR