Income Tax Appellate Tribunal - Mumbai
Anil R. Chordia, Mumbai vs Department Of Income Tax on 30 August, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES " D ", MUMBAI
BEFORE SHRI D. MANMOHAN, VICE PRESIDENT
AND SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER
ITA No. : 8153/Mum/2010
Assessment Year : 2005-06
ACIT, Central Circle 32, Shri Anil R. Chordia,
Room No.32(2), Ground floor, Prop. M/s. Shambhav
Aayakar Bhavan, M.K. Road, Diamonds,
Marine Lines, 604, Bhishma Vishal Nagar,
Mumbai-400 020 Vs. Marve Road, Malad (West),
Mumbai-400 097
PAN NO: ABNPJ 1533 H
(Appellant) (Respondent)
Appellant by : Mrs. Rupinder Brar
Respondent by : Shri S. L. Poddar
Date of hearing : 30.08.2012
Date of Pronouncement : 12.09.2012
ORDER
Per Rajendra Singh, A.M. :
This appeal by the Revenue is directed against the order dated 08.09.2010 of CIT(A)-41, Mumbai for the A.Y. 2005-06. The only dispute raised by the Revenue in this appeal is regarding the addition made by the A.O. on account of G.P. rate.
2. The facts in brief are that the A.O. during the assessment proceedings noted that the assessee had shown sales of `.12.09 crores in the Schedule-7 which had been directly reduced from the purchases of imported diamonds and not added to the total turnover. The assessee 2 ITA No : 8153/Mum/2010 Shri Anil R. Chordia explained that the said sales had been made on behalf of the parties for whom rough diamonds were imported and there was no margin on sales. However, the assessee offered a sum of `.3,64,186/- being the net profit on the basis of N.P. rate declared for the year. The A.O., therefore, added the said amount to the total income. However, in the computation of the income, the A.O. added the sum of `.10,28,018/- as undeclared G.P. The assessee disputed the decision of the A.O. and submitted before the CIT(A) that sales of rough diamonds were duly accounted in the regular books of account which were also audited. It was also submitted that the sales were of the rough diamonds imported on behalf of the other parties and, therefore, sale being at the same rate there was no profit. Necessary details were given. The CIT(A) was convinced by the explanation given. It was observed by him that the A.O. had not disturbed the quantitative details furnished by the assessee nor any discrepancies had been pointed out in the books of accounts. It was also observed by him that even during the course of search no incriminating documents were found or seized. The CIT(A) also noted that the assessment u/s.143(3) before the search had been made in this case and no addition had been made on account of gross profit on sale of rough diamonds. The CIT(A), therefore, held that there was no ground for making any G.P. addition. However, since the assessee himself had offered an amount of `.3,64,186/- to avoid litigation and to buy piece of mind, the addition was restricted to that extent. The CIT(A), therefore, deleted the balance addition of `.6,63,832/- aggrieved by whom the revenue is in appeal.
3. Before us, the Ld. AR for the assessee reiterated the submissions made before the lower authorities, whereas the Ld. DR placed reliance on the order of the A.O. 3 ITA No : 8153/Mum/2010 Shri Anil R. Chordia
4. We have perused the records and considered the matter carefully. The dispute is regarding the addition on account of G.P. rate in respect of sale of rough diamonds. The assessee had declared the sale of rough diamonds of `.12.09 crores in the schedule-7 of the balance sheet and this had been directly reduced from the purchases. The case of the assessee is that the rough diamonds had been imported on behalf of the clients and, therefore, the same had been sold to them at the same rate and accordingly these sales had been reduced from the purchases. However, to avoid the litigation, the assessee had agreed for the addition of `.3,64,186/- on the basis of N.P. rate declared for the year. We find even the A.O. in the assessment order mentioned that the sum of `.3,64,186/- was to be added to the total income but in the computation of the income, he added `.10,28,018/- without giving any basis. Neither any defect was pointed out in the books of accounts nor have any incriminating materials been found at the time of the search. Therefore, we agree with the finding of the CIT(A) that there was no basis for any addition. However, since the assessee himself had agreed for addition of `.3,64,186/-, the addition had been rightly upheld to that extent. We see no infirmity in the order of the CIT(A) and the same is, therefore, upheld.
5. In the result, the appeal filed by the Revenue is dismissed.
Order pronounced on this 12th day of September, 2012.
Sd/- Sd/-
( D. MANMOHAN ) ( RAJENDRA SINGH )
VICE PRESIDENT ACCOUNTANT MEMBER
MUMBAI, Dt: 12.09.2012
4
ITA No : 8153/Mum/2010
Shri Anil R. Chordia
Copy forwarded to :
1. The Appellant,
2. The Respondent,
3. The C.I.T.
4. CIT (A)
5. The DR, - Bench, ITAT, Mumbai
//True Copy//
BY ORDER
ASSISTANT REGISTRAR
ITAT, Mumbai Benches, Mumbai
Roshani