Kanchanlal R. Gilitwala, Surat vs Assessee

ु द , लेखा सद य एवं ी कुल भारत, या यक सद य । सम ी अ नल चतव BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER And SHRI KUL BHARAT, JUDICIAL MEMBER

आयकर अपील सं./I.T.A. No.2106/Ahd/2011 ( नधा रण वष / Assessment Year : 2007-08) The Income Tax Officer बनाम/ Shri Kanchanlal Ranglidas Ward-2(3) Vs. Gilitwala Surat 25 Fab Tex Industrial Society Khatodara, Surat थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : ABAPG 9274 B (अपीलाथ% /Appellant) .. (&'यथ% / Respondent)

And CO No.233/Ahd/2011 - AY 2007-08 (In ITA No.2106/Ahd/2011 - AY 2007-08) Shri Kanchanlal Ranglidas Gilitwala vs. The Income Tax Officer Surat Ward-2(3), Surat (Cross Objector) .. (Respondent) Revenue by : Shri B.L. Yadav, Sr.DR Assessee by : None (Written submissions)

ु वाई क) तार ख / सन Date of Hearing 22/06/2015 घोषणा क) तार ख /Date of Pronounce ment 30/06/2015 आदे श / O R D E R

PER SHRI KUL BHARAT, JUDICIAL MEMBER :

This appeal and cross-objection by the Revenue and the assessee respectively against the order of the Ld.Commissioner of Income ITA No.2106 /Ahd/2011 (By Revenue) and CO No.233/Ahd/2011 (By Assessee) ITO vs. Shri Kanchanlal R.Gilitwala Asst.Year - 2007-08 -2-

Tax(Appeals)-II, Surat ('CIT(A)' in short) dated 01/06/2011 pertaining to Assessment Year (AY) 2007-08.

2. None appeared on behalf of assessee, however a letter dated 19/06/2015 is placed on record. The submissions made on behalf of assessee are as under:-

"1. In this case, the appeal has been filed by the revenue contesting following additions deleted by the CIT(A):

i. Addition of Rs.2,37,807/- for low Gross Profit. ii. Addition of Rs.4,07,033/- towards cessation of liability u/s.41(1). iii. Disallowance of vatav kasar expenses of Rs.83,060/-.

2. So total additions disputed by the revenue are amounting to Rs.7,27,900/-. The maximum marginal rate including surcharge for A.Y. 2007-08 is 33.66%. So tax effect involve in the revenue's appeal is Rs.2,45,010/-.

3. For the appeal filed after 09.02.2011, the Instruction No.3/11 dated 09.02.2011 is applicable which lays down monetary limit of Rs.3 lacs for filing appeal before Honourable Tribunal by department.

As this appeal is filed on 26.08.2011, it is clearly governed by the said instruction and so the appeal of revenue is liable to be dismissed. The assessee's cross objection being consequential, it is also required to be dismissed although it involves disputing addition of Rs.6,83,896/-."

2.1. As per the above written submission, the contention of the assessee is that the appeal of the Revenue deserves to be dismissed on account of the low- tax effect in view of the Instruction No.3/2011 [F.No.279/MISC.142/2007- ITJ], dated 09/02/2011. As per the assessee, total addition made by the Assessing Officer is of Rs.7,27,900/-. The maximum marginal rate including surcharge for AY 2007-08 is 33.66%. So, tax effect involved in the Revenue's ITA No.2106 /Ahd/2011 (By Revenue) and CO No.233/Ahd/2011 (By Assessee) ITO vs. Shri Kanchanlal R.Gilitwala Asst.Year - 2007-08 -3-

appeal is Rs.2,45,010/-. This contention of the assessee is not controverted by the ld.Sr.DR by placing any material on record. Moreover, the Revenue has also not placed on record any material suggesting that the present case falls under the clause8 of the Instruction No.3/2011 [F.No.279/MISC.142/2007- ITJ], dated 09/02/2011 issued by CBDT. As per clause 3 of the CBDT's Instruction No.3/2011 dated 09/02/2011, no appeal shall be filed on behalf of the Revenue where the tax effect does not exceed the monetary limits of Rs.3 lacs before the Tribunal. In the instant case, the tax effect is of Rs.2,45,010/-, therefore the present appeal as filed by the Revenue is not maintainable on account of pecuniary limit prescribed under Instruction No.3/2011 dated 09/02/2011. Under these facts, we dismiss the appeal of the Revenue being not maintainable on account of low tax effect. Before parting with the matter, we make it clear that we have not expressed our view on the merit of the case. As a result, the appeal of the Revenue is rejected.

