M/s Maa Industries, Kanpur V. Income Tax Officer-2(2), Kanpur

MA 119/LKW/2015

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6265 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 5 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 12-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 05-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rule of consistency

Judgement Text

M.A. NO.119/LKW/2015 ASSESSMENT YEAR:2008-09 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI T. S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER MISC. APPLICATION NO.119/LKW/2015 (ARISING OUT OF I.T.A. NO.136/LKW/2015) ASSESSMENT YEAR:2008-09 M/S MAA INDUSTRIES, G-90, D, PANKI SITE-3, KANPUR. PAN:AALFM 9678 B VS. INCOME TAX OFFICER - 2(2), KANPUR. (APPLICANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THIS MISC. APPLICATION HAS BEEN FILED BY THE ASSES SEE AGAINST THE ORDER OF THE TRIBUNAL DATED 28/08/2015 PASSED IN I. T.A. NO.136/LKW/2015. 2. AT THE OUTSET, LEARNED A. R. SUBMITTED THAT THE ASSESSEE BEFORE HON'BLE TRIBUNAL HAD SPECIFICALLY RAISED GROUND NO. 3 TO 6 WHICH RELATED TO THE LEGAL ISSUES RAISED BY THE ASSESSEE AND WHICH T HE HON'BLE TRIBUNAL HAD NOT DISCUSSED AND ADJUDICATED ONLY ON THE MERITS OF THE CASE. IN THIS RESPECT OUR ATTENTION WAS INVITED TO FINDINGS OF TH E TRIBUNAL AS CONTAINED IN PARA 5 OF THE ORDER. IT WAS SUBMITTED THAT HON'BLE TRIBUNAL HAS CLASSIFIED TWO GRIEVANCES RAISED BY THE ASSESSEE AND HAS NOT S PECIFICALLY DEALT WITH THE GROUNDS OF APPEAL TAKEN IN GROUND NO. 3 TO 6 AN D IN THIS RESPECT OUR ATTENTION WAS INVITED TO GROUNDS OF APPEAL TAKEN IN THE ORIGINAL APPEAL. IN APPLICANT BY SHRI RAKESH GARG, ADVOCATE RESPONDENT BY SHRI RAJIV MOHAN, D. R. DATE OF HEARING 09/03/2018 DATE OF PRONOUNCEMENT 12 / 03 /201 8 M.A. NO.119/LKW/2015 ASSESSMENT YEAR:2008-09 2 VIEW OF THE ABOVE, IT WAS PRAYED THAT THE ABOVE GRO UNDS, WHICH OMITTED TO BE ADJUDICATED, SHOULD BE RECALLED FOR FRESH ADJUDI CATION. 3. LEARNED D. R., ON THE OTHER HAND, RELIED ON THE ORDER OF THE TRIBUNAL AND SUBMITTED THAT THERE IS NO MISTAKE APPARENT FRO M THE RECORD. 4. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT VIDE GROUND NO. 3 T O 6 THE ASSESSEE HAD RAISED THE FOLLOWING GROUNDS: 3. BECAUSE THE CIT(A) HAS ERRED IN UPHOLDING THE REJECTION OF BOOKS OF ACCOUNT AND THE ADDITION OF RS.4,45,668/- IN TRADING ACCOUNT, WHICH ADDITION IS CONTRARY TO FACTS, BAD IN LAW AND BE DELETED. 4. BECAUSE THE CIT(A) HAS FAILED TO APPRECIATE THAT THERE BEING NO CHANGE IN THE METHOD OF ACCOUNTING REGULAR LY EMPLOYED BY THE ASSESSEE, QUESTION OF REJECTING THE BOOKS OF ACCOUNT AND ESTIMATING THE PROFIT DOES NOT ARISE, THE ADDITION OF RS.4,45,668/- BE DELETED. 5. BECAUSE THE CIT(A) HAS FAILED TO APPRECIATE THAT THE SALES OF THE ASSESSEE FIRM INCREASED BY 72% IN AS MUCH AS FROM RS.8,43,21,770/- TO RS.14,58,40,769/- WHEREAS, THE GP RATE HAS SLIGHTLY DECLINED FROM 2.9 8% TO 2.58%, NONETHELESS, THERE WAS NO REASON FOR REJECTING THE SAME AND ESTIMATING THE INCOME, ESPECIALLY WHEN THE PURCHASES, SALES AND VALUATION OF BOTH OPENING & CLOSING STOCKS HAVE NOT BEEN DOUBTED . 6. BECAUSE THE METHOD OF ACCOUNTING EMPLOYED BY THE ASSESSEE AS IN THE EARLIER YEARS, ACCEPTED BY THE ASSESSING OFFICER, THERE WAS NO REASON TO DISBELIEV E THE SAME, PRINCIPLE OF CONSISTENCY SHOULD HAVE BEEN ADHERED TO, THE ADDITION MADE BE DELETED. 4.1 THE HON'BLE TRIBUNAL VIDE PARA 5 OF ITS ORDER H AS ALLOWED PART RELIEF TO THE ASSESSEE BY DECIDING THE ISSUE ON MERITS AND HAS NOT DEALT M.A. NO.119/LKW/2015 ASSESSMENT YEAR:2008-09 3 SPECIFICALLY WITH THE GROUNDS 3 TO 6. FOR THE SAKE OF COMPLETENESS THE PARA 5 OF THE DECISION OF HON'BLE TRIBUNAL IS REPRODUCED BELOW: 5. REGARDING THE SECOND ISSUE, THE MAIN CONTENTION OF THE LEARNED AR OF THE ASSESSEE WAS THIS THAT THE ADOPTI ON OF GP RATE OF 2.89% IS EXCESSIVE. LEARNED DR OF THE REVEN UE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW ON TH IS ISSUE ALSO. IN THE PRESENT YEAR, THE G.P. RATE SHOWN BY THE ASS ESSEE IS 2.58% WHEREAS IN THE PRECEDING YEAR, IT WAS 2.82 % AND IN THE SUCCEEDING YEAR, IT WAS 2.96 %. THE A.O. HAS ADOPTE D 2.89% BEING AVERAGE OF 2.82% AND 2.96%. IF WE CONSIDER TH E AVERAGE OF ALL THREE YEARS, I.E. THE PRECEDING YEAR, THE PR ESENT YEAR AND THE SUCCEEDING YEAR, THE AVERAGE COMES TO 2.79%. WE DIRECT THE A.O. TO ADOPT THIS THREE YEARS AVERAGE RATE OF 2.79% IN THE FACTS OF THE PRESENT CASE. THE ASSESSEE GETS PART R ELIEF OF 0.10%. 4.2 THE ABOVE FINDINGS DO NOT INDICATE THAT GROUND NO. 3 TO 6 HAVE BEEN ADJUDICATED. THEREFORE, NON ADJUDICATION OF GROUND S OF APPEAL HAS AMOUNTED TO A MISTAKE APPARENT FROM THE RECORD WHIC H NEEDS TO BE RECTIFIED. THEREFORE, WE RECALL THE ORDER OF THE T RIBUNAL DATED 28/08/2015 FOR THE LIMITED PURPOSES OF ADJUDICATION OF GROUND NO. 3 TO 6. 5. IN THE RESULT, THE MISC. APPLICATION OF THE ASSE SSEE IS ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 12/03/2018) SD/. SD/. (PARTHA SARATHI CHAUDHURY) ( T. S. KAPOOR ) JUDICIAL MEMBER A CCOUNTANT MEMBER DATED:12/03/2018 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR