ACIT, Jaipur V. OPRABHU DAYAL JAT, Jaipur

ITA 913/JPR/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 47944 (ITAT-JAIPUR)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 13-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S L PODDAR

Judgement Text

1 ITA 913-10 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 913/JP/2010 ASSTT. YEAR : 2007-08. THE ACIT, CIRCLE-2, VS. SHRI PRABHU DAYAL JAT, ALWAR. PROP. M/S. PRABHUJI DAIRY, MANOHRPUR, SHAHPURA, JAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SANJAY KUMAR RESPONDENT BY : SHRI S.L. PODDAR ORDER DATE OF ORDER : 10/06/2011. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY DEPARTMENT AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2007-08. 2. THE DEPARTMENT IS OBJECTING IN RESTRICTING THE T RADING ADDITION OF RS. 61,05,442/- TO RS. 23,10,995/- INSPITE OF UPHOLDING THE PROVISI ONS OF SECTION 145(3). THE DEPARTMENT IS ALSO OBJECTING IN RESTRICTING THE DISALLOWANCE M ADE OUT OF COLLECTION CENTRE, FREIGHT, TELEPHONE AND SALARY PAYMENT EXPENSES AND ALLOWING RELIEF OF RS. 1,13,800/-, RS. 1,47,000/-, RS. 2,750/- AND RS. 11,500/- RESPECTIVE LY. 3. THE LD. D/R HAS PLACED RELIANCE ON THE ORDER OF AO. 4. ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSESS EE HAS PLACED RELIANCE ON THE ORDER OF LD. CIT (A) AND ALSO PLACED RELIANCE ON THE ORDE R OF TRIBUNAL IN CASE OF ASSESSEE ITSELF FOR ASSESSMENT YEAR 2007-08, COPY OF THE SAME WAS A LSO FILED. 2 5. NOW THE APPEAL OF THE DEPARTMENT IS DISPOSED OFF IN THE FOLLOWING MANNER. 6. REGARDING THE FIRST ISSUE, IT IS NOTICED THAT TH E AO REJECTED THE BOOKS OF ACCOUNT IN VIEW OF PROVISIONS OF SECTION 145(3) AND ESTIMATED G.P. RATE @ 8% AGAINST 5.35% DECLARED BY THE ASSESSEE AND MAKING TRADING ADDITIO N OF RS. 61,05,442/-. THE LD. CIT (A) AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD AND TAKING INTO CONSIDERATION THE PAST HISTORY OF THE CASE DIRECTED TO APPLY G.P. RATE OF 6.35% AGAINST G.P. RATE OF 5.35% DECLARED BY ASSESSEE. 7. AFTER CONSIDERING THE ORDERS OF THE AO, LD. CIT (A) AND THE ORDER OF THE TRIBUNAL IN CASE OF ASSESSEE ITSELF FOR THE SAME ASSESSMENT YEAR DECIDED IN ITA NO. 942/JP/2010 VIDE ITS ORDER DATED 31.1.2011, WE FIND THAT ISSUE HAS ALREADY BEEN CONCLUDED BY THE TRIBUNAL BY ALLOWING THE APPEAL OF THE ASSESSEE. T HE APPEAL OF THE ASSESSEE WAS AGAINST SUSTAINING THE TRADING ADDITION OF RS. 23,10,995/- AND THIS ISSUE HAS ALREADY BEEN DECIDED BY THE TRIBUNAL BY HOLDING THAT COMPLETE DETAILS AR E MAINTAINED BY ASSESSEE AND G.P. RATE IS BETTER AS COMPARED TO EARLIER YEAR. THEREFORE, T HERE WAS NO JUSTIFICATION IN SUSTAINING THE PART ADDITION BY LD. CIT (A). THOUGH THE APPEA L OF THE ASSESSEE AS WELL AS APPEAL OF THE DEPARTMENT SHOULD HAVE BEEN DECIDED TOGETHER, H OWEVER, AT THE TIME OF HEARING OF THE APPEAL OF THE ASSESSEE IT WAS NOT BROUGHT TO THE KN OWLEDGE OF THE TRIBUNAL EITHER BY ASSESSEE OR BY DEPARTMENT THAT DEPARTMENTS APPEAL IS ALSO PENDING AND, THEREFORE, FOR THIS REASON THE APPEAL OF THE ASSESSEE WAS DISPOSED OFF ON EARLIER OCCASION. NO USEFUL PURPOSE WILL BE SERVED IF THE ORDER OF THE TRIBUNAL IS RECA LLED FOR DISPOSING OFF BOTH THESE APPEALS TOGETHER FOR THE SIMPLE REASON THAT IN CASE OF ASSE SSEES APPEAL THE TRIBUNAL HAS ALREADY TAKEN A VIEW THAT ADDITION SUSTAINED BY LD. CIT (A) WAS NOT JUSTIFIED AND, THEREFORE, TRADING ADDITION SUSTAINED BY LD. CIT (A) HAS BEEN DELETED IN ITS ENTIRETY. SINCE ADDITION 3 MADE BY THE AO AT RS. 61,00,000/- OR ODD STAND DELE TED IN ITS ENTIRETY AS LD. CIT (A) HAS ALLOWED THE APPEAL IN PART BY GIVING PART RELIEF AG AINST WHICH ASSESSEE CAME IN APPEAL BEFORE THE TRIBUNAL AND AS STATED ABOVE, THE TRIBUN AL HAS ALLOWED THE APPEAL OF THE ASSESSEE BY DELETING THE ENTIRE ADDITION SUSTAINED BY LD. CIT (A). THEREFORE, ENTIRE MATTER STANDS CONCLUDED. THE FINDING OF THE TRIBUNAL HAVE BEEN RECORDED IN PARA 2.5 AT PAGE 2 & 3 ARE AS UNDER :- WE HAVE HEARD BOTH THE PARTIES. IT IS TRUE THAT THE EXPENSES DEBITED ARE NOT VERIFIABLE BECAUSE THEY DO NOT CONT AIN NAME OF THE RECIPIENTS OR SIGNATURE OF THE RECIPIENTS. HENCE TH E EXPENSES ARE NOT VERIFIABLE. THEREFORE, THE AO WAS JUSTIFIED IN INVO KING THE PROVISIONS OF SECTION 145(3) OF THE ACT. HOWEVER, AFTER INVOKING THE PROVISIONS OF SECTION 145(3), THE AO IS REQUIRED TO MAKE THE BEST JUDGMENT ASSESSMENT ON THE BASIS OF THE MATERIAL ON RECORD. BEFORE THE LD. CIT (A), THE ASSESSEE REFERRED TO THE COMPARABLE CASE OF M/S. APNI DAIRY. M/S. APNI DAIRY HAS SHOWN GROSS PROFIT RATE OF 5.76% ON TURNOVER OF RS. 3.64 CRORES FOR THE ASSESSMENT YEAR 2007-08. THE ASSESSEE HAS SHOWN TH E GROSS PROFIT RATE OF 5.35% AGAINST 5.01% OF THE IMMEDIATELY PRECEDING YE AR. THERE IS SUBSTANTIAL INCREASE IN THE TURNOVER. M/S. APNI DAI RY HAS SHOWN GROSS PROFIT RATE OF 5.76% ON TURNOVER OF RS. 3.64 CRORES AND CONSIDERING THE GROSS PROFIT RATE OF M/S. APNI DAIRY AND CONSIDERIN G THE INCREASE IN GROSS PROFIT RATE OF THE ASSESSEE AS COMPARED TO LAST YEA R, WE FEEL THAT THERE WAS NO CASE OF MAKING ANY TRADING ADDITION. THE TRADIN G ADDITION CONFIRMED BY THE LD. CIT (A) IS DELETED. 