M/s Bodh Raj Ram Nath, Karta, Ambala Cantt. v. ITO, Ambala

ITA 1358/CHANDI/2010 | 2007-2008
Pronouncement Date: 30-09-2011 | Result: Partly Allowed

Appeal Details

RSA Number 135821514 RSA 2010
Assessee PAN AAOHR0409Q
Bench Chandigarh
Appeal Number ITA 1358/CHANDI/2010
Duration Of Justice 10 month(s) 1 day(s)
Appellant M/s Bodh Raj Ram Nath, Karta, Ambala Cantt.
Respondent ITO, Ambala
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 30-09-2011
Date Of Final Hearing 29-09-2011
Next Hearing Date 29-09-2011
Assessment Year 2007-2008
Appeal Filed On 29-11-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL: CHANDIGARH BENCH B BEFORE MS SUSHMA CHOWLA JM AND SHRI MEHAR SINGH AM ITA NO. 1358/CHANDI/2010 ASSESSMENT YEAR 2007-08 BODH RAJ RAM NATH KARTA V. I.T.O WARD -1 AMBAL A SHRI RAM NATH SHUKUL KUND ROAD AMBALA CANTT PAN: AAOHR 0409 Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY: SMT. JAISHRE SHARMA DATE OF HEARING: 29.9.2011 DATE OF PRONOUNCEMENT: 30 .9.2011 ORDER PER MEHAR SINGH AM THE PRESENT APPEAL FILED BY THE ASSESSEE FOR ASSES SMENT YEAR 2007- 8 IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) PAN CHKULA DATED 25.10.2010 U/S 250 (6) OF THE INCOME-TAX ACT (IN SHORT THE AC T). 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL:- 1 THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE REJECTION OF DULY AUDITED ACCOUNTS BY APPLYING THE PROVISIONS OF SECTION 145(3) FOR THE ACT WHICH IS A RBITRARY AND UNJUSTIFIED. 2 THAT THE LD. CIT(A) HAS FURTHER ERRED IN UPHOLDI NG THE APPLICATION OF GP RATE OF 19.91% IN RAKHI ACCOUNT A S AGAINST 16.04% DECLARED BY THE APPELLANT RESULTING IN AN ADDITION OF RS. 70 574/- WHICH IS ARBITRARY AND UNJUSTIFIED. 3 THAT THE LD. CIT(A) HAS FURTHER ERRED IN SUSTAIN ING THE ADDITION OF RS. 1 82 150/- IN THE FIREWORKS ACCOUN T DETERMINED BY APPLICATION OF GP RATE OF 14.35% AS AGAINST 11.49% DECLARED BY THE APPELLANT WHICH IS ARBITRARY AND UNJUSTIFIED. 4 THAT THE LD. CIT(A) HAS FURTHER ERRED IN UPHOLDI NG THE DISALLOWANCES OF EXPENSES TO THE EXTENT OF 1/10 TH CLAIMED UNDER THE ITA NO. 1358/CHANDI/2010 BODH RAJ RAM NATH V. ITO 2 HEADS CAR EXPENSES TELEPHONE EXPENSES AND DEP RECIATION ON CAR WHICH IS ARBITRARY AND UNJUSTIFIED. THE EXPEN SES ARE TOTALLY ATTRIBUTABLE TO THE BUSINESS AND AS SUCH CALLS FOR NO DISALLOWANCES. 5 THAT THE ORDER OF THE LD. CIT(A) IS ERRONEOUS A RBITRARY OPPOSED TO LAW AND FACTS OF THE CASE AND IS THUS UNTENABLE. 3. IN GROUND NO. 2 THE ASSESSEE CHALLENGED THE ADD ITION OF RS. 70 574/- UPHELD BY THE LD. CIT(A) ON ACCOUNT OF LOW GP RATE IN RAKHI ACCOUNT. 4. THE LD AR FOR THE ASSESSEE SUBMITTED THAT SALE HAS INCREASED SUBSTANTIALLY AND LOW GP RATE IS BOUND TO COME. IT IS FURTHER ADDED THAT MAINTENANCE OF GP RATE AT THE UNIFORM RATE IS NOT F EASIBLE IN ANY BUSINESS CONCERN AS IT DEPENDS ON A NUMBER OF FACTORS. 5. THE DR ON THE OTHER HAND PLACED RELIED ON THE ORDER OF LD. CIT(A). 6. WE HAVE CAREFULLY PERUSED THE FACTS OF THE CASE AND FIND THAT THE SALE HAS SUBSTANTIALLY INCREASED AS CONTENDED BY TH E LD AR FOR THE ASSESSEE AND THERE WAS FORCE IN THE CONTENTION OF T HE ASSESSEE THAT UNIFORMITY IN THE GP RATE IS NOT UNIVERSALLY FEASIB LE. HAVING REGARD TO THE QUANTUM INCREASE IN THE SALE WE FIND MERIT IN THE CONTENTION OF THE ASSESSEE THEREFORE THIS ADDITION IS DELETED. GRO UND NO. 2 OF ASSESSEES APPEAL IS ALLOWED. 7. IN GROUND NO. 3 THE ASSESSEE CHALLENGED SIMILAR ADDITION OF RS. 1 82 150/- ON ACCOUNT OF LOW GP IN FIREWORKS ACC OUNTS UPHELD BY THE LD. CIT(A). SIMILAR CONTENTIONS WERE RAISED IN RES PECT OF THIS GROUND. 8. THE AO MADE THE ADDITION OF RS. 1 82 150/- IN R ESPECT OF FIREWORKS ACCOUNT FOR THE FALL IN GP RATE AS COMPAR ED TO THE EARLIER YEARS. IT WAS SUBMITTED BY THE ASSESSEE THAT THERE BEING S UBSTANTIAL INCREASE IN THE VOLUME OF BUSINESS OF THE ASSESSEE THE MAINTEN ANCE OF GP AT HIGHER ITA NO. 1358/CHANDI/2010 BODH RAJ RAM NATH V. ITO 3 RATE OR UNIFORM RATE IS NOT POSSIBLE. THE LD. CIT( A) UPHELD THE ADDITION MADE BY THE AO. 9. IT WAS POINTED OUT THAT THERE IS COMPETITION IN THE MARKET DUE TO OPENING OF NEW UNITS. IT WAS HIGHLIGHTED THAT THIS TRADE IS CONTROLLED BY THE LOCAL AUTHORITIES AND POLICE AND THEIR INTERFER ENCE AFFECTS THE BUSINESS OF THE ASSESSEE. IT WAS ALSO ARGUED THAT BEING A S EASONAL TRADE IT IS NOT POSSIBLE TO COMPARE THE GP ON YEAR AFTER YEAR BASIS . 10. WE HAVE CAREFULLY PERUSED THE FACTS OF THE CASE RIVAL SUBMISSIONS AND FIND THAT THERE IS MERIT IN THE CONTENTION OF T HE ASSESSEE AND THE ADDITION ON ACCOUNT OF LOW GP RATE CANNOT MADE ME CHANICALLY WITHOUT APPRECIATING THE WHOLE FACTUAL MATRIX OF THE CASE A ND NATURE OF THE TRADE. THEREFORE THE IMPUGNED ADDITION IS DELETED. GROUND NO. 3 IS ALLOWED. 11. GROUND NO. 4 WAS NOT PRESSED BEFORE THE BENCH. WE DO NOT THINK TO ADJUDICATE THE SAME. 12. GROUND NO. 5 IS GENERAL IN NATURE AND DOES NOT REQUIRE ANY ADJUDICATION. 13. GROUND NO. 1 IS TO BE DECIDED ON LEGAL MERITS WE DO NOT CONSIDER IT FAIR TO ADJUDICATE THE ISSUE ON LEGAL GROUND AS RAI SED BY THE ASSESSEE. 14. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 30.9.2011 SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNANT MEMBER CHANDIGARH THE 30.9.2011 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE CIT(A) / THE DR ITA NO. 1358/CHANDI/2010 BODH RAJ RAM NATH V. ITO 4