R.Sadhasivam, CHENNAI V. ITO, Salem

ITA 1239/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8043 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-11-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 22-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: S SRIDHAR
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . . . , . , & BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.1239/MDS/2015 ( / ASSESSMENT YEAR: 2008-09) MR. R.SADHASIVAM, KATTUVALAVU THOTTAM MUTHUKALIPATTY P.O. RASIPURAM TK VS INCOME TAX OFFICER, WARD-II(2), SALEM. PAN:APDPS8446J ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. S.SRIDHAR, ADVOCATE /RESPONDENT BY : MR. A.V.SREEKANTH, JCIT /DATE OF HEARING : 27 TH NOVEMBER, 2015 /DATE OF PRONOUNCEMENT : 29 TH JANUARY, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY T HE ORDER OF THE LD.CIT(A),SALEM DATED 31.03.2015 IN IT A NO.81/2010-11PASSED UNDER SECTION 143(3) READ WITH SECTION 250 OF THE ACT. 2. THOUGH THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN THE APPEAL, THE CRUX OF THE ISSUE IS THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION OF ` 4,50,000/- MADE BY THE LEARNED 2 ITA NO.1239 /MDS/2015 ASSESSING OFFICER BY ESTIMATING THE EXCESS PURCHASE AMOUNT OF TAPIOCA BY ADOPTING AVERAGE RATE OF ` 175/- PER BAG. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL FILED HIS E-RETURN OF INCOME ON 30.09.20 08 DECLARING INCOME AS ` 36,000/- AND AGRICULTURAL INCOME AS ` 1,68,890/-. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AN D NOTICE UNDER SECTION 143(2) WAS ISSUED TO THE ASSESSEE AND IN RESPONSE TO THAT ASSESSEE FURNISHED NECESSARY DETAI LS AND BOOKS OF ACCOUNTS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE LD. ASSESSING O FFICER THAT THE ASSESSEE HAS PURCHASED TAPIOCA ROOTS @ RS. 190 TO RS 199/- PER BAG FOR THE PERIOD 1.2.2008 TO 19.03.2 008. THE LEARNED ASSESSING OFFICER FURTHER OBSERVED THAT PRI OR TO THE MONTH OF FEBRUARY, THE ASSESSEE WAS PURCHASING THE SAME BETWEEN THE RATES RS.170/- TO RS.180/-. THEREFORE, THE LEARNED ASSESSING OFFICER OPINED THAT THE PURCHASES MADE BY THE ASSESSEE DURING THE MONTH OF FEBRUARY TO MARCH, 2008 HAS BEEN INFLATED AND THEREFORE BY ESTIMATION ADOPT ED AVERAGE RATE OF RS.175/- PER BAG AND THEREBY COMPUT ED 3 ITA NO.1239 /MDS/2015 RS.4,50,000/- AS THE INFLATED PURCHASE BY THE ASSES SEE. ACCORDINGLY, HE MADE THE DISALLOWANCE OF RS.4,50,00 0/-. 4. ON APPEAL, LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ORDER OF THE LEARNED ASSESS ING OFFICER AFTER OBTAINING A REMAND REPORT BY OBSERVI NG AS UNDER:- I HAVE PERUSED THE ASSESSMENT ORDER, THE REMAND RE PORT AND THE SUBMISSIONS OF THE APPELLANT. THE ASSESSING OFFICER HAS IN HIS ORDER MADE A LOGICAL ANALYSIS OF THE FACTS AND CIRCUMSTAN CES OF THE CASE. HE HAS ALSO TAKEN INTO CONSIDERATION OF THE FLUCTUA TION IN PRICE OF SAGO WHILE FIXING THE RATE OF RS.175/-. HE HAS ALSO TAKEN INTO ACCOUNT THE FALL OF GROSS PROFIT RATIO IN THE CURRE NT YEAR. 5. BEFORE US, LEARNED AUTHORIZED REPRESENTATIVE ARG UED BY STATING THAT THE ASSESSEE HAD CLAIMED THE EXPEND ITURE CORRECTLY BY MAINTAINING PROPER BILLS AND VOUCHERS. HE FURTHER SUBMITTED THAT THE LEARNED ASSESSING OFFICER HAS SI MPLY DISALLOWED RS.4,50,000/- BASED ON PRESUMPTIONS. HE THEREFORE PLEADED THAT ADDITION MADE MAY BE DELETED . 6. LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED TH E ORDERS OF THE LOWER AUTHORITIES. 7. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PER USED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS O F THE CASE, IT IS APPARENT THAT THE LEARNED ASSESSING OFFICER H AS SIMPLY 4 ITA NO.1239 /MDS/2015 MADE ADDITION BASED ON CONJECTURES AND SURMISES AND ADOPTED RATE OF TAPIOCA AT RS.170/- PER BAG BASED O N EARLIER PURCHASES. IT IS A KNOWN FACT THAT AGRICULTURAL BAS ED RAW MATERIALS FLUCTUATE IN PRICE THROUGHOUT THE YEAR. C ONSIDERING THESE FACTS, IT CANNOT BE PRESUMED THAT ASSESSEE WO ULD HAVE PURCHASED TAPIOCA ROOTS PER BAG @ RS.170/- PER BAG INSTEAD OF THE VARIOUS RATES CLAIMED BY THE ASSESSEE BETWEE N RS.180 TO RS.190 PER BAG. LEARNED COMMISSIONER OF INCOME T AX (APPEALS) HAS ALSO SIMPLY FOLLOWED THE VIEW OF THE LEARNED ASSESSING OFFICER. IN THESE CIRCUMSTANCES WE DO NO T HAVE ANY OTHER OPTION OTHER THAN TO DELETE THE ADDITION MADE BY THE REVENUE BY SURMISES AND CONJECTURES. ACCORDINGLY WE HEREBY DIRECT THE LEARNED ASSESSING OFFICER TO DELE TE THE ADDITION OF RS. 4,50,000/- MADE ON ACCOUNT OF INFLA TED PURCHASE VALUE OF TAPIOCA ROOTS. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH JANUARY, 2016 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 29 TH JANUARY, 2016 SOMU 5 ITA NO.1239 /MDS/2015 *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF