Appeal details
Counselvise Citation
[2011] 100 COUNSELVISE.COM (IT) 2315 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 7 month(s) 19 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
21-03-2011
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
G
Next Hearing Date
21-03-2011
Assessment Year
2003-2004
Appeal Filed On
01-08-2008
Judgement Text
ITA NO. 2603/DEL/2008 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 2603/DEL/2008 A.Y. : 2003-04 ACIT, CIRCLE - 2, MEERUT VS. SH. SATISH CHAND, PROP. M/S DIAMOND JEWELLERS, SARRAFFA BAZAAR, MEERUT (PAN/GIR NO. :AAYPC 6688E) (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. V.K. GOEL, ADV. DEPARTMENT BY : SH. KISHORE B., D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 12.5.2 008 PERTAINING TO ASSESSMENT YEAR 2003-04. 2. THE ISSUE RAISED IS THAT LD. COMMISSIONER OF INCOM E TAX (APPEALS) ERRED IN DIRECTING THE ASSESSING OFFICER TO ACCEPT THE BOOK RESULTS AS OFFERED BY THE ASSESSEE. 3. IN THIS CASE, THE ASSESSEE IS ENGAGED IN THE BUS INESS OF MONEY LENDING. HE ALSO DID TRADING AS AN AUTHORIZED DEAL ER OF GOLD BARS PURCHASED FROM PUNJAB NATIONAL BANK. THE ASSESSEE CLAIMED THAT HE HAD INCURRED A LOSS OF ` 14,64,632/- IN THE TRADING OF GOLD BARS. REASONS FOR LOSS WAS STATED TO BE DUE TO EXCESS RATES CHARG ED BY THE BANK IN RESPECT OF 5 SPECIFIC PURCHASE DEALS, DETAILS OF WH ICH ARE GIVEN IN THE ITA NO. 2603/DEL/2008 2 ASSESSMENT ORDER. THE SALE RATES WERE LOWER, AND, HENCE, ON THESE 5 DEALS, LOSS WAS INCURRED. THE ASSESSEE FURTHER SUBMI TTED THAT THE ABOVE MENTIONED PURCHASES WERE AT FIXED RATES AS PE R AGREEMENT AND, HENCE, CONTROVERSY AROSE BETWEEN THE ASSESSEE AND T HE BANK REGARDING RATES FIXED VERSUS TRADE CHARGES. THE ASSESSEE ALSO FILED SUIT IN HIGH COURT, WHICH MATTER WAS STATED TO BE P ENDING BEFORE THE HIGH COURT. THE DISPUTE BEFORE THE HIGH COURT COVER S THE AMOUNT OF LOSS TO THE EXTENT OF ` 8,75,686/-. 3.1 THE ASSESSING OFFICER MENTIONS THAT EXAMINATION OF SALE BILLS REVEAL THAT THERE ARE CASH SALES WITHOUT IDENTITY O F THE BUYER AND, HENCE, SALES WERE NOT VERIFIABLE. THE ASSESSING OFF ICER INVOKED PROVISIONS OF SECTION 145 AND HELD THAT THE LOSS OF ` 5,88,946/- (` 14,64,632 8,75,686) WAS DUE TO LESSER RATE CHARG ED BELOW THE PURCHASE PRICE BUT WHERE THE SALES WERE NOT VERIFIA BLE, BECAUSE NEITHER ADDRESS OF THE BUYER WAS GIVEN NOR THE BUYE R HAD SIGNED ON THE SALE BILLS NOR EVEN SALE RATES COULD BE EVIDEN CED BY THE STATISTICS FROM THE BULLION MARKET. THE ASSESSING OFFICER COMP ARED ASSESSEES SALE RATES WITH THAT OF ONE M/S RAM KISHAN DAS HANS KUMAR SARRAF. THE ASSESSING OFFICER CONCLUDED THAT SALE BILLS AN D STOCK REGISTER WERE SELF GENERATED AND WERE OF QUESTIONABLE AUTHENTICI TY. THE ASSESSING OFFICER ESTIMATED SALES AT ` 2,75,00,000/- AND APP LIED GROSS PROFIT @ PERCENT. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) ELABORATELY CONSIDERED THE ISSUE AND HELD AS UNDER:- AFTER CAREFUL CONSIDERATION OF ALL THE FACTS ON RE CORD; I AM OF THE VIEW THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN INVOKING PROVISIONS OF SECTION 145(3). COMPLETE BOOKS OF ACC OUNTS, SALE ITA NO. 2603/DEL/2008 3 BILLS AND STOCK REGISTER ETC. WERE PRODUCED. THE ASSESSING OFFICER HAS NOT BEEN ABLE TO GIVE ANY WORTHWHILE R EASON AS TO WHY HE CAN TERM THESE BOOKS AS OF DOUBTFUL AUTHENTIC ITY. IT IS VERIFIABLE THAT ONLY SOME SALE TRANSACTIONS HAVE BEEN MADE IN CASH. IT IS WELL KNOWN THAT MANY OF SUCH CAS H SALES ARE MADE WITHOUT THE NAME AND ADDRESS OF THE BUYERS. TH IS CANNOT BE THE BASIS OF REJECTING THE BOOKS. WHAT IS IMPORTANT IS TO VERIFY THE COMPARABILITY OF THE SELLING RATES. IF THAT THE DOCUMENTARY EVIDENCE IND ICATE THAT SELLING RATES OF GOLD BARS AS RECORDED IN ASSESSE ES BOOKS AND BILLS WERE COMPARABLE WITH THE MARKET RATES. THE TRADE TAX DEPARTMENT HAS ACCEPTED THE ASSESSEE S SALES AND THIS STRENGTH GOES IN FAVOUR OF THE ASSES SEE, ESPECIALLY, WHEN ASSESSING OFFICER HAS NOT BEEN ABLE TO BRING OUT ANY MATERIAL WHICH COULD INDICATE SUPPRESSION OF SALES O R ABNORMAL DEFLATION IN SALE RATES. IN VIEW OF THE ABOVE FINDINGS ON RECORD, I HOLD T HAT THE ASSESSING OFFICER WAS NOT CORRECT IN REJECTING THE BOOK RESULTS. THEREFORE, ASSESSING OFFICERS ACTION IN ENHANCING THE SALES FIGURES AND APPLYING A DIFFERENT GROSS PROFIT RATE / RATIO, WITHOUT GIVING ANY COMPARABLE CASE IS IN SUPPORT OF SUCH VIE W, IS HELD TO BE UNJUSTIFIED. 5. AGAINST THIS ORDER THE REVENUE IS IN APPEAL BEFO RE US. 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. WE FIND THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) W AS QUITE CORRECT IN HOLDING THAT THE ASSESSING OFFICER WAS NOT JUSTI FIED IN INVOKING THE ITA NO. 2603/DEL/2008 4 PROVISIONS OF SECTION 145(3) WHEN THE COMPLETE BOO KS OF ACCOUNT, SALE BILLS AND STOCK REGISTER ETC. WERE PRODUCED AN D NO SIGNIFICANT DEFECTS WERE NOT FOUND WHICH WARRANT THE REJECTION O F BOOKS OF ACCOUNTS. UNDER THE CIRCUMSTANCES, IN OUR CONSIDER ED OPINION, LD. COMMISSIONER OF INCOME TAX (APPEALS)S ORDER DOES NO T NEED ANY INTERFERENCE. HENCE, WE UPHOLD THE SAME AND DECID E THE ISSUE IN FAVOUR OF THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21/03/2011 UP ON CONCLUSION OF HEARING. SD/- SD/- [ [[ [A.D. JAIN] A.D. JAIN] A.D. JAIN] A.D. JAIN] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 21/03/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES
