BHANWARLAL RATHI V. INCOME TAX OFFICER

ITA/70/2009

AI Insights

The case involves an appeal against the order and judgment of the Income Tax Appellate Tribunal, Cuttack Bench, which pertained to issues of double addition in the assessment and unaccounted stock. The Tribunal had earlier confirmed the decisions of the CIT (A), which addressed the discrepancies in the balance sheet and the additions made to the assessee's income regarding unaccounted stock. The Tribunal found that one of the additions made by the Assessing Officer was a double addition and thus deleted it, while confirming the other. Regarding the unaccounted stock, the Tribunal reduced the addition by considering the opening stock but confirmed the remaining addition. The High Court, after hearing the arguments and reviewing the materials, agreed with the Tribunal's findings and dismissed the appeal.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 761898 (HC-CUTTACK)
• Appeal Type: Others
• Pronouncement Date: 30-01-2019
• Assessment Year: misc
• Result in Favour of: Respondent
• Court: HIGH COURT
• Department Lawyers: T K SATAPATHY
• Assessee Lawyers: B PANDA
• Keywords: Balance sheet discrepancy; Double addition; Unaccounted stock

Judgement Text

" 10. 30.01.2019 Heard Mr. B. Panda, learned counsel for the petitioner and Mr. T.K. Satapathy, learned Senior Standing Counsel for the opposite party-Income Tax. 2. By way of this appeal, the appellant has challenged the order and judgment dated 30.04.2009 passed by the learned Income Tax Appellate Tribunal, Cuttack Bench, Cuttack in I.T.A. No.88/CTK/2008. 3. Learned Tribunal while delivering the impugned order, in paragraphs-8 and 9, has observed as under: “8. After hearing the rival submissions and on careful perusal of the materials available on record, we find no infirmity in the orders of the Ld. CIT (A). The relevant observations of the Ld. CIT (A) on both the issues are as under: Issue No.1 “It is seen from the assessment order that the Assessing Officer has made an addition of Rs.1,47,442/- twice, after examining the balance sheet of the assessee. The first addition relates to the difference in the balance sheet. In so far as the closing balance in assessment year 2002-03, the opening balance for the year 2003-04, differed by a sum of Rs.1,47,442/-. The second additional made by the Assessing Officer was also based on the examination of the balance sheet and this difference has been added on account of the cash difference of Rs.1,47,636/-. During the course of appellate proceeding, the A/R argued that both the additions could not be made at the same time. The action of the Assessing Officer represents double addition. Firstly, on account of difference in the balance sheet and secondly again on account of the difference in the balance sheet I.T.A. No. 70 of 2009 -2- and secondly again on account of the difference in cash. The above contention of the A/R is correct. After examination of the balance sheet, the Assessing Officer could have made only one addition i.e. either on account cash or on account of unexplained difference in the balance sheet. Making both the additions means double taxation of the same account. In view of the above, out of the two additions of Rs.1,47,442/- and Rs.1,47,636/- by the Assessing Officer one addition of Rs.1,47,442/- is confirmed and the other addition is deleted.” Issue No.2. It is seen that the Assessing Officer has added the entire stock available with the assessee on the date of survey to his total income as unaccounted stock. The A/R of the assessee stated that the business of the assessee could not have been carried on if the assessee had no stock just because of the fact that books of accounts could not be produced, the Assessing Officer was not right in assuming that the disclosed stock was ‘Nil’. For this purpose, he relied on the balance sheet filed by the assessee showing stock as on 31.03.2003 as also the stock as on 31.03.2004. A perusal of the balance sheet shows that the stock as on 31.03.2003 is Rs.2,38,930/- and the stock as on 31.03.2004 is Rs.3,51,600/-. The above indicates that the average stock balance lying with the assessee would be worth Rs.3,50,000/-. In view of the above, the Assessing Officer should not have added the entire stock as unaccounted stock but at least allow a rebate on the opening stock as on beginning of the year. In view of the above, the addition made by the assessing Officer is reduced by a sum of Rs.3,50,000/- and an addition of Rs.3,40,453/- is confirmed on this account.”. -3- 8.1. Keeping in view of the fact that the Ld. Counsel for the Assessee could not contradict the observations of the Ld. CIT (A) by bringing any materials on record, we confirm the orders of the Ld. CIT (A) on both these issues by rejecting the grounds of the assessee.” 4. Having heard learned counsel for the parties and considering the materials on record, we are of the considered opinion that the factual finding given by the learned CIT (A) has been confirmed by the Tribunal in the impugned order, which is just and proper. Even otherwise, no substantial question of law is involved in this appeal. The appeal is dismissed being devoid of merit. All connected Misc. Cases/I.A. are disposed of accordingly. SKJ .…….......……………… ( K.S. Jhaveri ) Chief Justice …………………..……… (K.R. Mohapatra) Judge "