M/s. Suryanarayan Silk Mills Pvt.Ltd.,, Surat v. The ACIT., Circle-9,, Surat

ITA 1051/AHD/2008 | 2004-2005
Pronouncement Date: 28-05-2010 | Result: Partly Allowed

Appeal Details

RSA Number 105120514 RSA 2008
Assessee PAN AAQFS4159J
Bench Ahmedabad
Appeal Number ITA 1051/AHD/2008
Duration Of Justice 2 year(s) 2 month(s) 4 day(s)
Appellant M/s. Suryanarayan Silk Mills Pvt.Ltd.,, Surat
Respondent The ACIT., Circle-9,, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 28-05-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted D
Tribunal Order Date 28-05-2010
Date Of Final Hearing 17-05-2010
Next Hearing Date 17-05-2010
Assessment Year 2004-2005
Appeal Filed On 24-03-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AT SURAT CAMP AHMEDABAD BEFORE SHRI T.K. SHARMA JUDICIAL MEMBER AND SHRI D. C. AGRAWAL ACCOUNTANT MEMBER ITA NO.1051/AHD/2008 ASSESSMENT YEAR: 2004-05 DATE OF HEARING:24.5.10 DRAFTED:25.5.10 SSURYANARAYAN SILK MILLS GANDHI COLONY A.K. ROAD SURAT PAN NO.AAQFS4159J V/S . ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE-9 SURAT (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI P.M. JAGASHETH AR RESPONDENT BY:- SHRI H.P. MEENA SR-DR O R D E R PER D.C.AGRAWAL ACCOUNTANT MEMBER:- THIS IS AN APPEAL FILED BY ASSESSEE RAISING FOLLOW ING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS W ELL AS LAW ON THE SUBJECT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS ERRED CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN M AKING ADDITION OF LUMP SUM RS.10 00 000/- OF COLOUR & CHEMICALS EXPENSES. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WE LL AS LAW ON THE SUBJECT THE LEARNED COMMISSIONER OF THE INCOME TAX (APPEALS) HAS ERRED CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN D ISALLOWING INTEREST OF PARTNERS CAPITAL OF RS.3 55 988/-. 2. LD. AR DID NOT PRESS GROUND NO.2 HENCE IT IS REJECTED AS NOT PRESSED. 3. GROUND NO.1 RELATES TO ADDITION OF RS.10 LAKH OU T OF COLOUR & CHEMICALS EXPENSES. ITA NO.1051/AHD/2008 A.Y. 2004-05 SURYANARAYAN SILK MILLS V. ACIT CIR-9 SRT PAGE 2 4. THE FACTS OF THE CASE ARE THAT ASSESSEE DECLARED GROSS PROFIT OF RS.68 52 928/- @ 11.35% ON TOTAL TURNOVER OF RS.6 0 3 52 721/-. AS AGAINST THIS LAST YEAR GP RATE WAS 9.69% ON TOTAL TURNOVER OF RS .6 15 15 472/-. THE ASSESSING OFFICER PRODUCED FOLLOWING CHART FOR COMP ARISON:- YEAR TURNOVER GROSS PROFIT G.P. MARGIN 2004-05 6 03 52 721 68 52 928 11.35% 2003-04 6 15 15 472 59 59 818 9.69% 2002-03 3 84 11 673 (-) 27 24 677 - 7.09% THOUGH ASSESSEE HAS SHOWN A GP RATE OF 11.3% BUT I N THE AUDITED ACCOUNTS GP RATE WAS @ 8.60% TURNOVER BEING THE SAME. WHEN ASS ESSEE WAS ASKED TO RECONCILE HE GAVE FOLLOWING WORKING FOR TWO YEARS A S UNDER:- A.Y. TOTAL SALES G.P. G.P. % 2004-05 6 03 52 721 51 84 869 8.59% 2003-04 6 15 15 472 39 52 596 6.43% THE ASSESSING OFFICER NOTICED THAT ASSESSEE IS GETT ING JOB WORK DONE FROM SEVERAL PARTIES. IT IS ALSO CONSUMING COLOUR AND C HEMICAL. TOTAL CONSUMPTION OF COLOUR AND CHEMICALS WAS AT RS.1 31 39 595/- WHEREA S IN THE IMMEDIATELY PRECEDING YEAR THE CONSUMPTION WAS AT RS.85 89 851 /-. TOTAL TURNOVER ON THE OTHER HAND HAD DECREASED. THE AO REQUIRED THE ASSES SEE TO GIVE DETAILS OF THE PARTIES FROM WHOM COLOUR AND CHEMICALS WERE PROCURE D. HE SENT NOTICED U/S.133(6) OF THE ACT ON 12 PARTIES AS UNDER:- SL. NO. NAME OF THE PARTY REMARKS 1. SUN SILK THOUGH THE LETTER WAS SENT ON THE GIVEN ADDRESS THE SAME WAS RETURNED UN- SERVED WITH THE REMARKS LEFT/NOT KNOWN 2. UTSAV SILK MILLS P. LTD. THOUGH THE LETTER WAS SENT ON THE GIVEN ADDRESS THE SAME WAS RETURNED UN- SERVED WITH THE REMARKS LEFT/NOT KNOWN ITA NO.1051/AHD/2008 A.Y. 2004-05 SURYANARAYAN SILK MILLS V. ACIT CIR-9 SRT PAGE 3 3. DEVANG FABRICS THOUGH THE LETTER WAS SENT ON THE GIVEN ADDRESS THE SAME WAS RETURNED UN- SERVED WITH THE REMARKS LEFT/NOT KNOWN 4. YESH ENTERPRISES THOUGH THE LETTER WAS SENT ON T HE GIVEN ADDRESS THE SAME WAS RETURNED UN- SERVED WITH THE REMARKS LEFT/NOT KNOWN 5. Y.Z.TRADERS THOUGH THE LETTER WAS SENT ON THE GI VEN ADDRESS THE SAME WAS RETURNED UN- SERVED WITH THE REMARKS LEFT/NOT KNOWN 6. HEENA CHEMICALS THOUGH THE LETTER WAS SENT ON TH E GIVEN ADDRESS THE SAME WAS RETURNED UN- SERVED WITH THE REMARKS LEFT/NOT KNOWN 7. TAPAN ENTERPRISES THOUGH THE LETTER WAS SENT ON THE GIVEN ADDRESS THE SAME WAS RETURNED UN- SERVED WITH THE REMARKS LEFT/NOT KNOWN 8. EMBEE CORPORATION THOUGH THE LETTER WAS SENT ON THE GIVEN ADDRESS THE SAME WAS RETURNED UN- SERVED WITH THE REMARKS LEFT/NOT KNOWN 9. REMIK TRADING CO. P. LTD. THOUGH THE LETTER WAS SENT ON THE GIVEN ADDRESS THE SAME WAS RETURNED UN- SERVED WITH THE REMARKS LEFT/NOT KNOWN 10. SHRI LAXMI TEXTILES TILL DATE NO RESPONSE HAS BEEN RECEIVED THOUGH THE LETTER WAS SENT ON THE GIVEN ADDRESS 11. UMELITE SALES CORPN. TILL DATE NO RESPONSE HAS BEEN RECEIVED THOUGH THE LETTER WAS SENT ON THE GIVEN ADDRESS. 12. AMISHA ENTERPRISES P. LTD. TILL DATE NO RESPONSE HAS BEEN RECEIVED THOUGH THE LETTER WAS SENT ON THE GIVEN ADDRESS. ACCORDING TO ASSESSING OFFICER THE CONSUMPTION OF C OLOUR AND CHEMICALS HAS INCREASED FROM 12.7% OF THE TURNOVER TO 21.5% OF TH E TURNOVER. NO SATISFACTORY EXPLANATION HAS BEEN FURNISHED AND HENCE HE DISALLO WED A SUM OF RS.10 LAKH BY ESTIMATE. 5. LD. CIT(APPEALS) CONFIRMED THE SAME BY FINDING T HAT ASSESSEE IS NOT CO- OPERATING. ITA NO.1051/AHD/2008 A.Y. 2004-05 SURYANARAYAN SILK MILLS V. ACIT CIR-9 SRT PAGE 4 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIALS ON RECORD. LD. AR ON THE OTHER HAND SUBM ITTED THAT ABOVE ADDITION IS EXCESSIVE WHERE LD. SR-DR RELIED ON THE ORDER OF LD . CIT(APPEALS). 7. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUM STANCES OF THE CASE WE CONFIRM THE ADDITION OF RS.5 LAKH. IT MEANS THAT A SSESSEE GETS RELIEF OF RS.5 LAKH. AS A RESULT THIS ISSUE OF ASSESSEES APPEAL IS PARTLY ALLOWED. 8. IN THE RESULT APPEAL FILED BY ASSESSEE IS PARTLY A LLOWED. ORDER PRONOUNCED IN OPEN COURT ON 28/05/2010 SD/- SD/- (T.K.SHARMA) (D.C.AGRAWAL) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD DATED : 28/05/2010 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-V SURAT 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD