I.T.O Wd - 43(3),kolkata, Kolkata V. Sri Bisweswarlal Nakhatmal, Kolkata

ITA 107/KOL/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4988 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2016
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 01-03-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 16-01-2013
• Court: TRIBUNAL
• Department Lawyers: NONGOTHUNG JUNGIO
• Assessee Lawyers: B C JAIN
• Keywords: Assessment record

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KO LKATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI M. BALAGANES H, AM] I.T.A NO.107/KOL/2013 ASSESSMENT YEAR: 2004-05 INCOME-TAX OFFICER, WD-43(3), KOLKATA VS. BISWES WARLAL NAKHATMAL (PAN: AADFB0097R) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 01.03.2016 DATE OF PRONOUNCEMENT: 04.03.2016 FOR THE APPELLANT: SHRI NONGOTHUNG JUNGIO, JCIT FOR THE RESPONDENT: SHRI B. C. JAIN, FCA ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-XXX, KOLKATA VIDE APPEAL NO. 86/CIT(A)-XXX/WD-43(3)/2010-11 DATED 26.09.2012. A SSESSMENT WAS FRAMED BY ITO, WARD- 43(3), KOLKATA U/S. 143(3)/263 OF THE INCOME-TAX AC T, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2004-05 VIDE HIS ORDER DATED 31 .12.2008. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGA INST THE ORDER OF CIT(A) IN DELETING THE ADDITION MADE BY AO ON ACCOUNT OF UNACCOUNTED STOCK DURING THE COURSE OF SURVEY. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.1: 1. THAT THE LD. CIT(A)-XXX, KOLKATA, ERRED IN DELE TING THE ADDITION OF STOCK FOUND DURING THE COURSE OF SURVEY AMOUNTING TO RS.70,75,322/- WITHOU T CONSIDERING THE FACTS OF THE CASE THAT THE STOCK WHICH IS UNEXPLAINED ACTUALLY BELONGS TO THE APPELL ANT AND NOT TO THE COMPANY M/S. BISWESWAR LAL NAKHATMAL PVT. LTD. 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT A SUR VEY U/S. 133 OF THE ACT WAS CARRIED OUT ON THE BUSINESS PREMISES OF THE ASSESSEE ON 24.12.2003. DU RING THE COURSE OF SURVEY THE REVENUE DEPARTMENT HAS INVENTORISED THE STOCK TO THE TUNE O F RS.70,75,322/-. THE ASSESSEE BEFORE THE AO CLAIMED THAT THIS STOCK BELONGS TO BISWESWAR LAL NAKHATMAL COTTS PVT. LTD., 16, PAGYA PUTTY STREET, KOLKATA-700 007. THE AO REQUIRED THE ASSESS EE TO EXPLAIN HOW THE STOCK BELONGS TO BISWESWAR LAL NAKHATMAL COTTS PVT. LTD. AND TO PROD UCE ALL PURCHASE AND SALE BILLS, VOUCHERS, CHALLANS AND CONSIGNMENT NOTES OF THE TRANSPORTERS TO ESTABLISH THE CLAIM THAT THE STOCK BELONGS TO THE COMPANY. THE ASSESSEE FILED HIS WRITTEN SUB MISSIONS STATING THAT COMPLETE BOOKS OF ACCOUNT, BANK STATEMENT, PURCHASE BILLS, STOCK REGI STERS AND OTHER DETAILS WERE PRODUCED. AS PER THE BOOKS OF ACCOUNT OF BISWESWAR LAL NAKHATMAL COT TS PVT. LTD IDENTICAL STOCK IS RECORDED IN THE SAME. IT WAS ALSO EXPLAINED THAT IN THE SAME A DDRESS WHERE ASSESSEE FIRM EXISTS AND OTHER ASSOCIATE COMPANIES EXIST AND CARRY ON BUSINESS FRO M COMMON PREMISES AS PER THE PRACTICE IN THE COMMERCIAL AREA OF BURRABAZAR. THE ASSESSEE PR ODUCED COMPLETE DETAILS CALLED FOR BY THE 2 ITA NO.107/KOL/2013 BISWESWARLAL NAKHATMAL AY 2004-05 2 AO WHICH ARE RECORDED BY THE AO IN HIS ASSESSMENT O RDER BUT THE AO DENIED HAVING PRODUCED THESE DOCUMENTS. ACCORDING TO AO, EVEN WHILE CHECKI NG THE BOOKS OF BISWESWAR LAL NAKHATMAL COTTS PVT. LTD., THE STOCK WAS NOT FOUND RECORDED. ACCORDINGLY, HE TREATED THE STOCK AS BELONGING TO THE ASSESSEE AND MADE ADDITION OF R S.70,75,322/- TREATING THE SAME AS UNEXPLAINED STOCK EVEN DURING THE COURSE OF SURVEY. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO DELETED THE ADDITION BY OBSERVIN G AS UNDER: 4. THE SUBMISSIONS OF THE APPELLANT HAVE BEEN CONS IDERED AND I HAVE ALSO GONE THROUGH THE ASSESSMENT RECORDS IN THE CASE OF THE APPELLANT AS WELL AS THAT OF THE COMPANY M/S.BISESWAR LAL NAKHATMAL COTTS PVT. LTD. WHICH IS PRESENTLY ASSESS ED WITH ITO, WARD-9(2). IT IS SEEN THAT THE ISSUE IS IN RESPECT OF THE STOCK OF RS.70,75,322/- FOUND BY THE SURVEY PARTY DURING THE COURSE OF SURVEY U/S.133(A) OF THE APPELLANT FROM ITS PREMISES AS ON 24.12.2003. IT IS FURTHER SEEN THAT THIS STOCK HAS BEEN EXPLAINED TO BE THAT OF THE COMPANY M/S.BISESW AR LAL NAKHATMAL COTTS PVT. LTD. AND IT WAS EXPLAINED DURING THE ASSESSMENT PROCEEDINGS THAT TH E APPELLANT FIRM HAD BEEN WOUND UP AND THE BUSINESS ACTIVITIES WERE BEING CONDUCTED BY THE COM PANY FROM 01.08.2003. IN VIEW OF THE SUBMISSIONS OF THE APPELLANT IT WAS CONSIDERED FIT TO VERIFY FROM THE SURVEY PROCEEDINGS AND SUBSEQUENT ASSESSMENT PROCEEDINGS AS TO WHETHER THE SUBMISSIONS MADE BY THE APPELLANT REGARDING THE CLAIM THAT THE STOCK FOUND DURING SUR VEY BELONG TO THE COMPANY AND NOT TO THE APPELLANT. IT IS SEEN THAT THE A.O. OF THE APPELLAN T HAD MADE A REFERENCE TO THE A.O. OF THE COMPANY M/S. BISESWAR LAL NAKHATMAL COTTS PVT. LTD. VIDE LE TTER DATED 31.05/02.06.2005, IN WHICH IT WAS MENTIONED THAT DURING COURSE OF SURVEY AND DEPOSITI ON OF THE PARTNER IT HAD BEEN MENTIONED THAT THE FIRM HAD NO STOCK ON THE DATE OF SURVEY I.E. ON 24.12.2003 BUT ON PHYSICAL VERIFICATION AN INVENTORY, STOCK WAS FOUND AT RS.70,75,322/- WHICH APPEARED TO BE THE STOCK OF THE ABOVE MENTIONED COMPANY M/S. BISESWAR LAL NAKHATMAL COTTS PVT. LTD. AND THE FACT ALSO REITERATED BY SHRI B. SARDA. 5. THE A.O. OF THE APPELLANT PASSED ON THE COPY OF STOCK INVENTORY ETC. TO THE A.O. OF THE COMPANY FOR NECESSARY ACTION AT HIS END. IT IS ALSO SEEN T HAT PARTNER OF THE APPELLANT FIRM HAS STATED THAT DURING THE COURSE OF SURVEY THE STOCK BELONGED TO T HE COMPANY AND STATED THAT CLOSING STOCK OF THE FIRM ON THE DATE OF SURVEY WAS NIL. IT IS ALSO SEEN FROM THE DOCUMENTS AT PAGE NO.33 OF THE SURVEY RECORDS THE TRADING ACCOUNT OF THE COMPANY M/S. BIS ESWAR LAL NAKHATMAL COTTS PVT. LTD. FOR THE PERIOD 23.05.2003 TO 21.12.2003 CLEARLY SHOWED THAT THERE WAS CLOSING STOCK OF RS.79,39,298.91 IN THE HANDS OF THE COMPANY. IT IS ALSO SEEN THAT IN R ESPECT OF THE ASSESSMENT OF THE COMPANY THE A.O. HAD NOT MADE ANY ADVERSE INFERENCE IN RESPECT OF TH E STOCK FOUND DURING THE SURVEY AND HAD CONSIDERED THE INFORMATION PASSED ON BY THE A.O OF THE APPELLANT BEFORE COMPLETING THE ASSESSMENT OF THE COMPANY OR A.Y.2004-05. IT IS THE REFORE CLEAR THAT FROM THE RECORDS AND EVIDENCES AVAILABLE THAT THE APPELLANT HAS CLEARLY EXPLAINED WITH EVIDENCE THAT THE STOCK FOUND DURING THE COURSE SURVEY U/S.133(A) OF THE APPELLAN T'S PREMISES ON 24.12.2003 AND THAT THE SAME DID NOT BELONG TO THE APPELLANT FIRM BUT WAS THAT OF THE COMPANY M/S. BISESWAR LAL NAKHATMAL COTTS PVT. LTD. IN FACT THIS INFORMATION HAVE BEEN PASSED ON BY THE A.O. OF THE APPELLANT TO THE A.O. OF THE COMPANY. ALL THESE FACTS INDICATE THAT THE S UBMISSION OF THE APPELLANT ARE JUSTIFIED AND THAT THE AO HAD NO GROUNDS OR EVIDENCE TO CONSIDER THAT THE STOCK FOUND DURING THE COURSE OF SURVEY ON THE APPELLANTS PREMISES BELONG TO THE APPELLANT AN D NOT TO THE COMPANY M/S. BISESWAR LAL NAKHATMAL COTTS PVT. LTD. THEREFORE, THERE WAS NO JUSTIFICATION ON THE PART OF THE AO TO CONSIDER AND ASSESS THIS STOCK IN THE HANDS OF THE APPELLANT . THE ADDITION IS THERE NOT JUSTIFIED AND THE SAME IS DELETED. AGGRIEVED, REVENUE CAME IN APPEAL BEFORE TRIBUNAL 3 ITA NO.107/KOL/2013 BISWESWARLAL NAKHATMAL AY 2004-05 3 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. I FIND FROM THE FACTS OF THE CASE THAT BISESWAR LAL NAKHATMAL COTTS PVT. LTD. WAS ASSESSED WITH ITO, WARD-9(2) KOLKATA. THE ASSESSEE EXPLAINED THE STOCK OF RS.70,75,322/- FOUND BY THE SURVEY PARTY DURING THE COURSE OF SURVEY U/S.133(A) OF THE ACT FROM ASSESSEES PREMISES AS ON 24.12.2003 TO BE THAT OF THE COMPANY BISESWAR LAL N AKHATMAL COTTS PVT. LTD. AND IT WAS EXPLAINED DURING THE ASSESSMENT PROCEEDINGS THAT AS SESSEE FIRM HAD BEEN WOUND UP AND THE BUSINESS ACTIVITIES WERE BEING CONDUCTED BY THE COM PANY FROM 01.08.2003. I HAVE VERIFIED THE CLAIM THAT THE STOCK FOUND DURING SURVEY BELONGS TO THE COMPANY AND NOT TO THE ASSESSEE. IT IS SEEN THAT THE AO OF ASSESSEE HAD MADE A REFERENCE T O THE AO OF THE COMPANY BISESWAR LAL NAKHATMAL COTTS PVT. LTD. VIDE LETTER DATED 31.05/0 2.06.2005, IN WHICH IT WAS MENTIONED THAT DURING COURSE OF SURVEY AND DEPOSITION OF THE PARTN ER IT HAD BEEN MENTIONED THAT THE FIRM HAD NO STOCK ON THE DATE OF SURVEY I.E. ON 24.12.2003 B UT ON PHYSICAL VERIFICATION AN INVENTORY, STOCK WAS FOUND AT RS.70,75,322/- WHICH APPEARED TO BE THE STOCK OF THE ABOVE MENTIONED COMPANY BISESWAR LAL NAKHATMAL COTTS PVT. LTD. AND THE FACT ALSO REITERATED BY SHRI B. SARDA. THE AO OF ASSESSEE PASSED ON THE COPY OF STOCK INVE NTORY ETC. TO AO OF THE COMPANY FOR NECESSARY ACTION AT HIS END. IT IS ALSO SEEN THAT PARTNER OF ASSESSEE FIRM HAS STATED THAT DURING THE COURSE OF SURVEY THE STOCK BELONGED TO THE COMP ANY AND STATED THAT CLOSING STOCK OF THE FIRM ON THE DATE OF SURVEY WAS NIL. FURTHER, IT IS SEEN FROM THE DOCUMENTS AT PAGE NO.33 OF THE SURVEY RECORDS THAT THE TRADING ACCOUNT OF THE COMP ANY BISESWAR LAL NAKHATMAL COTTS PVT. LTD. FOR THE PERIOD 23.05.2003 TO 21.12.2003 CLEARL Y SHOWED THAT THERE WAS CLOSING STOCK OF RS.79,39,298/- IN THE HANDS OF THE COMPANY. FROM TH ESE FACTS IT IS CLEAR THAT ASSESSEE HAS CLEARLY EXPLAINED WITH EVIDENCE THAT THE STOCK FOUN D DURING THE COURSE SURVEY U/S.133(A) OF ASSESSEES PREMISES ON 24.12.2003, THE SAME DID NOT BELONG TO ASSESSEE FIRM BUT WAS THAT OF THE COMPANY BISESWAR LAL NAKHATMAL COTTS PVT. LTD. IN FACT THIS INFORMATION HAVE BEEN PASSED ON BY THE AO OF ASSESSEE TO AO OF THE COMPANY. ALL THESE FACTS INDICATE THAT THE SUBMISSIONS OF THE ASSESSEE ARE JUSTIFIED AND THAT THE AO CONTR OVERTED EVIDENCES TO ESTABLISH THAT THE STOCK FOUND DURING THE COURSE OF SURVEY FROM ASSESSEES P REMISES BELONG TO ASSESSEE AND NOT TO THE COMPANY BISESWAR LAL NAKHATMAL COTTS PVT. LTD. THE ASSESSEE ALSO PRODUCED COMPLETE BOOKS OF ACCOUNT, BANK STATEMENT, PURCHASE BILLS, STOCK R EGISTERS AND OTHER DETAILS. AS PER THE BOOKS OF ACCOUNT OF BISWESWAR LAL NAKHATMAL COTTS PVT. LT D IDENTICAL STOCK IS RECORDED IN THE SAME, WHICH CLEARLY PROVES THAT THE STOCK FOUND DURING SU RVEY BELONGS TO COMPANY BISWESWAR LAL 4 ITA NO.107/KOL/2013 BISWESWARLAL NAKHATMAL AY 2004-05 4 NAKHATMAL COTTS PVT. LTD AND NOT TO THE ASSESSEE. A CCORDINGLY, WE CONFIRM THE ORDER OF CIT(A) DELETING THE ADDITION OF UNDISCLOSED STOCK. THIS ISSUE OF REVENUES APPEAL IS DISMISSED. 5. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 04.03.2016. SD/- SD/- (M. BALAGANESH) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 4 TH MARCH, 2016 JD. SR. P.S COPY OF THE ORDER FORWARDED TO: 1. APPELLANT ITO, WARD-43(3), KOLKATA. 2. RESPONDENT SHRI BISWESWARLAL NAKHATMAL, 16, PAGEY A PATTY STREET, 2 ND FLOOR, KOLKATA- 700 007. 3. CIT(A), , KOLKATA 4. CIT, , KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .