S.K. INDUSTRIES, JAIPUR V. INCOME TAX OFFICER, JAIPUR

ITA 862/JPR/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 8982 (ITAT-JAIPUR)
• Duration Of Justice: 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 21-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI
• Assessee Lawyers: C M BATWARA
• Keywords: Corroborative evidences

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 862/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2013-14 S.K. INDUSTRIES, B-191(C) ROAD NO. 9F, V.K.I. AREA, JAIPUR. CUKE VS. THE ITO, WARD-4(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ L-@ PAN/GIR NO.: AAEFS 5551 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ R ESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI C.M. BATWARA (ADV.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI J.C. KULHARI (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 10/10/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 15/10/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A), JAIPUR DATED 20.09.2017 FOR THE ASSESSMENT YEAR 2013-14 WHEREIN THE SOLE GROUND OF APPEAL RELATES TO CONFI RMATION OF ADDITION OF RS. 2,00,000/- TOWARDS TRADING ADDITION MADE BY THE AO AND WHICH HAS BEEN SUSTAINED BY THE LD. CIT(A). 2. DURING THE COURSE OF ASSESSMENT PROCEEDING, THE AO FROM THE EXAMINATION OF BOOKS OF ACCOUNTS OBSERVED THAT THE ASSESSEE HAS ITA NO. 862 /JP/2017 S.K. INDUSTRIES VS. ITO 2 CLAIMED WAGES OF RS. 9,20,800/- AND FREIGHT & CARTA GE INWARD OF RS. 37,58,355/-. THE AO OBSERVED THAT MOSTLY PAYMENTS W ERE MADE THROUGH CASH WITHOUT PROPER SUPPORTING EVIDENCE AND A LUMP SUM TRADING ADDITION OF RS. 2,00,000/- WAS THEREFORE MA DE FOR COVERING ANY POSSIBILITY OF REVENUE LEAKAGE AND SAME WAS BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE. ON APPEAL, THE LD. CIT(A) OB SERVED THAT THE GP RATIO OF THE ASSESSEE HAS COME DOWN FROM 2.68% TO 2 .14% IN THE CURRENT YEAR AND THE ASSESSEE HAS NOT GIVEN PLAUSIB LE REASON FOR SUCH DOWNFALL IN THE GP, THEREFORE, THE LUMP SUM DISALLO WANCE MADE BY THE AO WAS FOUND TO BE REASONABLE AND CONFIRMED BY THE LD. CIT(A). 3. DURING THE COURSE OF HEARING, THE LD. AR HAS SUB MITTED THAT DURING THE YEAR UNDER CONSIDERATION, THE WAGES, SAL ARY AND CARRIAGE INWARDS EXPENSES HAVE REDUCED BY ALMOST 33% AS THE PERCENTAGE OF DIRECT PURCHASES AS COMPARED OF LAST YEAR. FURTHER, THE ASSESSEE HAS MAINTAINED COMPLETE RECORDS WITH SUPPORTING VOUCHER S AND IT IS WELL KNOWN TRADE PRACTICE THAT CARRIER AGENT OR VEHICLE INCHARGE COLLECT CASH PAYMENT AT THE TIME OF UNLOADING THE VEHICLE AND T HEREFORE, THE PAYMENT TO VEHICLE INCHARGE WAS MADE IN CASH AND RE CEIPT TAKEN ON THE VOUCHERS. FURTHER, WAGES AND SALARY ARE PAID TO FAC TORY EMPLOYEES AS PER THEIR SERVICES AND THE NECESSARY SALARY REGISTE R/RECORDS HAVE BEEN DULY MAINTAINED WHERE RECEIPT FOR SALARY PAYMENT IS DULY TAKEN ON RECORD AND ALL THESE DOCUMENTS WERE SUBMITTED BEFOR E THE LOWER AUTHORITIES WHICH HAVE NOT BEEN CONSIDERED IN RIGHT PRESPECTIVE. IT WAS ACCORDINGLY SUBMITTED THAT THE ADDITIONS HAVE BEEN MADE ON PURELY AD HOC BASIS AND THE SAME MAY KINDLY BE DELETED. ITA NO. 862 /JP/2017 S.K. INDUSTRIES VS. ITO 3 4. THE LD. DR IS HEARD WHO HAS RELIED ON THE FINDI NG OF THE LOWER AUTHORITIES. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IT IS CLEAR CASE OF ADHOC ADDITION WHICH HAS BEEN MADE BY THE ASSESSING OFFICER AND FURTHER, MERELY A FALL IN GP RATE CANNOT BE THE SOLE BASIS FOR MAKING THE ADHOC DISALLOWANCE IN THE HANDS OF THE ASSESSEE. THE ASSESSING OFFICER HAS TO HIGHLIGHT SPECIFIC DEFECTS WHICH HAVE BEEN FOUND OR INVESTIGATED DURIN G THE COURSE OF ASSESSMENT PROCEEDING AND WHICH HAVE BEEN FOUND NOT IN ACCORDANCE WITH LAW, HOWEVER, IN THE INSTANT CASE WE FIND THAT THERE IS NO SUCH EXAMINATION WHICH HAS BEEN CARRIED OUT BY THE ASSES SING OFFICER AND THUS, NO FINDINGS WHICH HAVE BEEN RECORDED TO THAT EFFECT. THEREFORE, THE TRADING ADDITION OF RS. 2,00,000/- IS PURELY ON AD HOC BASIS WHICH CANNOT BE SUSTAINED IN THE EYE OF LAW HENCE, THE SA ME IS DELETED. IN THE RESULT, THE SOLE GROUND TAKEN BY THE ASSESSEE IS AL LOWED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 15/10/2018. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 15/10/2018. * SANTOSH ITA NO. 862 /JP/2017 S.K. INDUSTRIES VS. ITO 4 VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- S.K. INDUSTRIES, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD-4(2), JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. XKMZ QKBZY@ GUARD FILE { ITA NO. 862/JP/2017} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR