ITA NO. 1285/DEL/2012
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "E", NEW DELHI
BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER
AND
SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER
I.T.A. No. 1285/Del/2012
A.Y. : 2007-08
Asstt. Commissioner of Income vs. M/s Moets Bar-B-Cue,
Tax, 50, Defence Colony Market,
Central Circle-9, New Delhi New Delhi 110 024
Room No. 357, ARA Centre, E-2 (PAN/GIR NO. : AAAFM7936M)
Jhandewalan Extn.,
New Delhi
(Appellant ) (Respondent )
Assessee by : Sh. Anil Jain & Sh. Rishab Jain,
Advocates
Department by : Sh. R.S. Negi, Sr. D.R.
ORDER
PER SHAMIM YAHYA: AM
This appeal by the Revenue is directed against the order of the
Ld. Commissioner of Income Tax (Appeals)-XXXII, New Delhi dated
03.1.2012 pertaining to assessment year 2007-08.
2. The grounds raised in the appeal by the Revenue read as
under:-
"1. That the Ld. Commissioner of Income Tax (Appeals)
erred in law and on facts of the case in deleting the
addition of ` 16,20,725/- by holding that the GP rate of
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ITA NO. 1285/DEL/2012
24.54% as shown by the assessee on the basis of
audited accounts was to be accepted instead of GP
rate of 30% applied by the Assessing Officer for
making the addition.
2(a). The order of the Ld. Commissioner of Income Tax
(Appeals) is erroneous and not tenable in law and on
facts.
(b). The appellant craves leave to add, alter or amend any
/ all of the ground of appeal before or during the
course of the hearing of the appeal."
3. In this case Assessing Officer noted that during the year under
consideration the assessee declared GP rate in Restaurant business @
24.93%. In the absence of complete supporting evidences, and in
the absence of justification of GP ratio applied, the GP rate was
considered @ 30% as applied in the earlier years. The GP on the
total sales of ` 3,19,65,579/- by applying GP ratio 2 30% was worked
out at ` 95,90,081/-. The undeclared GP computed in view of the
above discussion was worked out as under:-
GP worked out as above - 95,90,081/-
Less GP declared - 79,69,358/-
Undisclosed GP - 16,20,725/-
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4. Upon assessee's appeal Ld. Commissioner of Income Tax
(Appeals) noted that Assessing Officer has not given any specific
reason for estimation of GP @ 30% as against the GP rate of 24.54% as
declared by the assessee. He has simply stated that in absence of
justification of the GP declared, the GP is estimated at 30% as in earlier
years. Ld. Commissioner of Income Tax (Appeals) further noted that
however the estimation made in earlier years has been knocked down
in appeal by the Tribunal. The tribunal had found the GP rate declared
by the assessee as per their audited accounts as reasonable for the
immediately preceding year at 20.53% whereas the assessee has
declared GP rate of 24.54% in the instant year which is higher by 4.1%
as compared to the immediately preceding year. Ld. Commissioner
of Income Tax (Appeals) further observed that though the principle of
res judicata does not apply to the income tax proceedings, the
Assessing Officer has not brought any adverse material on record to
disturb the book results shown by the assessee during the relevant
previous year. Like in A.Y. 2006-07, no unrecorded sales have been
found during the instant assessment year. Therefore, Ld.
Commissioner of Income Tax (Appeals) held that following the
reasoning given by the ITAT in the above cited order in the assessee's
own case, it is held that it will not be proper to presume that the
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assessee earned a GP rate of 30% in the instant A.Y. without there
being any material indicating this fact. Ld. Commissioner of Income
Tax (Appeals) concluded that the GP rate as declared by the assessee
on the basis of audited accounts at 24.54% is to be accepted in the
absence of any adverse material on record. Ld. Commissioner of
Income Tax (Appeals) observed that the addition made by the
Assessing Officer was merely on presumption and therefore, not
sustainable and accordingly deleted.
5. Against the above order the Revenue is in appeal before us.
6. We have heard the rival contentions in light of the material
produced and precedent relied upon. We find that Assessing Officer
in this case has not rejected the books results of the assessee, nor has
given any specific reasoning why the GP rate adopted by the assessee
should be disturbed. Assessee has shown GP rate 24.54%. 20.53%
GP was accepted by the Tribunal in the assessee's own case in earlier
years. Thus, nothing has been brought on record to prove lacunae
in the assessee's books of accounts, neither any reason has been
stated why the GP rate should be disturbed and GP should be
estimated at 30%. We find that there is no cogent basis in the
Assessing Officer's decision in making the addition in this case. In
our considered opinion, Ld. Commissioner of Income Tax (Appeals) has
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taken a right view in the matter which does not need any interference
on our part. Accordingly, we uphold the same.
7. In the result, the appeal filed by the Revenue stands dismissed.
Order pronounced in the open court on 16/5/2012, upon
conclusion of hearing.
Sd/- Sd/-
[A.D. JAIN] [SHAMIM YAHYA]
JUDICIAL MEMBER ACCOUNTANT MEMBER
Date 16/5/2012
"SRBHATNAGAR"
Copy forwarded to: -
1. Appellant 2. Respondent 3. CIT 4. CIT (A)
5. DR, ITAT
TRUE COPY
By Order,
Assistant Registrar,
ITAT, Delhi Benches
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