Patel Kantilal Jivramdas & Co., Patan vs Department Of Income Tax

आयकर अपीलीय अिधकरण, अिधकरण, अहमदाबाद यायपीठ ''B'', अहमदाबाद ।

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, "B" BENCH सव ौी ौी जी.

जी.सी.

सी.गु ा, माननीय उपा!य", उपा!य", एवं अिनल चतुवद ' (, (, लेखा सदःय के सम" ।

BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER)

ITA No.1957/Ahd/2011 [Asstt.Year : 2005-2006]

ITO, Ward-2 बनाम/Vs. M/s.Patel Kantilal Jivramdas & Co.

Patan. 19, Cattle Shed, Old Ganj Bazar Unjha.

PAN : AACFP 0047 H

(अपीलाथ. / Appellant) (ू0यथ. / Respondent)

राजःव क1 ओर से/ : Revenue by Shri Roopchand, Sr.DR िनधा 4रती क1 ओर से/ : Assessee by Shri S.N. Divetia, AR सुनवाई क1 तार(ख/ : Date of Hearing 6th January, 2015 घोषणा क1 तार(ख/ : Date of Pronouncement 02-02-2015

आदे श / O R D E R

PER G.C. GUPTA, VICE-PRESIDENT: This appeal by the Revenue for the Asstt.Year 2005-2006 is directed against the order of the CIT(A).

2. Only effective ground of the appeal of the Revenue is ground no.1, which is reproduced as under:

"1. The ld.CIT(A) has erred in law and on facts in treating the reopening of the case and assessment proceedings invalid."

ITA No.1957/Ahd/2011 3. The learned DR submitted that reopening of the assessment is made within four years from the end of the relevant Asstt.Year 2005-06. He submitted that reasons were duly recorded and that shortage in various commodities dealt with by the assessee was on the higher side during the year as compared to earlier years. Overall shortage in various commodities is 2.52% as against 0.36% in the immediately preceding assessment year. He submitted that in these facts, reopening was validly made by the AO.

4. The learned counsel for the assessee has opposed the submissions of the learned DR. He submitted that original assessment was framed under scrutiny assessment under section 143(3) of the Act. He submitted that it is clear case of change of opinion on the part of the AO which is not permissible under the provision of the Act. He submitted that it is now well settled that reassessment cannot be made on mere change of opinion. He referred to table given in the appellate order of the CIT(A) at page no.8, which shows that main commodities purchased and sold by the assessee during the year shows better profit in percentage as compared to earlier Asstt.Year 2003-04 and 2004-05. He submitted that the issue is covered in favour of the assessee with the decision of the Hon'ble Jurisdictional High Court in the case of Vijay Rameshbhai Gupta Vs. ACIT, 215 taxmann 465 (Guj) and Jagat Jayantilal Parikh Vs. DCIT, 355 ITR 400 (Guj).

5. We have considered rival submissions and perused the orders of the AO and the CIT(A). We find that the original assessment in this case was framed in scrutiny assessment. We find that a bare reading of comparative shortage in various commodities dealt with by the assessee, as reproduced by the CIT(A) at page no.8 of his appellate order shows that there was practicably no excessive shortage during the relevant period as compared -2- ITA No.1957/Ahd/2011

to the shortage in the earlier assessment years 2003-04 and 2004-05. The increase in shortage during the relevant period was mainly in some commodities whose total turnover was very less, at a figure less than Rs.1.00 lakh in the entire year. We find that the AO has calculated the average shortage in various commodities purchased and sold by the assessee at 2.52% by taking average of the shortage in various commodities, which includes the commodities wherein the assessee has a very insignificant turnover. In these facts, we are of the view that even on merits, there was no justification for reopening of assessment by invoking section 147 of the Act. We find that no comparable case of lesser shortage in various commodities dealt with by the assessee has been cited by the AO in the assessment order. The case law cited by the learned counsel for the assessee supports the case of the assessee. It is a case of change of opinion on the part of the AO which was not permissible for invoking provisions of section 147 of the Act. In these facts, we are of the view that the CIT(A) was justified in striking down the reopening in this case, as there was no new information with the AO for change of opinion except a note of audit party. Accordingly, we confirm the order of the CIT(A) on this issue, and the grounds of the appeal of the Revenue are dismissed.

6. In the result, the appeal of the Revenue is dismissed.

Order pronounced in Open Court on the date mentioned hereinabove.

Sd/- Sd/- अिनल चतुव'द( / ANIL CHATURVEDI) (अिनल (जी. जी.सी. सी.गु ा/G.C. GUPTA) लेखा सदःय /ACCOUNTANT MEMBER उपा!य" /VICE-PRESIDENT

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