ACIT, Jaipur v. MAHESH CHAND GUPTA, Jaipur

ITA 319/JPR/2016 | 2012-2013
Pronouncement Date: 29-09-2016 | Result: Dismissed

Appeal Details

RSA Number 31923114 RSA 2016
Assessee PAN ACEPG9938K
Bench Jaipur
Appeal Number ITA 319/JPR/2016
Duration Of Justice 5 month(s) 23 day(s)
Appellant ACIT, Jaipur
Respondent MAHESH CHAND GUPTA, Jaipur
Appeal Type Income Tax Appeal
Pronouncement Date 29-09-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted Not Allotted
Tribunal Order Date 29-09-2016
Assessment Year 2012-2013
Appeal Filed On 06-04-2016
Judgment Text
VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCHES JAIPUR JH HKKXPUN] YS[KK LNL; OA JH DQY HKKJR] U;KF;D LNL ; DS LE{K BEFORE:SHRI BHAGCHAND AM & SHRI KULBHARAT JM VK;DJ VIHY LA-@ ITA NO. 319/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13 THE ACIT CIRCLE- 5 JAIPUR CUKE VS. SHRI MAHESH CHAND GUPTA PROP. M/S. RAJ SMALL SCALE COTTAGE INDUSTRIES JAGAT SHIROMANI ROAD AMER JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ACEPG 9938 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA ADDL CIT -DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MADHUKAR GARG LQUOKBZ DH RKJH[K@ DATE OF HEARING : 29/09/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 29 /09/2016 VKNS'K@ ORDER PER BHAGCHAND AM THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDE R OF THE LD. CIT(A)-2 JAIPUR DATED 29-01-2016 FOR THE ASSESSMEN T YEAR 2012-13 RAISING THEREIN FOLLOWING GROUNDS OF APPEAL. (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETI NG THE TRADING ADDITION OF RS. 5 92 506/- IN EXPORT UNIT A ND TRADING ADDITION OF RS. 26 28 088/- IN LOCAL UNIT WITHOUT A PPRECIATING THE FACTS NARRATED BY THE AO IN HIS ORDER. ITA NO. 319/JP/2016 ACIT CIRCLE- 5 JAIPUR VS. SHRI MAHESH CHAND GUPTA . 2 (II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN RESTRI CTING THE DISALLOWANCE OUT OF COMMISSION EXPENSES FROM RS. 15 89 508/- TO RS. 1 00 000/- WITHOUT APPRECIATING THE FACTS NARRATED BY THE AO IN HIS ORDER. 2.1 AS REGARDS GROUND NO. 1 RAISED BY THE REVENUE THE LD. AR OF THE ASSESSEE AT THE OUTSET OF THE HEARING PRAYED THAT S UCH ISSUE HAS ALREADY BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE COORD INATE BENCH VIDE ITS ORDER DATED 15-05-2015 IN ITA NO. 392/JP/2012 (A.Y. 2008-09) IN ASSESSEE'S OWN CASE. HENCE THIS ISSUE IS COVERED . 2.2 THE LD. CIT(A) HAS GRANTED RELIEF TO THE ASSESS EE ON THE BASIS OF THE OBSERVATION OF THE ITAT ORDER (SUPRA). THE RELEVANT PORTION OF LD. CIT(A)S ORDER ALLOWING RELIEF TO THE ASSESSEE ON T HE ISSUE IN QUESTION IS AS UNDER:- 3.3.1. I HAVE PERUSED THE FACTS OF THE CASE THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLA NT IN THIS YEAR.. 3.3.2 IN VIEW OF THE ABOVE OBSERVATION OF THE ITAT AS ALSO THE FACT THAT THE RATES APPLIED FOR THE ESTIMA TION OF PROFITS O THE DOMESTIC UNIT AS WELL AS EXPORT AT 36 % AND 56.17% WERE FOLLOWED FROM THE ASSESSMENT YEAR 2008- 09 BY THE ASSESSING OFFICER IN WHICH THE ITAT HAS ACCEPTE D THE PROFITS BEING BETTER THAN IN THE PREVIOUS YEAR TH E FACTS BEING SIMILAR IN THIS YEAR ALSO THE PROFIT RATE BEING BE TTER THAN PREVIOUS YEAR ARE ACCEPTED AND THE GROUND OF APPEA L OF THE ASSESSEE IS ALLOWED. ITA NO. 319/JP/2016 ACIT CIRCLE- 5 JAIPUR VS. SHRI MAHESH CHAND GUPTA . 3 2.3 AS REGARDS THE GROUND NO. 2 RAISED BY THE REVEN UE THE LD. AR OF THE ASSESSEE AT THE OUTSET OF THE HEARING PRAYED TH AT SUCH ISSUE HAS ALREADY BEEN DECIDED PARTLY IN FAVOUR OF THE ASSESSEE BY T HE COORDINATE BENCH VIDE ITS ORDER DATED 15-05-2015 (SUPRA) IN ASSESSEE 'S OWN CASE. HENCE THE ISSUE OF COMMISSION PAID BY THE ASSESSEE IS ALSO CO VERED FROM THE ITAT ORDER DATED 15-05-2015 IN ASSESSEE'S OWN CASE . 2.4 THE LD. CIT(A) HAS GRANTED PART RELIEF TO THE A SSESSEE ON THE BASIS OF THE OBSERVATION OF THE ITAT ORDER (SUPRA). THE R ELEVANT PORTION OF LD. CIT(A)S ORDER ALLOWING PART RELIEF TO THE ASSESSEE ON THE ISSUE IN QUESTION IS AS UNDER:- 4.3 I HAVE PERUSED THE FACTS OF THE CASE THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT IN VIEW OF THE FACTS OF THE CASE AS DISCUSSED ABOVE AND FOLLOWING THE ORDER OF THE ITAT FOR THE A.Y. 08-09 THE DISALLOWANCE UNDER THIS HEAD IS RESTRICTED TO RS. 1 00 000/-. THE ABOVE GROUND IS PARTLY ALLOWED. 2.5 THE LD. DR RELIED ON THE ORDER OF THE AO. 2.6 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AS REGARDS THE GROUND NO. 1 RA ISED BY THE REVENUE IT IS NOTED THAT SUCH ISSUE HAS ALREADY BEEN DECIDE D IN FAVOUR OF THE ITA NO. 319/JP/2016 ACIT CIRCLE- 5 JAIPUR VS. SHRI MAHESH CHAND GUPTA . 4 ASSESSEE BY THE COORDINATE BENCH IN ASSESSEE'S OWN CASE (SUPRA) BY OBSERVING AS UNDER:- 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH TH E PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE R ECORD. WHATEVER DEFECTS HAD BEEN POINTED OUT BY THE ASSESS ING OFFICER TO REJECT THE BOOK RESULT U/S 145(3) OF THE ACT AR E SUFFICIENT TO REJECT THE BOOK RESULT AND ALSO THE ASSESSEE HAS NO T CHALLENGED THIS GROUND OF APPEAL. HOWEVER THIS ASPECT HAS BEEN CONSIDERED BY THE COORDINATE BENCH IN A.Y. 2005-06 TO 2007-08. THE COORDINATE BENCH CONFIRMED THE REJECTION OF BOOKS B UT IT FURTHER OBSERVED THAT AS REGARDS THE ESTIMATION OF INCOME I N LOCAL UNIT IN ABSENCE OF ANY COMPARABLE CASE AND PAST HISTORY IN THE ASSESSEES OWN CASE IS THE BEST GUIDE IN THE PRESENT CASE. THE ASSESSEE HAD DECLARED BETTER RESULT AS COMPARED TO PRECEDING TWO YEARS AS MENTIONED BY THE LD CIT(A) AND IS A MATT ER OF RECORD. THEREFORE IN VIEW OF THE DECISION OF HONBLE JURISDICTIONAL HIGH COURTS DECISION IN THE CASE OF CIT VS. GOTAN L IME KHANIJ UDYOG 256 ITR 243 EVEN IF BOOKS OF ACCOUNT HAVE BEEN REJECTED IN THE CIRCUMSTANCES AND FACT OF THE PRESENT CASE NO ADDITION IS CALLED FOR. THEREFORE THE ORDER OF THE CIT(A) UPHELD BY THE COORDINATE BENCH FOR LOCAL SALE. AS REGARDS THE EXP ORT UNIT IT WAS POINTED OUT THAT THERE WAS ONLY ONE WOOLEN CARPET EAC H IN THE OPENING AS WELL AS IN THE CLOSING STOCK AND THE RELE VANT BILLS AND RECORD WAS AVAILABLE. AS REGARDS PURCHASES AND SALES NO SPECIFIC DEFECT HAS BEEN POINTED OUT. THE PURCHASES AND SALE S ARE FULLY VOUCHED. THE REASON FOR FALL IN G.P. WAS EXPLAINED BE CAUSE THE EXPORT OF GOLD JEWELLERY WAS MADE FOR THE FIRST TIME BY THE ASSESSEE DURING THE IMPUGNED YEAR. THE LD CIT(A) HAS ACCEPTED THE CONTENTION OF THE ASSESSEE TO SOME EXTENT. THE E XPLANATION GIVEN APPEARS TO BE SATISFACTORY. THE ESTIMATION MAD E BY THE ASSESSING OFFICER APPEARS TO BE ON THE HIGHER SIDE IN SPITE OF THE FACT THAT THE LD CIT(A) HAS ACCEPTED THE EXPLANATIO N MAY BE TO SOME EXTENT WHICH IS NOT DEFINED. IN THE FACTS AND C IRCUMSTANCES OF THE PRESENT CASE NO ADDITION IS CALLED FOR WHEN THE EXPLANATION OF FALL IN G.P. APPEARS TO BE SATISFACTORY. IN THE PRESENT CASE THE FINDING OF THE COORDINATE BENCH ARE SQUARELY APPLIC ABLE AS NO SPECIFIC DEFECT IN PURCHASE AND SALE HAS BEEN POINT ED OUT BY THE ASSESSING OFFICER. IN LOCAL SALE THE G.P. HAD INCR EASED FROM ITA NO. 319/JP/2016 ACIT CIRCLE- 5 JAIPUR VS. SHRI MAHESH CHAND GUPTA . 5 34.46% TO 34.53% COMPARED TO PRECEDING YEAR. IN EXP ORT DIVISION THE GP WAS CONSTANT AS SHOWN IN A.Y. 2007- 08 @ 49.07% AND IN YEAR UNDER CONSIDERATION @ 49.06%. THER EFORE BY RESPECTFULLY FOLLOWING THE DECISION OF THE COORD INATE BENCH WE DELETE THE ADDITION CONFIRMED BY THE LD CIT(A). ACCO RDINGLY BOTH THE GROUNDS OF ASSESSEES APPEAL ARE ALLOWED. 2.7 AS REGARDS THE GROUND NO. 2 RAISED BY THE REVE NUE IT IS NOTED THAT SUCH ISSUE HAS ALREADY BEEN PARTLY DECIDED IN FAVOU R OF THE ASSESSEE BY THE COORDINATE BENCH IN ASSESSEE'S OWN CASE (SUPRA) I.E. CONFIRMED THE DISALLOWANCE TO THE EXTENT OF RS. 1.00 LAC OUT OF T OTAL DISALLOWANCE MADE BY THE AO. THE OBSERVATION OF ITAT JAIPUR BENCH (SU PRA) IS REPRODUCED AS UNDER:- 11. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH T HE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE R ECORD. IN PAST SIMILAR ADDITIONS WERE MADE BY THE ASSESSING OFFICER WHICH HAS BEEN EITHER DELETED BY THE CIT(A) OR CONFIRMED BY T HE CIT(A) BUT FINALLY THE COORDINATE BENCH HAD CONFIRMED A LUMP S UM ADDITION OF RS. 50 000/- IN EACH YEAR. THE LD CIT(A) HAS SPECI FIED THE DEFECTS WITH REFERENCE TO BILLS AND NOT DEDUCTION TD S ON COMMISSION PAYMENT BUT HE IS NOT ALLOWED THE ASSESSE E TO EXPLAIN THE REASONS FOR NOT DEDUCTING TDS. THE DISCR EPANCY IS SPECIFIC AND COMMISSION PAYMENT IN THIS LINE OF BUS INESS IS ACCEPTED IN GENERAL AS THE HANDICRAFT EMPORIUMS GEN ERALLY PAY THE COMMISSION TO THE GUIDES TAXI DRIVERS AUTO DR IVERS. THEY COME FROM OUTSIDE AND HAD DEALING OCCASIONALLY AND IT WAS NOT FAIR TO PAY COMMISSION IN FRONT OF CUSTOMERS. IT IS JUST LIKE A SECRET COMMISSION AND A VERY SHORT DURATION IS AVAI LABLE WITH THE ASSESSEE TO COMPLETE THE FORMALITIES FOR PAYING COM MISSION. THEREFORE THERE MAY BE DEFECTS IN THE RECEIPTS OF C OMMISSION PAYMENT BUT IT IS A PART AND PARCEL OF THE BUSINESS DEALINGS. THEREFORE WE CONFIRM THE DISALLOWANCE UNDER THIS HEA D AT RS. 1 ITA NO. 319/JP/2016 ACIT CIRCLE- 5 JAIPUR VS. SHRI MAHESH CHAND GUPTA . 6 LAC OUT OF TOTAL DISALLOWANCE MADE BY THE ASSESSING OFFICER AT RS.16 54 883/-. ACCORDINGLY GROUNDS NO. 3 TO 6 OF THE APPEAL ARE PARTLY ALLOWED. CONSIDERING THE FACTS CIRCUMSTANCES OF THE CASE AN D RESPECTFULLY FOLLOWING THE ORDER OF ITAT JAIPUR BENCH (SUPRA) W E CONCUR WITH THE FINDINGS OF THE LD. CIT(A) ON BOTH THE ISSUES RAISE D BY THE REVENUE. HENCE THE GROUNDS RAISED BY THE REVENUE ARE DISMIS SED. 3.0 IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29-09-20 16. SD/- SD/- DQY HKKJR HKKXPUN (KUL BHARAT) (BHAGCHAND) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 29/09/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ACIT CIRCLE- 5 JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- SHRI MAHESH CHAND GUPTA JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR ITAT JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 319/JP/2016) VKNS'KKUQLKJ@ BY ORDER LGK;D IATHDKJ@ ASSISTANT. REGISTRAR