ACIT, UDAIPUR v. Shri Prakash Shrimali Prop. Hi-Tech Earth Movers, UDAIPUR

ITA 134/JODH/2013 | 2009-2010
Pronouncement Date: 30-10-2013 | Result: Allowed

Appeal Details

RSA Number 13423314 RSA 2013
Assessee PAN ADSPS9139F
Bench Jodhpur
Appeal Number ITA 134/JODH/2013
Duration Of Justice 7 month(s) 19 day(s)
Appellant ACIT, UDAIPUR
Respondent Shri Prakash Shrimali Prop. Hi-Tech Earth Movers, UDAIPUR
Appeal Type Income Tax Appeal
Pronouncement Date 30-10-2013
Appeal Filed By Department
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 30-10-2013
Date Of Final Hearing 28-10-2013
Next Hearing Date 28-10-2013
Assessment Year 2009-2010
Appeal Filed On 11-03-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH JODHPUR BEFORE SHRI HARI OM MARATHA JUDICIAL MEMBER AND SHRI N.K.SAINI ACCOUNTANT MEMBER ITA NOS. 134/JU/2013 A.Y: 2009-10 THE A.C.I.T. VS. SHRI PRAKASH SHRIMALI CIRCLE 1 PROP. HI-TECH EARTH MOVERS UDAIPUR 3/33A-A GOVERDHAN VILAS MAIN ROAD UDAIPUR PAN NO. ADSPS 9139 F (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SHRI R.H. GOHEL DATE OF HEARING : 28.10.2013 DATE OF PRONOUNCEMENT : 30.10.2013 ORDER PER HARI OM MARATHA J.M. THIS APPEAL FILED BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER OF THE CIT(A) UDAIPUR DATED 03. 12.2012 FOR A.Y 2009-10. 2 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT T HE ASSESSEE/RESPONDENT WAS SENT NOTICE THROUGH REGISTE RED POST. THE ASSESSEE WAS ALSO SERVED THROUGH THE DEPARTMENT. DESPITE BEING SO SERVED THE ASSESSEE/ RESPONDENT HAS CHOSEN NOT TO AVAIL OPPORTUNITY OF B EING HEARD. IN FACT IT HAS BECOME A HABIT OF CERTAIN A SSESSEES TO AVOID NOTICES ALTHOUGH LOT OF MONEY AND TIME IS SPENT ON THEIR SERVICES. SERVICE OF NOTICE ON THEM AND B Y TAKING RESORT TO HON'BLE SUPREME COURT DECISION IN WHICH I T HAS BEEN LAID DOWN THAT EVEN IF THE DECISION IS RENDERE D ON MERITS THE JUSTICE REQUIRES THAT THE PARTIES BE GIV EN OPPORTUNITY OF HEARING IN THE INTEREST OF JUSTICE. HOWEVER WHAT WE FEEL IS THAT THE HON'BLE APEX COUR T HAS NOT GIVEN A BLANKET PERMISSION TO SUCH PARTIES WHO DO NOT RESPECT THE PROCEDURE OF COURTS BUT THEIR LORDSHIPS HAVE TAKEN SUCH A VIEW TO UNDUE-INJUSTICE IF ANY RENDE RED IN CERTAIN CIRCUMSTANCES WHERE THE NOTICE WAS NOT AT A LL SERVED OR DIFFERENT CIRCUMSTANCES EXISTED. IN THIS CASE EVEN THE DEPTT. HAS SERVED NOTICE ON THE DIRECTIONS OF THE BENCH UPON THE ASSESSEE/RESPONDENT. IT SEEMS THAT THE 3 ASSESSEE IS NOT INTERESTED IN PURSUING AND DEFENDIN G THE APPEAL OF THE REVENUE. THEREFORE THERE IS NO REAS ON TO FURTHER WAIT IN THE MATTER AND THEREFORE WE PROCEE D EX PARTE AGAINST THE ASSESSEE/RESPONDENT. 3. WE HAVE HEARD THE LD. D.R. AT LENGTH. IN FACT THE ISSUE INVOLVED IN THIS APPEAL IS VERY SIMPLE AND CO VERED BY NUMEROUS DECISIONS TAKEN BY THIS BENCH AS WELL AS A LMOST ALL THE BENCHES THROUGHOUT INDIA AND EVEN BY THE JU DGMENT OF THE JURISDICTIONAL HIGH COURT. THEREFORE BY DE CIDING THIS APPEAL EX PARTE NO INJUSTICE IS CAUSED TO ANY PARTY. 3.1 FACTS APROPOS THE CONNECTED ISSUE PERTAINING TO REJECTION OF BOOKS OF ACCOUNT U/S 145(3) OF THE ACT AND CONSEQUENTIAL DELETION OF TRADING ADDITION OF RS. 1 .32 CRORES [APPROX.] MADE BY THE A.O. ARE THAT THE ASSE SSEE AS AN INDIVIDUAL BEING PROPRIETOR OF HI-TECH EARTH MOVERS FILED HIS RETURN OF INCOME [ROI] ON 30.9.2009 DECLA RING TOTAL INCOME OF RS. 16 18 299/-. THIS RETURN WAS SCRUTINIZED U/S 143(3) OF THE ACT AND INCOME WAS 4 COMPUTED AT RS. 1 48 92 802/- BY MAKING ADDITION OF RS. 13274503/- TO THE DECLARED INCOME OF RS. 16 18 299/ -. THE ASSESSEE IS AUTHORIZED DEALER OF TELCO CONSTRUC TION EQUIPMENT CO. LTD. FOR THE SALE AND AFTER SALE SERV ICES OF HEAVY MACHINERY. IN FACT BEFORE THE A.O. DESPITE NUMEROUS NOTICES SENT U/S 143(2) AND 142(1) OF THE ACT NO COMPLIANCE WAS MADE AND THEREFORE FINALLY THE A.O. PROPOSED TO PROCEED AGAINST THE PROVISIONS OF SECTI ON 144 OF THE ACT. HOWEVER IN RESPONSE TO NOTICE U/S 142 (1) OF THE ACT DATED 19.10.2011 THE ASSESSEES AUTHORIZED REPRESENTATIVE APPEARED ON 24.10.2011 AND SUPPLIED THE REQUISITE DETAILS / INFORMATION / DOCUMENTS/ CLARIF ICATIONS SOUGHT BY THE A.O. HOWEVER THE ASSESSEE HAD NOT COMPLIED TO THE VARIOUS NOTICES WHICH IS IMPLICIT F ROM THE FOLLOWING CHART WHICH HAS BEEN INCORPORATED BY THE A.O. AT PAGE 2 AND 3 OF HIS ORDER: SL NO . DATE OF NOTICE U/S 142(1) DATE OF HEARING REMARKS 1. 03.02.2011 15.02.2011 NO COMPLIANCE 2. 31.03.2011 12.04.2011 NO COMPLIANCE 3. 01.06.2011 14.06.2011 NO COMPLIANCE 5 4. 16.06.2011 22.06.2011 NO COMPLIANCE 5. 13.07.2011 22.07.2011 NO COMPLIANCE 6. 25.07.2011 03.08.2011 NO COMPLIANCE 7. 19.08.2011 26.08.2011 NO COMPLIANCE 8. 29.08.2011 07.09.2011 NO COMPLIANCE 9. 08.09.2011 20.09.2011 NO CO MPLIANCE 10. 21.09.2011 29.09.2011 NO COMPLIANCE 11. 30.09.2011 07.10.2011 NO COMPLIANCE 12. 10.10.2011 18.10.2011 NO COMPLIANCE 3.2 THE ASSESSEE ALSO SUBMITTED A CHART SHOWING TUR NOVER AND GROSS PROFIT RATE ETC IN THE THREE A.YS. AS UND ER: A.Y. TUR NOVER GROSS PROFIT [BEFORE DEP. GROSS PROFIT MARGIN [BEFORE DEP] NET PROFIT GROSS PROFIT RATE 2009 - 10 305448903 10676006 3.50% 1581367 0 . 52 % 2008 - 09 143122117 11424580 7.98% 1480851 1 . 0 3% 2007 - 08 71396158 7674624 10.75% 941741 1. 32 % THE A.O. FOUND THAT THE TOTAL SALES AS PER LEDGER A CCOUNT TJD MACHINE EX-70 MACHINE EX-110 MACHINE AND EX-20 0 MACHINE DID NOT MATCH WITH SALES ACCOUNT OF MACHINE S SUBMITTED BY THE ASSESSEE. THE ASSESSEE WAS ASKED TO EXPLAIN THIS DISCREPANCY VIDE NOTICE DATED 2.12.201 1 AS UNDER: 6 ON VERIFICATION OF THE LEDGER ACCOUNT OF TJD MACHINE IT IS NOTICED THAT THE TOTAL SALES IS OF RS. 4 20 11 057/-. HOWEVER IN THE SALES ACCOUNT YOU HAVE BOOKED SALES OF TJD MACHINE OF RS. 4 13 82 136/- ONLY. SIMILARLY ON VERIFICATION OF THE LEDGER ACCOUNT OF EX-70 MACHINE IT IS NOTICED THAT THE TOTAL SALES IS OF RS. 48 07 692/- . HOWEVER IN THE SALES ACCOUNT YOU HAVE BOOKED SALES OF EC-70 MACHINE OF RS. 47 64 371/- ONLY. SIMILARLY ON VERIFICATION OF THE LEDGER ACCOUNT OF EX-110 MACHINE IT IS NOTICED THAT THE TOTAL SALES IS OF RS. 2 26 25 000/-. HOWEVER IN THE SALES ACCOUNT YOU HAVE BOOKED SALES OF EX-110 MACHINE OF RS. 2 23 17 037/- ONLY. SIMILARLY ON VERIFICATION OF THE LEDGER ACCOUNT OF EX-200 MACHINE IT IS NOTICED THAT THE TOTAL SALES IS OF RS. 14 02 73 618/-. HOWEVER IN THE SALES ACCOUNT YOU HAVE BOOKED SALES OF EX-200 MACHINE OF RS. 13 76 95 590/-. 3.3 THE ASSESSEE SUBMITTED ITS REPLY VIDE LETTER NO . NIL ON 12.12.2011 AS UNDER: SIR IN MY EARLIER REPLY I STATED THAT DUE TO TUFF COMPETITION IN THE MARKET MANY TIMES SALES 7 ON DISCOUNT. I HEREBY SUBMIT FRESH CHART IN WHICH DISCOUNT GIVEN FIGURE SEPARATELY MENTIONED. COPY OF CONFIRMATION FROM THE PARTIES TO WHOM THE DISCOUNT IS GIVEN ALSO BEING ENCLOSED FOR YOUR VERIFICATION. THE A.O. FOUND THAT THE SALES DID NOT MATCH WITH TH E DETAILS SUBMITTED BY THE ASSESSEE EARLIER. HE ALSO FOUND THAT DURING F.Y. 2008-09 AS PER THE ASSESSEE DISCO UNT TO HIS CUSTOMER OF RS. 29 64 906/- I.E. 1% OF THE TOTA L TURNOVER WAS GIVEN. WHEN THIS STATEMENT WAS COMPA RED WITH THE LEDGER ACCOUNT SUBMITTED BY THE ASSESSEE ALONGWITH THE REPLY DATED 14.11.2011 IT WAS NOTICE D THAT THERE WAS DISCREPANCY BETWEEN SALES FIGURE AS PER L EDGER ACCOUNT OF DIFFERENT MACHINES AND THE SALE FIGURE O F DIFFERENT MACHINES AS PER SALE DETAIL ACCOUNTS FURN ISHED BY THE ASSESSEE. MOREOVER THE ASSESSEE GAVE DIFFEREN T AMOUNT OF DISCOUNT FIGURES WHICH DID NOT TALLY WITH THE RECORDS. IT WAS SEEN BY THE ASSESSEE AS A PLOY TO ADJUST THE DIFFERENCE BY STATING A FALSE FACT. THE ASSESS EE COULD NOT CONFIRM THE DISCOUNT GIVEN TO BUYERS. IN THE B ACKDROP 8 OF THESE FACTS COUPLED WITH THE FACT THAT IN THE A UDIT REPORT SUBMITTED BY THE ASSESSEE QUANTITATIVE DETAI LS HAD NOT BEEN GIVEN IN COLUMN NO. 28 OF FORM NO. 3CD AND THAT THE ASSESSEE HAD DEBITED BUSINESS PROMOTION CHARGES OF RS. 13 87 894/- WHICH WERE NOT FOUND TO BE CORRECT AND THE DISCREPANCIES FOUND IN THE CLOSING STOCK THE A. O. OBSERVED THAT THE ASSESSEE HAS NOT MAINTAINED THE B OOKS OF ACCOUNT IN PROPER MANNER AND THE SAME ARE NOT RELIABLE. THEREFORE HE COMPLIED WITH THE PROVISIO NS OF SECTION 145(3) OF THE ACT AND BY FOLLOWING THE GENE RAL SETTLED LEGAL POSITION ADOPTED GROSS PROFIT RATE OF THE IMMEDIATELY PAST A.Y. IN THE CASE OF THIS ASSESSEE ONLY WHICH IS 7.98% INSTEAD OF 3.51% DECLARED BY THE ASS ESSEE AND MADE THE IMPUGNED ADDITION OF RS. 1 32 74 503/- . AGGRIEVED THE ASSESSEE WENT IN APPEAL AND THE LD. CIT(A) HAS ACCEPTED THE BOOKS OF ACCOUNT TO BE CORRECT AND HAS ALSO ACCEPTED THE DECLARED RESULTS THEREBY HE HAS DELETED THE ENTIRE ADDITION. 3.4 NOW THE REVENUE IS AGGRIEVED ON BOTH THE COUNTS . 9 3.5 AFTER HEARING THE LD. D.R. AND AFTER GOING THRO UGH THE ENTIRE RECORD WE HAVE FOUND THAT THE BOOKS OF ACCO UNT ARE NOT RELIABLE IN VIEW OF THE AFOREMENTIONED REAS ONS CULLED OUT BY THE A.O. AND THE LD. CIT(A) HAS INCOR RECTLY SET ASIDE THIS FINDING OF THE A.O. WHERE HE UPHELD THE REJECTION OF BOOKS AND INVOCATION OF PROVISIONS OF SECTION 145(3) OF THE ACT. IT IS TRITE THAT AFTER REJECTIO N OF BOOKS THE PAST HISTORY OF THE ASSESSEE IS MOST RELEVANT A ND HAS TO BE ADOPTED. SINCE IN THE IMMEDIATELY PRECEDING A.Y . THE GROSS PROFIT RATE DECLARED BY THE ASSESSEE IS 7.98% THEREFORE WE ADOPT THIS FIGURE AS THE GROSS PROFIT RATE OF THIS YEAR ALSO. IN OUR CONSIDERED OPINION THE A.O . HAS CORRECTLY DETERMINED THE TRADING ADDITION. THEREFO RE ON BOTH THE COUNTS WE REVERSE THE FINDING OF THE LD. CIT(A) AND RESTORE THAT OF THE A.O. 10 4. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLO WED. ORDER PRONOUNCED IN THE COURT ON 30 TH OCTOBER 2013. SD/- SD/- (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30 TH OCTOBER 2013 VL/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT BY ORDER 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR ITAT JODHPUR