ACIT CIR. - 6(3), MUMBAI v. M/s. LE LOISIR RESORTS P. LTD., MUMBAI

ITA 7346/MUM/2007 | 2004-2005
Pronouncement Date: 19-01-2010 | Result: Dismissed

Appeal Details

RSA Number 734619914 RSA 2007
Bench Mumbai
Appeal Number ITA 7346/MUM/2007
Duration Of Justice 2 year(s) 1 month(s) 9 day(s)
Appellant ACIT CIR. - 6(3), MUMBAI
Respondent M/s. LE LOISIR RESORTS P. LTD., MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 19-01-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted H
Tribunal Order Date 19-01-2010
Date Of Final Hearing 25-03-2010
Next Hearing Date 25-03-2010
Assessment Year 2004-2005
Appeal Filed On 10-12-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A MUMBAI BEFORE SHRI R.S.SYAL AM AND SMT.ASHA VIJAYARAGHAVAN JM ITA NO.6378/MUM/2007 : ASST.YEAR 2004-2005 M/S.LE LOISIR RESORTS LIMITED A-1/6 SARKAR RESIDENCY DR.MASCARENHAS ROAD MAZGAON MUMBAI 400 010. PA NO.AAACT2023M. VS. THE DY.COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 2 MUMBAI. (APPELLANT) (RESPONDENT) ITA NO.7346/MUM/2007 : ASST.YEAR 2004-2005 THE ASSTT.COMMISSIONER OF INCOME-TAX CIRCLE 6(3) MUMBAI. VS. M/S.LE LOISIR RESORTS LIMITED A-1/6 SARKAR RESIDENCY DR.MASCARENHAS ROAD MAZGAON MUMBAI 400 010. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI PITAMBAR DAS ASSESSEE BY : SHRI KIRIT SHETH O R D E R PER R.S.SYAL AM : THESE TWO CROSS APPEALS ONE BY THE ASSESSEE AND THE OTHER BY THE REVENUE ARISE OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 20.9.2007 IN RELATION TO THE ASSESSMENT YEAR 2004-2 005. 2. THE ASSESSEES APPEAL IS A RECALLED MATTER INASM UCH AS THE EARLIER EX PARTE ORDER PASSED BY THE TRIBUNAL WAS SUBSEQUENTLY RECAL LED VIDE ITS ORDER DATED 27.11.2009 IN MA NO.653/MUM/2009. BRIEFLY STATED TH E FACTS OF THE CASE ARE THAT THE ASSESSEE WAS RUNNING A HOTEL AT LONAWALA. DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER REQUIRED THE PROD UCTION OF BOOKS WHICH WERE NOT SHOWN ON THE GROUND THAT SUCH BOOKS WERE DAMAGE D IN FLOOD IN AUGUST 2006. LEFT WITH NO ALTERNATIVE THE ASSESSING OFFICER CO MPUTED THE INCOME ON THE BASIS OF RECORDS AVAILABLE AND THE VIEW TAKEN BY HIM IN EARLIER YEARS. THE ASSESSEE HAD ITA NOS.6378 & 7346/MUM/2007 M/S.LE LOISIR RESORTS LIMITED. 2 TWO STREAMS OF INCOME VIZ. FIRST FROM SALE OF L IQUOR AND SECOND FROM SALE OF FOOD. AS AGAINST THE GROSS PROFIT SHOWN BY THE ASSESSEE F ROM BAR AT 239% THE ASSESSING OFFICER FOLLOWING HIS ACTION IN EARLIER YEAR APPLI ED GROSS PROFIT RATE OF 400%. SIMILARLY THE INCOME FROM FOOD WAS COMPUTED BY APP LYING THE GP RATE OF 200% AS AGAINST DECLARED BY THE ASSESSEE AT 95%. WHEN THE MATTER CAME UP IN FIRST APPEAL BEFORE THE LEARNED CIT(A) HE UPHELD THE ACTI ON OF THE AO IN PRINCIPLE IN THE COMPUTATION OF INCOME TO THE BEST OF HIS JUDGMENT. HOWEVER THE G.P. RATE IN FOOD WAS REDUCED TO 150% AND THAT IN BAR TO 300%. B OTH THE SIDES ARE IN APPEAL AGAINST THEIR RESPECTIVE STANDS. 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD WE FIND THAT THE ASSESSEE HAD NOT PRODUCED T HE BOOKS OF ACCOUNT BEFORE THE ASSESSING OFFICER AND AS SUCH THE DETERMINATION OF INCOME FROM THE BOOKS OF ACCOUNT WAS NOT POSSIBLE. COMING TO THE MERITS OF T HE ADDITION IT IS SEEN THAT IN ASSESSMENT YEARS 2002-2003 AND 2003-2004 THE ASSESS ING OFFICER APPLIED SAME RATE OF 200% AND 400% OF G.P. IN FOOD AND BAR RES PECTIVELY. HOWEVER THE LEARNED CIT(A) REDUCED IT TO 60% AND 150% IN ASSESS MENT YEAR 2002-2003 AND 70.21% & AND 254% IN ASSESSMENT YEAR 2003-2004. WHE N THE MATTER CAME UP BEFORE THE TRIBUNAL ACTION OF THE CIT(A) IN ASSESS MENT YEARS 2002-2003 AND 2003- 2004 WAS UPHELD. THUS IT CAN BE SEEN THAT IN THE IM MEDIATELY PRECEDING YEAR THE TRIBUNAL HAS UPHELD THE APPLICATION OF G.P. RATIO OF 70.21% IN FOOD AND 254% IN BAR. IT IS SETTLED LEGAL POSITION THAT IN MAKING TH E ASSESSMENT TO THE BEST OF THE JUDGMENT THE ASSESSING OFFICER SHOULD BE GUIDED BY THE PROFIT RATE FINALLY APPLIED IN THE IMMEDIATELY PRECEDING YEAR UNLESS THERE ARE REASONS JUSTIFYING DEPARTURE THERE FROM. NO SUCH SPECIAL REASONS HAVE BEEN BROU GHT TO OUR NOTICE ON BEHALF OF THE EITHER PARTY. SINCE THE TRIBUNAL IN THE IMMEDIA TELY PRECEDING YEAR HAS UPHELD THE G.P. RATE OF 70.21% IN FOOD WHICH IS LESS TH AN 95% DECLARED BY THE ASSESSEE WE ARE OF THE CONSIDERED OPINION THAT NO FURTHER AD DITION CAN BE SUSTAINED IN RESPECT OF INCOME FROM FOOD. COMING BACK TO INCOME FROM BAR WE NOTE THAT THE ASSESSEE ITA NOS.6378 & 7346/MUM/2007 M/S.LE LOISIR RESORTS LIMITED. 3 DECLARED G.P. RATE AT 239% AS AGAINST THE TRIBUNA L UPHOLDING 254% IN ASSESSMENT YEAR 2003-2004. RESPECTFULLY FOLLOWING THE PRECEDEN T WE DIRECT THAT GROSS PROFIT RATE OF 254% BE APPLIED IN RESPECT OF INCOME FROM B AR. 4. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED AND THAT OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 19 TH DAY OF JANUARY 2010. SD/- SD/- (ASHA VIJAYARAGHAVAN) ( R.S.SYAL ) JUDICIAL MEMBER ACCOUNTANT ME MBER MUMBAI : 19 TH JANUARY 2010. DEVDAS* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) CENTRAL-I MUMBAI. 5. THE DR/ITAT MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR ITAT MUMBAI. ITA NOS.6378 & 7346/MUM/2007 M/S.LE LOISIR RESORTS LIMITED. 4 DATE INITIAL 1. DRAFT DICTATED ON 18.01.2010 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 18.01.2010 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 9. DATE OF DISPATCH OF ORDER. &