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Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH
Before: Shri Rajpal Yadav & Shri Amarjit Singh
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A” BENCH Before: Shri Rajpal Yadav, Judicial Member And Shri Amarjit Singh, Accountant Member ITA No. 104 & CO No. 37 /Ahd/2016 Assessment Year 2011-12
The DCIT, M/s. Aditya Forge Ltd. Circle-1(1)(1), Vadodara- Plot No. 415, GIDC 390007 Vs Por, Baroda, (Appellant/Respondent) PIN: 39124 PAN: AABCA7948P (Respondent/Cross Objector)
Revenue by: Shri Prasoon Kabra, Sr. D.R. Assessee by: Shri B.T. Thakkar, A.R. Date of hearing : 08-06-2018 Date of pronouncement : 27-06-2018 आदेश/ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-
This Revenue’s appeal and assessee’s cross objection for A.Y. 2011-12, arise from order of the CIT(A)-1, Vadodara dated 28-10-2015, in proceedings under section 143(3) of the Income Tax Act, 1961; in short “the Act”. 2. The revenue has raised following ground of appeal:- 1. "On the facts and in the circumstances of the case and in law, the Ld.CIT(Appeals) erred in by deleting addition made by Assessing Officer by estimating the GP ratio of the current year after rejecting the books of account of the assessee without appreciating the findings of Assessing Officer that the party wise sale details submitted by the assessee, did not match with the related party details as mentioned in the Tax Audit Report and ledger account furnished as explained in assessment order." 3. The brief fact of the case is that return of income declaring income of Rs. nil was filed on 29th Sep, 2011. Subsequently, the case was selected under
I.T.A No. 104 & CO No. 37/Ahd/2016 A.Y. 2011-12 Page No 2 DCIT vs. M/s. Aditya Forge Ltd.
scrutiny by issuing of notice u/s. 143(2) of the act on 28th Sep, 2012. On scrutiny, the assessing officer noticed that assessee has shown written down value of dies and jigs purchased for Rs. 4,06,27,861/- from M/s. Dev Profiles and not claimed depreciation on dies and jigs. She had also noticed that the dies and jigs were not appearing in the fixed asset annexure attached to the audit report. The assessing officer observed that the gross profit was Rs. 10.48% as compared to gross profit shown by the assessee of Rs. 16.84% during the assessment year 2010-11. The assessing officer has also noticed that party wise sale detail was not matched with the ledger a/c furnished by the assessee. Thereafter, the assessing officer has rejected the books of accounts of the assessee. The assessee was asked to explain the fall in GP. The assessee has responded that there was increase in consumption of raw material store spares and increase of labour and wags expenses which resulted in fall in GP. Regarding purchase of dies and tool it was stated that these were purchased in the last week of March, 2010 and the same could not be put to use and the same was included in the fixed asset without claiming any depreciation. The assessing officer has not accepted the explanation of the assessee and stated that assessee company has shown profit in assessment year 2010-11 at 16.8% compared to gross profit 10.49% shown during the year under consideration, therefore, she has adopted gross profit of Rs. 13.67% during the year under consideration and made addition of Rs. 1,28,82,084/-.
Aggrieved assessee filed appeal before the ld. CIT(A). The ld. CIT(A) has allowed the appeal of the assessee by stating that assessing officer is not correct in rejecting books of account as the assessee has filed reconciliation statement before the assessing officer stating that CENVAT/Sales tax etc. were clearly reflected in the ledger account but not shown in the tax audit report. He has stated that assessing officer has not pointed out any discrepancy in the reconciliation statement submitted by the assessee. The assessing officer has not considered that the dies and jigs were purchased the assessment year 2010-
I.T.A No. 104 & CO No. 37/Ahd/2016 A.Y. 2011-12 Page No 3 DCIT vs. M/s. Aditya Forge Ltd.
11 on which no depreciation was claimed. Therefore, it cannot be said that books of account of the assessee was defective. Further, regarding fall in GP, the ld. CIT(A) has stated that during the year under consideration the correct figure of gross profit shown by the assessee was Rs. 13.68% as against 10.49% reported by the assessing officer.
We have heard both the sides and perused the material carefully. We find that assessing officer has rejected the books of account on the ground that the purchases of dyes and jigs could not be verified from the books of the seller and the discrepancies were noticed in the sale details. The assessee has reported as per ledger account CENVAT & VAT was included in the sale detail whereas the party wise detail was showing net amount excluding these taxes. The assessing officer has not pointed out any discrepancy in such reconciliation. The dies and jigs were purchases in A.Y.2010-2011 and not during the year under consideration. After considering the findings of ld. CIT(A), it is clear that assessing officer has failed to point out any defect in reconciliation filed by the assesee. Further, we have considered that actual gross profit declared by the assessee during the year under consideration was 13.68% as against incorrect figure adopted by the assessing officer of 10.49%. After considering above and the detailed findings of the Ld.CIT(A) we do not find any infirmity in the decision of the ld. CIT(A). Accordingly, the appeal of the revenue is dismissed.
The assessee has raised following grounds in the cross objection:- “1. The assessment order and the appeal by Dy.CIT Circle 1 (1), Vadodara before the Income Tax Appellate Tribunal is bad in law and deserves to be quashed. 2. To set aside the appeal filed by Dy.CIT Circle 1(1)(1), Baroda. 3. To set aside the addition of Rs.1,28,82,048/- on account of lower profit made by the Appellant. 4. To restore the Order of Commissioner of Income Tax (Appeal) Vadodara.”
I.T.A No. 104 & CO No. 37/Ahd/2016 A.Y. 2011-12 Page No 4 DCIT vs. M/s. Aditya Forge Ltd.
Since the grounds of appeal of the revenue on the same issue has been rejected in this order, accordingly, the cross objection of the assessee has become infructuous therefore stand dismissed.
In the result, both the appeal of the revenue and cross objection of the assessee are dismissed. Order pronounced in the open court on 27-06-2018
Sd/- Sd/- (RAJPAL YADAV) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad : Dated 27/06/2018 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद