Pawan Kumar, Ahmedgarh. v. ITO, Malerkotla

ITA 365/CHANDI/2015 | 2009-2010
Pronouncement Date: 27-10-2016 | Result: Partly Allowed

Appeal Details

RSA Number 36521514 RSA 2015
Assessee PAN ACJPK8769P
Bench Chandigarh
Appeal Number ITA 365/CHANDI/2015
Duration Of Justice 1 year(s) 6 month(s) 16 day(s)
Appellant Pawan Kumar, Ahmedgarh.
Respondent ITO, Malerkotla
Appeal Type Income Tax Appeal
Pronouncement Date 27-10-2016
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 27-10-2016
Date Of Final Hearing 03-11-2015
Next Hearing Date 03-11-2015
Assessment Year 2009-2010
Appeal Filed On 10-04-2015
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI BHAVNESH SAINI JUDICIAL MEMBER ITA NO. 365/CHD/2015 ASSESSMENT YEAR: 2009-10 SH. PAWAN KUMAR VS. THE ITO WARD-IV(4) AHMEDGARH MALERKOTLA PAN NO.ACJPK8769P (APPELLANT) (RESPONDENT) APPELLANT BY : SH. RAJ KAMAL RESPONDENT BY : SH. MANJIT SINGH DATE OF HEARING : 24.10.2016 DATE OF PRONOUNCEMENT : 27.10.2016 ORDER THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED AGAI NST THE ORDER OF LD. CIT(A)-2 LUDHIANA DATED 11.2.2015 FOR ASSESSMENT Y EAR 2009-10. 2. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PAR TIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. 3. EARLIER THIS APPEAL WAS DISMISSED FOR DEFAULT H OWEVER THE ASSESSEE FILED MISC. APPLICATION EXPLAINING THE REASONS FOR NON-APPEARANCE. THE 2 MISC. APPLICATION OF THE ASSESSEE WAS ALLOWED AND A PPEAL WAS RESTORED FOR DECIDING ON MERIT. 4. ON GROUND NOS. 1 TO 4 THE ASSESSEE CHALLENGED T HE REJECTION OF THE BOOKS OF ACCOUNT AND ADDITION OF RS. 3 LAKHS ON ACC OUNT OF LOW YIELD OF COTTON SEED OIL. 5. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSEE DERIVES INCOME FROM COTTON SEED AND SARSON AND IS ALSO DEALING IN CATTL E FEED. THE ASSESSING OFFICER NOTED THAT ASSESSEE HAD SHOWN GP RATE OF 8. 8% AGAINST GP RATE OF 10.78% IN IMMEDIATELY PRECEDING YEAR. THE ASSESSING OFFICER FURTHER NOTED THAT ENTIRE EXPENDITURE DEBITABLE TO THE MANUFACTUR ING ACCOUNT HAD BEEN CLAIMED IN THE PROFIT AND LOSS ACCOUNT. AFTER REDU CING THE MANUFACTURING ACCOUNT EXPENSE THE ASSESSING OFFICER COMPUTED GP RATE OF THE ASSESSEE AT 2.95%. THE ASSESSING OFFICER OBSERVED THAT GP RATE OF 2.95% IN MANUFACTURING CONCERN RUNNING OIL MILL AND CATTLE F EED UNIT ARE APPARENTLY VERY LOW. THE ASSESSING OFFICER THEREAFTER EXAMINED THE BOOKS OF ACCOUNT AND NOTED THAT NUMBER OF DISCREPANCIES IN THE BOOKS OF ACCOUNT. THE ASSESSING OFFICER DISCUSSED THE DISCREPANCIES AND D EFECTS IN THE ASSESSMENT ORDER AND ON FINDING UNSATISFACTORY EXPLANATION OF THE ASSESSEE REJECTED THE BOOKS OF ACCOUNT. THE LD. CIT(A) CONFIRMED THE REJECTION OF THE BOOKS OF ACCOUNT. THE ASSESSING OFFICER MADE ADDITION OF RS. 10 40 108/- BY ADOPTING THE YIELD OF OIL FROM COTTONSEED @11%. THE ASSESSING OFFICER NOTED THE ASSESSEE HAD SHOWN YIELD OF OIL FROM COTT ON SEED @ 10.02%. THE ASSESSING OFFICER COMPARED THE ASSESSEES CASE WITH THE SIMILAR CASES OF MANUFACTURING OF COTTON SEED OIL AND POINTED OUT TH AT THE COMPARABLE CASES 3 WERE SHOWING YIELD OF 12 TO 15%. AFTER CONSIDERING THE ASSESSEES SUBMISSIONS ON THIS ISSUE THE ASSESSING OFFICER EST IMATED THE YIELD OF OIL FROM COTTON SEED @ 11% AND ACCORDINGLY MADE ABOVE A DDITION. THE ASSESSEE SUBMITTED BEFORE THE LD. CIT(A) THAT 11% Y IELD IS UNJUSTIFIED. THE ASSESSEE CONTENDED THAT CASE OF SHRI PARVEEN JA IN PERTAINS TO ASSESSMENT YEAR 2008-09 AND THE CASE OF SHRI RAVIN DER KUMAR RELATES TO KHACHI KHAL IN WHICH OIL CONTENTS WERE MORE WHEREAS THE ASSESSEE MADE PAKKI KHAL IN WHICH OIL CONTENTS WAS LOW. THE ASSE SSEE ALSO CONTENDED THAT IT HAD PURCHASE BINOLA FROM OUTSIDE THE STATE IN WHICH OIL CONTENTS WAS LOW. THE ASSESSEE RELIED ON THE DECISION OF THE IT AT IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008-09 IN WHICH YIELD OF 11% WAS APPLIED AND ADDITION WAS FINALLY UPHELD TO THE EXTENT OF ONLY R S. 3 LAKHS. THE LD. CIT(A) NOTED THAT SIMILAR ADDITION WAS MADE IN THE ASSESSEES CASE FOR ASSESSMENT YEAR 2008-09 WHEREIN THE YIELD OF THE CO TTON SEED WAS ESTIMATED BY THE ASSESSING OFFICER @ 11% THE ADDIT ION WAS REDUCED BY LD. CIT(A) TO RS. 2 LAKHS. THE DEPARTMENTAL APPEAL WAS DECIDED BY THE TRIBUNAL VIDE ITS ORDER DATED 17.5.2012 IN ITA NO. 1119/CHD/2011 AND AFTER EXAMINING THE ISSUE IN DETAIL RESTRICTED TH E ADDITION TO RS. 3 LAKHS. THE LD. CIT(A) FOUND THAT THE ISSUE IS IDENTICAL AN D FACTS ARE SIMILAR THEREFORE FOLLOWING THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2008- 09 RESTRICTED THE ADDITION TO RS. 3 LAKHS. 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS I AM NO T INCLINED TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). THE ASSESSING OFF ICER HAS POINTED OUT SEVERAL DEFECTS AND DISCREPANCIES IN THE ACCOUNTS O F THE ASSESSEE ON WHICH NO SPECIFIC ARGUMENTS HAVE BEEN MADE BY LD. COUNSEL FOR THE ASSESSEE. THE 4 ASSESSEE ALSO RELIED UPON THE ORDER OF THE ITAT CH ANDIGARH BENCH IN THE CASE OF THE SAME ASSESSEE FOR PRECEDING ASSESSMENT YEAR 2008-09 IN WHICH ADDITION WAS CONFIRMED FOR A SUM OF RS. 3 LAKHS. NO DISTINGUISHABLE FEATURE HAVE BEEN BROUGHT TO MY NOTICE THEREFORE THE LD. CIT(A) WAS JUSTIFIED IN FOLLOWING THE ORDER OF THE TRIBUNAL FO R THE PURPOSE OF RESTRICTING THE ADDITION TO RS. 3 LAKHS. THE LD. CI T(A) WAS ALSO JUSTIFIED IN REJECTING THE BOOKS OF ACCOUNT KEEPING IN VIEW THE DEFECTS AND DISCREPANCIES POINTED OUT BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. THESE GROUNDS OF APPEAL OF THE ASSESSEE ARE ACCORDI NGLY DISMISSED. 7. ON GROUND NOS. 5 & 6 THE ASSESSEE HAS CHALLENGE D THE ADDITION OF RS. 2 LAKHS ON ACCOUNT OF LOW GP RATE OF CATTLE FEE D. THE ASSESSING OFFICER MADE ADDITION OF RS. 5 78 348/- BY ADOPTING GP RATE OF 15% ON SALE OF CATTLE FEED. 8. BRIEF FACTS ARE THAT DURING THE YEAR THE ASSESS EE HAD SOLD 13494.50 QUINTALS OF CATTLE FEED FOR AN AMOUNT OF RS. 94 50 110/- @ RS. 700/- PER QUINTAL. THE ASSESSING OFFICER POINTED OUT THAT ASS ESSEE SOLD SELF MANUFACTURED FEED IN CASH AND VOUCHERS OF CASH SALE S OF CATTLE FEED HAD NOT BEEN ISSUED IN NORMAL COURSE OF BUSINESS. THE ASSES SING OFFICER REFERRED TO GP SHOWN BY THE ASSESSEE AND POINTED OUT THAT GP SH OWN AT 8.88% WAS LOW AS COMPARED TO 10.08% OF THE LAST YEAR. THE ASSESSI NG OFFICER FURTHER POINTED OUT THAT IF EXPENDITURE PERTAINING TO MANUF ACTURING ARE ALSO DEBITED TO THE TRADING ACCOUNT THE GP WOULD COME TO 2.96% AS AGAINST 3.34% OF THE PRECEDING YEAR. THE ASSESSING OFFICER ACCORDING LY HELD THAT GP SHOWN BY THE ASSESSEE ON SALE OF CATTLE FEED WAS LOW. THE ASSESSING OFFICER 5 ESTIMATED THE SAME AT 15% AGAINST GP OF 8.8% AND MA DE THE ABOVE ADDITION. THE ASSESSEE SUBMITTED BEFORE LD. CIT(A) THAT GP RATE AS APPLIED BY THE ASSESSING OFFICER 15% IS WHOLLY UNJUSTIFIED BECAUSE GP SHOWN BY THE ASSESSEE ON SALE OF CATTLE FEED COMES TO 17.69% AND NOT 8.8.% AS OBSERVED BY THE ASSESSING OFFICER. THE ASSESSING OF FICER IN HIS REMAND REPORT SUBMITTED THAT GP RATE OF 17.68% FROM TRADI NG ACCOUNT OF CATTLE FEED APPEARS TO BE CORRECT. THE LD. CIT(A) HOWEVER FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSMENT YEAR 2008-09 RESTRICT ED THE ADDITION TO RS. 2 LAKHS. THE CIT(A) ALSO NOTED THAT THE DIFFERENCE IN THIS YEAR IS THE GP ONLY BUT DID NOT DISPUTED THE GP RATE SHOWN BY THE ASSES SEE AT 17.69% ON ACCOUNT OF CATTLE FEED. 9. AFTER CONSIDERING THE RIVAL SUBMISSIONS I AM OF THE VIEW THAT THE ADDITION IS WHOLLY UNJUSTIFIED. THE ASSESSEE SUBMIT TED BEFORE THE LD. CIT(A) THAT GP RATE OF 17.69% HAS BEEN WORKED OUT ON SALE OF CATTLE FEED. THIS FACT WAS ADMITTED BY THE ASSESSING OFFICER IN HIS REMAND REPORT. EVEN THE LD. CIT(A) DID NOT DISPUTE THE SAME IN THE IMPU GNED ORDER. THE ASSESSING OFFICER COMPARED THE GP RATE OF OVER ALL PROFIT DECLARED BY THE ASSESSEE FROM ALL SOURCES AT 8.88% WITHOUT ANY JUST IFICATION. THE ASSESSING OFFICER MADE THE ADDITION BY APPLYING GP RATE OF 15 % WHICH IS ALREADY LOW ON ACCOUNT OF HIGHER GP RATE SHOWN BY THE ASSESSEE ON SALE OF CATTLE FEED THEREFORE THERE IS NO JUSTIFICATION TO SUSTAIN THE ADDITION OF RS. 2 LAKHS ON THIS HEAD. I THEREFORE SET ASIDE THE ORDERS OF TH E AUTHORITIES BELOW AND DELETE THE ADDITION OF RS. 2 LAKHS. 10. GROUND NO. 5 OF THE APPEAL OF THE ASSESSEE IS A CCORDINGLY ALLOWED. 6 11. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED : 27 TH OCTOBER 2016 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR