JASBIR SINGH BHASIN, RAIPUR V. I.T.O. Ward 1(2), RAIPUR

ITA 131/BIL/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7767 (ITAT-RAIPUR)
• Duration Of Justice: 2 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 15-10-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHEETAL SHASHWAT
• Assessee Lawyers: S C MAHESHWA RI
• Keywords: Opportunity of being heard
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH , RAIPUR BEFORE S HRI N.K. BILLAIYA (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 131 /RPR /20 1 5 ASSESSMENT YEAR: 2011 - 12 SHRI JASBIR SINGH BHASIN, PROP. KESAR AUTO PARTS, NEW BOMBAY MARKET, RAIPUR (C.G.) PAN: A DLPB6851A VS. THE INCOME TAX OFFICER, CENTRAL REVENUE BUILDING, CIVIL LINES, RAIPUR (C.G.) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.C. MAHESHWARI ( CA ) REVENUE BY : MS. SHEETAL SHASHWAT (DR ) DATE OF HEARING: 08 /03 /201 8 DATE OF PRONOUNCEMENT: 08 / 06 /201 8 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST ORDER DATED 19.08.2015 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS), RAIPUR , FOR THE A S S ESSMENT YEAR 2011 - 12 , WHEREBY THE LD. CIT (A) HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE AGAINST ASSESSMENT ORDER PASSED BY THE AO U/S 143 (3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE A CT). 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CA RRYING ON RETAIL TRADING OF MOTOR PARTS, FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING THE TOTAL INCOME OF RS. 6,85,590/ - . THE CASE WAS SELECTED FOR SCRUTINY. SINCE, THE ASSESSEE FAILED TO PAY THE TAX ON THE INCOME VOLUN TARILY SURRENDERED DURING SURVEY PROCEEDINGS U/S 133A, THE AO ADDED BACK THE WHOLE AMOUNT OF RS. 26,52,812/ - 2 ITA NO. 131 / RPR /201 5 ASSESSM ENT YEAR: 20 11 - 1 2 SURRENDERED DURING THE COURSE OF SURVEY PROCEEDINGS, TO THE INCOME OF THE ASSESSEE. THE AO FURTHER MADE ADDITION OF RS. 50,000/ - OUT OF THE TOTAL E XPENSES OF RS. 4,47,595/ - CLAIMED BY THE ASSESSEE. AFTER MAKING THE AFORESAID ADDITION, THE AO DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS. 33,88,400/ - . THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE LD. CIT (A). THE LD.CIT (A) AFTER HEARING THE ASSESSEE DISMISSED THE APPEAL AND CONFIRMED THE ADDITIONS MADE BY THE AO. AGAINST THE SAID ORDER PASSED BY THE LD. CIT (A) IS IN APPEAL BEFORE THE TRIBUNAL. 3. T HE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL ON THE FOLLOWING EFFECTIVE GROU ND : - 1. IN THE FACTS AND CIRCUMSTANCES THAT THE ADDITION OF RS. 26,52,812/ - FOR UNDISCLOSED STOCK AS DISCUSSED IN PARA 4.3 OF THE ASSESSMENT ORDER MAINTAINED BY THE CIT (APPEALS) MAY BE DELETED. 2. IN THE FACTS AND CIRCUMSTANCES THE ADDITION OF RS. 50,000/ - F OR DISALLOWANCE OUT OF RS. 54,955/ - AS HAMMALI EXPENSES, RS. 2,02,517/ - AS CONVEYANCE EXPENSES, RS. 80,732/ - AS OFFICE EXPENSES, RS. 77,221/ - AS TELEPHONE AND MOBILE EXPENSES, RS. 3,21,170/ - AS TRAVELLING EXPENSES (TOTAL RS. 4,47,595/ - ) AS PER PARA 5 OF TH E ASSESSMENT ORDER MAINTAINED BY THE CIT (APPEALS) MAY BE DELETED. 4. BEFORE US THE LD. COUNSEL FOR THE ASSESSE E SUBMITTED THAT THE LD. CIT (A) HAS WRONGLY CONFIRMED THE ADDITION OF RS. 26,52,812/ - . THE TOTAL STOCK DURING THE SURVEY WAS RS. 1,30,44,509/ - WHICH WAS REFLECTED AS CLOSING STOCK ON 25.01.2011 IN THE TRADING ACCOUNT. IN THE SAID ACCOUNT FOR PERIOD 26.01.2011 TO 31.03.2011 THE OPENING STOCK WAS ALSO RS. 1,30,44,509/ - . THEREFORE, THE STOCK AND CASH FOUND IN SURVEY WERE FULLY 3 ITA NO. 131 / RPR /201 5 ASSESSM ENT YEAR: 20 11 - 1 2 SHOWN IN THE ACCOUNT S AND THE INCOME TAX RETURN. THE RECONCILIATION SUBMITTED BY THE ASSESSEE SHOWS THAT THE GOODS WERE RECEIVED , DELIVERED AND BROUGHT TO BUSINESS PLACE BEFORE THE SURVEY. FROM THE AMOUNT OF RS. 26,52,812/ - THE PURCHASES OF RS. 25,92,122/ - HAVE BEEN REFLECTED IN THE RECONCILIATION STATEMENT AND THE REMAINING RS. 60,690/ - HAS BEEN DULY REFLECTED IN THE BOOKS OF ACCOUNT. THE LD. COUNSEL FURTHER SUBMITTED THAT IN VIEW OF THE AFORESAID FACTS, THE FINDINGS OF THE LD. CIT(A) IS LIABLE TO BE SET ASIDE AND THE ADDITIO N IS LIABLE TO BE DELETED. 5. SO FAR AS THE ADDITION OF RS. 50,000 IS CONCERNED, THE LD. COUNSEL SUBMITTED THAT THE LD.CIT (A) HAS WRONGLY CONFIRMED THE ADDITION OF RS. 50,000/ - ON ACCOUNT OF DISALLOWANCE MADE BY THE AO @ 10% OUT OF THE TOTAL EXPENSES OF RS. 4,47,595/ - INCURRED EXCLUSIVELY FOR THE BUSINESS OF THE ASSESSEE . THE LD. COUNSEL FURTHER SUBMITTED THAT SINCE THE AO HAS NOT REJECTED THE BOOKS OF ACCOUNT, THE LD. CIT(A) HAS WRONGLY CONFIRMED THE ADDITION. 6. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) RELYING ON THE FINDINGS OF THE AUTHORITIES BELOW SUBMITTED THAT SINCE THE ASSESSEE HAS FAILED TO PAY TAX AS PER THE INCOME SURRENDERED DURING THE SURVEY ACTION AND FURTHER FAILED TO JUSTIFY ITS ACTION , THE LD. CIT (A) HAS RIGHTLY CONFIR MED THE ADDITION OF RS. 26,52,812/ - . SIMILARLY, SINCE THE ASSESSEE HAS FAILED TO PRODUCE THE COMPLETE VOUCHERS AND OTHER DOCUMENTS TO ESTABLISH THAT THE EXPENSES CLAIMED WERE INCURRED EXCLUSIVELY FOR THE PURPOSES OF THE BUSINESS, T HE LD. CIT (A) HAS RIGHTL Y CONFIRMED THE ADDITION MADE BY THE AO ON ACCOUNT OF DISALLOWANCE MADE @ 10% OUT OF TOTAL EXPENDITURE CLAIMED BY THE ASSESSEE. 4 ITA NO. 131 / RPR /201 5 ASSESSM ENT YEAR: 20 11 - 1 2 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO GONE THROUGH THE MATERIAL ON RECORD IN THE LIGHT OF THE RESPECTIVE SUBMISSIONS OF THE PARTIES. VIDE FIRST GROUND OF APPEAL , THE ASSESSEE HAS CHALLENGED THE ACTION OF THE LD. CIT(A) IN CONFIRMING THE ADDITION OF RS. 26,52,812/ - ON THE GROUND THAT THE ASSESSEE HAS SURRENDERED THE UNDISCLOSED STOCK. AS PER AO , DURING SURVEY ACTION THE A SSESSEE SURRENDERED UNDISCLOSED STOCK WORTH RS. 26,52,812/ - AND CASH OF RS. 1,49,441/ - , HOWEVER, THE ASSESSEE DID NOT TA KE INTO ACCOUNT THE SAID STOCK AND AMOUNT IN ITS RETURN OF INCOME. THE ASSESSEE CONTENDED THAT THE STOCK AND CASH FOUND IN SURVEY HAS BE EN SHOWN IN THE ACCOUNTS AND THE RETURN OF INCOME. THE TOTAL STOCK IN SURVEY WAS RS. 1,30,44,509/ - WHICH HAS BEEN REFLECTED AS CLOSING STOCK ON 25.01.201 1 . THE AO REJECTING THE CONTENTION OF THE ASSESSEE MADE ADDITION IN QUESTION . IN THE FIRST APPEAL, T HE L D CIT(A) DID NOT FIND ANY MERIT IN THE CONTENTION OF THE ASSESSEE AND CONFIRMED THE ADDITION. 8. DURING THE COURSE OF ARGUMENTS THE LD. COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO THE COPY RECONCILIATION STATEMENT/PURCHASE DETAILS AT PAGE 54 AND 55 OF THE PAPER BOOK AND THE COPIES OF CREDIT MEMOS AT PAGE 56 TO 156 OF THE PAPER BOOK AND SUBMITTED THAT THE GOODS WORTH RS. 25,92,122/ - WERE PHYSICALLY RECEIVED BEFORE THE SURVEY BUT WERE ENTERED THE IN ACCOUNTS AFTER SURVEY AND THE BALANCE WAS DULY REFLEC TED IN BOOKS OF ACCOUNT. THE LD. COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE HAS EXPLAINED THE SAME DURING THE ASSESSMENT PROCEEDINGS AND IN ORDER TO SUBSTANTIATE HIS CONTENTION INVITED OUR ATTENTION TO THE COPY OF REPLY SUBMITTED BEFORE THE AO IN RESPONSE TO THE NOTICE U/S 142(1) OF THE ACT . HOWEVER, THE AUTHORITIES BELOW HAVE DECIDED THE ISSUE WITHOUT TAKING INTO CONSIDERATION THE SAID PLEA OF THE ASSESSEE. WE ALSO NOTICE 5 ITA NO. 131 / RPR /201 5 ASSESSM ENT YEAR: 20 11 - 1 2 THAT THE AUTHORITIES BELOW HAVE NOT CONSIDERED THE RECONCILIATION STATEMENT AND OTHE R DOCUMENTS SUBMITTED BY THE ASSESSEE . HENCE , WE SET ASIDE THE FINDINGS OF THE LD. CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE AO TO DECIDE THE ISSUE AFRESH IN THE LIGHT OF THE RECONCILIATION/ DETAILS OF PURCHASES REFERRED ABOVE AFTER DUE VERIFICATION AND AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9. SO FAR AS THE SECOND GROUND IS CONCERNED, THE LD. CIT(A) HAS CONFIRMED THE ADDITION OF 10% OF TOTAL EXPENSES CLAIMED BY THE ASSESSEE HOLDING THAT PROPER BILLS AND VOUC HERS WERE NOT PRODUCED BY THE ASSESSEE. MOREOVER, USE OF TELEPHONE AND TRAVELLING FOR PERSONAL PURPOSES CANNOT BE RULED OUT. THOUGH LD. COUNSEL DID NOT POINT OUT ANY SPECIFIC EVIDENCE TO REBUT THE FINDINGS OF THE LD. CIT(A). HOWEVER, SIN CE THE AO HAS DISAL LOWED THE ADDITION ON AD HOC BASIS, IN OUR CONSIDERED VIEW THE SAME IS ON HIGHER SIDE. WE THEREFORE MODIFY THE ORDER OF THE LD. CIT(A) AND RESTRICT THE ADDITION TO 5% OF THE TOTAL AMOUNT OF EXPENSES CLAIMED BY THE ASSESSE E . IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR A SSESSMENT YEAR 2011 - 12 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 8TH JUNE , 2018 . SD/ - SD/ - ( N.K. BILLAIYA) ( RAM LAL NEGI ) ACCOUNTA NT MEMBER JUDICIAL MEMBER RAIPUR, DATED: 08 / 06 / 201 8 6 ITA NO. 131 / RPR /201 5 ASSESSM ENT YEAR: 20 11 - 1 2 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , RAIPUR / DR, ITAT, RAIPUR 6. / GUARD FILE . / BY ORDE R, //TRUE COPY// / (DY./ASSTT. REGISTRAR) / PS , RAIPUR / ITAT, RAIPUR