ACIT, Jaipur V. GREEN FIRE EXPORTS, Jaipur

ITA 871/JPR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2168 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 29-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S KOTHARICIT
• Assessee Lawyers: S R SHARMA
• Keywords: Rejection of books of accounts
• Section: 10AA

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 DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SH. KUL BHARAT, JM & SH. VIKRAM SINGH YADAV , AM VK;DJ VIHY LA- @ ITA NO. 871/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2010-11 THE ASSISTANT COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-1, JAIPUR CUKE VS. M/S GREEN FIRE EXPORTS, H-1, SEZ PHASE 1 ST , SITAPURA, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAEFG9837H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA- @ ITA NO. 872/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2011-12 THE ASSISTANT COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-1, JAIPUR CUKE VS. M/S GREEN FIRE EXPORTS, H-1, SEZ PHASE 1 ST , SITAPURA, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAEFG9837H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI S.R.SHARMA JKTLO DH VKSJ LS @ REVENUE BY : SHRI D.S.KOTHARI(CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 27/04/2017 MN?KKS'K .KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 28/04/2017 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M.: THESE ARE TWO APPEALS FILED BY THE REVENUE AGAINST TWO SEPARATE ORDERS PASSED BY LD. CIT(A)-4, JAIPUR OF EVEN DATE 22/07/2016 FOR ITA NO. 871 & 872 /JP/2016 THE ASSISTANT COMMIS SIONER OF INCOME-TAX VS M/S GREEN FIRE EXPORTS 2 A.Y. 2010-11 & 2011-12 RESPECTIVELY. SINCE COMMON I SSUES ARE INVOLVED, BOTH THE APPEALS WERE HEARD TOGETHER AND DISPOSED OFF BY THIS COMMON ORDER. THE GROUNDS OF APPEAL TAKEN BY THE R EVENUE ARE AS UNDER:- ITA NO. 871/JP/2016:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE CIT(A) WAS RIGHT IN DELETING THE ADDITION OF RS. 11 ,42,53,528/- MADE BY AO ON ACCOUNT OF DISALLOWANCE OF DEDUCTION U/S 10AA OF THE INCOME TAX ITA NO. 872/JP/2016:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE CIT(A) WAS RIGHT IN DELETING THE ADDITION OF RS. 2, 05,25,672/- MADE BY A.O ON ACCOUNT OF DISALLOWANCE OF DEDUCTION U/S 10AA OF THE INCOME-TAX ACT. 2. AT THE OUTSET, THE LD. AR SUBMITTED THAT THE GRO UND RAISED IN BOTH THE APPEALS FILED BY THE REVENUE IS COVERED IN FAVO UR OF THE ASSESSEE BY THE DECISION OF COORDINATE BENCHES IN ASSESSEES OW N CASE FOR A.Y 2007-08, 2008-09 AND 2009-10 RESPECTIVELY. IT WAS FURTHER SUBMITTED THAT EVEN AO HAS PASSED SIMILAR ORDERS FO LLOWING EARLIER YEAR ASSESSMENT ORDERS AND AS SUCH, THERE IS NO CHANGE I N THE FACTS AND CIRCUMSTANCES OF THE CASE. IT WAS, ACCORDINGLY, SU BMITTED THAT THE EARLIER ORDERS PASSED BY THE COORDINATE BENCHES MAY KINDLY BE FOLLOWED. ITA NO. 871 & 872 /JP/2016 THE ASSISTANT COMMIS SIONER OF INCOME-TAX VS M/S GREEN FIRE EXPORTS 3 3. THE LD. DR IS HEARD WHO HAS RELIED ON THE ORDER OF THE LOWER AUTHORITIES. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURSUED THE MATERIAL AVAILABLE ON RECORD. IT IS NOTED THAT LD. CIT(A) HA S GRANTED THE NECESSARY RELIEF TO THE ASSESSEE BY FOLLOWING THE E ARLIER ORDERS PASSED BY THE COORDINATE BENCHES WHETHER THE MATTER HAS BE EN DECIDED IN FAVOUR OF THE ASSESSEE. 5. THE RELEVANT FINDING OF THE COORDINATE BENCH IN ITA NO. 431/JP/2012 FOR AY 2009-10 DATED 17.07.2015 IS AS U NDER: WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MA TERIAL ON RECORD. THE COORDINATE BENCH IN ITA NO. 426/JP/201 0 FOR A.Y 2007-08 AND IN ITA NO. 477/JP/2011 FOR A.Y 2008-09 HAD CONS IDERED THE ISSUE OF RECONSTRUCTION AND DEDUCTION CLAIMED UNDER SECTI ON 10AA. THE LD. CIT(A) HAS FOLLOWED THE ITAT ORDER AND ALLOWED THE ASSESSEES APPEAL HOLDING THAT THE ISSUE IS IDENTICAL TO ASSESSMENT Y EARS 2007-08 AND 08- 09. REGARDING REJECTION OF BOOKS OF ACCOUNTS UNDER SECTION 145(3) OF THE IT ACT AND APPLYING GP RATE OF 25% AND ESTIMATI NG THE PROFIT UNDER SECTION 80IA(10) READ WITH SECTION 10AA(9), THE AO HAD COMPARED THE GP AND NP RATE OF M/S GREEN FIRE AND ASSESSEE FOR A .Y. 2007-08. THE LD. AO HAS NOT BROUGHT ON RECORD THAT M/S GREEN FIR E HAS EXPORTED THE SAME ITEMS TO THE SAME PARTIES. FURTHER, IT IS INF ORMED BY THE ASSESSEE THAT BUSINESS OF M/S GREEN FIRE EXPORTS IS EXCLUSIV ELY MANUFACTURING OF ORNAMENTS STUDDED WITH PRECIOUS AND SEMI PRECIOUS S TONES AND DIAMONDS. WHEREAS M/S GREEN FIRE WAS ENGAGED IN TR ADING OF DIAMOND AND MANUFACTURING OF STUDDED DIAMOND ITEMS AND CLAI MED THAT BOTH THE BUSINESS ARE SEPARATE AND CANNOT BE COMPARED. THE ASSESSEES ASSERTION WAS THAT IN DIAMOND BUSINESS, THE MARGIN OF PROFIT REMAINS VERY LOW AS COMPARED TO PRECIOUS/SEMI PRECIOUS STON ES AND THAT THE ASSESSEE FIRM MANUFACTURED FANCY ITEMS HAVING VERY GOOD DEMAND IN INTERNATIONAL MARKET AND THE MARGIN OF PROFIT WAS A LSO HIGHER ON IT. THE GP AND NP WAS ALSO DEPENDENT ON DOLLAR RATE WITH RU PEE. IT IS ALSO FACT THAT SEZ UNIT IS CONTROLLED BY THE CUSTOMS AUTHORIT IES AND THERE IS A ITA NO. 871 & 872 /JP/2016 THE ASSISTANT COMMIS SIONER OF INCOME-TAX VS M/S GREEN FIRE EXPORTS 4 CHECK ON THE UNDER INVOICING OR OVER INVOICING. TH E LD. AO HAD NOT ALSO BROUGHT ON RECORD THAT ITEMS EXPORTED BY THE TWO CO NCERNS ARE SAME AND THERE ARE NO DETAILS OF PARTIES TO WHOM THE GOO DS WERE EXPORTED. THE DEPARTMENT HAD NOT FILED ANY APPEAL ON SIMILAR ISSUE BEFORE US IN A.Y 2007-08 AND 2008-09. THEREFORE, WE CONFIRM THE ORDER OF LD. CIT(A). 6. UNDISPUTEDLY, THERE IS NO CHANGE IN THE FACTS AN D CIRCUMSTANCES OF THE CASE OR IN THE LEGAL POSITION. NO CONTRARY AUTHORITY HAS BEEN BROUGHT TO OUR NOTICE. IN LIGHT OF THE SAME, RESP ECTIVELY FOLLOWING THE ORDERS PASSED BY THE COORDINATE BENCHES IN ASSESSEE S OWN CASE IN ITA NO. 426/JP/10 ORDER DATED 18-3-2011 FOR AY 2007-08, ITA NO. 477/JP/11 ORDER DATED 20/01/2012 FOR AY 2008-09 AND ITA NO. 431/JP/12 ORDER DATED 17/07/2015 FOR AY 2009-10, WE CONFIRM THE ORDER PASSED BY THE LD CIT(A) FOR THE BOTH THE YEAR S UNDER CONSIDERATION. IN THE RESULT, GROUND TAKEN BY THE REVENUE FOR THE BOTH THE YEARS IS DISMISSED. IN THE RESULT, BOTH THE APPEALS OF REVENUE ARE DISM ISSED. SD/- SD/- DQY HKKJR FOE FLAG ;KNO (KUL BHARAT) (VIKRAM SINGH YADAV) JAIPUR DATED:- 28/04 /2017 *GANESH VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ASSISTANT COMMISSIONER OF INCOME-TAX 2. IZR;FKHZ@ THE RESPONDENT- M/S GREEN FIRE EXPORTS 3. VK;DJ VK;QDR@ CIT TDS, JAIPUR 4. VK;DJ VK;QDRVIHY@ THE CIT(A)-III, JAIPUR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR ITA NO. 871 & 872 /JP/2016 THE ASSISTANT COMMIS SIONER OF INCOME-TAX VS M/S GREEN FIRE EXPORTS 5 6. XKMZ QKBZY@ GUARD FILE (ITA NO.871 & 872 /JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR