DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, JAMSHEDPUR, JAMSHEDPUR V. M/S AURO PLASTIC INJECTION MOULDER PVT.LTD., JAMSHEDPUR

ITSSA 23/RAN/2021

AI Insights

The case involves the Deputy Commissioner of Income Tax, Central Circle-1, Jamshedpur (Appellant) against M/s. Auro Plastic Injection Moulders Pvt Ltd. (Respondent) concerning the assessment year 2017-18. The dispute arose from a survey conducted on the premises of the assessee on July 21, 2016, where discrepancies in stock and unexplained expenses were noted. The Assessing Officer made additions to the assessee's income based on these discrepancies, which were later contested and deleted by the CIT(A). The revenue appealed against this decision, leading to the current proceedings before the Income Tax Appellate Tribunal, Ranchi Bench.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 716923 (ITAT-RANCHI)
• Duration Of Justice: 3 year(s) 8 month(s) 5 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-08-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Appeal Filed On: 15-12-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT DATTA; LD
• Assessee Lawyers: P.S.PAUL
• Keywords: Unexplained expenditure; Valuation report

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE S/ RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER Dy.Commissioner of Income Tax, Central Circle Road, Jamshedpur (Appellant Per Bench This is an appeal filed by CIT(A), Patna-3 3/10006/2020-2021 2. Shri P.S.Paul CIT DR represented on behalf of the revenue. 3. It was submitted by ld CIT DR that there was a survey on the premises of the assessee on 21.7.2016. It was the submission that in the IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI S/HRI GEORGE MATHAN, JUDICIAL MEMBER RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER IT(ss)A No.23/RAN/2021 Assessment Year : 2017-18 Dy.Commissioner of Income Central Circle-1, Office Road, Jamshedpur Vs. M/s. Auro Plastic Injection Moulders Pvt Ltd., DNS Industrial Area, Adityapur, Jamshedpur PAN/GIR No.AABCA 3925 G (Appellant) .. ( Respondent Assessee by : Shri P.S.Paul, Adv Revenue by : Shri Rajat Datta, ld CIT Date of Hearing : 20/08/202 Date of Pronouncement : 20/08/202 O R D E R This is an appeal filed by the assessee against the ord 3 dated 25.8.2021 in Appeal No.CIT(A), 2021 for the assessment year 2017-18. Shri P.S.Paul ld AR appeared for the assessee. Shri represented on behalf of the revenue. It was submitted by ld CIT DR that there was a survey on the premises of the assessee on 21.7.2016. It was the submission that in the P a g e 1 | 19 IN THE INCOME TAX APPELLATE TRIBUNAL, HRI GEORGE MATHAN, JUDICIAL MEMBER AND RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER M/s. Auro Plastic Injection Moulders Pvt Ltd., DNS-2, Industrial Area, Adityapur, AABCA 3925 G Respondent) ld CIT DR /2025 /2025 the assessee against the order of the ld in Appeal No.CIT(A),Patna- ed for the assessee. Shri Rajat Datta, ld It was submitted by ld CIT DR that there was a survey on the premises of the assessee on 21.7.2016. It was the submission that in the Printed from counselvise.com IT(ss)A No.23/RAN/2021 Assessment Year : 2017-18 P a g e 2 | 19 course of survey, a statement had been recorded from one Shri Heman Mehta, son of Shri Kishore G Mehta, who was the director of the assessee company. It was the submission that in the course of assessment, Shri Heman Mehta had confirmed the variation in the stock of Rs.78 lakhs and unexplained expenses of Rs.26.88 lakhs totaling to Rs.1,04,88,000/-. It was the submission that the ld CIT(A) has deleted the addition in respect of stock of Rs.78,61,466/- by holding that the Assessing Officer has doubted the inventory of stock prepared by the department during the course of survey and the Assessing Officer did not apply his mind regarding the fact that the quantity of stock has been increased by the valuer without any basis and applied the same rate which was adopted by the assessee. It was the further submission that the addition of Rs.26.88 lakhs was also deleted by the ld CIT(A) holding that the disclosure made by the assessee must be evidenced and the AO had failed to consider the addition made on account of unexplained expenditure was part of schedule of fixed assets in audited balance sheet which was available before the Assessing Officer during the course of assessment proceedings. It was the submission that the statement had been made by Shri Heman Mehta in the course of survey and such statement could be believed to be true. It was the prayer that the order of the ld CIT(A) be reversed. 4. In reply, ld AR submitted that the stock statement as recorded in the course of survey is at pages 13 to 24 of paper book, which reads as follows: Printed from counselvise.com IT(ss)A No.23/RAN/2021 Assessment Year : 2017-18 P a g e 3 | 19 “ Printed from counselvise.com IT(ss)A No.23/RAN/2021 Assessment Year : 2017-18 P a g e 4 | 19 Printed from counselvise.com IT(ss)A No.23/RAN/2021 Assessment Year : 2017-18 P a g e 5 | 19 Printed from counselvise.com IT(ss)A No.23/RAN/2021 Assessment Year : 2017-18 P a g e 6 | 19 Printed from counselvise.com IT(ss)A No.23/RAN/2021 Assessment Year : 2017-18 P a g e 7 | 19 Printed from counselvise.com IT(ss)A No.23/RAN/2021 Assessment Year : 2017-18 P a g e 8 | 19 Printed from counselvise.com IT(ss)A No.23/RAN/2021 Assessment Year : 2017-18 P a g e 9 | 19 Printed from counselvise.com IT(ss)A No.23/RAN/2021 Assessment Year : 2017-18 P a g e 10 | 19 Printed from counselvise.com IT(ss)A No.23/RAN/2021 Assessment Year : 2017-18 P a g e 11 | 19 Printed from counselvise.com IT(ss)A No.23/RAN/2021 Assessment Year : 2017-18 P a g e 12 | 19 Printed from counselvise.com IT(ss)A No.23/RAN/2021 Assessment Year : 2017-18 P a g e 13 | 19 Printed from counselvise.com IT(ss)A No.23/RAN/2021 Assessment Year : 2017-18 P a g e 14 | 19 5. It was the submission that the variation is on account of variation in the value. It was the submission that the perusal of the valuer’s report also shows that the quantity has been made wrong figures without giving specific examination or stock taking. It was the submission that the addition made by the AO was simply on the basis of the valuation report of the valuer, who has changed the quantity by adhoc method and no physical verification had been done. It was the further submission that the addition Printed from counselvise.com IT(ss)A No.23/RAN/2021 Assessment Year : 2017-18 P a g e 15 | 19 of Rs.26.88 lakhs made by the AO has rightly been deleted by the ld CIT(A) insofar as the items which were mentioned are vatable items and the expenses have also been recorded in the books. It was the further submission that the statement has been recorded from Shri Heman Mehta, the son of the Director of the assessee company. It was the submission that Shri Heman Mehta was not in anywhere connected with the assessee company and was at the premises when the survey took place. It was the submission that such statement could not be given any credence without any supporting documents. 6. We have considered the rival submissions. Here, it may be mentioned that on the last hearing being on 12.6.2025, ld DR had been directed to have the AO verify the stock statement. The order sheet nothing reads as follows Date :12.6.2025 IT(ss) A No.23/Ran/2021 Assessment Year: 2017-18 DCIT vs Auro Plastic Injection Moulder Pvt Ltd Assessee represented by Shri P.S.Paul, AR Department represented by : Khubchand T Pandya, sr DR The ld Sr DR is directed to makie the AO to verify and tally the stocks statement as recorded at the time of survey with the stock statement as supplied by him alongwith valuation determining the value at Rs.2,83,31,572/-. The ld Sr DR shall also have the same compared and verified with the pages 13 to 24 of the paper book of the assessee where the reconciliation has been provided. The appeal is posted for hearing on 29.7.2025. Sd/- sd/- Ratnesh Nanda Sahay George Mathan Accountant Member Judicial Member Printed from counselvise.com IT(ss)A No.23/RAN/2021 Assessment Year : 2017-18 P a g e 16 | 19 7. The Assessing Officer has submitted his report as follows: Printed from counselvise.com IT(ss)A No.23/RAN/2021 Assessment Year : 2017-18 P a g e 17 | 19 8. A perusal of the report submitted by the AO clearly shows that the direction as given by the Tribunal has not been followed but what has been mentioned in the assessment has been just reiterated. It was not what was Printed from counselvise.com IT(ss)A No.23/RAN/2021 Assessment Year : 2017-18 P a g e 18 | 19 expected from the Assessing Officer. The stock book had also been provided which has also not been considered. This being so, the perusal of the facts of the present case clearly shows that the Assessing Officer has blindly relied upon the valuation officer’s statement. The survey does not talk of any stock statement having been taken. There is no specific stock statement shown nor considered in the statement recorded from Shri Heman Mehta, son of the Director of the assessee company. Even otherwise, Shri Heman Mehta not being in any where connected with the assessee company other than being a son of the Director, his statement cannot be used for the purpose of making an addition in the hands of the assessee. The facts remains that the audit report was also before the Assessing Officer in the course of assessment proceedings. The fact that the amount of Rs.26.88 lakhs has been disclosed as addition to the fixed assets in the audited balance sheet has not also been rebutted by the revenue. This being so, we find no reason to interfere with the order of the ld CIT(A). Consequently, the order passed by ld CIT(A) stands upheld. 9. In the result, appeal of the revenue stands dismissed. Order dictated and pronounced in the open court on 20/08/2025. Sd/- sd/- (RATNESH NANDAN SAHAY) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER Ranchi ; Dated 20/08/2025 Printed from counselvise.com IT(ss)A No.23/RAN/2021 Assessment Year : 2017-18 P a g e 19 | 19 B.K.Parida, SPS (OS) Copy of the Order forwarded to : By order Sr.Pvt.secretary ITAT, Ranchi 1. The Appellant : Dy.Commissioner of Income Tax, Central Circle-1, Office Road, Jamshedpur 2. The Respondent: M/s. Auro Plastic Injection Moulders Pvt Ltd., DNS-2, Industrial Area, Adityapur, Jamshedpur 3. The CIT(A), Patna-3 4. Pr.CIT, Jamshedpur 5. DR, ITAT, Ranchi 6. Guard file. //True Copy// Printed from counselvise.com "