The ITO, Ward-1,, Palanpur v. M/s. Paras Agro Products, Dist.Banaskanth

ITA 828/AHD/2009 | 2005-2006
Pronouncement Date: 07-01-2011 | Result: Dismissed

Appeal Details

RSA Number 82820514 RSA 2009
Assessee PAN AAHFP2581J
Bench Ahmedabad
Appeal Number ITA 828/AHD/2009
Duration Of Justice 1 year(s) 9 month(s) 22 day(s)
Appellant The ITO, Ward-1,, Palanpur
Respondent M/s. Paras Agro Products, Dist.Banaskanth
Appeal Type Income Tax Appeal
Pronouncement Date 07-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 07-01-2011
Date Of Final Hearing 04-01-2011
Next Hearing Date 04-01-2011
Assessment Year 2005-2006
Appeal Filed On 16-03-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI MUKUL KR. SHRAWAT JUDICIAL MEMBER AND SHRI A.N. PAHUJA ACCOUNTANT MEMBER DATE OF HEARING : 04/1/2011 DRAFTED ON: 04/ 1/2011 ITA NO.828/AHD/2009 ASSESSMENT YEAR : 2005-06 THE ITO WARD-1 PALANPUR VS. M/S.PARAS AGRO PRODUCTS AT & POST CHADOTAR TAL. PALANPUR DIST.BANASKANTHA (N.GUJ) PAN/GIR NO. : AAHFP 2581 J ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI DILEEP KUMAR SR D.R. RESPONDENT BY: SHRI S.N. DIVETIA O R D E R PER SHRI MUKUL KR. SHRAWAT JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE W HICH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-XV AHMEDABA D DATED 07/01/2009. TWO SUBSTANTIVE GROUNDS HAVE BEEN RAIS ED BY THE REVENUE WHICH ARE REPRODUCED BELOW:- 1. THE LD. COMMISSIONER OF INCOME-TAX(A)-XV AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITIONS OF RS.32 92 485/- MADE BY THE A.O. ON A/C OF COST OF UNACCOUNTED PURCHASES. 2. THE LD. COMMISSIONER OF INCOME-TAX(A)-XV AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ITA NO .828/AHD/2009 ITO VS. M/S. PARAS AGRO PRODUCTS ASST.YEAR - 2005-6 - 2 - ADDITIONS OF RS.6 81 686/- MADE BY THE A.O. ON A/C OF GROSS PROFIT ON UNACCOUNTED SALE . 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) OF THE I.T. ACT 1961 DATED 06/1 2/2007 WERE THAT THE ASSESSEE-FIRM IS IN THE BUSINESS OF MANUFACTURING OF CASTER OIL AND ALSO TRADING IN CASTER CAKE AND CASTER OIL. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAS PREPARED A MO NTH-WISE CHART OF ELECTRICITY CONSUMPTION. ON THE BASIS OF THE SAID DETAILS THE ASSESSING OFFICER HAS NOTED THAT FOR THE MONTHS OF APRIL-2004 NOVEMBER-2004 DECEMBER-2004 JANUARY-2005 & MARCH-2005 THE CONSUM PTION OF ELECTRICITY UNITS PER QUINTAL WAS IN THE RANGE OF 1 2.7 TO 16.21 UNIT PER QUINTAL. IN RESPECT OF REST OF THE MONTHS THE AV ERAGE CONSUMPTION WAS IN THE RANGE OF 7.49 UNIT PER QUINTAL TO 8.63 UNIT PER QUINTAL. AS PER ASSESSING OFFICER SINCE THERE WAS EXCESSIVE CONSU MPTION OF ELECTRICITY IN FEW MONTHS THEREFORE THERE WOULD HAVE BEEN UNA CCOUNTED CONSUMPTION OF CASTER SEEDS. AS PER THE CALCULATIO N OF THE ASSESSING OFFICER ON ACCOUNT OF EXCESS CONSUMPTION OF ELECT RICITY IN RESPECT OF SOME OF THE MONTHS THERE OUGHT TO BE UNACCOUNTED CO NSUMPTION WHICH WAS WORKED OUT TO 7525.26 QUINTAL FROM 12 MONTHS. HOWEVER HE HAS SHORT-LISTED THE UNACCOUNTED CONSUMPTION FOR THE RE SPECTIVE MONTHS WHICH WAS COMPUTED AS 1925.43 QUINTALS. BY APPLYIN G THE AVERAGE COST PER QUINTAL OF RS.1710 THE ASSESSING OFFICER HAS W ORKED OUT THE UNACCOUNTED PURCHASES OF RS. 32 92 485/- WHICH WAS ACCORDINGLY TAXED IN THE HANDS OF THE ASSESSEE. ITA NO .828/AHD/2009 ITO VS. M/S. PARAS AGRO PRODUCTS ASST.YEAR - 2005-6 - 3 - 3. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLAT E AUTHORITY WHO HAS DELETED THE ADDITION PRIMARILY ON THE GROUND THAT WITHOUT DISCOVERING ANY DEFECT IN THE BOOKS OF ACCOUNT OR EVEN WITHOUT REJECTING THE BOOKS OF ACCOUNT THE ASSESSING OFFICER HAS MADE THE ADDITION MERELY ON PRESUMPTION. THE LEARNED CIT(APPEALS) HAS ALSO NOT ED THAT A REPORT WAS CALLED FOR IN RESPECT OF ANY DISCREPANCY WHETHER FO UND BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS BUT IN THE ABSENCE OF ANY SUCH REPORT A VIEW WAS TAKEN TO DELETE THE ADDITION FOLLOWING FEW CASE LAWS NAMELY SL.NO(S) DECISION IN THE CASE OF REPORTED IN 1. ACIT VS. KHAMBATTA FAMILY TRUST 67 ITD 411 (AHD.) 2. ITO VS. SATYANARAYAN PAREEK 71 TTJ 997 (GAU BENCH) 3. ST.TERESAS OIL MILL VS. STATE OF KERALA 76 ITR 365 4. N.RAJU PULLAIAH 73 ITR 224 (A.P). 4. IN THE LIGHT OF THE ABOVE DISCUSSION WE HAVE HE ARD BOTH THE SIDES AND ALSO PERUSED THE MATERIAL PLACED BEFORE US. AD MITTED FACTUAL POSITION IS THAT MERELY ON THE BASIS OF SOME VARIATION IN FE W MONTHS IN THE ELECTRICITY CONSUMPTION THE ASSESSING OFFICER HAD MADE THE IMPUGNED PRESUMPTIVE ADDITION BY WRONGLY HOLDING THAT THERE OUGHT TO BE CORRESPONDING UNACCOUNTED PURCHASES . IN THIS REGA RD A SPECIFIC QUERY HAS BEEN RAISED BY THE BENCH DURING THE COURSE OF H EARING THAT WHETHER BEFORE MAKING AN ADDITION THE ASSESSING OFFICER HA S FOUND ANY DEFECTS IN THE BOOKS OF ACCOUNT OR WHETHER THE PROVISIONS O F SECTION 145(3) WERE INVOKED FOR REJECTION OF BOOKS OF ACCOUNT. FROM TH E SIDE OF THE REVENUE ITA NO .828/AHD/2009 ITO VS. M/S. PARAS AGRO PRODUCTS ASST.YEAR - 2005-6 - 4 - NO SATISFACTORY REPLY WAS SUBMITTED. ON THE OTHER HAND LEARNED AUTHORISED REPRESENTATIVE HAS STRONGLY OBJECTED THE MANNER IN WHICH THE IMPUGNED ADDITION WAS MADE. IN ADDITION TO THE CAS E LAWS CITED BY THE LEARNED CIT(APPEALS) THE LEARNED AUTHORISED REPRES ENTATIVE HAS ALSO RELIED UPON A DECISION OF ITAT BENCH A AHMEDABAD IN THE CASE OF SAUMIL TRADERS PVT.LTD. VS. ITO BEARING ITA NOS.59/ AHD/2005 & 2285/AHD/2006 FOR ASSESSMENT YEAR 2001-02 DATED 03/03/2009 WHEREIN IT WAS OPINED THAT MERELY BECAUSE OF HIGHER CONSUMPTION OF ELECTRICITY OUTRIGHT THE BOOKS OF ACCOUNT COULD NOT BE REJECTED . ONCE THE BOOKS HAVE BEEN PREPARED ON THE BASIS OF THE BILLS AND VOUCHERS AND THERE IS NO ALLEGATION THAT EITHER THE PURCHASE OF RAW-MA TERIAL OR PRODUCTION WAS FOUND UNRECORDED THEN THERE WAS NO REASON FOR AN ADDITION THAT TOO ON PRESUMPTIONS. CONSIDERING THE TOTALITY OF THE BO OK RESULT IT CAN ALSO BE OPINED THAT IF NO DISCREPANCY IS FOUND IN THE AVERA GE CONSUMPTION OF PRODUCTION AND THE BOOK RESULTS ARE BASED UPON THE DETAILS OF MANUFACTURING ACTIVITY ETC. THEN ALSO THERE WAS NO REASON FOR SUCH A PRESUMPTIVE ADDITION. THE LEARNED AUTHORISED REPR ESENTATIVE HAS ALSO MENTIONED THAT ONE SLP OF THE REVENUE IN THE CASE OF FLEXI PACK 319 ITR 03 (STATUTE) HAS ALSO BEEN REJECTED WITH THE OBSERVATION THAT N O SUBSTANTIAL QUESTION OF LAW AROSE FROM THE ORDER OF THE TRIBUNAL AND THAT THERE WAS NO QUESTION OF GOING INTO ESTIMATION WITHOUT REJEC TION OF THE BOOKS WHICH HAD BEEN PROPERLY MAINTAINED IN THE REGULAR COURSE. IN THAT CASE AS WELL THE TRIBUNAL HAD HELD THAT THE ASSESSING OFFICER HAD NOT INVOKED THE PROVISIONS OF SECTION 145 OF THE I. T.ACT THEREFORE THERE WAS NO JUSTIFICATION FOR NOT ACCEPTING BOOK RESULTS . IN THE RESULT CONSIDERING THE TOTALITY OF THE CIRCUMSTANCES OF TH E CASE AS ALSO THE CASE LAWS REFERRED HEREINABOVE WE ARE OF THE CONSCIENTI OUS VIEW THAT THE ITA NO .828/AHD/2009 ITO VS. M/S. PARAS AGRO PRODUCTS ASST.YEAR - 2005-6 - 5 - LEARNED CIT(APPEALS) HAS RIGHTLY REVERSED THE FINDI NGS OF THE ASSESSING OFFICER. WE HEREBY CONFIRM THE VIEW TAKEN BY THE LEARNED CIT(APPEALS). THIS GROUND OF THE REVENUE IS THERE FORE DISMISSED. 5. APROPOS GROUND NO.2 THE SAME IS CONNECTED WIT H GROUND NO.1 BECAUSE THE ASSESSING OFFICER HAS WORKED OUT UNACCO UNTED SALES ON THE IMPUGNED UNACCOUNTED PURCHASES AS DISCUSSED HEREINA BOVE. ON THOSE SALES THE ASSESSING OFFICER HAS THEN COMPUTED THE PROFIT BY APPLYING GROSS PROFIT RATE AT 4.87%. WITH THE RESULT ON U NACCOUNTED SALES THE ASSESSING OFFICER HAS CALCULATED GROSS PROFIT OF RS. 6 81 686/- AND TAXED ACCORDINGLY. ONCE WE HAVE ALREADY HELD IN ABOVE PA RAGRAPHS THAT THERE WAS NO REASON FOR PRESUMPTION OF UNACCOUNTED PURCH ASES THEREFORE THE CONSEQUENTIAL PRESUMPTION OF UNACCOUNTED SALES DID NOT ARISE. WE ACCORDINGLY HOLD THAT THE ASSESSING OFFICER HAD WRO NGLY MADE THE ADDITION WHICH WAS CORRECTLY DELETED BY THE LEARNED CIT(APPEALS). RESULTANTLY THIS GROUND OF THE REVENUE IS ALSO DIS MISSED. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER SIGNED DATED AND PRONOUNCED IN THE COURT ON 7/ 1 /2011. SD/- SD/- ( A.N. PAHUJA ) ( MU KUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBE R AHMEDABAD; DATED / /2011 T.C. NAIR SR. PS ITA NO .828/AHD/2009 ITO VS. M/S. PARAS AGRO PRODUCTS ASST.YEAR - 2005-6 - 6 - COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEPARTMENT. 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-XV AHMEDABAD 5. THE DR AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD 1. DATE OF DICTATION..04/01/2011 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 04/01/2011 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 7.1.2011 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 7.1.2011 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER