M/s. K.K. Enterprise, Ahmedabad V. The Dy.CIT.,Circle-3, Ahmedabad

ITA 1064/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94587 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-10-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 11-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DIPAK SUTARIA
• Assessee Lawyers: M J SHAH
• Keywords: Condonation of delay
• Section: 133A

Judgement Text

, B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO.1064/AHD/2011 / ASSTT. YEAR: 2007-2008 M/S.K.K. ENTERPRISE SPAN HOUSE, NR.VIPUL DUDHIYA STADIUM CIRCLE, NAVRANGPURA AHMEDABAD. PAN : AAEFK 0780F VS DCIT, CIR.3 AHMEDABAD. / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI DIPAK SUTARIA, SR.DR ASSESSEE BY : SHRI M.J. SHAH ! / DATE OF HEARING : 21/10/2015 '#$ ! / DATE OF PRONOUNCEMENT: 21/10/2015 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF THE CIT(A)-XVI, AHMEDABAD DATED 8.11.2010 PASSED FOR TH E ASSTT.YEAR 2007-08. 2. THOUGH THE ASSESSEE HAS TAKEN THREE GROUNDS OF A PPEAL, BUT ITS GRIEVANCE REVOLVES AROUND A SINGLE ISSUE WHEREBY TH E LD.CIT(A) HAS CONFIRMED AN ADDITION OF RS.1,67,157/- MADE BY THE AO. 3. THE REGISTRY HAS POINTED OUT THAT THE APPEAL OF THE ASSESSEE IS TIME BARRED BY 63 DAYS. THE ASSESSEE HAS FILED AP PLICATION FOR CONDONATION OF DELAY ALONG WITH AFFIDAVIT OF SHRI M IHIR KANTILAL KHANDHAR, ITA NO.1064/AHD/2011 2 ERSTWHILE PARTNER OF THE ASSESSEE-FIRM. IN THE AFF IDAVIT, IT HAS BEEN DEPOSED THAT THE LD.FIRST APPELLATE AUTHORITY HAS D ECIDED THE APPEAL OF THE ASSESSEE ON 8.11.2010 AND THE ORDER OF THE CIT( A) WAS RECEIVED ON 9.12.2010 AT THE BUSINESS PREMISES OF THE ASSESSEE AT SPAN HOUSE. THE ASSESSEE HAS DISCONTINUED ITS BUSINESS IN THE P REMISES, AND THEREFORE, THE ORDER WAS NOT COMMUNICATED TO THE CO NCERNED PERSON. THE STAFF DID NOT REALIZE IMPORTANCE OF THE MATTER AND LEFT THE ENVELOPE AT THE ABOVE PREMISES. DUE TO THIS COMMUNICATION G AP, THE APPEAL OF THE ASSESSEE WAS TIME BARRED BY 63 DAYS. THE LD. C OUNSEL FOR THE ASSESSEE HAD PRAYED FOR CONDONATION OF THE DELAY. 4. ON THE OTHER HAND, THE LD.DR OPPOSED THE PRAYER OF THE ASSESSEE. HE CONTENDED THAT IT IS THE ASSESSEE WHO HAS FAILED TO COMMUNICATE THE PROPER ADDRESS TO THE LD.FIRST APPELLATE AUTHORITY FOR THE SERVICE OF NOTICE AND THE ORDER. 5. ON DUE CONSIDERATION OF THE FACTS AND CIRCUMSTAN CES, WE ARE OF THE VIEW THAT THE ASSESSEE WOULD NOT GAIN ANYTHING BY MAKING ITS APPEAL TIME BARRED. THERE CANNOT BE ANY DELIBERATE ATTEMPT ATTRIBUTABLE TO THE ASSESSEE FOR DELAYING THE APPEA L. THEREFORE, WE CONDONE THE DELAY IN FILING THE APPEAL AND PROCEED TO DISPOSE OF THE APPEAL ON MERITS. 6. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED ITS RETURN OF INCOME ELECTRONICALLY ON 29.10.2007 DECLARING TOTAL INCOME AT RS.31,61,410/-. THE CASE OF THE ASSESSEE WAS SELEC TED FOR SCRUTINY ASSESSMENT AND NOTICE UNDER SECTION 143(2) OF THE I NCOME TAX ACT WAS ISSUED 23.7.2008. IT IS PERTINENT TO MENTION THAT A SURVEY UNDER SECTION 133A OF THE ACT WAS CARRIED OUT AT THE BUSI NESS PREMISES OF THE ASSESSEE ON 29.11.2006. DURING THE COURSE OF SURVE Y, STOCK POSITION OF THE ASSESSEE WAS VERIFIED PHYSICALLY AND EXCESS STO CK HAVING VALUE OF ITA NO.1064/AHD/2011 3 RS.29,32,715/- WAS DETECTED WHICH WAS NOT RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. THE ASSESSEE HAS OFFERED THE VALUE OF THIS STOCK IN THE RETURN OF INCOME. THE ASSESSEE HAS CL AIMED THAT THE STOCK HAVING VALUE OF RS.1,67,157/- WAS INCLUDED IN THIS EXCESS STOCK. MATERIAL WAS RECEIVED BY THE ASSESSEE ON 6 TH AND 7 TH OF NOVEMBER, WHEREAS THE SURVEY WAS TAKEN PLACE ON 29.11.2006. THE BILLS FOR THIS STOCK WERE RECEIVED IN THE MONTH OF DECEMBER. THE ASSESSEE HAS CLAIMED A SET OFF OF RS.1,67,157/- OUT OF THE ALLEG ED EXCESS STOCK COMPUTED BY THE SURVEY TEAM ON THE GROUND THAT THE STOCK HAS ALREADY RECEIVED. IT WAS NOT ACCOUNTED IN THE BOOKS BEFORE THE SURVEY DATE, BUT ULTIMATELY THE ASSESSEE HAS RECEIVED THE BILLS FOR THE STOCK. IT HAS FILED CONFIRMATION FROM THE SUPPLIER DEMONSTRATING THE FACT THAT THE STOCK WAS DELIVERED ON 6 TH AND 7 TH OF NOVEMBER, 2006. ON THE STRENGTH OF THIS CONFIRMATION, THE ASSESSEE HAS CONTENDED TH AT THE STOCK TO THE EXTENT OF RS.1,67,157/- OUGHT TO BE CONSIDERED AS E XPLAINED ONE. THE LD.AO DID NOT ACCEPT THE CONTENTIONS OF THE ASSESSE E. IN HIS OPINION, ONCE THE STOCK WAS RECEIVED IN THE MONTH OF NOVEMBE R, 2006, THERE IS NO OCCASION FOR THE ASSESSEE TO TAKE BILLS IN THE M ONTH OF DECEMBER, AND THEN ACCOUNT IT. IN A WAY, THE AO WAS OF THE O PINION THAT THE ASSESSEE MIGHT HAVE TRIED TO EXPLAIN SOME PART OF T HE EXCESS STOCK DURING THE COURSE OF SURVEY. ACCORDINGLY HE MADE A SEPARATE ADDITION OF RS.1,67,157/-. 7. APPEAL TO THE LD.CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 8. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT ON THE DATE OF SURVEY, THIS STOCK WAS NOT ACCOUNTED IN THE BOOKS, BUT WITH THE HELP OF BILLS, CONFIRMATION AND THE DETAILS OF PAYMENTS MADE, THE ASSESSEE HAS DEMONSTRATED THAT THE STOCK WAS RECEIVED BEFORE THE DATE OF SURVEY AND IT REMAINED TO BE ACCOUNTED. THE LD.AO DID NOT ISS UE ANY SUMMONS TO ITA NO.1064/AHD/2011 4 THE SUPPLIERS IN ORDER TO CROSS-VERIFY THE CLAIM OF THE ASSESSEE. THE APPREHENSION OF THE AO IS THAT THE ASSESSEE MIGHT H AVE TRIED TO EXPLAIN THE EXCESS STOCK FOUND DURING THE COURSE OF SURVEY. IF THE ASSESSEE HAS USED THAT MODUS OPERANDI TO EXPLAIN THE EXCESS STOCK, THEN THE COST OF STOCK OUGHT TO HAVE BEEN RECEIVED BY THE ASSESSEE C OULD BE SHOWN MORE AND NOT JUST A SUM OF RS.1,67,157/- AGAINST TO TAL VALUE OF STOCK OF RS.29,70,000/-. THUS, WE DO NOT SEE ANY MALA FIDE IN THIS EXPLANATION OF THE ASSESSEE AND THE CREDIT OF THE STOCK OUGHT T O HAVE BEEN GIVEN TO THE ASSESSEE AGAINST THE DECLARED STOCK. WE, THERE FORE, ALLOW THE APPEAL OF THE ASSESSEE AND DELETE THE ADDITION MADE BY THE AO. WE DIRECT THE AO TO GIVE TELESCOPIC BENEFIT OF STOCK V ALUE OF RS.1,67,157/- AGAINST THE TOTAL DECLARED STOCK. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 21 ST OCTOBER, 2015 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 21/10/2015