Ram Deo Jat, Shillong V. Income Tax Officer, Ward-2, Shillong

ITA 111/GTY/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 9008 (ITAT-GUWAHATI)
• Duration Of Justice: 1 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 26-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources
• Section: 133A; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC GAUHATI BEFORE SHRI S ANJAY GARG , JUDICIAL MEMBER . / ITA NO. 111 / GAU/2019 ASSESSMENT YEAR: 20 1 3 - 14 RAM DEO JAT M/S. BAJRANG HARDWARE STORES, MAWLONGHAT BARA BAZAR, SHILLONG, 793002, ASSAM. PAN: ABYPJ 1797Q / V/S . I.T.O., WARD 2, SHILLONG SHILLONG, AAYKAR BHAVAN, MG ROAD, SHILLONG, 793001, ASSAM / APPELLANT .. / RESPONDENT HEARING THROUGH VIDEO CONFERENCING / BY APPELLANT SHRI CHETAN GANGWAL, C.A , A .R / BY RESPONDENT SHRI JAYANTA MRIDHA , JCIT, SR - DR / DATE OF HEARING 16 - 03 - 20 2 1 / DATE OF PRONOUNCEMENT 16 - 03 - 20 2 1 / O R D E R TH E PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 2 4 - 01 - 2019 OF THE COMMISSIONER OF INCOME - TAX (APPEALS) , SHILLONG [HEREINAFTER REFERRED TO AS CIT(A)] . 2. IN THIS APPEAL , THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF AP PEAL: - 1.1 DISCREPANCY IN VALUE OF STOCK THAT THE LEARNED ASSESSING OFFICER HAS MADE ADDITION OF RS . 11,60,736/ - AS THE DIFFERENCE IN PHYSICAL STOCK AND THE STOCK AS PER BOOKS OF ACCOUNT. TOTAL ADDITIONS AND CALCULATIONS MADE ARE PRESUMPTIVE BASIS AND DOES NOT REFLECT ACTUAL COST/VALUE OF STOCK. THE PHYSICAL STOCK IS VALUED AT MAXIMUM RETAIL PRICE (MRP ) OR SALE PRICE (SP) OF THE GOODS. THE IMPACT OF VAT IN STOCK IS ALSO NOT STATED. ASSESSEE REQUESTED TO CONSIDER THE VALUE OF STOCK AS PRESUMPTIVE AND REQUEST TO DELETE IT FULLY. 1.2 THAT THE LEARNED ASSESSING OFFICER WAS NOT JUSTIFIED BY MAKING THE ADDIT IONS OF RS. 2,99,225/ - AS DIFFERENCE IN CASH REPRESENTS UNACCOUNTED INCOME. SINCE ON THE DATE OF SURVEY THE BOOKS OF ACCOUNTS WERE NOT UP ITA NO. 111 /GAU/2019 A.Y. 20 13 - 14 RAM DEO JAT PAGE 2 DATED AS WELL AS THE FIGURE TAKEN AS BALANCE IN CASH BOOK AS ON DATE IS IMAGINARY, THEREFORE THE ADDITION MADE SHOULD BE DELETED FULLY. 3. VIDE GROUND NO. 1 THE ASSESSEE HAS CONTESTED THE VALIDITY OF CONFIRMATION OF ADDITION OF RS. 11,60,736/ - MADE BY THE LEARNED ASSESSING OFFICER ( IN SHORT, THE LD. AO) ON ACCOUNT OF DIFFERENCE IN PHYSICAL STOCK AS COMPARED TO THAT HAS BEEN RECORDED IN BOOKS OF ACCOUNT . 4. BRIEF FACTS RELATING TO THE ISSUE ARE THAT A SURVEY ACTION U/S. 133A OF THE INCOME T AX ACT, 1961 ( IN SHORT, THE ACT) WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE. WHEN T HE PHYSICAL STOCK AVAILABLE WAS COMPARED WITH THE BOOKS OF ACCOUNT S OF THE ASSESSEE, A DIFFERENCE OF RS. 11,60,736/ - WAS FOUND . ON BEING ASKED TO EXPLAIN IN THIS RESPECT , THE ASSESSEE SUBMITTED THAT THE FIGURES AS COLLECTED BY THE SURVEY PARTY W ERE NOT COR RECT . THAT THE ASSESSEE HAS RE - CONCILED THE PHYSICAL STOCK . THE FIGURES OF THE FREIGHT AND CARTAGE WERE NOT TAKEN INTO ACCOUNT BY THE SURVEY PARTY. EVEN IN THE STATEMENT RECORDED U/S. 131(1) OF THE ACT , THE ASSESSEE HAD STATED THAT IF THERE WAS ANY DI SCREPANCY NOTED BY THE SURVEY PARTY THAT WILL BE EXPLAINED AT THE TIME OF ASSESSMENT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSEE SUBMITTED NECESSARY DETAILS FOR VERIFICATION. HOWEVER, THE LD. AO NOTED THAT SINCE THERE WAS A DIFFERENCE IN STO CK VALUATION NOTED BY THE SURVEY PARTY, HE THEREFORE, MADE THE IMPUGNED ADDITION, WHICH HAS BEEN CONFIRMED BY THE LD. CIT(A) ALSO . THE ASSESSEE, THUS, HAS COME UP IN APPEAL BEFORE THIS TRIBUNAL. 5. I HAVE HEARD THE RIVAL CONTENTIONS AND GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIES. A PERUSAL OF THE ASSESSMENT ORDER REVEALS THAT THE ASSESSEE SUBMITTED NECESSARY DETAILS AND BOOKS OF ACCOUNTS TO EXPLAIN TO THE LD. AO THAT, IN FACT, THERE WAS NO DI FFERENCE IN VALUATION OF STOCK. HOWEVER, THE LD. AO WITHOUT CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HAS MADE THE IMPUGNED ADDITION IN A MECHANICAL MANNER SOLELY ON THE REASON THAT THE SURVEY PARTY HAD SHOWN/FOUND THE DIFFERENCE IN VALUATION OF STOCK. HE HAS NOT CONSIDER ED AT ALL THE RECONCIL ED STATEMENT SUBMITTED BY THE ASSESSEE. THE LD. CIT(A) ALSO UPHELD THE IMPUGNED ADDITION MADE BY THE LD. AO WITHOUT CONSIDERING THE DETAILS SUBMITTED BY THE ASSESSEE. IN VIEW OF THIS, IMPUGNED ITA NO. 111 /GAU/2019 A.Y. 20 13 - 14 RAM DEO JAT PAGE 3 ADDITION IS NOT SUS TAINABLE IN THE EYES OF LAW. ACCORDINGLY, THE SAME IS ORDERED TO BE DELETED. GROUND NO.(1.1) OF ASSESSEES APPEAL IS ALLOWED. 6. VIDE GROUND NO. (1.2) , THE ASSESSEE HAS CONTESTED THE VALIDITY OF CONFIRMATION OF ADDITION OF RS. 2,99,225/ - ON ACCOUNT OF EXCESS CASH FOUND DURING THE SURVEY ACTION AS COMPARED TO THE CASH RECORDED IN THE CASH BOOK. THE ASSESSEE SUBMITTED THAT THERE WAS NO EXCESS CASH FOUND AND SUBMITTED THE RECONCIL ED STATEMENT TO SHOW THAT NO EXCESS CASH WAS FOUND BY THE SURVEY PARTY D URING SURVEY ACTION. THE LD. AO, HOWEVER, WITHOUT CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE MADE THE IMPUGNED ADDITION ON THE BASIS OF THE REPORT OF THE SURVEY PARTY. THE LD. CIT(A) ALSO DID NOT CONSIDER THE SUBMISSIONS MADE BY THE ASSESSEE. 7. AFTER CONSIDERING THE RIVAL CONTENTIONS, I DO NOT FIND ANY JUSTIFICATION ON THE PART OF THE LOWER AUTHORITIES IN MAKING/CONFIRMING THE IMPUGNED ADDITION WITHOUT CONSIDERING THE EXPLANATION SUBMITTED BY THE ASSESSEE . ACCORDINGLY, THE SAME IS ORDERED TO BE DELETED. GROUND NO.(1. 2 ) OF ASSESSEES APPEAL IS ALLOWED. IN VIEW OF THE ABOVE, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN OPEN COURT AT THE TIME OF HEARING ON TUESDAY , 1 6 TH MARCH , 2021 . SD/ - (S ANJAY GAR G ) JUDICIAL MEM BER * *PP /SR.PS - 16 - 03 - 2021 /KOLKATA / COPY OF ORDER FORWARDED TO: - 1. /APPELLANT /ASSESSEE: RAM DEO JAT M/S. BAJRANG HARDWARE STORES, MAWLONGHAT BARA BAZAR, SHILLONG, 793002, ASSAM . 2. /RESPONDENT - I.T.O., WARD - 2, SHILLONG, AAYKAR BHAVAN, MG ROAD, SHILLONG, 793001, ASSAM 3. / CONCERNED CIT 4. - / CIT (A) 5. , / DR, ITAT, GUWAHATI 6. / GUARD FILE. BY ORDER/ , /TRUE COPY/ FOR, SENIOR PRIVATE SECRETARY