Shri Rajubhai B.Shah, Baroda v. The Dy.CIT.,Circle-2(2),, Baroda

ITA 3468/AHD/2010 | 2006-2007
Pronouncement Date: 09-09-2011 | Result: Allowed

Appeal Details

RSA Number 346820514 RSA 2010
Bench Ahmedabad
Appeal Number ITA 3468/AHD/2010
Duration Of Justice 8 month(s) 11 day(s)
Appellant Shri Rajubhai B.Shah, Baroda
Respondent The Dy.CIT.,Circle-2(2),, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 09-09-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 09-09-2011
Assessment Year 2006-2007
Appeal Filed On 29-12-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD B BENCH . . ! . ' . #$ % ' ITA NO.3468/AHD/2010 [ASSTT. YEAR : 2006-2007] RAJUBHAI B. SHAH 4 RAJENDRA SOCIETY MANJALPUR BARODA. /VS. DCIT CIR.2(2) BARODA. ( &' / APPELLANT) ( (#&' / RESPONDENT) )* + ' / ASSESSEE BY : SHRI S.N. SOPARKAR % + ' / REVENUE BY : SHRI SAMIR TEKRIWAL -. + */ / DATE OF HEARING : 2 ND SEPTEMBER 2011 012 + */ / DATE OF PRONOUNCEMENT : 9 TH SEPTEMBER 2011 '3 / O R D E R G.D. AGARWAL VICE-PRESIDENT : THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-I V BARODA DATED 20.10.2010 ARISING OUT OF THE ORDER OF THE ASSESSI NG OFFICER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961. 2. THE ONLY GROUND RAISED IN THIS APPEAL BY THE ASS ESSEE READS AS UNDER: ITA NO.3468/AHD/2010 -2- 1. THE LD.CIT(A) ERRED IN CONFIRMING THE ADDITION ON ACCOUNT OF GROSS PROFIT AMOUNTING TO RS.4 69 340/- DESPITE THE FACT THAT THE BOOKS OF ACCOUNTS WERE NOT REJECTED BY THE AO WHILE MAKIN G THE SAID ADDITION. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. THE ONLY BUSINESS OF THE ASSESSEE IS TRADING O F VARIOUS ITEMS INCLUDING PAN MASALA ETC. THAT DURING THE YEAR UNDER CONSIDERATION TH E GP RATE OF THE ASSESSEE HAS REDUCED. IT WAS EXPLAINED BY THE ASSE SSEE THAT THE FALL IN THE GP RATE WAS BECAUSE DURING THE YEAR UNDER CONSIDERATIO N THE ASSESSEE STARTED TRADING IN NEW ITEMS SUCH AS POHA PARLE GLUCOSE MAGGI ETC. IN WHICH MARGIN OF PROFIT IS LOW. HOWEVER THE AO DID NOT ACCEPT T HE ASSESSEES EXPLANATION AND APPLIED GP RATE OF 5% WHICH RESULTED IN THE ADD ITION OF RS.4 69 340/-. THE SAME IS SUSTAINED BY THE CIT(A) HENCE THIS APPEAL B Y THE ASSESSEE. 4. HAVING HEARD BOTH THE PARTIES WE HAVE GONE THRO UGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE AO HAS NOT POI NTED OUT A SINGLE DEFECT IN THE ASSESSEES BOOKS OF ACCOUNTS. MERELY BECAUSE T HE RATE OF GP HAS REDUCED FROM LAST YEAR WOULD BE NO GROUND FOR REJECTION OF THE BOOKS OF ACCOUNTS. THOUGH THE ASSESSEE HAS GIVEN EXPLANATION FOR FALL IN THE GP HOWEVER IF IN THE OPINION OF THE AO THE EXPLANATION WAS NOT SATISFAC TORY HE COULD HAVE EXAMINED THE ASSESSEES BOOKS OF ACCOUNTS IN DEPTH AND IF HE HAD FOUND SOME DEFECTS IN THE BOOKS OF ACCOUNTS OR THE METHOD OF A CCOUNTING EMPLOYED BY THE ASSESSEE THEN ONLY ASSESSEES BOOKS OF ACCOUNTS COU LD HAVE BEEN REJECTED. HOWEVER IN THIS CASE THE AO HAS NOT POINTED OUT A SINGLE DEFECT IN THE BOOKS OF ACCOUNTS. THEREFORE THE SAME CANNOT BE REJECTE D. ONCE THE BOOKS OF ACCOUNTS CANNOT BE REJECTED THE PROFIT CANNOT BE E STIMATED. IN VIEW OF THE ABOVE WE HOLD THAT THE REJECTION OF THE BOOKS OF A CCOUNTS BY THE AO AND ITA NO.3468/AHD/2010 -3- ESTIMATION OF GP BY HIM CANNOT BE UPHELD. ACCORDIN GLY THE ADDITION OF RS.4 69 340/- MADE BY THE AO ON ACCOUNT OF LOW GP I S DELETED. 5. IN THE RESULT ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( . .. .' '' ' . .. .#$ #$ #$ #$ /D.K. TYAGI) % % % % /JUDICIAL MEMBER ( . .. . . .. . G.D. AGARWAL) /VICE-PRESIDENT COPY OF THE ORDER FORWARDED TO: 1) : ASSESSEE 2) : DEPARTMENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR ITAT. BY ORDER DR/AR ITAT AHMEDABAD