2018 (5) TMI 1632

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....fficer by which the Assessing Officer has applied the gross profit rate of 41.05% on enhanced sales of Rs. One crore in I.T.A. No.267 and Rs. 50 lac in I.T.A. No. 266. Ground No. 6 relates to the addition which the authorities below had made on account of alleged purchases from Rourkela Steel Plant. 5. At the outset, Learned A. R. submitted that assessment proceedings were completed u/s 153A and six years of assessments were opened and similar addition on account of gross profit on enhanced sales @41.05% were made by the Assessing Officer in assessment year 2000-01 and Hon'ble Tribunal vide order dated 30/01/2017 had decided the issue in favour of the assessee and in this respect our attention was invited to para 5 of the order of the Tribunal and therefore, it was prayed that ground No. 5 can be decided following the above order of the Tribunal. 5.1 As regards the other addition of Rs. 8,47,730/- and Rs. 10,08,014/- which the Assessing Officer had made on account of purchases from Rourkela Steel Plants, Learned A. R. submitted that during the search, a document namely LP-11 and LP-14 were seized and on the basis of those documents the additions were made in the case of t....

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.... specific attention was invited to paper book page 82 which showed that the entries on this LP-11 relate to Shree Gopal Engineering & Chemical Works (P) Ltd. 8. We have heard the rival parties and have gone through the material placed on record. We find that as regards the first issue of estimation of turnover and application of gross profit rate of 41.05%, the same is covered in favour of the assessee by the order of Hon'ble Tribunal in I.T.A. No.265 for assessment year 2000-01 where the Hon'ble Tribunal, under similar facts and circumstances, had decided the issue in favour of the assessee by holding as under: "5. We noted form the order of the Tribunal in ITA No.- 72/Lkw/2013 in the Assessment Year 2005-06, the copy of which is available at 114 to 123 of the paper book dated 18.09.2015 that the Tribunal has confirmed the order of the CIT(A) not finding valid and legal action of the Assessing Officer issuing the notice u/s 147 of the Act. In view of this fact, the GP rate shown as elide on by the Assessing Officer @ 41.05% does not have any leg to stand. This is a fact that during the course of search the sales as per the books of the assessee as Rs. 55,00,000....

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...., we find that the GP rate shown by the assessee is on the higher side. We, therefore, set aside the order of the CIT(A) and delete the addition. 8. In the result, appeal filed by the assessee stands allowed." 8.1 We find that in the year under consideration also the assessments were reopened u/s 153A and on the basis of assessment year 2005-06 the gross profit rate of 41.05% was applied. These facts were also similar for assessment year 2000-01 wherein also the assessments were reopened u/s 153A and additions were made on similar basis. Respectfully following the above judicial precedent in the case of the assessee itself, we allow ground No. 5 in both the appeals. 9. Now coming to ground No. 6 regarding addition on account of alleged undisclosed purchases from Rourkela Steel Plants, we find that the document namely LP-11 placed in paper book page 58 did not belong to the assessee and in fact belong to Shree Gopal Engineering & Chemical Works (P) Ltd. The above document though was seized from the premises of the assessee but it actually belonged to Shree Gopal Engineering & Chemical Works (P) Ltd. This fact is also apparent from a copy of letter dated 10th October, ....

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....ly submitted. 5. That even after thorough examination of the said details/ information, no defects or discrepancy was found by the Assessing Officer. 6. That so far as the addition on account of investment in purchases from M/s Rourkela Steel Plants amounting to Rs. 10.08,014/- is concerned, the same is based on loose papers as seized from the business premises of the "Company" as LP-11. Copies of the said loose papers as are relevant for the year under reference appear Annexure III as part of this affidavit. 7. That by way of explanation, it was submitted during the course of assessment proceedings that the same pertained to M/s Shri Gopal Engineering & Chemical Works (P) Limited, which is managed by Shri Gopal Krishna Gupta as Managing Director. For the sake of verification, it was specifically stated that the ledger found during the course of search in the said case, which was carried out on the same date, contained all the relevant entries which conclusively proved that the transactions in question represented purchases made by M/s Shri Gopal Engineering & Chemical Works (P) Limited and they themselves had duly accounting for the same. 8. Tha....

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....(A). For the sake of completeness, the submission of the assessee before learned CIT(A) for assessment year 2001-02 and 2003-04 are reproduced below: Assessment year:2001-02 "27. Addition of Rs. 8,47,730/- as has been stated in para 9 hereinfore: Such an addition has been made on the basis of LP-11, copy of which appears at pages 24 to 31 of Volume Ist. It is suffice to say that the said documents pertained to M/s. Shri Gopal Engg. & Chemical Works Pvt. Ltd., and the said transactions are fully verifiable from the records of the said company. As has been stated in para 6 hereinfore, the said company was also subjected to search and seizure action, simultaneously and the copy of ledger account of Rourkela party forms part of their seized records in that case at page 1 of BK-2. The contents of LP-11 tally fully with the ledger account of Rourkela Steel Plant as appearing in the books of Shri Gopal Engg. & Chemical Works (P) Ltd. Such a comparative statement is given hereunder:- As per LP-11   As per seized record of Shri Gopal Engg. 8n Chemical Works (P) Ltd. Difference 2001-2002     2001-2002 D....