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Income Tax Appellate Tribunal, KOLKATA BENCH “C” KOLKATA
Before: Shri S.S.Godara & Dr. A.L. Saini
O R D E R
PER S.S.Godara, Judicial Member:
- This Revenue’s appeal for assessment year 2010-11 arises against the Commissioner of Income Tax (Appeals)-XII, Kolkata’s order dated 09.10.2013 passed in case No.72/XII/Cir-40/13-14, involving proceedings u/s 143(3) of the Income Tax Act, 1961; in short ‘the Act’. Case called twice. None appears at the assessee’s behest. We proceed ex parte against the assessee in the instant appeal.
The Revenue’s former substantive ground challenges correctness of the CIT(A)’s finding reversing Assessing Officer’s action rejecting assessee’s books of accounts. Its case is that the taxpayer had failed to explain all the evidences / documents supporting its fall in gross profit rate alongwith reasonable costs(s) of output, production and consumption of the raw material followed by non-satisfactory response justifying cost of defective goods and A.Y. 2010-11 ACIT, Cir-40, Kol. Vs. Shri Saurabh Gupta Page 2 corresponding sales return in stock. Its next ground seeks to revive the Assessing Officer’s action disallowing replacement provision of ₹91,07,528/- as deleted in the lower appellate proceedings. We deem it appropriate to reproduce the CIT(A)’s detailed discussion on both the issue(s) as follows:-
Learned Senior Departmental Representative vehemently contends during the course of hearing that the Assessing Officer had rightly rejected assessee’s books of account as he had failed to explain decline its profit rate in the light input, production and consumption of raw materials. We find no substance in Revenue’s instant arguments on the instant former issue of rejection of books of account. Case file suggests that the CIT(A) had sent assessee’s relevant details to the Assessing Officer rejecting comparative increase in raw material price in foreign currency, without any trend to this effect in sale price of the exported goods. We also find that assessee had successfully proved its purchase payments routed through banlong channel only. The Revenue fails to rebut the crucial fact that the taxpayer’s submissions in Annexure A-D sufficiently indicated comparative gross profit rates in preceding vis-à-vis the impugned assessment year, profit rates of export and domestic sales, raw material price upward movement and availability of all quantitative details during the course of assessment. Learned DR’s argument is that the assessee had failed to explain its contention with the help of supportive documentary evidence is devoid of merit therefore. We conclude in these peculiar facts and circumstances that the CIT(A) has rightly upheld assessee’s books of account in view of various judicial precedent (supra) governing the