Ved Khurana, Kurukshetra V. JCIT, Kurukshetra

ITA 786/CHANDI/2011

• Counselvise Citation: 78621514 RSA 2011
• Duration Of Justice: 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 09-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Assessee Lawyers: S C SAPRA SHRI VIKRANT G UPTA
• Keywords: Gross profit estimation; Rejection of books of accounts; Business income
• Section: 142(1); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE MS SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 786/CHD/2011 ASSESSMENT YEAR: 2007-08 SHRI VED KHURANA V JCIT, S/O KRISHAN LAL KHURANA, KURUKSHETRA RANGE, DAIRY MOHALLA, INCOME TAX OFFICE, TARAORI, DISTT.KARNAL, SECTOR 17, U.E., (HARYANA). KURUKSHETRA. PAN: AIDPP-2627B (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI S.C.SAPRA FOR SHRI VIKRANT G UPTA RESPONDENT BY: SMT. JAISHREE SHARMA DATE OF HEARING : 26.09.2011 DATE OF PRONOUNCEMENT : 27.09.2011 ORDER PER MEHAR SINGH, AM THIS APPEAL IS AGAINST THE ORDER DATED 13.05.2011 P ASSED BY THE CIT(A) U/S 250(6) OF THE INCOME-TAX ACT,1961 FOR THE ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE WORTHY CIT(A) ERRED IN CONFIRMING THE REJECTION OF THE BOOKS OF ACCOUNT MADE BY THE LD. A O U/S 145(3) OF THE INCOME-TAX ACT,1961 WITHOUT DETECTING ANY UNRECORDED TRANSACTION OR POINTING OU T ANY DISCREPANCY IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE REGULAR COURSE OF BUSINESS. HENCE THE REJECTION IS NOT TENABLE IN THE EYES OF LAW AND AS SUCH THE ORDER REJECTING THE BOOKS OF ACCOUNT BE KINDLY REVERSED. 2. THAT THE WORTHY CIT(A) ALSO ERRED IN SUSTAINING THE ADDITION OF RS.6,80,825/- MADE BY THE LD. AO 2 WITHOUT ANY BASIS, WHIMSICALLY AND ONLY ON THE BASI S OF CONJECTURES AND SURMISES AND IGNORING THE FACTS OF THE CASE AND THE BOOKS OF ACCOUNTS DULY MAINTAINED IN THE REGULAR COURSE OF BUSINESS DULY SUPPORTED BY THE VOUCHERS OF EXPENSES AND BILLS OF SALES AND PURCHASES. AS SUCH THE ADDITION HAS BEEN MADE AGAINST LAW AND FACTS AND BE KINDLY DELETED. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS W HOLESALE DEALER OF PURCHASE AND SALE OF RUBBER WHO FILED ITS RETURN OF INCOME ON 29.10.2007 AT AN INCOME OF RS.2,53,300/-. THE CASE WAS SELECTED FOR SCRUTINY THROUGH CASS AS PER PART B OF ACTION PLAN FOR THE FINANCIAL YEAR 2008-09 AS PER SR.NO. 7 OF ITR-4,5 AS UNSECURED LOANS EXCEEDING RS.50 LACS ALSO EXCEED 30 % OF TOTAL CAPITAL EMPLOYED. STATUTORY NOTICES WERE ISSUED U/ S 143(2) AND 142(1) OF THE INCOME-TAX ACT,1961. IN THE TRADING ACCOUNT IT WAS NOTICED THAT ON THE TOTAL SALES OF RS.9,21,06,400/- , GROSS PROFIT WAS RETURNED AT RS.16,21,835/- RESULTING IN LOW GP RATE OF 1.76%. THE AO REJECTED THE BOOKS OF ACCOUNTS OF THE ASSESSEE U/S 145(3) OF THE ACT AND ESTIMATED THE INCOME BY A PPLYING GP RATE @ 2.5% ON THE SALE OF RS.9.21 CRORES RESULTED IN TRADING ADDITION OF RS.6,80,825/-. THE CIT(A) CONFIRMED THE ADDITION MADE BY THE AO. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE COMPARABLE CASE CITED BY THE LD. CIT(A ) ARE NOT COMPARABLE. THEREFORE, THE BOOK VERSION OF THE SIMI LAR CONCERNS CAN BE COMPARED. THE FINDINGS ON THE BASIS OF UN-C OMPARABLE CASES CANNOT BE MADE THE BASE FOR MAKING ADDITION A ND CONFIRMING THE SAME. IN VIEW OF THIS, THE GROUND O F APPEAL RAISED BY THE ASSESSEE IS ALLOWED. AS THE ISSUE HA S BEEN DECIDED 3 IN FAVOUR OF THE ASSESSEE, WE DO NOT CONSIDER IT NE CESSARY TO ADJUDICATE THE LEGAL GROUND. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED, AS INDICATED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH SEPTEMBER,2011. SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27 TH SEPT.,2011 POONAM COPY TO: 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE CIT(A), 4. THE CIT 5. THE D.R, INCOME-TAX DEPARTMENT, CHANDIGARH ASSISTANT REGISTRAR, ITAT, CHANDIGARH