VIRENDRA KUMAR CHATURVEDI, Jaipur V. ITO, Jaipur

ITA 1014/JPR/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59549 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 20-12-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 10-08-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K MEENA
• Section: 143(3); 69

Judgement Text

1 ITA 1014-10 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR. ( BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ) ITA NO. 1014/JP/2010 ASSTT. YEAR : 2006-07. SHRI VIRENDRA KUMARCHATURVEDI, VS. THE INCOME-TAX OFFICER, PROP. M/S. VISHNU MOTORS, ` WARD-3, HINDAUN CITY. SAWAI MADHOPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : WRITTEN SUBMISSION. RESPONDENT BY : SHRI D.K. MEENA DATE OF HEARING : 20.01.2012. DATE OF PRONOUNCEMENT : 02.02.2012. ORDER DATED : 02/02/2012. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2006-07. 2. THE APPEAL FILED BY ASSESSEE IS LATE BY 3 DAYS. CONDONATION APPLICATION ALONG WITH AFFIDAVIT OF THE ASSESSEE ARE PLACED ON RECORD . AFTER CONSIDERING THE CONDONATION APPLICATION AND AFFIDAVIT, WE FIND THAT THERE WAS A BONA FIDE IN FILING APPEAL LATE BY 3 DAYS AS THE ASSESSEE WAS ON PILGRIMAGE TOUR AND AFTER RE TURN FROM THE PILGRIMAGE TOUR IMMEDIATELY THE ASSESSEE FILED APPEAL. IN VIEW OF THESE FACTS, WE CONDONE THE DELAY IN FILING THE APPEAL LATE. 2 3. NONE APPEARED ON BEHALF OF THE ASSESSEE THOUGH W RITTEN SUBMISSIONS ARE PLACED ON RECORD AND IT WAS REQUESTED THAT APPEAL OF THE ASSE SSEE MAY BE DISPOSED OFF ON MERIT. 4. THE APPEAL OF THE ASSESSEE IS BEING DISPOSED OFF AFTER TAKING INTO CONSIDERATION THE WRITTEN SUBMISSIONS AND THE ARGUMENTS OF LD. D/R WH O HAS PLACED RELIANCE ON THE ORDER OF LD. CIT (A). 5. GROUND NO. 1 IS AGAINST CONFIRMING THE ORDER OF AO PASSED UNDER SECTION 143(3) AS VALID AND NOT VOID ABINITIO. 6. IN THIS CASE THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) ON 13.12.2008 BY WHICH ADDITION OF RS. 14,72,444/- WAS MADE ON ACCOU NT OF EXCESS STOCK WITH REFERENCE TO BANK STATEMENT. THE AO OBTAINED REPORT FROM THE BA NK IN REGARD TO STATEMENT STOCK AND AS PER WRITTEN SUBMISSIONS THE AO DID NOT PROVIDE C OPY OF BANK STATEMENT IN TIME AS THE SAME WAS PROVIDED ON 25.12.2008 WHEREAS LAST DATE O F HEARING WAS ON 26.12.2008. IT WAS FURTHER STATED THAT ONLY ONE DAYS TIME WAS LEFT FO R FURNISHING REPLY IN REGARD TO EXCESS STOCK AND, THEREFORE, THE ADDITION MADE BY AO WAS N OT JUSTIFIED AND ASSESSMENT SO COMPLETED SHOULD BE QUASHED. 7. AFTER CONSIDERING THE SUBMISSIONS, WE ARE OF THE VIEW THAT ASSESSEE WAS ALLOWED OPPORTUNITY BY THE AO. THEREFORE, IT CANNOT BE SAID THAT ASSESSMENT SO COMPLETED LACK JURISDICTION. WHETHER TIME WAS ONE DAY OR NOT ASSES SEE COULD HAVE ASKED FOR FURTHER TIME. ASSESSMENT WAS COMPLETED ON 30.12.2008 AND NOT ON 2 6.12.2008 WHICH WAS THE DATE OF HEARING. THEREFORE, THE ORDER PASSED UNDER SECTION 143(3) IS A VALID ORDER. ACCORDINGLY THIS GROUND OF THE ASSESSEE IS REJECTED. 8. SECOND GROUND IS AGAINST CONFIRMING THE ADDITION OF RS. 14,72,444/- MADE UNDER SECTION 69 WHICH IS CONFIRMED BY LD. CIT (A). 3 9. AS STATED ABOVE, THE AO OBTAINED BANK STATEMENT IN RESPECT OF STOCK STATEMENT FILED BEFORE THE BANK WAS OF RS. 14,73,948/-. AT T HE END OF THE YEAR THE CLOSING STOCK AS PER BOOKS OF ACCOUNT WAS OF RS. 752/- ONLY. THEREF ORE, THE AO NOTED THAT THERE IS A DISCREPANCY IN THE STOCK. ACCORDINGLY ASSESSEE WAS PROVIDED OPPORTUNITY. NO COGENT REASONING WAS GIVEN, THEREFORE, HE ADDED THE AMOUNT OF S. 14,72,444/- ON ACCOUNT OF EXCESS STOCK SHOWN IN THE BANK STATEMENT. THE LD. CIT (A) HAS ALSO CONFIRMED THE ACTION OF THE AO. 10. AFTER CONSIDERING THE ORDERS OF THE AUTHORITIES BELOW AND THE WRITTEN SUBMISSIONS, WE FIND THAT ASSESSEE DESERVES TO SUCCEED IN THIS G ROUND IN PART. IN FACT, THE STATEMENT OF STOCK GIVEN TO THE BANK WAS GIVEN ON 28.2.2006 AND AS PER BANK STATEMENT THE STOCK WAS SHOWN AT RS. 14,73,948/-. AS PER BOOKS OF ACCOUNT AS ON 31.3.2006 THE STOCK IS SHOWN AT RS. 752/- ONLY. HOWEVER, THE STOCK AS PER BOOKS SH OULD HAVE BEEN TAKEN AS ON 28.2.2006 AND NOT AS ON 31.03.2006. IT IS ALSO SUBMITTED IN T HE WRITTEN SUBMISSIONS THAT THE CALCULATION OF STOCK AS ON 31.3.2006 AT RS. 752/- I S ALSO WRONG. IT IS STATED THAT OPENING STOCK OF SPARE PARTS WAS OF RS. 5,81,850/-. ASSESSE E MADE PURCHASES DURING THE YEAR UNDER CONSIDERATION AT RS. 22,40,625/-. DURING THE YEAR SALE HAS BEEN SHOWN AT RS. 24,81,290/- WHICH INCLUDES GP AT 15% AT RS. 2,60,00 0/- AND IF ALL THESE FIGURES ARE TAKEN INTO CONSIDERATION, THE CLOSING STOCK COMES TO RS. 6,01,185/-. ACCORDINGLY IT IS SUBMITTED THAT IT WAS WRONG ON THE PART OF THE AO AS WELL AS ON THE PART OF THE LD. CIT (A) IN OBSERVING THAT STOCK WAS AS ON 31.3.2000 WAS ALSO R S. 752/-. BOOKS OF ACCOUNT WERE AUDITED. IF THE CONTENTION OF THE ASSESSEE IS ACCE PTED THAT AS ON 31.3.2006 CLOSING STOCK WAS OF RS. 6,01,185/- THEN ALSO THERE WAS A VAST DI FFERENCE IN STOCK STATEMENT SUBMITTED TO THE BANK AND STOCK AS PER BOOKS OF ACCOUNT. IT WAS FURTHER STATED IN THE WRITTEN 4 SUBMISSION THAT IN THE BANK AN ESTIMATED STOCK WAS SHOWN JUST TO AVAIL HIGHER LOAN FACILITY AND IT IS FURTHER SUBMITTED BY THE DECISIO N OF HONBLE RAJASTHAN HIGH COURT IN CASE OF M/S. UDAIPUR CHEMICALS AND FERTILIZERS, 166 TAXMAN 226 AND IN CASE OF RELAXO, 259 ITR 744 WHEREIN IT IS HELD THAT DISCREPANCY IN STOCK SHOWN IN BOOKS VIS--VIS BANK STATEMENT DOES NOT WARRANT ANY ADDITION AS DISCREPA NCY IN STOCK WAS ON ACCOUNT OF SEEKING HIGHER LOAN FACILITY FROM THE BANK AND THE ORDER OF TRIBUNAL WAS CONFIRMED WHO DELETED THE ADDITION. NO DOUBT, THE RATIO OF DECIS ION IS IN SUPPORT OF THE CASE OF THE ASSESSEE, HOWEVER, THERE IS A VAST DISCREPANCY IN S TOCK. THEREFORE, WE FEEL THAT IF AN ADDITION OF RS. 4,00,000/- IS SUSTAINED ON ACCOUNT OF EXCESS STOCK, THEN IT WILL MEET THE ENDS OF JUSTICE. THIS ADDITION OF RS. 4,00,000/- IS SUSTAINED BY TAKING INTO CONSIDERATION THAT THE STOCK OF SPARE PARTS AS PER RECONCILIATION CHART WAS RS. 6,01,185/- AND THIS WAS SHOWN ON HIGHER SIDE JUST TO AVAIL FACILITY FROM TH E BANK. TO THE EXTENT OF RS. 6,01,185/- NO ADDITION CAN BE MADE. REMAINING ADDITION IS OF RS. 8,00,000 OR ODD AND OUT OF RS. 8,00,000/- OR ODD, WE ARE OF THE VIEW THAT IF AN AD DITION OF RS. 4,00,000/- IS SUSTAINED THAT WILL MEET THE ENDS OF JUSTICE. WE ORDER ACCORDINGLY . 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D IN PART. 12. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 02 .02.2012. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/ 5 COPY FORWARDED TO :- SHRI VIRENDRA KUMAR CHATURVEDI, HIDAUN CITY. THJE ITO WARD-3, SAWAI MADHOPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 1014/JP/2010) BY ORDER, AR ITAT JAIPUR.