Smt. Seema Sarode, Hyderabad V. Income Tax Officer, Ward-4(3), Hyderabad

ITA 1115/HYD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66406 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 19-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SIRIVELLA VENKATESWARA RAO
• Assessee Lawyers: AMISHA S GUPT
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL M EMBER ITA NO.1115/HYD/2012 : ASSESSM ENT YEAR 2007-08 SMT. SEEMA SARODE, HYDERABAD (PAN AINPS 9040 D) (APPELLANT) V/S. INCOME-TAX OFFICER, WARD4(3), HYDERABAD (RESPONDENT) AND ITA NO.1116/HYD/2012 : ASSESSM ENT YEAR 2007-08 SHRI GHANSHYAM SARODE , HYDERABAD (PAN ADRPS 6180 R) (APPELLANT) V/S. INCOME TAX OFFICER, WAD - 4(3), HYDERABAD (RESPONDENT) APPELLANTS BY : SHRI SIRIVELLA VENKATESWARA RAO ASSESSEES BY : SMT. AMISHA S.GUPT DATE OF HEARING 29.10.2012 DATE OF PRONOUNCEMENT 31.10.2012 O R D E R PER SAKTIJIT DEY, JUDICIAL MEMBER: THESE TWO APPEALS, CONCERNING CONNECTED ASSESSEES A ND INVOLVING A COMMON ISSUE, ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF THE COMMISSIONER OF INCOME-TAX(APPEALS) V, HYDERABA D DATED 22.5.2012 FOR THE ASSESSMENT YEAR 2007-08. SINCE A COMMON ISSUE IS INVOLVED, THESE APPEALS ARE BEING DISPOSED OFF WITH THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.1115-1116/HYD/2012 SMT. SEEMA SARODE & ANR. HYDERABAD 2 ITA NO.1115/HYD/2012 : ASSESSMENT YEAR 2007-08 SMT. SEEMA SARODE, HYDERABAD. 2. IN THIS APPEAL FILED BY SMT.SEEMA SARODE, WIFE OF SHRI GHANSHYAMDAS SARODE, THE ONLY ISSUE RELATES TO ADDI TION OF AN AMOUNT OF RS.14,17,347 ON ACCOUNT OF EXCESS STOCK FOUND AT THE TIME OF SURVEY. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL, CARRYING ON BUSINESS IN WHOLESALE AND RETAIL TRADE OF HANDLOOM SAREES. FOR THE ASSESSMENT YEAR UNDER APPEAL, THE ASSESSEE FIELD HER RETURN OF INCOME DECLARING A TOTAL INCOME OF RS.3,14,940. TH E SURVEY UNDER S.133A OF THE ACT WAS CONDUCTED IN THE BUSINESS PRE MISES OF THE ASSESSEE ON 23.3.2010. IN THE COURSE OF THE SURVEY OPERATIONS, WHILE TAKING PHYSICAL INVENTORY OF STOCK, EXCESS STOCK OF RS. 28,34,694 WAS FOUND. A STATEMENT WAS RECORDED FROM THE ASSESSEE WITH REGARD TO DISCREPANCY IN THE STOCK. THE ASSESSEE IN RESPONSE TO THE QUESTION PUT TO HER AT THE TIME OF SURVEY, STATED THAT THE CLOSI NG STOCK INCLUDES THE STOCK BELONGING TO THE OTHER TWO ENTITIES OF HER TW O SONS AND HER HUSBANDS HUF, FOR WHICH PROPER BOOKS WERE NOT MAIN TAINED. SHE FURTHER STATED THAT WHATEVER DIFFERENCE OF STOCK WA S FOUND AT THE TIME OF SURVEY, SHE IS WILLING TO OFFER THE SAME TO TAX. SHE HAS REQUESTED THAT THE EXCESS STOCK FOUND MAY BE ASSESSED EQUALLY IN BOTH IN HER HANDS AND IN THE HANDS OF HER HUSBAND, SHRI GHANSHY AM SARODE. AS A SEQUENCE OF SURVEY OPERATION, SCRUTINY PROCEEDING W AS INITIATED BY ISSUING NOTICES UNDER S.143(2) AND 142(1) OF THE AC T. IN THE COURSE OF THE SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ON THE BASIS OF THE STATEMENT RECORDED FROM THE ASSESSEE AT THE TIME OF SURVEY, ADDED 50% OF THE VALUE OF THE EXCESS STOCK FOUND AT THE TIME OF SURVEY IN THE HANDS OF THE ASSESSEE, WHICH WORKED OUT TO R S.14,17,347. THE ITA NO.1115-1116/HYD/2012 SMT. SEEMA SARODE & ANR. HYDERABAD 3 ASSESSING OFFICER ALSO RELYING UPON THE STATEMENT O F THE ASSESSEE AND HER HUSBAND THAT PROPER BOOKS OF ACCOUNT WERE NOT M AINTAINED AND PROFIT SHOULD BE ESTIMATED, PROCEEDED TO REJECT THE BOOKS OF ACCOUNT, AND ESTIMATED THE NET PROFIT AT 6% ON THE TURNOVER OF RS.66,33,860, AND DETERMINED THE NET PROFIT AT RS.3,98,032. 4. THE ASSESSEE BEING AGGRIEVED BY THE ADDITION M ADE ON ACCOUNT OF ADDITIONAL STOCK FOUND AT THE TIME OF SU RVEY, FILED AN APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER EXAMINING THE RECORDS, FOUND THAT THE ASSESSEE HAS NOT SUBMITTED ANY EVIDENCE EITHER AT THE TIME OF SURVEY OR AT THE TIME OF ASSESSMENT PROCEEDINGS TO PROVE THAT THE EXCESS STOCK BELONGED TO SHRI GHANSHYAM SARODE HUF AND HER THREE SONS, S/SHRI AJIT SARODE, ARUN SARODE AND ANIL SARO DE. THAT APART, THE ASSESSEE HERSELF, IN A STATEMENT RECORDED AT THE TI ME OF SURVEY HAD ADMITTED THAT THE EXCESS STOCK FOUND WAS UNACCOUNTE D AND MAY BE ASSESSED EQUALLY IN HER HANDS AND IN THE HANDS OF H ER HUSBAND, SHRI GHANSHYAM SARODE. THE CIT(A) THEREFORE, CONSIDERING THE FACT THAT THE ASSESSEE HERSELF HAS ACCEPTED FOR ADDITION OF 50% O F THE STOCK FOUND AT THE TIME OF SURVEY, CONCLUDED THAT THERE IS NO REAS ON TO ALLOW THE CLAIM OF THE ASSESSEE IN APPEAL. AGGRIEVED BY THE ORDER OF THE CIT(A), ASSESSEE IS IN APPEAL BEFORE US. 5. THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE LOWER AUTHORITIES WERE NOT CORRECT IN ADDING THE EXCESS STOCK FOUND AT THE TIME OF SURVEY IGNORING THE ASSESSEES EXPLANATION THAT THE EXCESS STOCK BELONG ED TO OTHER CONCERNS OF THE HUF AND ASSESSEES THREE SONS OPERA TING FROM THE SAME PREMISES. THE LEARNED AUTHORISED REPRESENTATI VE FOR THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSING OFFIC ER HAVING ESTIMATED ITA NO.1115-1116/HYD/2012 SMT. SEEMA SARODE & ANR. HYDERABAD 4 THE PROFIT, AFTER THE REJECTION OF THE BOOKS OF ACC OUNT, NO SEPARATE ADDITION ON ACCOUNT OF EXCESS STOCK IS JUSTIFIED. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITT ED THAT THE ASSESSEE NOT ONLY ACCEPTED FOR THE ADDITION OF 50% OF THE VALUE OF THE EXCESS STOCK FOUND AT THE TIME OF SURVEY, BUT IN TH E COURSE OF ASSESSMENT ALSO, SHE HAS SUBMITTED IN WRITING BEFOR E THE ASSESSING OFFICER ACCEPTING ADDITION REPRESENTING 50% OF THE DIFFERENCE IN STOCK FOUND AT THE TIME OF SURVEY. 7. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD. FROM THE ORDERS OF THE LOWER AUTHORITIES A S WELL AS FROM THE FACTS ON RECORD, IT IS EVIDENT THAT THE ASSESSEE NO T ONLY AT THE TIME OF SURVEY BUT ALSO IN THE COURSE OF ASSESSMENT PROCEED INGS, ACCEPTED FOR ADDITION OF 50% OF THE EXCESS STOCK FOUND DURING TH E COURSE OF PHYSICAL VERIFICATION OF STOCK DONE AT THE TIME OF SURVEY. THE LETTER OF THE ASSESSEE TO THE ASSESSING OFFICER AGREEING FOR ADDI TION IN THIS BEHALF IS PLACED ON RECORD. THE PROPOSITION CANVASSED WITH RE GARD TO PERMISSIBILITY OF SEPARATE ADDITIONS, OVER AND ABOV E THE ESTIMATED GP ADDITION, WAS RIGHTLY REJECTED BY THE CIT(A) AND WE AGREE WITH HIS REASONING. IN THIS VIEW OF THE MATTER, WE ARE OF T HE OPINION THAT THE ADDITION MADE BY THE ASSESSING OFFICER IS JUSTIFIED . WE ACCORDINGLY UPHOLD THE ORDER OF THE CIT(A) AND REJECT THE GROUN DS OF THE ASSESSEE ON THIS ISSUE. 8. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ITA NO.1116/HYD/2012 : ASSESSMENT YEAR 2007-08 SHRI GHANSHYAM, HYDERABAD. 9. IN THIS APPEAL FILED BY SHRI GHANSHYAM SARODE, HUSBAND OF SMT. SEEMA SARODE, THE FIRST ISSUE RELATES TO ADDIT ION OF RS.2,40,000 ITA NO.1115-1116/HYD/2012 SMT. SEEMA SARODE & ANR. HYDERABAD 5 UNDER S.69A OF THE ACT, MADE ON ACCOUNT OF UNEXPLA INED INVESTMENT IN RESPECT OF SILVER COINS. 10. BRIEF FACTS OF THE CASE IN RELATION TO THIS IS SUE ARE THAT IN THE COURSE OF THE SURVEY UNDER S.133A OF THE ACT THAT W AS CONDUCTED IN THE BUSINESS PREMISES OF THE ASSESSEE ON 23.3.2010, A S TATEMENT SUBMITTED BY THE ASSESSEE TO THE BANK FOR THE PURPO SE OF OBTAINING LOAN WAS FOUND, WHICH REVEALED THAT THE ASSESSEE WAS IN POSSESSION OF SILVER COINS WORTH RS.2,40,000. IN THE COURSE OF ASSESSME NT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT THE SILVER COINS WERE NOT SHOWN IN THE BALANCE SHEET OF THE ASSESSEE FOR ANY OF THE ASSESS MENT YEARS AND THE ASSESSEE ALSO COULD NOT SATISFACTORILY EXPLAIN WITH REGARD TO THE SILVER COINS. THE ASSESSING OFFICER THEREFORE, ADDED THE A MOUNT OF RS.2,40,000 UNDER S.69A OF THE ACT. 11. THE ASSESSEE CHALLENGED THE ABOVE ADDITION BEF ORE THE FIRST APPELLATE AUTHORITY. THE CIT(A) ALSO SUSTAINED THE ADDITION BY OBSERVING THAT THOUGH THE ASSESSEE SUBMITTED THAT T HE SILVER COINS BELONGED TO THE GRANDFATHER OF THE ASSESSEE, NO EVI DENCE IN THAT REGARD WAS SUBMITTED EITHER BFORE THE ASSESSING OFFICER OR BEFORE HIM. THE CIT(A) FURTHEER OBSERVED THAT HAD THE ASSESSEE PROD UCED EVEN A SINGLE COIN, IT SHOULD HAVEE INDICATED SOME FACT REGARDING THE YEAR OF MANUFACTURE AND THE AGE OF THE COIN. WITH TEHSE O SBEERVATIONS, THE CIT(A) SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER. 12. WE HAVE HEARD RIVAL SUBMISSIONS AND WE HAVE PE RUSED THE MATERIALS ON RECORD. ON A PERUSAL OF THE ORDERS O F THE LOWER AUTHORITIES, IT IS ABSOLUTELY CLEAR THAT THE ASSESS EE HAS NOT PRODUCED ANY EVIDENCE EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE CIT(A) TO ITA NO.1115-1116/HYD/2012 SMT. SEEMA SARODE & ANR. HYDERABAD 6 SUBSTANTIATE HIS CLAIM THAT THE SILVER 600 COINS P OSSESSED BY HIM, BELONGED TO HIS GRAND-FATHER. EVEN BEFORE US, THE A SSESSEE HAS FAILED TO PRODUCE ANY EVIDENCE WITH REGARD TO THE FACT THAT T HE SILVER COINS ACTUALLY BELONGED TO THE ASSESSEES GRAND-FATHER AN D WERE ONLY POSSESSED BY HIM. IN THE ABSENCE OF ANY EVIDENCE S UBMITTED BY THE ASSESSEE IN THAT BEHALF, IN OUR CONSIDERED OPINION, THE CLAIM MADE BY HIM THAT THE SILVER COINS BELONGING TO HIS GRAND-FA THER WERE AVAILABLE WITH HIM FOR OBTAINING LOAN FROM THE BANK, IS ONLY A MAKE BELIEVE STORY. WE THEREFORE, FIND NO JUSTIFICATION TO INTERFERE WI TH THE ORDERS OF THE LOWER AUTHORITIES. ASSESSEES GROUNDS ON THIS ISSU E ARE REJECTED. 13. THE NEXT ISSUE INVOLVED IN THIS APPEAL RELATES TO THE ADDITION OF RS.14,17,347, MADE BY THE ASSESSING OFFICER ON A CCOUNT OF EXCESS VALUE OF STOCK FOUND AT THE TIME OF SURVEY ON PHYSI CAL VERIFICATION, WHICH HAS BEEN CONFIRMED BY THE CIT(A). 14. WE HEARD BOTH THE SIDES AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. THE ADDITION INVOLVED IN THIS IS SUE IS IDENTICAL TO THE ONE WE HAVE DEALT WITH, WHILE DEALING WITH THE APPE AL OF THE WIFE OF THE ASSESSEE, SMT.SEEMA SARODE, HEREINABOVE. IN THIS C ASE ALSO, THE ASSESSEE HAS WRITTEN A LETTER TO THE ASSESSING OFFI CER ACCEPTING THE ADDITION OF 50% OF THE VALUE OF THE EXCESS STOCK FO UND AT THE TIME OF SURVEY. IN THIS VIEW OF THE MATTER, FOR THE DETAIL ED REASONS DISCUSSED BY US IN PARA-7 HEREINABOVE, IN THE CONTEXT OF CORR ESPONDING ADDITION IN THE CASE OF SMT.SEEMA SARODE, WE SUSTAIN THE IMPUGN ED ADDITION, BY UPHOLDING THE ORDERS OF THE LOWER AUTHORITIES ON TH IS ISSUE, AND REJECT THE GROUNDS OF THE ASSESSEE. ITA NO.1115-1116/HYD/2012 SMT. SEEMA SARODE & ANR. HYDERABAD 7 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE, BEI NG ITA NO.1116/HYD/2012, IS DISMISSED. 16. TO SUM UP, BOTH THE APPEALS OF THE ASSESSEES ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 31.10.2012 SD/- SD/- (CHANDRA POOJARI) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED/- 31 ST OCTOBER, 2012 COPY FORWARDED TO: 1. 2. SMT. SEEMA SARODE, 2-2-12/A/1, B-63, 1 ST FLOOR, D.D.COLONY, SHIVAM ROAD, HYDERABAD 500 007 SHRI GHANSHYAM SARODE, 2-2-12/A/1, B-63, 1 ST FLOOR, D.D.COLONY, SHIVAM ROAD, HYDERABAD 500 007 3. 4. 5. 6 INCOME-TAX OFFICER, WARD 4(3). HYDERABAD COMMISSIONER OF INCOME-TAX(APPEALS)-V, HYDERABAD COMMISSIONER OF INCOME-TAX IV, HYDERABAD DEPARTMENTAL REPRESENTATIVE INCOME-TAX APPELLATE TR IBUNAL, HYDERABAD B.V.S.