Income Tax Appellate Tribunal - Ahmedabad
Hazira Refactory Works Pvt.Ltd.,, ... vs Department Of Income Tax on 7 January, 2013
आयकर अपीलीय अिधकरण,
अिधकरण, अहमदाबाद Ûयायपीठ ''A'', अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD,
"A" 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.792/Ahd/2010
[Asstt.Year : 2006-2007]
DCIT, Cir.1 बनाम/Vs. M/s.Hazira Refactory Works P. Ltd.
Surat. 47, Ichhapore GIDC
Bhatpore, Surat.
PAN : AABCH 3466 R
(अपीलाथȸ / Appellant) (ू×यथȸ / Respondent)
राजःव कȧ ओर से/
Revenue by : Shri Rahulkumar, SR.DR
िनधा[ǐरती कȧ ओर से/
Assessee by : Shri Mehul Shah
सुनवाई कȧ तारȣख/
Date of Hearing : 7th January, 2013
घोषणा कȧ तारȣख/ : 01-02-2013
Date of Pronouncement
आदे श / O R D E R
PER G.C. GUPTA, VICE-PRESIDENT: This appeal by the Revenue
for the assessment year 2006-07 is directed against the order of the CIT(A)-
I, Surat dated 8.1.2010.
2. The only ground of the appeal of the Revenue is as under:
1. On the facts and circumstance of the case
and in law, the ld.CIT(A) has erred in
deleting the addition made by the AO of
Rs.9,83,904/-on account of law GP."
ITA No.792/Ahd/2010
3. The learned DR submitted that the AO has recorded that there was
no day-to-day stock register maintained by the assessee, and during the year
under review the ratio of the raw-material consumed has increased, which
has resulted into reduction of gross profit of the assessee. He referred to
para-3 onwards of the assessment in support of the case of the Revenue.
He submitted that the GP rate of the assessee has decreased from 22.60% of
the immediately preceding assessment year to 14.39% during the relevant
period, and the AO has added only 2% of the turnover of the assessee on
account of low GP declared by the assessee, which was most reasonable.
He relied on the order of the AO.
4. The learned counsel for the assessee has opposed the submissions of
the Revenue. He submitted that the assessee has maintained stock register
and details thereof have been filed from page no.19 to 60 with supporting
bills of purchase, item-wise in the compilation filed before the Tribunal and
the copies of the same was filed before the AO. He submitted that there is
no specific ground taken by the Revenue that the books of accounts were
wrongly accepted by the CIT(A), and therefore no GP addition could be
sustained. The learned counsel for the assessee referred to the written reply
of the assessee dated 23.12.2008 explaining the reasons for fall in GP rate,
copy of which has been filed in the compilation filed before the Tribunal.
He referred to the relevant portions of the appellate order passed by the
CIT(A) in support of the case of the assessee. He referred to statement
showing variation in sale and purchase price and its effect on the GP filed
before the AO, copy of which has been filed in the compilation before the
Tribunal.
5. We have considered rival submissions and have perused the orders
of the AO and the CIT(A) and copies of various documents filed in the
compilation filed by the assessee. We find that there is a fall in the GP rate
of assessee from 22.60% of the immediately preceding assessment year to
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ITA No.792/Ahd/2010
14.39% during the relevant assessment year. However, we find that the
turnover of the assessee has increased from Rs.2.15 crores of the
immediately preceding assessment year to Rs.4.91 crores during the
relevant period. This case seems to be based on wrong appreciation of the
facts on the part of the AO. The assessee has filed item-wise day-to-day
stock register details with supporting bills of purchases before the AO, copy
of which has been filed before us in the compilation by the assessee at page
no.19 to 60. The CIT(A) has given a finding that the assessee was
maintaining day-to-day stock register. The product-wise quantitative
details were also submitted and these finding could not be controverted on
behalf of the Revenue. The department has not taken any specific ground
that the CIT(A) has wrongly accepted the books of accounts of the
assessee. We find that the assessee has filed a statement showing variation
in sale and purchase price and its effect on GP, copy of which has been
filed before the Tribunal at page nos.10 to 13. The assessee has filed a
detailed reply dated 23.12.2008 wherein the reasons for fall in GP rate has
been given by the assessee with a note that the assessee is maintaining day-
to-day stock register and excise record are maintained and the produce-wise
quantitative details were submitted to the AO and the valuation of the
closing stock with supporting bills was submitted to the AO and that all the
purchases and sales are supported by the bills and vouchers and the
assessee has maintained all the records which are compulsorily to be
maintained under the Income Tax Act, and the there was no defect in the
account books of the assessee which were audited under section 44AB of
the Act. We find that the facts of the case could not be correctly
appreciated by the AO and the finding recorded by him seems to be
contrary to the evidence produced by the assessee. We find that the CIT(A)
has passed a well reasoned speaking order and has recorded that the sale
price of the assessee has not increased in proportion to the increase in the
purchase price of the assessee. He has further recorded that some products
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ITA No.792/Ahd/2010
were new for the relevant year, which were not there in the earlier years and
vice-versa and that each product has different margin. The CIT(A) has
recorded that the AO has not brought any material to show that the
purchases were bogus and inflated and sales were not accounted or under
valued. The AO could not point out any defects in the account books along
with bills and vouchers produced by the assessee. The CIT(A) has noted
that there is no adverse remark in the audit report regarding the assessee
maintaining the day-to-day stock register. In these facts, we hold that there
is no reason to interfere with the order of the CIT(A), which is accordingly
confirmed and the grounds of the appeal of the Revenue being without any
merit is dismissed.
6. In the result, the appeal of the Revenue is dismissed.
Order pronounced in Open Court on the date mentioned hereinabove.
Sd/- Sd/-
(अिनल चतुवदȣ
ȶदȣ / ANIL CHATURVEDI) जी..सी
जी
(जी सी..गुƯाा/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 -4-