MAHESH CHAND GUPTA, Jaipur v. ADD. CIT, Jaipur

ITA 508/JPR/2015 | 2009-2010
Pronouncement Date: 29-09-2016 | Result: Partly Allowed

Appeal Details

RSA Number 50823114 RSA 2015
Assessee PAN ACEPG9938K
Bench Jaipur
Appeal Number ITA 508/JPR/2015
Duration Of Justice 1 year(s) 4 month(s) 8 day(s)
Appellant MAHESH CHAND GUPTA, Jaipur
Respondent ADD. CIT, Jaipur
Appeal Type Income Tax Appeal
Pronouncement Date 29-09-2016
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted Not Allotted
Tribunal Order Date 29-09-2016
Assessment Year 2009-2010
Appeal Filed On 21-05-2015
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 NOS. 508 TO 510/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2009-10 TO 2011-12 SHRI MAHESH CHAND GUPTA PROP. M/S. RAJ SMALL SCALE COTTAGE INDUSTRIES JAGAT SHIROMANI ROAD AMER JAIPUR CUKE VS. THE ADDL. CIT RANGE-5 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ACEPG 9938 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MADHUKAR GARG JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA ADDL CIT -DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 28/09/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 29 /09/2016 VKNS'K@ ORDER PER BHAGCHAND AM THE ASSESSEE HAS FILED THREE APPEALS AGAINST RESPE CTIVE ORDERS OF THE LD. CIT(A)-2 JAIPUR DATED 11-03-2015 AND 20-3- 2015 FOR THE ASSESSMENT YEARS 2009-10 TO 2010-12 RAISING THEREI N FOLLOWING COMMON GROUNDS OF APPEAL. 1. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE AO IN APPLYING GROSS PROFIT RATE OF 5 6.17% IN EXPORT DIVISION RESULTING IN TRADING ADDITION OF ITA NO. 508/JP/2015 SHRI MAHESH CHAND GUPTA VS. ADDL. CIT RANGE-5 JA IPUR . 2 RS. 13 43 530/-(2009-10) RS. 10 40 652 (2010-11) A ND RS. 13 27 731 (2011-12). THE TRADING ADDITION SUSTAINED IS UNJUSTIFIED AND EXCESSIVE. 2. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE AO IN APPLYING A GROSS PROFIT RATE OF 36% IN LOCAL DIVISION AND MAKING TRADING ADDITION OF RS. 1 6 48 075/- (2009-10) RS.17 71 109 (2010-11) AND RS. 21 21 062 (2011- 12) . THE ACTION OF THE LD. CIT(A) IN SUSTAINING TH E ADDITION IS ILLEGAL AND ADDITION SUSTAINED IS UNJUSTIFIED A ND EXCESSIVE 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN SUSTAINING THE DISALLOW ANCE OF RS. 10 21 172/- (2009-10) RS. 8 66 642 (2010-11) AND RS. 10 24 251 (2011-12) OUT OF THE COMMISSION PAID BY THE ASSESSEE. THE DISALLOWANCE SUSTAINED IS ILLEGAL UNJUSTIFIED AND EXCESSIVE. 4. THAT THE LD. CIT(A) HAS ERRED IN SUSTAINING A DISALLOWANCE OF RS. 76 241/-(2009-10) RS. 1 03 582 /- (2010- 11) AND RS. 1 33 711 (2011-12) OUT OF ENTERTAINMENT EXPENSES. THE DISALLOWANCE SUSTAINED IS UNJUSTIFIED . 2.1 DURING THE COURSE OF HEARING THE LD. AR OF THE ASSESSEE HAS NOT PRESSED THE GROUND NO. 4 OF THE ASSESSEE FOR THE AS SESSMENT YEARS 2009- 10 TO 2011-12. HENCE THIS GROUND OF THE ASSESSEE F OR THE ASSESSMENT YEAR 2009-10 TO 2011-12 IS DISMISSED BEING NOT PRESSED. 3.1 AS REGARDS GROUND NO. 1 AND 2 OF THE ASSESSEE 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 ITA NO. 508/JP/2015 SHRI MAHESH CHAND GUPTA VS. ADDL. CIT RANGE-5 JA IPUR . 3 ORDER DATED 15-05-2015 IN ITA NO. 392/JP/2012 (A.Y. 2008-09) IN ASSESSEE'S OWN CASE. HENCE THE BOTH THE ISSUES ARE COVERED. 3.2 AS REGARDS THE GROUND NO. 3 OF THE ASSESSEE THE LD. AR OF THE ASSESSEE AT THE OUTSET OF THE HEARING PRAYED THAT S UCH 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 . 3.3 THE LD. DR RELIED ON THE ORDERS OF THE AUTHORIT IES BELOW. 3.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AS REGARDS THE GROUND NO. 1 AN D 2 OF THE ASSESSEE IT IS NOTED THAT SUCH ISSUE HAS ALREADY BEEN DECIDED I N FAVOUR OF THE ASSESSEE BY THE COORDINATE BENCH IN ASSESSEE'S OWN CASE (SUP RA) 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 ITA NO. 508/JP/2015 SHRI MAHESH CHAND GUPTA VS. ADDL. CIT RANGE-5 JA IPUR . 4 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 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. 3.5 AS REGARDS THE GROUND NO. 3 OF THE ASSESSEE IT IS NOTED THAT SUCH ISSUE HAS ALREADY BEEN PARTLY DECIDED IN FAVOUR OF THE ASSESSEE BY THE COORDINATE BENCH IN ASSESSEE'S OWN CASE (SUPRA) I.E . CONFIRMED THE ITA NO. 508/JP/2015 SHRI MAHESH CHAND GUPTA VS. ADDL. CIT RANGE-5 JA IPUR . 5 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 HEAD AT RS. 1 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. 3.6 RESPECTFULLY FOLLOWING THE DECISION OF ITAT JAI PUR BENCH IN ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEAR 2008-09 (SUPRA) THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED AND THE SAME ANA LOGY SHALL APPLY MUTATIS MUTANDIS IN ALL APPEALS OF THE ASSESSEE FOR THE ASSESSMENT YEAR ITA NO. 508/JP/2015 SHRI MAHESH CHAND GUPTA VS. ADDL. CIT RANGE-5 JA IPUR . 6 2009-10 TO 2011-12. HENCE THE APPEALS OF THE ASSES SEE ARE PARTLY ALLOWED AS INDICATED ABOVE. 4.0 IN THE RESULT THE APPEALS FILED BY THE ASSESSE E ARE PARTLY ALLOWED 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- SHRI MAHESH CHAND GUPTA JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ADDL. CIT RANGE-5 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. 508 TO 510/JP/2015) VKNS'KKUQLKJ@ BY ORDER LGK;D IATHDKJ@ ASSISTANT. REGISTRAR