Income Tax Appellate Tribunal - Ahmedabad
Alidhara Texpro Engineers Pvt.Ltd.,, ... vs Department Of Income Tax on 30 January, 2013
आयकर अपीलीय अिधकरण,
अिधकरण, अहमदाबाद Ûयायपीठ 'डȣ
डȣ',
डȣ , अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL
" D " BENCH, AHMEDABAD
ौी मुकुल कुमार ौावत, Ûयाियक सदःय एवं ौी अिनल चतुवद
ȶ ȣ, लेखा सदःय के सम¢।
BEFORE SHRI MUKUL Kr.SHRAWAT, JUDICIAL MEMBER And
SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER
1. आयकर अपील सं./I.T.A. Nos.1853/Ahd/2010
2. आयकर अपील सं./I.T.A. Nos.1854/Ahd/2010
( िनधा[रण वष[ / Assessment Year : 2007-08)
1. The Dy.CIT बनाम/ 1. M/s.Alidhara Texpro
Circle-1 Vs. Engineers Pvt.Ltd.
Surat Plot No.B-52, Road No.3
Udhyognagar, Udhana
Surat
2. The Dy.CIT PAN : AAACD 8469 M
Circle-1 2. M/s.Alidhara Textool
Surat Engineers Pvt.Ltd.
Plot No.B-168,
Road No.6,
Udhyognagar
Udhna, Surat
PAN: AAACD 8469M
(अपीलाथȸ /Appellant) .. (ू×यथȸ / Respondents)
अपीलाथȸ ओर से / Appellant by : Shri T. Shankar, Sr. D.R.
ू×यथȸ कȧ ओर से/Respondents by : Shri Mehul Shah, A.R.
सुनवाई कȧ तारȣख / Date of Hearing : 30/01/2013
घोषणा कȧ तारȣख /Date of Pronouncement : 31/1/13
आदे श / O R D E R
PER SHRI MUKUL Kr. SHRAWAT, JUDICIAL MEMBER :
Both these appeals have been filed by the Revenue in the case of different assessees arising from the separate orders of ld.CIT(A)-I, Surat identically dated 24/03/2010 passed for A.Y. 2007-08. Since the issue ITA Nos.1853 & 1854/Ahd/2010 Dy.CIT vs. M/s.Alidhara Texpro Engg.P.Ltd. & M/s.Alidhara Textool Engg.Pvt.Ltd.
(respectively) Asst.Year - 2007-08 -2- involved in both the appeals is identical, therefore for the sake of convenience, the same are disposed of by a common order.
2. The common ground reads as follows:-
1. On the facts and circumstances of the case and in law the Ld.CIT(A) has erred in deleting the addition made by the AO of Rs.41,23,828 (in the case of M/s.Alidhara Texpro Engineers Pvt.Ltd.) [and Rs.46,04,524 in the case of Alidhara Textool Engg.Pvt.Ltd.] on account of fall in G.P. ITA No.1853/Ahd/2010 - in the case of M/s.Alidhara Texpro Engg.P.Ltd.
2.1, Facts in brief as emerged from the corresponding assessment order passed u/s.143(3) of the Act dated 30/11/2009 were that the assessee-
company is in the business of manufacturing of texturized machine and spare parts on job-work basis. The AO has noted that during the year under consideration the assessee has shown gross profit of Rs.3,67,79,912/- on total turnover of Rs.20,58,56,773/- which worked out at 17.87%, as against the G.P. of 19.13% on total turnover of Rs.16,47,50,195 shown in the A.Y. 2006-07. The AO has rejected the books of accounts and finally computed the G.P. as follows:-
"The next thing which comes after rejection of the book result is to make fair and reasonable estimation of profit. In the instant case, the assessee has shown G.P. ratio of 17.87% for the year under consideration as against the G.P. ratio of 19.13% shown in the ITA Nos.1853 & 1854/Ahd/2010 Dy.CIT vs. M/s.Alidhara Texpro Engg.P.Ltd. & M/s.Alidhara Textool Engg.Pvt.Ltd.
(respectively) Asst.Year - 2007-08 -3- A.Y. 2006-07. In the A.Y. 2006-07 thee was a fall in G.P. 1.54% as compared to shown by the assessee in the A.Y. 2005-06. After considering the rise in price of raw materials and other consumables, the G.P. was adopted at 20.13% by estimating at 1% above the gross profit shown by the assessee. When compared with the G.P. adopted in the last year, there is a fall in G.P. of 2.26% during the year under consideration. However, after considering the rise in price of raw materials and other consumables and increase in sales turnover and also the facts and circumstances of the case, it would be fair and reasonable to estimate the G.P. ratio of the assessee for the year under consideration at 2% above the G.P. ratio shown by the assessee which comes to 19.87%. Accordingly the gross profit of the assessee for the year under consideration is estimated at Rs.4,09,03,740/- as against the gross profit of Rs.3,67,79,912/- shown by the assessee. Therefore, the difference amount of Rs.41,23,828/- is hereby added to the total income of the assessee on account of low G.P. Penalty proceedings u/s.271(1) are being initiated separately for failure eto disclose the true particulars of income / for furnishing inaccurate particulars of income or concealed the particulars of its income."
