Income Tax Appellate Tribunal - Delhi
Eagle Marketing Pvt. Ltd., New Delhi vs Assessee on 30 September, 2014
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'B
'B' : NEW DELHI
BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND
SHRI H.S. SIDHU,
SIDHU, JUDICIAL MEMBER
ITA No.
No.3265/Del/2013
Assessment Year : 2008-
2008-09
M/s Eagle Marketing Private Vs. Income Tax Officer,
Limited, Ward-
Ward-11(1),
D-298, Kashyap House, New Delhi.
Sarvodaya Enclave,
New Delhi - 110 017.
PAN : AAACE0113D.
(Appellant) (Respondent)
Appellant by : Shri Pritesh Kapur, Shri Shaurak
Kashyap and Shri Pratyush Miglani,
Advocates.
Respondent by : Ms. Parwinder Kaur, Sr.DR.
ORDER
PER G.D. AGRAWAL, VP :
This appeal by the assessee is directed against the order of learned CIT(A)-XIII, New Delhi dated 21st March, 2013 for the AY 2008-
09.
2. The grounds of appeal furnished by the assessee were very argumentative running in almost thirty pages. Therefore, at the time of hearing before us, the learned counsel for the assessee was directed to submit the concise grounds of appeal. He submitted that the grounds of appeal have already been summarized at the end of the grounds of appeal under the title "relief claimed in this appeal". He, therefore, submitted that the relief claimed in the appeal should be treated as concise grounds of appeal. The same are reproduced below:-
2 ITA-3265/Del/2013 "9. Relief claimed in this appeal In view of the above, the appellant prays that this Hon'ble Tribunal may be pleased to :
a) allow the present appeal;
b) quash and set aside the impugned order of the learned CIT;
c) delete the addition amounting to Rs.2,30,396/-
made under Section 40A(3) of the Act as per the impugned order of the learned CIT;
d) delete the addition amounting to Rss.11,20,554/- made under Section 40(a)(ia) of the Act as per the impugned order of the learned CIT;
e) delete the addition amounting to Rs.12,75,827/- made under Section 145(3) of the Act as per the impugned order of the learned CIT;
f) delete the enhancement of income of the assessee by Rs.3,42,998/- made as per the impugned order of the learned CIT;
g) delete all interest under Section 234B and Section 234D of the Act levied in the impugned assessment order;
h) quash the penalty proceedings u/s 271(1)(c) against the appellant;
i) restrain the respondent from taking any coercive steps with respect to the demand; and
j) pass any other order(s) as this Hon'ble Tribunal may deem fit in the facts and circumstances of the present case."
3. We have heard the submissions of both the sides and perused relevant material placed before us. Ground No.(a) & (b) are of general nature and need no separate adjudication.
4. Ground No.(e) is for rejection of books of account and a resultant addition by application of gross profit rate.
5. From a perusal of the assessment order, we find that the Assessing Officer has noted that there are several defects with regard to recording of bills of dyeing charges which have been detailed in 3 ITA-3265/Del/2013 paragraph 5 of the assessment order. He has also pointed out that the assessee did not produce the books of account along with complete bills, vouchers, fixed asset register etc. The quantitative details were not furnished along with the return of income and the quantitative details furnished during the course of assessment proceedings were not signed by the auditor and also contained certain discrepancies. All these discrepancies noted by the Assessing Officer in the assessment order could not be satisfactorily explained before us. We, therefore, uphold the rejection of books of account. We also find that after rejecting the books of account, the Assessing Officer applied the gross profit rate of 10% which was even less than the gross profit rate applied in the preceding year. In view of the above, we uphold the trading addition of `12,75,827/- made by the Assessing Officer after the rejection of books of account. Accordingly, ground No.(e) of the concise grounds of appeal is rejected.
6. Insofar as ground No.(c) & (d) are concerned, it was argued before us that once the books of account are rejected and a gross profit rate is applied, no other addition or disallowance which would affect the trading result can be made. In support of this contention, the assessee relied upon the decision of Hon'ble Allahabad High Court in the case of CIT Vs. Banwari Lal Banshidhar - [1998] 229 ITR 229, wherein their Lordships held as under:-
"Held, affirming the decision of the Tribunal, that no disallowance could be made in view of the provisions of section 40A(3) read with rule 6DD(j) of the Income-tax Rules, 1962, as no deduction was allowed to and claimed by the assessee. When the gross profit rate was applied, that would take care of everything and there was no need for the Assessing Officer to make scrutiny of the amount incurred on the purchases made by the assessee."
4 ITA-3265/Del/2013
7. That the ratio of the above decision of Hon'ble Allahabad High Court would be squarely applicable to ground Nos.(c) & (d) of the assessee's appeal. The Assessing Officer has rejected the assessee's books of account and determined the profit by applying the gross profit rate which has also been upheld by us by rejecting ground No.(e) of the assessee's appeal. Once the gross profit rate is applied, it is deemed that all the expenses which are debited to the trading account have been duly taken care of because the gross profit is the resultant figure of the trading account. Once the gross profit has already been determined, no other adjustment in the trading account can be made, otherwise, it will affect the gross profit which has already been determined. In view of the above, respectfully following the above decision of Hon'ble Allahabad High Court, we allow ground Nos.(c) &
(d) of the assessee's appeal.
8. Insofar as ground No.(f) is concerned, at the time of hearing before us, no specific argument was advanced by the learned counsel against the enhancement made by the learned CIT(A). We find that the learned CIT(A) made the enhancement on account of peak negative balance in the cash book. Since no submission was made with regard to ground No.(f) of the assessee's appeal, the same is rejected as not pressed.
9. Ground No.(g) which is against the charging of interest under Section 234B & 234D is stated to be consequential. We agree with the learned counsel that the charging of interest under Section 234B & 234D is consequential and direct the Assessing Officer to re-work out the interest, if any, as per law after determination of income as per our order.
5 ITA-3265/Del/2013
10. Ground No.(h) which is against the initiation of penalty proceedings under Section 271(1)(c) is premature and needs no adjudication.
11. In the result, the appeal of the assessee is partly allowed.
Decision pronounced in the open Court on 30th September, 2014.
Sd/- Sd/-
(H.S. SIDHU)
SIDHU) (G.D. AGRAWAL)
AGRAWAL)
JUDICIAL MEMBER VICE PRESIDENT
Dated : 30.09.2014
VK.
Copy forwarded to: -
1. Appellant : M/s Eagle Marketing Private Limited, D-298, Kashyap House, Sarvodaya Enclave, New Delhi - 110 017.
2. Respondent : Income Tax Officer, Ward-
Ward-11(1), New Delhi.
3. CIT
4. CIT(A)
5. DR, ITAT Assistant Registrar