8. IN VIEW OF THESE FACTS AND CIRCUMSTANCES AND IN VIEW OF THE FINDING OF THE TRIBUNAL GIVEN IN CASE OF ASSESSEE ITSELF, WE DISMI SS THE GROUND OF THE DEPARTMENT AND CONFIRM THE ORDER OF LD. CIT (A) ACCORDINGLY. 4 9. NOW WE WILL TAKE UP THE ISSUE IN RESPECT OF ALLO WING PART RELIEF ON ACCOUNT OF VARIOUS EXPENSES DISALLOWED BY THE AO. 10. THE AO DISALLOWED EXPENSES ON ACCOUNT OF COLLEC TION EXPENSES AT RS. 2,00,000/-, ON ACCOUNT OF FREIGHT EXPENSES AT RS. 7,00,000/-, O N ACCOUNT OF SALARY PAID AT RS. 1,00,000/- AND ON ACCOUNT OF TELEPHONE EXPENSES AT RS. 13,000/-. PART RELIEF WAS GIVEN BY LD. CIT (A). AGAINST PARTLY SUSTAINED DISALLOWANCE , ASSESSEE FILED APPEAL BEFORE TRIBUNAL, AND THE TRIBUNAL AFTER CONSIDERING THE ISSUE IN DET AIL HAVE SUSTAINED THE DISALLOWANCE AT RS. 86,200/- ON ACCOUNT OF COLLECTION CHARGES. NO F URTHER RELIEF WAS GIVEN BY THE TRIBUNAL. REGARDING THE FREIGHT EXPENSES, THE TRIBU NAL CONFIRMED THIS DISALLOWANCE TO RS.2.5 LACS AGAINST SUSTAINED BY LD. CIT (A) AT RS. 5.53 LACS. ON ACCOUNT OF SALARY EXPENSES, THE DISALLOWANCE SUSTAINED BY LD. CIT (A) AT RS. 88,500/- WAS DELETED AND DISALLOWANCE OF RS. 2,750/- ON ACCOUNT OF TELEPHONE EXPENSES WERE SUSTAINED BY TRIBUNAL WHILE PASSING ORDER IN ITA NO. 942/JP/2010 DATED 31 .1.2011 (SUPRA). SINCE THE TRIBUNAL HAS ALREADY DECIDED THIS ISSUE, PART RELIEF WAS GIV EN BY LD. CIT (A), AGAINST PART RELIEF ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL, AND THE TRIBUNAL ON ACCOUNT OF TELEPHONE EXPENSES HE SUSTAINED THE ORDER OF LD. CIT (A) AND ON ACCOUNT OF OTHER TWO EXPENSES I.E. ON ACCOUNT OF FREIGHT EXPENSES AND SALARY PAYMENT H AVE ALREADY ALLOWED THE ISSUE IN FAVOUR OF THE ASSESSEE IN PART. ACCORDINGLY THE IS SUE RAISED BY THE DEPARTMENT STANDS CONCLUDED. THEREFORE, NO SEPARATE ORDER CAN BE PASS ED NOW. 11. SIMILARLY, WE HAVE ALREADY DISPOSED OFF FIRST I SSUE AGAINST TRADING ADDITION DELETED BY LD. CIT (A) AND WE HAVE HELD THAT THE TRIBUNAL H AS ALREADY DECIDED THIS ISSUE. IN VIEW OF THE SAME REASONING, WE REJECT THE GROUND OF THE DEPARTMENT HERE ALSO AS ALL THE ISSUES HAVE ALREADY BEEN DEALT WITH BY THE TRIBUNAL WHILE DECIDING THE APPEAL OF THE ASSESSEE. 5 12. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISM ISSED. 13. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 10 .6.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/- COPY FORWARDED TO :- THE ACIT, CIRCLE-2, ALWAR. SHRI PRABHU DAYAL JAT, MANOHARPUR, SHAHPURA, JAIPUR . THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 913/JP/2010) BY ORDER, AR ITAT JAIPUR.