3. When the matter was carried before the first appellate authority, ld.CIT(A) has held that the AO had not mentioned any particular item of defect in the books of account. The AO had not brought on record any material to show that there was disproportionate consumption of raw- material. On facts, it was noted by the ld.CIT(A) that the assessee was required to manufacture Tailer made machine, therefore, the requirement of every customer was distinct, hence it was not possible to maintain a particular standard of profit rate. Further, he has also noted that as per the requirement of the Excise Department, the assessee had maintained ITA Nos.1853 & 1854/Ahd/2010 Dy.CIT vs. M/s.Alidhara Texpro Engg.P.Ltd. & M/s.Alidhara Textool Engg.Pvt.Ltd.
(respectively) Asst.Year - 2007-08 -4- RG-23A Register. Finally, the rejection of books of accounts was overruled and the addition was deleted.
4. At the outset, we have been informed that in assessee's own case from A.Y. 2003-04 to 2006-07 a consistent view has been taken by the Respected Co-ordinate Benches in the following cases:-
Sl.No(s) In the case of case of.... In ITA No(s).
1. M/s.Alidhara Texpro Engineers (P) ITA Ltd. vs. Addl.CIT No.3290/Ahd/2009 For A.Y. 2006-07 ITAT "C" Bench Ahmedabad order dated 23/09/2011
2. M/s.Alidhara Texpro Engineers ITA No.3496 & Pvt.Ltd. vs. DCIT and Alidhara 3497/Ahd/2008 for Textool Engineers Pvt.Ltd. vs. A.Y. 2005-06 DCIT respectively ITAT "D" Bench Ahmedabad order dated 12/08/2011
3. DCIT vs. Alidhara Texpro Engineers ITA Nos.925 & Pvt.Ltd. (cross-appeals) 3777/Ahd/2007 and ITA Nos.1042 & 3591/Ahd/2007 for A.Ys.2003-04 & 2004-05 ITAT "C" Bench Ahmedabad order dated 11.06.2010 4.1. Keeping brevity in mind, we hereby conclude that on identical facts the Respected Co-ordinate Benches have consistently rejected the ITA Nos.1853 & 1854/Ahd/2010 Dy.CIT vs. M/s.Alidhara Texpro Engg.P.Ltd. & M/s.Alidhara Textool Engg.Pvt.Ltd.
(respectively) Asst.Year - 2007-08 -5- stand of the Revenue Department by deleting the GP addition. For A.Y. 2006-07, the Tribunal has followed an earlier order of A.Y. 2005-06, wherein it was held that for a small variation in GP it was not justified to reject the books of accounts and to make a GP addition. Likewise for A.Ys. 2003-04 & 2004-05, the Tribunal has held that all the items are subject to Excise Duty and no defect was noted by the AO in the Excise Register or other Registers maintained in respect of the excisable items manufactured by the assessee. In that decision, the Tribunal has cited CIT vs. Gotan Lime Khanij Udhyog 256 ITR 243 (Raj.) for the legal proposition that it is not always necessary to make an addition even if the books of accounts have been rejected.
5. Since a consistent view has regularly been taken in the past in the case of the assessee, therefore, respectfully following the past history, we hereby uphold the view taken by the ld.CIT(A). Before we part with the issue, it is worth to mention that the ld.AR has also pointed out that factually there was no fall in GP rate for the year under consideration because in one year the percentage of GP ratio was taken by including the "other income" in the total turnover; while the turnover of the assessment year compared with was after excluding the "other income". Meaning thereby the comparison of the GP ratio was unfair and if the discrepancy is removed, then there is no significant variation in the profit ratio for the year under consideration. Ground is dismissed.
ITA Nos.1853 & 1854/Ahd/2010 Dy.CIT vs. M/s.Alidhara Texpro Engg.P.Ltd. & M/s.Alidhara Textool Engg.Pvt.Ltd.
(respectively) Asst.Year - 2007-08 -6-
6. In the result, the appeal of the Revenue is dismissed.
ITA No.1854Ahd/2010 - in the case of M/s.Alidhara Textool Engg.Pvt.Ltd.
7. Since the facts and circumstances are similar to the facts and circumstances in the case of Alidhara Texpro Engg.Pvt.Ltd.(supra), following the same reasoning, we hereby dismiss this appeal of the Revenue.
8. In the result, both the appeals of the Revenue are dismissed.
Sd/- Sd/-
( अिनल चतुवȶदȣ ) ( मुकुल कुमार ौावत )
लेखा सदःय Ûयाियक सदःय
( ANIL CHATURVEDI ) ( MUKUL Kr. SHRAWAT )
ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 31/ 1 /2013
टȣ.सी.नायर, व.िन.स./T.C. NAIR, Sr. PS आदे श कȧ ूितिलǒप अमेǒषत/Copy षत of the Order forwarded to :
1. अपीलाथȸ / The Appellant
2. ू×यथȸ / The Respondent.
3. संबंिधत आयकर आयुƠ / Concerned CIT
4. आयकर आयुƠ(अपील) / The CIT(A)-
5. ǒवभागीय ूितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड[ फाईल / Guard file.
आदे शानुसार/ BY ORDER, स×याǒपत ूित //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) उप/ आयकर अपीलीय अिधकरण, अिधकरण, अहमदाबाद / ITAT, Ahmedabad