Lal Ji Jaiswal. Prop.M/s Kalawati Steel, Varanasi V. ITO, Varanasi

CO 20/ALLD/2012

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0486 (ITAT-ALLAHABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 17 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 27-04-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 09-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: UMESH PATHAK
• Assessee Lawyers: S K JAISWAL
• Keywords: Rejection of books of accounts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, ALLAHABAD BENCH, ALLAHABAD BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AN D SHRI C. N. PRASAD, JUDICIAL MEMBER ITA NO. 138/ALLD/2012 ASSESSMENT YEAR: 2009-10 ITO WARD-2(3) VARANASI VS. SHRI LAL JI JAISWAL PROP- M/S. KALAWATI STEELS, N- 10/67-KHA-3, KAKARMATTA, VARANASI 221004 PAN:-ADJPJ8678D (APPELLANT) (RESPO NDENT) C.O. NO. 20/ALLD/2012 (ARISING OUT OF ITA NO. 138/ALLD/2012) ASSESSMENT YEAR: 2009-10 SHRI LAL JI JAISWAL PROP- M/S. KALAWATI STEELS, N-10/67- KHA-3, KAKARMATTA, VARANASI 221004 PAN:-ADJPJ8678D VS. ITO WARD-2(3) VARANASI (APPELLANT) (RESPO NDENT) ASSESSEE BY : SHRI S.K.JAISWAL REVENUE BY : SHRI UMESH PATHAK DATE OF HEARING : 27.04.2015 DATE OF PRONOUNCEMENT : 27 .04.2015 O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE TWO APPEAL UNDER CONSIDERATION, THE MAIN APPEAL IS FILED BY THE REVENUE, IS FILED AGAINST THE ORDER OF THE LD. CIT( A) VARANASI, DATED 14.03.2012 FOR THE A.Y. 2009-10. THE GROUND READ AS UNDER:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND AS PER LAW. LD. CIT(A) IS NTO JUSTIFIED IN HOLDING THAT INVOCATION OF PROVISION O F SECTION 145(3) OF THE I.T. ACT IS NOT SUSTAINABLE DELETING ADDITION OF RS.20,8 8,365/- IGNORING THE FACT THAT TRADING RESULTS ARE NOT SUPPORTED BY DAY TODAY STOCK REGISTER AND BILLS AND VOUCHERS. C.O. NO. 20/ALLD/2012 (ARISING OUT OF ITA NO. 138/ALLD/2012) ASSESSMENT YEAR: 2009-10 2 2. BRIEFLY STATED, RELEVANT FACTS ARE THAT THE ASSE SSEE IS ENGAGED IN TRADING OF STEEL, DURING THE ASSESSMENT PROCEEDINGS. AO NOTIC ED CERTAIN DISCREPANCIES MENTIONED IN PARA 3 AND PARA 5 AND PROCEEDED TO REJ ECT THE BOOKS OF ACCOUNTS BY INVOKING THE PROVISION OF SECTION 145(3) OF THE ACT . SUBSEQUENTLY, AO ESTIMATED THE G.P. @ 2% IN PLACE OF 0.9% DISCLOSED BY THE ASSESSE E YEAR UNDER CONSIDERATION. EVENTUALLY, AO MADE ADDITION OF RS.20,88,365/-. FO R REJECTION OF BOOKS OF ACCOUNTS, AO FOUND CERTAIN CORRECTIONS/ADJUSTMENTS AFTER CAS H MEMOS WERE ISSUED. AO ALSO NOTICED THE ADJUSTMENT ENTIRE MADE IN THE STOCK REG ISTER TO ACCOUNT FOR EXCESS STOCK 7462 KG OF STOCK AT THE YEAR-END. AGGRIEVED WITH TH E SAID ORDER OF THE AO, ASSESSEE FILED THE APPEAL BEFORE THE LD. CIT(A). BEFORE HIM, ASSESSEE DEMONSTRATED THAT THE CORRECTIONS/ADJUSTMENTS MADE AFTER THE ISSUE OF CAS H MEMOS WERE BONAFIDE AND THEREFORE, IT IS NOT GOOD ENOUGH A REASON FOR REJEC TION OF THE BOOKS. SIMILARLY REFERRING TO THE ADJUSTMENT