Income Tax Appellate Tribunal - Ahmedabad
Ajay C.Panchal, Ahmedabad vs Assessee on 19 October, 2011
IN THE INCOME TAX APPELLATE TRIBUNAL,
"A " BENCH, AHMEDABAD
Before Shri T. K. SHARMA , JUDICIAL MEMBER
and Shri A. K. GARODIA, ACCOUNTANT MEMBER
I.T.A. No. 367/ Ahd/2009
(Assessment year 2005-06)
Shri Ajay C. Panchal, Vs. CIT(A) XI,
Shiv Industries Compound, Ahmedabad
Opp. Lucas Service Station,
Nr. L.K. Patel Timber Market,
Narol, Ahmedabad
PAN/GIR No. : AGDPP3528M
(APPELLANT) .. (RESPONDENT)
Appellant by: Written Submission
Respondent by: Shri P.R. Ghosh, Sr. DR
Date of hearing: 19.10.2011
Date of pronouncement: 25-10-2011
ORDER
PER SHRI A. K. GARODIA, AM:-
This is assessee's appeal directed against the order of Ld. CIT(A) XI, Ahmedabad dated 04.12.2008 for the assessment year 2005-06.
2. The grounds raised by the assessee are running into four pages but the only grievance of the assessee is regarding confirmation of addition on account of low G.P. to the extent of Rs.2,01,223/- out of total addition made by the A.O. on this account of Rs.4,02,445/- and for confirming the 2nd addition made by the A.O. of Rs.630/- on account of difference in cash book.
3. None appeared on behalf of the assessee on the appointed date of hearing but written submission of the assessee dated 14.05.2011 is 2 I.T.A.No.367 /Ahd/2009 available on record in which it ahs been requested that the appeal may be decided after considering these written submissions of the assessee and hence, we proceed to decide the appeal of the assessee after hearing Ld. D.R. of the revenue and after considering these written submissions of the assessee. Ld. D.R. of the revenue supported the orders of authorities below.
4. In the written submissions of the assessee, it was submitted by the assessee that reliance was placed on the judgment of Hon'ble Rajasthan High court in the case of Jaimal Ram & Party Vs CIT as reported in 172 Taxman 228.
5. We have considered the rival submissions, perused the material on record and have gone through the orders of authorities below and the judgement cited by the assessee in his written submissions. We find that it is noted by the A.O. in para 3.1 of the assessment order that during this year, the assessee has declared G.P. @ 10.20% as against 17.21% in the preceding year i.e. assessment year 2004-05. The A.O. asked the assessee to explain the reason for fall in G.P. with supporting documentary evidence. The A.O. further noted in para 3.2 of the assessment order that the assessee vide letter dated 20.11.2007, has simply stated that the G.P. ratio is decreased due to decline in sales turnover and increase in purchase cost of raw material. The A.O. further confronted the assessee on this issue and as per the letter dated 04.12.2007, the assessee furnished some purchase bills for the present year and comparative rates for the last year to substantiate the claim of increase in cost of purchases but with regard to reduction in sale price of the products manufactured by the assessee, assessee did not furnish any supporting evidence. The A.O. was not satisfied with the submissions of the assessee and he rejected the books of accounts u/s 145(3) of the Act 3 I.T.A.No.367 /Ahd/2009 and adopted the same G.P. rate of 17.21% which was shown by the assessee in the preceding year and on this basis, he made addition of Rs.4,02,445/-. Being aggrieved, the assessee carried the matter in appeal before Ld. CIT(A). It was decided by the Ld. CIT(A) that in the absence of stock register, he is of the opinion that rejection of books of account does not call for any interference but regarding the addition made by the A.O., he upheld the addition of Rs.2,01,223/- only to the extent of 50% of the addition made by the A.O. Now, before us, the only argument of the assessee is the reliance on the judgment of Hon'ble Rajasthan High Court rendered in the case of Jaimal Ram & Party (supra). We find that reliance has been wrongly placed by the assessee on this judgment of Hon'ble Rajasthan High Court because this judgement is against the assessee. In that case, it was held by Hon'ble Rajasthan High court that when net profit of the assessee in the immediately preceding year was quite high in comparison to net profit rate shown by the assessee in the relevant year and although the assessee produces books of accounts but the assessee admittedly did not produce stock register and sale bills, trading addition of Rs.22 lacs cannot be said to be unjustified or arbitrary. Hence, this judgment is of no help to the assessee in the present case rather it covers the issue against the assessee because in the present case also, the assessee has not produced stock register and also did not produce sale bills to establish that the sale price in the present year is lower as compared to the preceding year. In the grounds of appeal also, the assessee has placed reliance on several judgments but these judgements are also of no help to the assessee in the present case because the facts are different. In those cases, it was held that arbitrary addition straightforward on the ground of low profit is not permissible but in the present case, the A.O. has given reasoning in addition to the fact that the 4 I.T.A.No.367 /Ahd/2009 G.P. rate shown by the assessee is lesser and the A.O. has noted that the assessee did not maintain stock register and did not produce any evidence to substantiate this contention that the sale price in the present year is lower as compared to the preceding year. In view of this factual finding of the A.O., which could not be controverted by the assessee before the Ld. CIT(A) or before us, various judgments cited by the assessee in the grounds of appeal are also of no help to the assessee in the present case. We, therefore, decline to interfere in the order of Ld. CIT(A).
6. In the result, appeal of the assessee stands dismissed.
7. Order pronounced in the open court on 25th Oct., 2011.
Sd/- Sd/-
(T.K. SHARMA) (A. K. GARODIA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad; Dated : 25-10-2011
Sp
Copy of the Order forwarded to:
1. The applicant
2. The Respondent
3. The CIT Concerned
4. The Ld. CIT (Appeals)
5. The DR, Ahmedabad By order
6. The Guard File
AR,ITAT,Ahmedabad
1. Date of dictation......19.10
2. Date on which the typed draft is placed before the Dictating Member......20.10 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 Dictating Member for pronouncement ............
5. Date on which the fair order comes back to the Sr. P.S./P.S.
6. Date on which the file goes to the Bench Clerk .....................
7. Date on which the file goes to the Head Clerk .......................
8. The date on which the file goes to the Assistant Registrar for signature on the order .........................
9. Date of Despatch of the order. .......................