3. Now, we take up the Assessee's Cross Objection No.233/Ahd/2011 for AY 2007-08 (Arising out of ITA No.2106/Ahd/2011 for AY 2007-08 - by Revenue), wherein the assessee has raised the following grounds:-

[1] On the facts and circumstances of the case and in law, the Ld.CIT(A)-II, Surat has erred in restricting the estimation of G.P. @ 8.5% as against 10% estimated by the A.O. on rejection of Books of Accounts u/s.145(3) of the I.T.Act and, thus, granting relief of Rs.2,37,806/-, without appreciating the facts that assessee failed to produce any register, qualitative and quantitative details of production, consumption or vouchers for expenses.

ITA No.2106 /Ahd/2011 (By Revenue) and CO No.233/Ahd/2011 (By Assessee) ITO vs. Shri Kanchanlal R.Gilitwala Asst.Year - 2007-08 -4-

[2] On the facts and circumstance of the case and in law, the Ld.CIT(A)-II, Surat has erred in deleting the addition towards cessation of liability u/s.41(1) Rs.4,07,033/- without noting that the assessee failed to discharge the onus of proving the genuineness of the creditors in spite of being afforded an opportunity to do so.

[3] On the facts and circumstance of the case and in law, the Ld.CIT(A)-II, Surat has erred in deleting the addition towards disallowances of Vatav/Kasar expenses of Rs.83,060/- eventhough the assessee failed to discharge the onus cast on him as per law to prove the genuineness of the claim. [4] On the facts and in the circumstances of the case, the Ld.CIT(A) ought to have upheld the order of the Assessing Officer. [5] It is, therefore, prayed that the order of the CIT(A) may be set-

aside and that of Assessing Officer may be restored to the above extent.

3.1. The assessee in its written submission dated 19/06/2015 has submitted that the cross-objection filed being consequential in nature.

In view of the submission of the assessee, the cross-objection of the assessee is dismissed.

4. In the combined result, the appeal of the Revenue as well as the cross-objection filed by the assessee both are dismissed. Order pronounced in the Court on Tuesday, the 30th day of June, 2015 at Ahmedabad.

Sd/- Sd/- (अ नल चतव ु द ) (कुल भारत) लेखा सद य या यक सद य ( ANIL CHATURVEDI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 30/ 06 /2015 ट .सी.नायर, व. न.स./T.C. NAIR, Sr. PS ITA No.2106 /Ahd/2011 (By Revenue) and CO No.233/Ahd/2011 (By Assessee) ITO vs. Shri Kanchanlal R.Gilitwala Asst.Year - 2007-08 -5-

आदे श क! " त$ल%प अ&े%षत/Copy of the Order forwarded to :

1. अपीलाथ% / The Appellant

2. &'यथ% / The Respondent.

3. संबं3धत आयकर आयु5त / Concerned CIT

4. आयकर आयु5त(अपील) / The CIT(A)-II, Surat

5. 6वभागीय & त न3ध, आयकर अपील य अ3धकरण, अहमदाबाद / DR, ITAT, Ahmedabad

6. गाड: फाईल / Guard file.

आदे शानुसार/ BY ORDER,

स'या6पत & त //True Copy//

उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad

1. Date of dictation .. 22.6.15 (dictation-pad 5+ pages attached at the end of this File)

2. Date on which the typed draft is placed before the Dictating Member ...23.6.15

3. Other Member...

4. Date on which the approved draft comes to the Sr.P.S./P.S.................

5. Date on which the fair order is placed before the Dictating Member for pronouncement......

6. Date on which the fair order comes back to the Sr.P.S./P.S.......30.6.15

7. Date on which the file goes to the Bench Clerk.....................30.6.15

8. Date on which the file goes to the Head Clerk..........................................

9. The date on which the file goes to the Assistant Registrar for signature on the order..........................

10. Date of Despatch of the Order..................