ENTRY FOR A QUANTITY OF 7462 KG MADE AT THE YEAR END, ASSESSEE DEMONSTRATED THAT THIS IS AN ADDITIONAL EX CESS STOCK BROUGHT INTO RECORD/STOCK REGISTER CONSEQUENT TO THE CORRECT CAL IBRATION AND PHYSICAL VERIFICATION OF STOCK RECEIVED BY THE ASSESSEE FROM THE SUPPLI ERS. WEIGHT OF THE STOCK DO NOT EXACTLY TALLY WITH THE QUANTITY MENTIONED IN THE IN VOICES. ACCORDINGLY, LD. CIT(A) ACCEPTED THE BOOKS OF THE ASSESSEE AND DELETED THE ADDITION MADE BY THE AO. THE RELEVANT EXTRACT FROM THE LD. CIT(A) ORDER FROM PAG E 9/10 IN APPROPRIATE PAGES OF THIS ORDER. AGGRIEVED WITH THE SAID DECISION OF THE LD. CIT(A), REVENUE IS IN APPEAL BEFORE US WITH THE SOLITARY GROUND EXTRACTED ABOVE. 3. LD. DR FOR THE REVENUE RELIED ON THE ORDER OF TH E AO AND SUBMITTED BOOKS ARE CORRECTLY REJECTED THEREFORE, THE ADDITIONS SHOULD BE RESTORED. 4. ON THE OTHER HAND, LEARNED COUNSEL FOR THE ASSES SEE HAS BROUGHT OUR ATTENTION TO THE CORRECTIONS/ADJUSTMENTS MADE AFTER ISSUE A CASH MEMOS AND MENTIONED THAT ASSESSING OFFICER HAS NOT DEMONSTRAT ED THE MALAFIDE IN MAKING THE SAID ADJUSTMENTS IN THE BOOKS. FURTHER, HE BROUGHT OUR ATTENTION TO THE DETAILS RELATING TO DISCREPANCIES IN THE CLOSING STOCK TO T HE EXTENT OF 7462 KGS AND EXPLAINED THE SAME WITH THE HELP OF PAPER BOOK. IN THIS REGAR D, HE BROUGHT OUR ATTENTION TO THE PAGE 10 OF THE PAPER BOOK OF EXPLAINING THE REA SONS FOR BRINGING EXCESS STOCK OF 7462 KGS TO THE STOCK REGISTER. C.O. NO. 20/ALLD/2012 (ARISING OUT OF ITA NO. 138/ALLD/2012) ASSESSMENT YEAR: 2009-10 3 5. AFTER HEARING BOTH THE PARTIES, WE FIND THE DISC REPANCIES NARRATED BY THE AO ARE NOT GOOD ENOUGH FOR REJECTING THE BOOKS OF ACCO UNTS BY INVOKING THE PROVISION U/S 145(3) OF THE ACT. BOOKS OF ACCOUNTS OF THE ASS ESSEE CAN ONLY BE REJECTED ONLY FOR THEIR INCOMPLETENESS OR FOR INACCURACY. IN OUR OPINION, THE AO HAS NOT MADE THE REQUIREMENTS OF THE LAW. THEREFORE, WE DISAPPROVE THE SAME. ACCORDINGLY, FOR THESE REASONS ALSO, WE FIND THAT THE ORDER OF THE LD. CIT (A) IS FAIR AND REASONABLE AND DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GR OUND RAISED BY THE REVENUE IS DISMISSED. 6. IN THE APPEAL, FILED BY THE REVENUE IS DISMISSED . C.O. NO. 20/ALLD/2012 FOR A.Y. 2009-10 7. THE CROSS OBJECTION RAISED BY THE ASSESSEE ESSEN TIALLY SUPPORT THE ORDER OF THE LD. CIT(A), WHICH IS AFFIRMED BY US IN THIS ORD ER. CONSIDERING OUR DECISION AND APPEAL OF THE REVENUE, IN OUR OPINION, THE C.O. FIL ED BY THE ASSESSEE SHOULD BE DISMISSED AS ACADEMIC. AFTER OBSERVATION RAISED BY THE ASSESSEE, ARE DISMISSED AS ACCORDINGLY. 8. IN THE RESULT, CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF APRIL, 2015. SD/- SD/- (C. N. PRASAD) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER ALLAHABAD, DATED: 27.04.2015 *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, ALLAHABAD THE CIT(A) CONCERNED, ALLAHABAD THE DR BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, ALLAHABAD.