Income Tax Appellate Tribunal - Ahmedabad
Fairdeal Suppliers Pvt.Ltd.,, ... vs Department Of Income Tax on 8 August, 2014
आयकर अपीलीय अिधकरण,
अिधकरण, अहमदाबाद Ûयायपीठ ''C'', अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD,
"C" BENCH
सव[ौी ौी जी.
जी.सी.
सी.गुƯा, माननीय उपाÚय¢,
उपाÚय¢, एवं अिनल चतुवद
ȶ ȣ,
ȣ, लेखा सदःय के सम¢ ।
BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND
ANIL CHATURVEDI, ACCOUNTANT MEMBER)
ITA No.181/Ahd/2011
[Asstt.Year : 2006-2007]
The DCIT, Cir.4 बनाम/Vs. Fairdeal Suppliers P. Ltd.
Ahmedabad. 4th Floor, Shalin Building
Ashram Road, Ahmedabad.
PAN : AAACF 2878 C
(अपीलाथȸ / Appellant) (ू×यथȸ / Respondent)
राजःव कȧ ओर से/ :
Revenue by Shri B.L. Yadav, Sr.DR
िनधा[ǐरती कȧ ओर से/ :
Assessee by Shri P.F. Jain
सुनवाई कȧ तारȣख/ :
Date of Hearing 1st July, 2014
घोषणा कȧ तारȣख/ :
Date of Pronouncement 08/08/2014
आदे श / O R D E R
PER G.C. GUPTA, VICE-PRESIDENT: This appeal by the Revenue
for the Asstt.year 2006-2007 is directed against the order of the CIT(A).
2. The only effective ground of the appeal of the Revenue is as under:
"1. The ld.CIT(A) has erred in law and on facts in deleting the
disallowance of Rs.48,49,074/- made by the AO on account of low
GP without properly appreciating the facts of the case and the
material brought on record by the AO."
ITA No.181/Ahd/2011
1.2 The ld.CIT(A) has erred in law and on facts in deleting the
aforesaid disallowance on the ground that mere fall in GP cannot be
a ground to reject the books, without appreciating that the AO had
pointed out a number of parameters which the assessee had not been
able to substantiate and consequently the AO had estimated the
profit of the business."
3. The learned DR submitted that the assessee is in the business of
trading and manufacturing of met coke and there is a steep fall in the GP
rate in manufacture of met coke and during the relevant period, the
assessee has declared GP rate of 6.73% on sale of 1646 lakhs, as against
the GP rate of 28.96% on sales of 1189 lakhs of the immediately preceding
assessment year. He submitted that the AO was reasonable in applying the
GP rate of 16.83% to the turnover of the assessee. He relied on the order
of the AO.
4. The learned counsel for the assessee submitted that not a single
defect in the accounts of the assessee could be pointed out by the AO and
the accounts of the assessee were audited by the Chartered Accountant.
He relied on the decision of the Hon'ble jurisdictional High Court in the
case of CIT Vs. Symphony Comfort System Ltd., Tax Appeal No.1501 of
2011 dated 1.10.2012 in support of his argument that when the AO could
not point out any defect in the accounts of the assessee, the trading results
could not be disturbed merely because there was a fall in the GP. He
relied on the order of the CIT(A).
5. We have considered rival submissions and perused the orders of the
AO and the CIT(A). We find that the assessee has maintained complete
books of accounts with regard to its met coke business and accounts were
audited for the purpose of Companies Act as well as for the purpose of
Income Tax Act. We find no defect, in the account books of the assessee,
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ITA No.181/Ahd/2011
could be pointed out by the AO. Merely because there is a fall in the GP
rate in the manufacturing unit of met coke, it does not follow that trading
account of the assessee could be rejected. The CIT(A) has recorded that
the AO has not found any other defect in the accounts whatsoever, apart
from the reduction in the gross profit of the assessee. He further recorded
that fall in GP could be due to several factors, such as, increase in prices of
raw material, increase in the cost of manufacturing, decrease in sale price
etc. He has cited a number of decisions of the Hon'ble Courts in support
of these propositions. We find that the assessee has shown much better
trading results in the trading unit of met coke by declaring the GP rate of
16.83% on increased sales turnover of Rs.481 lakhs as against the GP rate
of 9.43% on sales of Rs.137 lakhs in the immediately preceding
assessment year. In the facts of the case of the assessee, we have no
hesitation in holding that there was no valid reason to reject the account
books of the assessee, accordingly, the order of the CIT(A) in deleting the
trading addition is confirmed, and the grounds of the appeal of the
Revenue are rejected.
6. In the result, appeal of the Revenue is dismissed.
Order pronounced in Open Court on the date mentioned hereinabove.
Sd/- Sd/-
अिनल चतुवȶदȣ / ANIL CHATURVEDI)
(अिनल (जी.
जी.सी.
सी.गुƯा/G.C. GUPTA)
लेखा सदःय /ACCOUNTANT MEMBER उपाÚय¢ /VICE-PRESIDENT
Copy of the order forwarded to:
1) : Appellant
2) : Respondent
3) : CIT(A)
4) : CIT concerned
5) : DR, ITAT.
BY ORDER
DR/AR, ITAT, AHMEDABAD -3-