TMI Blog2016 (1) TMI 1352X X X X Extracts X X X X X X X X Extracts X X X X ..... PER R.P. TOLANI, JM:- This is a set of appeals filed by the assessee for the assessment years 2006-07, 2008-09 and 2009-10 and cross appeal by the Revenue for the assessment year 2006-07 against three separate orders of the ld. CIT(A) dated 1-10-2013. Since the issues raised in the appeals are common, therefore, the same are being disposed off through a consolidated order for the sake of convenience. 2.1 During the course of hearing, the ld. AR of the assessee has not pressed Ground Nos. 1 and 2 of the assessee for the assessment year 2006- 07. Hence, the same are dismissed being not pressed. 3.1 Ground No. 3 of assessee and corresponding revenue ground for the assessment year 2006-07 is as under:- Assessee ground No.3 On the facts and in the circumstances of the case and in law the ld. CIT(A) erred in confirming the trading addition of ₹ 14,60,764/- out of ₹ 29,74,480/- made by the AO by confirming the gross profit rate of 50% on declared sales of ₹ 1,51,37,197/- as against 60% applied by the AO and 40.35% declared by the assessee. Revenue s solitary ground On the facts and in the circumstances of the case and in law the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd, who opposed the admission of additional ground on the ground that this issue was not raised before any lower authorities. 6.4 We have heard the rival contentions and perused the materials available on record on the issue of admission of additional ground which is purely legal in nature and the propensity is going to the root of the addition. Respectfully following the decision of Hon'ble Supreme Court in the case of NTPC Ltd. 229 ITR 283, additional ground raised by the assessee is admitted. 7.1 Adverting to merits ld. Counsel contends that ITAT Jaipur has already adjudicated GP estimation and related issues while deciding the assessee s appeal for AY 2007-08 arising from same search proceedings, by order in ITA 910/JP/2012 dtd. 23-4-2015, holding in this behalf as under: 4. Now the assessee as well as the revenue are in appeals before us. The Ld. A.R. for the assessee has submitted that no incriminating documents were found during the course of search. The scope of assessment U/s 153A of the Act is limited to some incriminating documents/evidence found as a result of search. The assessee filed its regular return U/s 139(1) of the Act on 31/10/2007 and notice of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase and sales are verifiable and payments were made through account payee cheques in mostly. The Hon ble Rajasthan High Court in the case of Malani Ramjivan Jagannath Vs. ACIT (2009) 316 ITR 120 has held that where opening stock, purchase, sales and closing stock figures are sufficient to judge the correct income of the assessee and when there is no dispute about the sale and purchase, non-maintenance of stock register lost its significance so far as arriving at GP is concerned. When all the data and entries made in the trading account were not found to be incorrect in any manner, there could not have been any other result except what has been shown by the assessee in the books of account. The ld AR further drawn our attention on business results from A.Y. 2005-06 to 2007- 08 and argued that during the year, not only sale but GP has increased from 40.35% to 44.79%. The sales have increased more than double from A.Y. 2005-06. The assessee has been dealing in medicine and G.P. margin in each kind of medicines remains different. There is throat cut competition in the medicine business, therefore, he prayed to delete the addition confirmed by the ld CIT(A). He further argued that on no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A). Both the lower authorities have not pointed out any defect in the books of account. The books of account has been audited under the Income Tax as well as Companies Law. The case law relied by the ld AR in the case of Malani Ramjivan Jagannath Vs. ACIT (supra) of the Hon ble Jurisdictional High Court is squarely applicable. As per Income Tax law, in Section 2 (12A) books of account includes ledgers, day-books, cash books, account-books and other books, whether kept in the written form or as print-outs of data stored in a floppy, disc, tape or any other form of electro-magnetic data storage device. The Hon ble Delhi High court in the case of CIT Vs. Jack Elegance Exports (supra) has held that no provision either in the Act or in the Rules requiring an assessee carrying business of nature, to maintain the stock register as a part of its account has been brought to notice. The other case laws referred by the assessee on rejection of book and maintenance of stock register are also squarely applicable. Thus, we hold that the addition confirmed by the ld. CIT(A) is not justified. 7.2 Similarly, other findings of facts on the similar issues have been also decided by ITAT Jaipu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 153A cannot be issued for an abetted assessment, more particularly where no incriminating documents as a result of search are discovered by search seizure operations on 27-08-2008. c. Reliance is placed on the decision of Hon ble Jurisdictional High Court in the case of Jai Steel (India) Vs Astt Commissioner of Income Tax (2013) 88 DTR (Raj) 1 : (2013) 259 CTR (Raj) 281 : (2013) 219 TAXMAN 223 (Rajasthan). ITAT Jodhpur Bench relying on this decision has accordingly held in the case of Vishal Dembla Vs Deputy Commissioner of Income Tax ITA 308/Jd/2013; 22nd July, 2013 (2013) 93 DTR (Jd)(Trib) 1 (2013) 36 CCH 484 JodhTrib (2014) 61 SOT 10 (Jodhpur)(URO). 2.5 It is contended that:- (i) Assessee was suffering continuous losses in subsequent years also and ultimately, the business operations of the assessee were closed. Therefore, there can be no design to show loss. Besides in case of disallowance of loss there is no loss to the revenue. Reliance is placed on Hindustan Steels Ltd. Vs. State of Orissa, 83 ITR 26 (SC). Hon ble Apex Court has held that - Penalty shall not be imposed merely because it is lawful to do so. Even if a minimum penalty is prescribed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding of the AO alleging any document showing unaccounted sales or purchases or inflation of expenses or any other unaccounted income. (ii) Assessee s contention about non service of notice u/s 143(2) till the last date of limitation has not been rebutted. Consequently the impugned assessment stands deemed as abetted. In view thereof there is merit in assessee s plea that notice u/s 153A cannot be issued for an abetted assessment, based on search seizure operations on 27-08-2008 where no incriminating documents as a result of search are discovered. (iii) Reliance is placed on the decision of Hon ble Jurisdictional High Court in the case of Jai Steel (India) Vs ACIT (2013) 259 CTR (Raj) 281 and it is by now settled law that the scope of the assessment u/s 153A is limited to incriminating documents/evidence found as a result of search. In search and seizure operations admittedly no incriminating material belonging to this assessee was found. It is by now settled law that the scope of the assessment u/s 153A is limited to incriminating documents/evidence found as a result of search. (iv)There is no justifiable basis to disbelieve the assessee s contention that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of search or any inquiry conducted in this behalf. 3. No addition in search assessment can be made in search assessment unless any incriminating material is found during search by relying on Jurisdictional High Court decision in the case of Jai Steel and host of other judgments (supra). 4. There were serious disputes amongst Mittal and Burman Group of directors and the accounts could not be produced by Mittal group in assessment proceedings. It has been clearly observeed by ITAT that a/c books were in possession of Shri Atul Burman. Subsequently there was a patch up and assesse produced books of account by way of additional evidence. 5. There is no justification for ld. CIT(A) in refusing to admit additional evidence despite the fact remand reports were called and to ignoring the fact that in some years same books were admitted as additional evidence and no discrepancies were indicated by ld. AO. Similarly ld. CIT(A) has given self-contradictory findings in some years by holding that a/c books couldn t be produced due to sufficient reasons and in some years holding that they were deliberately not produced. Besides ld. AO in remand report has not raised serious ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
