Phool chand Brij Mohan, New Delhi V. ITO, Ward-41(4), New Delhi

ITA 8263/DEL/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6741 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 27-12-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: EKTA VISHNOI
• Keywords: Rejection of books of accounts; Business income
• Section: 201; 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NOS. 8262 & 8263/DEL/2018 ASSESSMENT YEARS: 2013-14 & 2014-15 PHOOL CHAND BRIJ MOHAN C-35/4, 1 ST FLOOR, INDUSTRIAL AREA, LAWRENCE ROAD, NEW DELHI. PAN NO. AAHFP0097P VS ITO, WARD 41(4) NEW DELHI. APPELLANT RESPONDENT ASSESSEE BY SHRI R.S. SINGHVI, CA SHRI SATYAJEET GOEL, CA REVENUE BY MS. EKTA VISHNOI, SR. DR ORDER THE ASSESSEE HAS FILED THE PRESENT APPEALS AGAINST THE IMPUGNED ORDERS DATED 28.03.2016 AND 16.12.2016 PAS SED BY THE LD. CIT(APPEALS)-14, NEW DELHI IN RELATION TO ASSES SMENT YEARS 2013-14 AND 2014-15 RESPECTIVELY. GROUNDS OF ITA NO. 8262/DEL/2018 (AY 2013-14) READ AS UNDER : 1. THAT CIT(A) WAS NOT JUSTIFIED IN CONFIRMING ORDER OF ASSESSING OFFICER WITHOUT PROPER FINDING AND ADJUDICATION REGARDING REJECTION OF BOOKS OF ACCOUNTS U/S 145 AND TRADING ADDITION OF RS. 22,45,700/- BASED ON ESTIMATION OF GP RATE @1.28% AS AGAINST DECLARED GP RATE OF 0.88%. 2 (I) THAT ON THE FACTS AND CIRCUMSTANCES OF THE 2 ITA NOS . 8262 & 8263/DEL/2018 CASE, THERE IS NO GROUND OR BASIS FOR REJECTION OF BOOKS OF ACCOUNTS AND ESTIMATION OF PROFIT. (II) THAT ESTIMATION OF GP RATE @ 1.28% IS HIGH LY ARBITRARY AND UNJUSTIFIED AND MERELY BASED ON PRESUMPTION AND SURMISES PARTICULARLY WHEN BOOKS OF ACCOUNTS WERE SUBJECTED TO AUDIT AND DULY SUPPORTED BY BILLS AND VOUCHERS AND AS SUCH THERE IS NO JUSTIFICATION FOR ANY ADVERSE INFERENCE MERELY ON THE GROUND THAT CONFIRMATION WAS NOT FILED FROM SUPPLIERS. (III) THAT HAVING ACCEPTED SALES, THERE IS NO JUSTIFICATION FOR DISPUTING PURCHASES AND ACCORDINGLY THERE IS NO CASE FOR ANY ADDITION ON ACCOUNT OF GP RATE. 3. THAT ORDERS OF LOWER AUTHORITIES ARE NOT JUSTIFIED ON FACTS AND SAME ARE BAD IN LAW. 2. FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NO T DISPUTED BY THE BOTH PARTIES, THEREFORE, NO NEED TO REPEAT THE SAME FOR THE SAKE OF CONVENIENCE. 3. ASSESSEE HAS RAISED THREE GROUNDS OF APPEAL. BU T AT THE TIME OF HEARING, HE ONLY ARGUED GROUND NO. 1 AND RE QUESTED THAT ESTIMATION OF GP RATE @ 1.28% AGAINST DECLARED BY THE ASSESSEE AT 0.88% IS ON HIGHER SIDE. HE REQUESTED THAT KEEPING IN VIEW OF THE PREVIOUS AND SUBSEQUENT GP R ATE ESTIMATED BY THE REVENUE AUTHORITY, FOR THIS YEAR A LSO REASONABLE GP RATE MAY BE ESTIMATED ON ASKING OF TH E BENCH THAT WHAT SHOULD BE THE REASONABLE GP RATE FOR THE ASSESSMENT YEAR IN DISPUTE. THE LD. COUNSEL FOR THE ASSESSEE AS WELL AS 3 ITA NOS . 8262 & 8263/DEL/2018 THE LD. DR STATED THAT REASONABLE ESTIMATION OF GP RATE MAY BE ESTIMATED AS BENCH DEEMED FIT. 4. AFTER HEARING THE BOTH PARTIES AND PERUSED THE R ELEVANT RECORD AVAILABLE WITH ME ESPECIALLY THE ORDER PASSE D BY THE REVENUE AUTHORITY. I AM OF THE VIEW THAT THE LD. C OUNSEL FOR THE ASSESSEE HAS FILED THE PAPER BOOK DATED 23.05.2 019 IN WHICH HE HAS ATTACHED VARIOUS TYPES OF DOCUMENTARY EVIDENCES FOR ESTABLISHING THE GP RATE DETERMINED F OR THE YEAR UNDER CONSIDERATION IS ON HIGHER SIDE AND REQUESTED FOR REDUCING THE SAME REASONABLY. I HAVE PERUSED THE P APER BOOK FILED BY THE ASSESSEE ESPECIALLY PAGE NO. 92 IN WHI CH THE ASSESSEE HAS SHOWN GP RATE FROM AY 2009-10 TO AY 20 14-15 FOR THE SAKE OF CONVENIENCE THE CHART SHOWING GROSS PROFIT EARNED BY THE APPELLANT IN THE EARLIER YEARS WHICH IS AT PAGE NO. 92 OF THE PAPER BOOK FILED BY THE ASSESSEE IS A S UNDER: AY TURNOVER (A) GROSS PROFIT (B) PERCENTAGE GROSS PROFIT (B/A * 100) SCRUTINY ASSESSMENT 2009-10 3,096.30 20.65 0.67% YES, N O ADDITION ON ACCOUNT OF GP RATIO 2010-11 2,818.76 22.22 0.79% NO, SCRUTINY ASSESSMENT 2011-12 2,841.20 33.99 1.20% YES, NO ADDITION ON ACCOUNT OF G.P. RATIO 2012-13 4,226.91 58.32 1.38% YES, N O ADDITION ON ACCOUNT OF GP RATIO 2013-14 5,628.15 49.58 0.88% YES, ADDITION MADE ON GP RATIO BY APPLYING GP RATE OF 1.28% RESULTING IN AN ADDITION OF RS. 22,45,775/- 4 ITA NOS . 8262 & 8263/DEL/2018 (CASE PENDING FOR ADJUDICATION) 2014-15 6,628.50 80.12 1.21% YES, ADDITION MADE ON GP RATIO BY APPLYING GP RATE OF 1.31% RESULTING IN AN ADDITION OF RS. 8,48,589/- (CASE PENDING FOR ADJUDICATION) 5. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF T HE PRESENT CASE AND THE GP RATE DETERMINED BY THE REVENUE AUTH ORITY FOR THE PREVIOUS YEAR. I AM OF THE CONSIDERED VIEW THAT UN DER THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE IT WOULD BE I N THE INTEREST OF JUSTICE, IF THE GP RATE IS ESTIMATED AT 1.01% AO IS DIRECTED TO COMPUTE THE ESTIMATION OF GP RATE @ 1.01% AT TOTAL SALE TURNOVER FOR THE YEAR UNDER CONSIDERATION I.E. RS. 56,28,15, 562/- AND ASSESS THE INCOME OF THE ASSESSEE ACCORDINGLY. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ITA NO. 8263/DEL/2018 (AY 2014-15) : 7. THE FACTS OF THIS CASE ARE ALMOST IDENTICAL TO T HE FACTS OF AFORESAID CASE I.E. ITA NO. 8262/DEL/2018 FOR AY 20 13-14. BUT AT THE TIME OF HEARING LD. DR STATED THAT IN THIS CASE THE ASSESSEE HAS DECLARED GP RATE @ 1.21% AND THE REVENUE HAS ES TIMATED GP RATE @ 1.31% ON THE GROSS PROFIT ON TOTAL SALES FOR THE ASSESSMENT YEAR IN DISPUTE I.E. AMOUNTING TO RS. 67,64,06,759/ -. LD. DR STATED THAT THIS REASONABLE ESTIMATION OF GP AND TH E SAME MAY BE UPHELD. LD. COUNSEL FOR THE ASSESSEE HAS NOT RAISE D ANY SERIOUS 5 ITA NOS . 8262 & 8263/DEL/2018 OBJECTION ON THE ARGUMENT OF LD. COUNSEL FOR THE AS SESSEE FOR AY 2014-15. 8. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF T HE PRESENT CASE AND THE GP RATE ESTIMATED BY THE REVENUE AUTHO RITIES @ 1.31% AS AGAINST DECLARED BY THE ASSESSEE @ 1.21%. IN THE INTEREST OF JUSTICE AND AS AGREED BY THE BOTH PARTI ES, I UPHOLD THE ESTIMATION OF GP RATE @ 1.31% ON THE GROSS PROFIT O N TOTAL SALES FOR THE ASSESSMENT YEAR IN DISPUTE I.E. RS. 67,64,06,75 9/- AND DIRECT THE AO TO ASSESS THE INCOME OF THE ASSESSEE ACCORDI NGLY. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE FOR THE AY 2014-15 IS DISMISSED. 10. IN THE RESULT, ITA NO. 8262/DEL/2018 FOR AY 201 3-14 IS PARTLY ALLOWED AND ITA NO. 8263/DEL/2018 FOR AY 201 4-15 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (H.S. SIDHU) JUDICIAL MEMBER DATED: 30/10/2019 *KAVITA ARORA 6 ITA NOS . 8262 & 8263/DEL/2018 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI