The DCITAnand Circle,, Anand v. M/s. M.M. Patel & Co.,, Borsad

ITA 2085/AHD/2009 | 2004-2005
Pronouncement Date: 25-11-2011 | Result: Allowed

Appeal Details

RSA Number 208520514 RSA 2009
Assessee PAN AAEFM0531K
Bench Ahmedabad
Appeal Number ITA 2085/AHD/2009
Duration Of Justice 2 year(s) 4 month(s) 25 day(s)
Appellant The DCITAnand Circle,, Anand
Respondent M/s. M.M. Patel & Co.,, Borsad
Appeal Type Income Tax Appeal
Pronouncement Date 25-11-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted D
Tribunal Order Date 25-11-2011
Date Of Final Hearing 21-11-2011
Next Hearing Date 21-11-2011
Assessment Year 2004-2005
Appeal Filed On 30-06-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD BEFORE SHRI MUKUL KUMAR SHRAWAT JUDICIAL MEMBER AND SHRI A. K. GARODIA ACCOUNTANT MEMBER I.T.A. NO. 2085/ AHD/2009 (ASSESSMENT YEAR 2004-05) DCIT ANAND CIRCLE ANAND VS. M/S. M M PATEL & CO. 15-16 ASHOK NAGAR ANAND ROAD BORSAD PAN/GIR NO. : AAEFM0531K (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI JAI RAJ KUMAR DR RESPONDENT BY: SHRI ASEEM L THAKKAR AR DATE OF HEARING: 21.11.2011 DATE OF PRONOUNCEMENT: 25.11.2011 O R D E R PER SHRI A. K. GARODIA AM:- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) I BARODA DATED 24.04.2009 FOR THE ASSESSMEN T YEAR 2004-05. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SER THE LD. CIT(A) ERRED IN STRIKING DOWN THE REJECTION OF BOOK S OF ACCOUNTS AND DIRECTING THE A.O. TO DELETE THE ADDITION MADE OF RS.22 59 723/- BEING ESTIMATION OF INCOME AT 8% ON THE TURNOVER OVERLOOKING THE FACT THAT APPELLANT HAD NOT MAINTAI NED ANY STOCK REGISTER AND ALSO FAILED TO PROVIDE DETAILS OF TRAN SPORTATION EXPENSES. 2. BRIEF FACTS TILL THE ASSESSMENT STAGE ARE NOTED BY THE LD. CIT(A) IN PARA 3 OF HIS ORDER WHICH IS REPRODUCED BELOW: I.T.A.NO.2085 /AHD/2009 2 3 GROUND NO 1 RELATES TO REJECTION OF THE BOOKS OF ACCOUNTS BY APPLYING THE PROVISIONS OF SECTION 145(3) OF THE AC T. THE BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT IS IN THE BUSINESS OF ROAD CONSTRUCTION. THE MAJORITY OF THE WORK IS DONE FOR THE GOVERNMENT. THE CONTRACTS ARE AWARDED TO THE APPELLANT BY TENDE R. THE BOOKS OF THE APPELLANT ARE AUDITED U/S 44AB. THE AO REJECTED THE BOOKS OF ACCOUNTS OF THE APPELLANT ON THE GROUND THAT THE AP PELLANT HAD NOT MAINTAINED ANY STOCK REGISTER AND THE APPELLANT ALS O FAILED TO PROVIDE DETAILS OF EXPENSES ON TRANSPORTATION AND H ENCE THE USE OF OWN TRUCKS AND CONSUMPTION OF DIESEL WERE NOT VERIF IABLE. 3. THE A.O. ESTIMATED THE INCOME OF THE ASSESSEE BY APPLYING 8% OF THE GROSS RECEIPT AND IN THIS MANNER ASSESSED THE INCOME OF THE ASSESSEE AT RS.20 64 720/- AS AGAINST THE INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME AT RS.9 12 750/-. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LD. CIT(A). LD. CIT(A) HELD THAT THE ESTIMATION OF THE INCOME IS NOT WARRANTED. HE CONF IRMED THE DISALLOWANCE OF RS.RS.25 000/- OUT OF THE EXPENDITU RE OF FREIGHT AND DELETED THE BALANCE ADDITION. NOW THE REVENUE IS IN APPEAL BEFORE US. 4. LD. D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS THE LD. A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF LD. CIT(A). HE ALSO SUBMITTED THAT IN ASSESSMENT YEAR 2000-01 AND 2003- 04 THE ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN I.T.A.NO. 4432/AHD/ 2003 AND 2587/AHD/2006 DATED 31.08.2007 AND THE COPY OF THIS TRIBUNAL ORDER IS AVAILABLE ON PAGES 1 & 2 OF THE PAPER BOOK. IT WAS SUBMITTED THAT AS PER THIS TRIBUNAL ORDER THE MATTER WAS RESTORED BACK T O THE FILE OF THE A.O. FOR A FRESH DECISION BY HOLDING THAT REJECTION OF BOOKS OF ACCOUNT IS NOT PROPER AND THE A.O. SHOULD HAVE DISALLOWED EXPENSES WHICH WERE EXCESS IN HIS OPINION BUT WHOLE SALE REJECTION OF BOOKS OF ACCOUNT CANNOT BE JUSTIFIED. HE ALSO SUBMITTED THAT THE ASSESSMENT O RDER PASSED BY THE A.O. AS PER THE TRIBUNAL DIRECTION IN ASSESSMENT YEAR 20 03-04 IS ALSO AVAILABLE I.T.A.NO.2085 /AHD/2009 3 ON PAGES 3-7 OF THE PAPER BOOK AS PER WHICH THE A .O. MADE DISALLOWANCE OF RS.2 95 777/- ON ACCOUNT OF FREIGHT EXPENSES AND OF RS.5 29 630/- ON ACCOUNT OF PETROL AND LDO EXPENSES AND TOTAL RS.8 25 407/- WAS DISALLOWED IN THAT YEAR. IT WAS HIS SUBMISSION THAT IN THE PRESENT YEAR LD. CIT(A) HAS ALREADY MADE DISAL LOWANCE OF RS.25 000/- OUT OF FREIGHT EXPENSES AND HENCE THE ORDER OF LD. CIT(A) SHOULD BE CONFIRMED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW AND THE TRIBUNAL DECISION IN ASSESSEES OWN CASE FOR THE AS SESSMENT YEAR 2003- 04. WE FIND THAT IN THE PRESENT YEAR THE A.O. HA S REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE INCOME @ 8% OF GROSS RECE IPT AND HE HAS NOT EXAMINED THE OTHER ASPECTS AS TO HOW MUCH WAS EXCES SIVE EXPENDITURE CLAIMED BY THE ASSESSEE UNDER VARIOUS HEADS I.E. FR EIGHT EXPENSES DIESEL CONSUMPTION ETC. IN ASSESSMENT YEAR 2003-04 IT WA S HELD BY THE TRIBUNAL THAT ALTHOUGH THE WHOLE SALE REJECTION OF BOOKS OF ACCOUNTS IS NOT JUSTIFIED BUT FOR THE VARIOUS DEFECTS POINTED OUT BY THE A.O. THE A.O. SHOULD HAVE DISALLOWED EXPENSES WHICH WERE EXCESSIVE IN HIS OP INION. AS PER THE CONSEQUENT ORDER PASSED BY THE A.O. IN THAT YEAR H E HAS MADE DISALLOWANCE OF RS.8 25 407/- OUT OF FREIGHT AND DI ESEL EXPENSES. IN OUR CONSIDERED OPINION IN THE PRESENT YEAR ALSO THE M ATTER SHOULD GO BACK TO THE FILE OF THE A.O. FOR MAKING SPECIFIC DISALLOWAN CE OUT OF EXPENSES WHICH ARE EXCESSIVE IN HIS OPINION BUT WHOLE SALE R EJECTION OF BOOKS OF ACCOUNT IS NOT JUSTIFIED. WE HOLD ACCORDINGLY. W E SET ASIDE THE ORDER OF LD. CIT(A) AND RESTORE THE MATTER BACK TO THE FILE OF THE A.O. FOR A FRESH DECISION. THE ASSESSEE HAS TO SATISFY THE A.O. THA T THE EXPENSES CLAIMED BY THE ASSESSEE ARE NOT EXCESSIVE AND THE A.O. CAN MAKE DISALLOWANCE TO I.T.A.NO.2085 /AHD/2009 4 THE EXTENT HE FINDS THAT EXPENSES CLAIMED BY THE A SSESSEE ARE EXCESSIVE. NEEDLESS TO SAY THE ORDER SHOULD BE PASSED BY THE A.O. AS PER ABOVE DISCUSSION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. IN THE RESULT APPEAL OF THE REVENUE STANDS ALLO WED FOR STATISTICAL PURPOSES. 6. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED HEREINABOVE. SD./- SD./- (MUKUL KUMAR SHRAWAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR AHMEDABAD BY ORDER 6. THE GUARD FILE AR ITAT AHMEDABAD 1. DATE OF DICTATION 23/11 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 24/11.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S.24/11 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 25/11 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.25/11 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 25/11/2011 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. ..