ACIT, CHENNAI V. Shri Shaik Usman Ali, CHENNAI

ITA 1149/CHNY/2011

• Counselvise Citation: 114921714 RSA 2011
• Duration Of Justice: 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 06-09-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 17-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHA JI P JACOB SRDR
• Assessee Lawyers: D ANAND
• Keywords: Set aside
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER I.T.A. NOS. 1149 & 1150/MDS/2011 (ASSESSMENT YEARS : 2005-06 & 2008-09) THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE IX, CHENNAI 600 006. (APPELLANT) V. SHRI SHAIK USMAN ALI, PROP M/S SHAH SANITARY STORES, NO.B (OLD NO.19) VANNIER STREET, CHENNAI 600 001. PAN : ABQPS2245G (RESPONDENT) APPELLANT BY : SHRI SHAJI P. JACOB, SR-DR RESPONDENT BY : SHRI D. ANAND, ADVOCATE DATE OF HEARING : 06.09.2011 DATE OF PRONOUNCEMENT : 08.09.2011 O R D E R PER HARI OM MARATHA, JUDICIAL MEMBER : THESE ARE TWO APPEALS OF THE REVENUE IN RESPECT OF SAME ASSESSEE IN WHICH IDENTICAL ISSUE, ARISING OUT OF C OMMON SET OF FACTS, IS INVOLVED. FOR THE SAKE OF CONVENIENCE AND BREVI TY, WE PROPOSE TO DECIDE BOTH THE APPEALS BY THIS COMMON ORDER. I.T.A. NOS. 1149 & 1150/MDS/11 2 2. THE ASSESSEE IS A DEALER IN SANITARY WARES. FOR THE SAKE OF HIGHER LOAN LIMIT, THE ASSESSEE WAS IN THE HABIT OF FURNISHING INFLATED STOCKS. ON 9.1.2001, A SEARCH UNDER SECTION 132 OF INCOME-TAX ACT, 1961 (IN SHORT THE ACT) WAS CONDUCTED IN THE BUSI NESS PREMISES OF THE ASSESSEE AND PHYSICAL INVENTORY OF STOCK WAS TA KEN. DURING THIS SURVEY, NO UNACCOUNTED EXCESS STOCK WAS FOUND. BUT , THE A.O. ADDED THE DIFFERENCE BETWEEN THE REAL DECLARED BOOK STOCK AND INFLATED STOCK FURNISHED TO THE BANK AND ALSO REOPE NED THE EARLIER ASSESSMENT AND MADE ADDITIONS. SIMILAR ADDITIONS A RE BEING MADE IN SUBSEQUENT YEARS ALSO. ON THE BASIS OF THE SAME SU RVEY, STOCK INVENTORY AND ON IDENTICAL FACTS, ADDITIONS WERE MA DE AND WHICH WERE DELETED BY THE TRIBUNAL IN ASSESSMENT YEAR 2005-06. THE TRIBUNAL HAS DIRECTED THE A.O. TO DECIDE THE ISSUE IN QUESTI ON AS DIRECTED IN THE ORDER FOR ASSESSMENT YEARS 2000-01 AND 2001-02. THE DIRECTION READS AS UNDER:- THE PERUSAL OF THE TRIBUNAL ORDERS, PRELIMINARILY SH OW THAT THE FACTS IN THIS YEAR ARE ALSO IDENTICAL TO OTHER YEARS EXCEPT THAT IN ASSESSMENT YEAR 2001-02, THERE WAS A SURVEY. BUT IT IS NOT KNOWN AS TO HAVE THIS IS GOING TO MAKE ANY SUBSTANTIAL DIF FERENCE. YET, TO BE JUST AND FAIR, WE RESTORE THIS ENTIRE ISSUE T O THE FILE OF THE ASSESSING OFFICER TO APPLY THE RATIO OF THE TRIBUNAL ORDERS IN QUESTION. IN THE GIVEN FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN ORDER TO MAINTAIN CONSISTENCY, IT IS FOUND TO BE JUST AND I.T.A. NOS. 1149 & 1150/MDS/11 3 FAIR THAT THE ISSUE MAY BE RESTORED TO THE FILE OF T HE ASSESSING OFFICER WITH A DIRECTION THAT HE SHALL APPLY THE RAT IO OF THE ABOVE MENTIONED TRIBUNAL ORDERS RENDERED IN THE CAS E OF THE ASSESSEE FOR ASSESSMENT YEARS 2000-01 & 2001-02 IN T HEIR LETTER AND SPIRIT. HE IS AT LIBERTY TO DISTINGUISH THE FAC TS AS HAS BEEN CANVASSED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE BEFORE US. BUT IN CASE THE FACTS ARE FOUND TO BE EXACTLY S IMILAR, THE ASSESSING OFFICER IS BOUND TO FOLLOW THE ABOVE MENT IONED TRIBUNAL ORDERS. CONSEQUENTLY WE RESTORE THIS APPEA L TO THE ASSESSING OFFICER TO DECIDE THE ISSUE IN QUESTION A S DIRECTED ABOVE. AGAIN, THE A.O. HAS MADE SIMILAR ADDITION, BUT THE TRIBUNAL FOR THE ASSESSMENT YEAR 2002-03 HAS GIVEN THE FOLLOWING FIN DING:- UPON A CAREFUL CONSIDERATION OF THE ISSUE, WE FIND THAT THE AUTHORITIES BELOW HAVE NOT DETECTED ANY MISTAKE OR OMISSION IN THE BOOKS OF ACCOUNTS OR STOCK RECORDS OF THE ASSES SEE. IT IS ALSO NOT THE CASE THAT BANK AUTHORITIES HAVE VERIFI ED THE ASSESSEES STOCK IN RELATION TO THE POSITION AS AT THE CLOSE OF THE YEAR. UNDER SUCH CIRCUMSTANCES, AS EXPOUNDED BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. N. SWAMY 241 ITR 363, THE BURDEN WAS UPON REVENUE TO PROVE THAT THE STOCK SUBMITTED TO THE REVENUE AUTHORITIES WAS ERRONEOUS. THIS BURDEN COULD NOT BE DISCHARGED BY MERELY REFERRING TO THE STATEMENT OF THE ASSESSEE TO THIRD PARTIES. UNDER THE CIRCUMSTANCES AND RESPECTFULLY FOLLOWING THE PRECEDE NT, WE SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DECIDE TH E ISSUE IN FAVOUR OF ASSESSEE. IN THE LIGHT OF THE ABOVE, IT WAS ARGUED THAT THE I SSUE STANDS COVERED BY THE TRIBUNAL ORDER PASSED FOR ASSESSMENT YEAR 20 01-02 IN ASSESSEES CASE IN I.T.A. NO. 2013/MDS/2005 DATED 2 7 TH JULY, 2007 RELATING TO ADDITION ON THE DIFFERENCE BETWEEN STOC K AS PER BOOKS AND I.T.A. NOS. 1149 & 1150/MDS/11 4 STOCK FURNISHED TO THE BANK. IT WAS FOUND THAT THE ISSUE STANDS COVERED IN FAVOUR OF ASSESSEE AND WE DECIDE ACCORDI NGLY BY DISMISSING THE APPEAL OF THE REVENUE. 3. FOR ASSESSMENT YEAR 2008-09 IN I.T.A. NO. 1150/M DS/2011, A SIMILAR ISSUE IS INVOLVED. ON THE BASIS OF SIMILAR REASON, WE DISMISS APPEAL OF THE REVENUE FOR THIS YEAR AS WELL. 4. IN THE RESULT, BOTH THE APPEALS FILED BY THE REV ENUE STAND DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 8 TH SEPTEMBER, 2011. SD/- SD/- (DR. O.K. NARAYANAN) (HARI OM MARATHA) VICE PRESIDENT JUDICIAL MEMBER CHENNAI, DATED THE 8 TH SEPTEMBER, 2011. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-IX, CHENNAI-34 (4) CIT-VIII, CHENNAI-34 (5) D.R. (6) GUARD FILE