JCIT, Jaipur v. M/S MANGLA PRODUCTS PVT. LTD., Jaipur

ITA 986/JPR/2011 | 2007-2008
Pronouncement Date: 10-02-2012 | Result: Dismissed

Appeal Details

RSA Number 98623114 RSA 2011
Bench Jaipur
Appeal Number ITA 986/JPR/2011
Duration Of Justice 2 month(s) 29 day(s)
Appellant JCIT, Jaipur
Respondent M/S MANGLA PRODUCTS PVT. LTD., Jaipur
Appeal Type Income Tax Appeal
Pronouncement Date 10-02-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 10-02-2012
Date Of Final Hearing 08-02-2012
Next Hearing Date 08-02-2012
Assessment Year 2007-2008
Appeal Filed On 11-11-2011
Judgment Text
1 ITA 986-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI SANJAY ARORA ITA NO. 986/JP/2011 ASSTT. YEAR : 2007-08. THE JCIT (OSD) VS. M/S. MANGLA PRODUCTS PVT. LT D. CIRCLE-4 JAIPUR. B-235 ROAD NO. 5 VKI AREA J AIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI D.K. MEENA RESPONDENT BY : SHRI SATISH GUPTA DATE OF HEARING : 08.02.2012. DATE OF PRONOUNCEMENT : 10.02.2012. ORDER DATE OF ORDER : 10/02/2012. PER R.K. GUPTA J.M. THIS IS AN APPEAL BY DEPARTMENT AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2007-08. 2. THE DEPARTMENT IS OBJECTING IN DELETING THE TRAD ING ADDITION OF RS. 12 50 000/- MADE BY THE AO. 3. DURING THE ASSESSMENT PROCEEDINGS THE AO NOTED THAT THERE ARE CERTAIN DISCREPANCIES IN MAINTAINING BOOKS OF ACCOUNT AS AS SESSEE DID NOT MAINTAIN STOCK RECORD OF BP SETS CONSUMED FOR RS. 24 17 478/-. THE CONSU MPTION DETAILS ON DAY TO DAY BASIS WERE ALSO NOT MAINTAINED BY THE ASSESSEE. THE AO F URTHER NOTED THAT ASSESSEE DID NOT MAINTAIN RECORD OF STORES AND SPARES CONSUMED FOR R S. 59 134/-. HE FURTHER OBSERVED THAT 2 CERTAIN PAYMENTS HAVE BEEN MADE THROUGH SELF MADE V OUCHERS THEREFORE HE WAS OF THE VIEW THAT PROVISIONS OF SECTION 145(3) ARE ATTRACTE D. ACCORDINGLY HE INVOKED PROVISIONS OF SECTION 145(3). THE AO FURTHER OBSERVED THAT AS SESSEE HAS SHOWN NEGATIVE GP RATE OF 1.65% AGAINST LOSS OF 8.26% SHOWN IN LAST YEAR. TH E AO NOTED THAT ON TURNOVER OF RS.L 33.15 CRORES OR ODD THE COMPANY HAS EARNED NET LOS S OF RS. 51 05 905/-. THEREFORE HE REJECTED THE BOOKS OF ACCOUNT AND MADE A LUMP SUM A DDITION OF RS. 12.50 000/-. IN THIS WAY TOTAL LOSS WAS COMPUTED AT RS. 23 31 940/-. 4. DETAILED SUBMISSIONS WERE FILED BEFORE LD. CIT ( A). IT WAS SUBMITTED THAT ASSESSEE HAS MAINTAINED REGULARLY COMPLETE SET OF B OOKS OF ACCOUNT AS IN THE PAST INCLUSIVE OF CASH BOOK LEDGER JOURNAL STOCK REGI STERS EXCISE RECORDS SALES & PURCHASE REGISTER VOUCHERS ETC. IT WAS ALSO SUBMITTED THA T ASSESSEE HAS FOLLOWED THE SAME METHOD OF ACCOUNTING STANDARD AND THERE WAS NO ADVERSE OBS ERVATION BY THE AO IN THIS RESPECT. THE AO HAS ALSO NOT MENTIONED ANY SPECIFIC INSTANCE IN REGARD TO INCORRECTNESS OR INCOMPLETENESS OF ACCOUNTS OF THE ASSESSEE. MERELY ON THE BASIS OF CONSUMPTION REGISTER OR BP CONSUMPTION REGISTER REJECTION OF BOOKS OF A CCOUNT WAS NOT JUSTIFIED AND WITHOUT BRINGING ANY MATERIAL ON RECORD. THE RESULT SHOWN BY ASSESSEE SHOULD HAVE BEEN ACCEPTED. RELIANCE WAS PLACED ON THE DECISION OF H ONBLE JURISDICTIONAL HIGH COURT IN CASE OF MALANI RAMJIVAN JAGANNATH 316 ITR 120 WHER EIN IT IS HELD THAT FOR NON MAINTENANCE OF STOCK REGISTER AND LOWERING OF GROSS PROFIT THE BOOKS OF ACCOUNTS COULD NOT BE REJECTED. IT WAS ALSO SUBMITTED THAT GP OF T HE ASSESSEE WAS BETTER AND ASSESSEE HAS MAINTAINED THE STOCK REGISTERS ALSO. FURTHER RELI ANCE WAS PLACED ON THE DECISIONS IN CASE OF POONAM RANI 326 ITR 223 (DEL.) AND IN CASE JAS JACK ELEGANCE EXPORT 233 CTR 398 (DEL.) WHEREIN IN THESE CASES IT IS HELD THAT NON M AINTENANCE OF STOCK REGISTER AND 3 LOWERING OF GROSS PROFIT ARE NOT GOOD GROUNDS OF RE JECTION OF BOOKS OF ACCOUNT. REGARDING CONSUMPTION OF BP SETS IT WAS SUBMITTED THAT CONSUMPTION OF BP SETS WAS LOWER AT RS. 24 17 478/- AS AGAINST RS. 28 79 403/- IN LAST YEAR. RESULTS ARE BETTER THIS YEAR. NON MAINTENANCE OF CONSUMABLE STORES ARE ONL Y RS. 59 134/- AS AGAINST RS. 92 564/- CONSUMED IN LAST YEAR. IN VIEW OF THESE F ACTS IT WAS SUBMITTED THAT REJECTION OF BOOKS OF ACCOUNT AND THEREBY MAKING A LUMP SUM ADDI TION WAS NOT JUSTIFIED. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERI AL ON RECORD THE LD. CIT (A) FOUND THAT THERE WAS NO JUSTIFICATION IN MAKING ANY LUMP SUM ADDITION BY REJECTING BOOKS OF ACCOUNT. ACCORDINGLY HE ALLOWED THE APPEAL OF THE ASSESSEE BY DELETING THE TRADING ADDITION MADE BY AO. 5. NOW THE DEPARTMENT IS IN APPEAL HERE BEFORE THE TRIBUNAL. 6. THE LD. D/R PLACED RELIANCE ON THE ORDER OF ASSE SSING OFFICER. 7. ON THE OTHER HAND THE LD. COUNSEL OF THE ASSESS EE PLACED RELIANCE ON THE ORDER OF LD. CIT (A). 8. AFTER CONSIDERING THE ORDERS OF THE AO AND LD. C IT (A) WE FIND NO INFIRMITY IN THE FINDING OF LD. CIT (A). SAME BUSINESS IS CARRI ED ON DURING THE YEAR UNDER CONSIDERATION AS CARRIED OUT IN EARLIER YEAR. THE TURNOVER IS BETTER AS COMPARED TO EARLIER YEAR. TRADING RESULTS ARE BETTER AS COMPARED TO EA RLIER YEAR. GROSS LOSS SHOWN @ 1.65% AGAINST LOSS @ 8.26% COMPARED TO EARLIER YEAR. THER EFORE THE TRADING RESULTS ARE BETTER. EVEN CONSUMPTION OF BP SETS IS LESS AS COMPARED TO EARLIER YEAR WHEREAS TURNOVER OF THE ASSESSEE HAS BEEN INCREASED AGAINST TURNOVER OF EAR LIER YEAR. CONSUMPTION OF STORES IS ALSO LESS AS COMPARED TO EARLIER YEAR. EARLIER YEA RS RESULT HAS BEEN ACCEPTED BY THE DEPARTMENT. THEREFORE IN OUR CONSIDERED VIEW WITH OUT BRINGING ANY MATERIAL ON RECORD 4 THE LUMP SUM TRADING ADDITION MADE BY AO WAS NOT JU STIFIED. ACCORDINGLY THE LD. CIT (A) WAS JUSTIFIED IN DELETING THE TRADING ADDITION. IN VIEW OF THESE FACTS AND CIRCUMSTANCES AND IN VIEW OF THE DETAILED REASONING GIVEN BY LD. CIT (A) WHICH WAS GIVEN AFTER CONSIDERING VARIOUS CASE LAWS WE HOLD THAT LD. CIT (A) WAS JUSTIFIED IN DELETING THE TRADING ADDITION AND WE CONFIRM HIS OR DER. 9. IN THE RESULT APPEAL OF THE DEPARTMENT IS DISMI SSED. 10. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 10 .02.2012. SD/- SD/- ( SANJAY ARORA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR D/- COPY FORWARDED TO :- THE JCIT (OSD) CIRCLE-4 JAIPUR. M/S. MANGLA PRODUCTS PVT. LTD. JAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 986/JP/2011) BY ORDER AR ITAT JAIPUR.