Deputy Commissioner of Income Tax, Ambala v. Sh. Deep Chand & Sons, Prop, Ambala

ITA 349/CHANDI/2010 | 2004-2005
Pronouncement Date: 23-02-2012 | Result: Dismissed

Appeal Details

RSA Number 34921514 RSA 2010
Assessee PAN AACHD9070K
Bench Chandigarh
Appeal Number ITA 349/CHANDI/2010
Duration Of Justice 1 year(s) 10 month(s) 18 day(s)
Appellant Deputy Commissioner of Income Tax, Ambala
Respondent Sh. Deep Chand & Sons, Prop, Ambala
Appeal Type Income Tax Appeal
Pronouncement Date 23-02-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 23-02-2012
Date Of Final Hearing 15-02-2012
Next Hearing Date 15-02-2012
Assessment Year 2004-2005
Appeal Filed On 05-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE MS. SUSHMA CHOWLA JUDICIAL MEMBER AND SHRI MEHAR SINGH ACCOUNTANT MEMBER ITA NO.349 /CHD/2010 (ASSESSMENT YEAR: 2004-05) THE D.C.I.T. VS. DEEP CHAND & SONS AMBALA. PROP.DEEPAK MARKETING CO. 4281 HILL ROAD AMBALA CITY. PAN: AACHD 9070K (APPELLANT) (RESPONDENT) APPELLANT BY : SMT.JAISHREE SHARMA DR RESPONDENT BY : SHRI ROHIT VITT DATE OF HEARING : 15.02.2012 DATE OF PRONOUNCEMENT : 23.02.2012 O R D E R PER SUSHMA CHOWLA J.M. : THE APPEAL FILED BY THE REVENUE IS AGAINST THE ORDE R OF THE COMMISSIONER OF INCOME-TAX APPEALS) PANCHKULA DATE D 18.01.2010 RELATING TO ASSESSMENT YEAR 2004-05 AGAINST THE ORD ER PASSED UNDER SECTION 143(3) OF THE I.T. ACT 1961. 2. THE ONLY GROUND OF APPEAL RAISED BY THE REVENUE READS AS UNDER: 1. ON THE BASIS OF THE FACTS AND IN THE CIRCUMSTAN CES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.8 75 327/- IN THE TRADING ACCOUNT OF THE ASSESSEE DISREGARDING THE FACT THAT THE PURCHASES WORTH RS.11 66 440/- FROM M/S UDGAM MERCANTILE PVT. LTD. NEW DELHI WERE HELD AS IN GENUINE IN THE A.Y. 2002-03 AFTER DETAILS EXAMINATION WHICH HAVE BEEN SUSTAINED IN APPEAL BY THE LD. CIT(A) AND THE LD. ITAT. FURTHER IN THE ASST. YEAR 2004-05 UNDER CONSIDERATION THE CONFIRMATION/COPY OF ASSESSEES ACCOUNT FROM M/S UDGAM MERCANTILES PVT. LTD. FROM WHOM PURCHASES WORTH RS.7 84 080/- HAVE BEEN SHOWN WAS NOT RECEIVED INSPITE OF REMINDERS ISSUED TO THE SAID COMPANY BY THE AO. FURTHER IN THE ABSENCE OF 2 INVENTORIES OF OPENING & CLOSING STOCK THE TRADING RESULTS SHOWN BY THE ASSESSEE WERE NEITHER VERIFIABLE NOR RELIABLE AND THE GP RATE OF 17.66% APPLIED BY THE AO WAS JUSTIFIED IN VIEW OF THE PAS T HISTORY OF THE CASE. 3. THE LEARNED A.R. FOR THE ASSESSEE AT THE OUTSET POINTED OUT THAT THE ISSUE IN THE PRESENT APPEAL STANDS COVERED BY THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE RELATING TO ASS ESSMENT YEAR 2005-06. 4. THE LEARNED D.R. FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF THE ASSESSING OFFICER. 5. THE LEARNED A.R. FOR THE ASSESSEE IN REJOINDER P OINTED OUT THAT IN THE SUCCEEDING YEAR ALSO THE PURCHASES WERE MADE FR OM THE SAID PARTY I.E. M/S UDGAM MERCENTILE PVT. LTD. A HIGHER GP RA TE WAS APPLIED BY THE ASSESSING OFFICER TO WORK OUT THE INCOME IN THE HANDS OF THE ASSESSEE. THE LEARNED A.R. FOR THE ASSESSEE ALSO D REW OUR ATTENTION TO THE COMPARATIVE CHART REFLECTING GROSS PROFITS FOR VARIOUS YEARS AND IT WAS POINTED OUT THAT IN ASSESSMENT YEARS 2006-07 AN D 2007-08 THE ASSESSEE HAD SHOWN LOWER GP RATE THAN SHOWN IN ASSE SSMENT YEAR 2004- 05 AND THE SAME ON IDENTICAL SET OF FACTS HAD BEEN ACCEPTED BY THE ASSESSING OFFICER VIDE ORDER PASSED UNDER SECTION 1 43(3) OF THE ACT. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD DE CLARED SALES OF RS.64 31 500/- ON WHICH GP RATE OF 4.04% WAS DECLA RED. THE ASSESSING OFFICER NOTED THE ASSESSEE NOT TO HAVE MAINTAINED S TOCK REGISTER AND FURTHER CONTENTION OF THE ASSESSING OFFICER WAS THA T THE PURCHASES WERE MADE FROM ONE M/S UDGAM MERCANTILE PVT. LTD. WHICH WERE FOUND TO BE NOT GENUINE IN ASSESSMENT YEAR 2002-03 AND THE INCO ME OF THE ASSESSEE WAS DETERMINED BY APPLYING GP RATE OF 17.66%. CONS EQUENTLY THE 3 INCOME OF THE ASSESSEE WAS COMPUTED AFTER REJECTING THE BOOKS OF ACCOUNT BY THE ASSESSING OFFICER AND GROSS PROFIT D ECLARED AT 4.04% WAS SUBSTITUTED BY GROSS PROFIT RATE OF 17.66% ARRIVED AT AFTER CONSIDERING THE TRADING ADDITION IN ASSESSMENT YEAR 2002-03. T HE CIT (APPEALS) AFTER TAKING NOTE OF THE WRITTEN SUBMISSION FILED B Y THE ASSESSEE IN WHICH THE CONTENTIONS OF THE ASSESSING OFFICER WERE ASSAI LED CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER. THE WRITTEN SUB MISSION OF THE ASSESSEE AND THE CONTENTS OF THE REMAND REPORT ARE REPRODUCED AT PAGES 4 TO 9 OF THE APPELLATE ORDER. THE TRIBUNAL IN ITA NO.568/CHD/2007 IN APPEAL FILED BY THE ASSESSEE VIDE ORDER DATED 29.9. 2008 HAD RESTORED BACK THE ISSUE TO THE CIT (APPEALS) TO ADDRESS THE SUBMISSION MADE BY THE ASSESSEE. THE CIT (APPEALS) HELD THAT THE ASSE SSING OFFICER WAS NOT JUSTIFIED IN REJECTING THE BOOKS OF ACCOUNT UNDER S ECTION 145(3) OF THE ACT WITHOUT POINTING OUT ANY SPECIFIC DEFECTS AND T HE DISCREPANCIES IN THE STOCK INVENTORY RELATING TO ASSESSMENT YEAR 200 2-03 COULD NOT BE THE BASIS FOR REJECTING THE BOOKS OF ACCOUNT IN THE CUR RENT ASSESSMENT YEAR. FURTHER ISSUE NOTICED BY THE CIT (APPEALS) WAS THAT THE ASSESSEE HAD FILED CONFIRMED COPY OF ACCOUNT OF M/S UDGAM MERCAN TILE PVT. LTD. BEFORE THE ASSESSING OFFICER. FURTHER CONTENTIONS OF THE ASSESSING OFFICER WITH REGARD TO THE PURCHASES RETURNED TO TW O PARTIES ALONGWITH THE GRS WERE ALSO ACCEPTED BY THE CIT (APPEALS) AND IT WAS OBSERVED THAT THE SAID PURCHASES RETURNED ONLY REDUCES PURCH ASES AND HENCE INCREASES THE PROFITS OF THE ASSESSEE. THE CIT (AP PEALS) ALSO ACCEPTED THE MARGIN FALL IN THE GP RATE AND HELD THAT THE AS SESSING OFFICER WAS NOT JUSTIFIED IN APPLYING THE GP RATE OF 17.66%. 7. THE REVENUE IS IN APPEAL AGAINST THE SAID ORDER OF THE CIT (APPEALS). HOWEVER WE FIND THAT SIMILAR ISSUE OF APPLICATION OF GP RATE ON TURNOVER DECLARED BY THE ASSESSEE AROSE BEFORE T HE TRIBUNAL IN 4 ASSESSEES OWN CASE. THE TRIBUNAL IN ITA NO.991/CH D/2009 RELATING TO ASSESSMENT YEAR 2005-06 VIDE ORDER DATED 16.7.2010 CONSIDERED THE CASE OF THE ASSESSEE WHERE AS AGAINST GP RATE DECLARED O F 4.64% GP RATE OF 17.66% WAS APPLIED. THE TRIBUNAL VIDE PARA 6 HELD AS UNDER : 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS. THE ASSESSEE IS ENGAGED IN THE BUSINESS O F TRADING IN STATIONERY ITEMS. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD DECLARED GROSS PROFI T OF 4% ON THE GROSS TURN OVER OF RS. 1.33 CR. THE ASSESSING OFFICER CONSIDERED THE ADDITIONS MADE IN ASSESSMENT YEARS 2002-03 AND 2003-04 AND ADOPTED THE GP RATE AT THE RATE OF 15% TO WORK OUT THE INCO ME FOR THE YEAR UNDER CONSIDERATION. IN ASSESSMENT Y EAR 2002-03 ON VERIFICATION CERTAIN PURCHASES MADE BY THE ASSESSEE WERE FOUND TO BE NON GENUINE RESULTING IN AN ADDITION OF RS. 12 23 196/- AND AS AGAINST GP OF 4.64% SHOWN IN THE RETURN OF INCOME THE ASSESSING OFFICER COMPUTED THE INCOME BY APPLYING GP RATE OF 17.66%. SIMILAR ADDITION WAS MADE IN ASSESSMENT YEAR 2004-05. THE ASSESSING OFFICER HAS FAILED TO POINT OUT ANY DEFECT IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE EXCEPT TO POINT OUT THAT THE ASSESSEE IS NOT MAINTAINING STOCK REGISTER. THE G P RATE OF 15% WAS ADOPTED TO WORK OUT THE INCOME FOR THE YEAR ON THE BASIS OF PAST ADDITIONS. THE ASS ESSEE IS CARRYING ON THE SAME LINE OF BUSINESS IN THE SUCCEEDING YEARS AND IN ASSESSMENT YEARS 2006-07 AND 2007-08 THE GP RATE DECLARED AT 3.75% HAS BEEN ACCEPTED BY THE ASSESSING OFFICER. THE COPY OF THE ASSESSMENT ORDER PASSED U/S 143 (3) OF THE ACT RELATING TO ASSESSMENT YEAR 2007-08 IS PLACED ON RECORD. THE ASSESSEE HAS ALSO FURNISHED THE COMPARATIVE STATEMENT OF THE GP RATE DECLARED BY TH E ASSESSEE IN THE PRECEDING AND SUCCEEDING YEARS. IN THE ABSENCE OF ANY DEFECT BEING POINTED OUT BY THE ASSESSING OFFICER WE FIND NO MERIT IN THE REJECTIO N OF BOOKS OF ACCOUNT MERELY BECAUSE HIGHER GP RATE WAS ADOPTED IN THE PRECEDING YEARS BECAUSE OF NON VERIFICATION OF PURCHASES. THOUGH THE PRINCIPLES OF RES JUDICATA ARE NOT APPLICABLE TO INCOME TAX PROCEEDINGS HOWEVER A CONSISTENT VIEW SHOULD BE ADOPTED FROM YEAR TO YEAR IN COMPUTING THE INCOME O F ASSESSEE UNLESS SOMETHING IS FOUND TO THE CONTRARY . THE ASSESSMENT IN THE CASE OF ASSESSEE ITSELF FOR T HE SUCCEEDING YEARS HAD BEEN COMPLETED U/S 143 (3) OF THE ACT UNDER WHICH GP RATE OF 3.75% HAD BEEN ACCEPTED. WE FIND THAT DURING THE YEAR UNDER APPEA L THE ASSESSEE HAD DECLARED GP RATE OF 4% AND IN THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF THE CASE WH ERE NO DEFECTS HAVE BEEN FOUND BY ASSESSING OFFICER TH E SAME MERITS TO BE ACCEPTED. WE UPHOLD THE ORDER OF 5 CIT(A) IN THIS REGARD AND DISMISS THE GROUND OF APPEAL RAISED BY THE REVENUE. 8. THE FACTS OF THE PRESENT CASE BEFORE US ARE IDEN TICAL TO THE FACTS BEFORE THE TRIBUNAL IN ASSESSMENT YEAR 2005-06. TH E PURCHASES IN QUESTION HAVE BEEN MADE FROM THE SAME PARTY AND GP RATE HAVE BEEN ADOPTED BY RELYING ON THE ADDITION MADE IN ASSESSME NT YEAR 2002-03. IN THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE PRES ENT CASE AND FINDINGS OF THE CIT (APPEALS) IN PARA 6.2 WHICH HAVE NOT BE EN CONTRAVERTED BY THE LEARNED D.R. FOR THE REVENUE WE FIND NO MERIT IN THE PRESENT GROUND OF APPEAL RAISED BY THE REVENUE. UPHOLDING THE ORD ER OF THE CIT (APPEALS) WE DISMISS THE GROUND OF APPEAL RAISED BY THE REVENUE. 9. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF FEBRUARY 2012. SD/- SD/- (MEHAR SINGH) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 23 RD FEBRUARY 2012 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT CHANDIGARH