The Dy./ACIT, 3(1), Bhopal V. M/s. Genda Lal Hazarilal & Company, Sehore

ITA 1320/IND/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0109 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-12-2018
• Assessment Year: 2009-2010
• Appeal Filed On: 28-11-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K G GOYAL
• Section: 143(3); 147; 148

Judgement Text

GENDA LAL HAZARILAL & COMPANY ITA NO.1320/IND/2016 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.1320/IND/2016 ASSESSMENT YEAR 2009-10 REVENUE BY S HRI K.G. GOYAL , SR.DR ASSESSEE BY SHRI MANOJ F ADNIS ,CA DATE OF HEARING 10 .1 2 . 2018 DATE OF PRONOUNCEMENT 11 .12. 2018 O R D E R PER MANISH BORAD, AM. THE ABOVE CAPTIONED APPEAL IS FILED AT THE INSTANCE OF REVENUE PERTAINING TO ASSESSMENT YEAR 2009-10 AND IS DIREC TED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS)- 2 (APPEALS)(IN SHORT LD.CIT(A)], BHOPAL DATED 27.09.2016 WHICH I S ARISING OUT OF THE ORDER U/S 147 R.W.S. 143(3) OF THE INCOME TAX ACT 1961(IN SHORT THE ACT) DATED 11.02.2015 FRAMED BY ACIT-3(1), BH OPAL. 2. THE SOLE GROUND RAISED BY THE REVENUE IS AS UNDE R; ASSISTAN T COMMISSIONER OF INCOME TAX 3(1), BHOPAL VS. GENDA LAL HAZARILAL & COMPANY, BARIAKHEDI, SEHORE ( APPELLANT ) (RESPONDENT ) PAN NO. A ADFG3039M GENDA LAL HAZARILAL & COMPANY ITA NO.1320/IND/2016 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , WHETHER LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.46,11, 148/- MADE BY AO ON ACCOUNT OF GROSS PROFIT WHICH WAS NOT OFFERED FOR T AXATION. 3. BRIEFLY STATED FACTS AS CULLED OUT FROM THE RECO RDS ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSIN ESS OF SALE AND PURCHASE OF LIQUOR. RETURN OF INCOME DECLARING INC OME OF RS.1,21,41,551/- WAS FILED FOR ASSESSMENT YEAR 2009 -10 ON 23.09.2009. ASSESSMENT U/S 143(3) OF THE ACT WAS C OMPLETED ON 21.12.2011 ASSESSING INCOME OF RS.2,98,76,890/-. S UBSEQUENTLY LEARNED ASSESSING OFFICER (IN SHORT LD.A.O) ON OB SERVING THAT THERE IS A MISMATCH OF THE PURCHASE SHOWN IN THE FINANCIA L STATEMENTS AS AGAINST PURCHASES APPEARING IN FORM NO.26AS, ISSUED NOTICE U/S 148 OF THE ACT DATED 21.03.2014 FOR THE ALLEGED ESC APEMENT OF INCOME OF RS.61,11,148/-. 4. IN RESPONSE THERE TO, REPLY WAS FURNISHED FOLLOW ED BY FILING INCOME TAX RETURN FILED IN COMPLIANCE OF NOTICE U/ S 148 SHOWING AT RS.1,21,41,551/-. RECONCILIATION OF THE PURCHASE W AS DULY SUBMITTED IN ORDER TO PROVE THAT NO ADDITION WAS CA LLED FOR. HOWEVER THE REPLY WAS NOT ACCEPTABLE TO THE LD. A. O AND HE ON THE BASIS OF ALLEGED DIFFERENCE OF RS.84,49,668/- IN RE SPECT OF PURCHASE GENDA LAL HAZARILAL & COMPANY ITA NO.1320/IND/2016 3 OF LIQUOR ASSUMED THE UNACCOUNTED SALES AT RS.1,39, 85,890/- AND MADE ADDITION OF GROSS PROFIT OF RS.46,11,148/- BY APPLYING GROSS PROFIT RATE AT 33.97%. INCOME ASSESSED AT RS.1,81, 41,818/- 5. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD.CI T(A) AND SUCCEEDED ON THE GROUND RELATING TO THE ALLEGED ADD ITION OF RS.46,11,148/- BUT LD. CIT(A) HAS SUSTAINED THE ADD ITION MADE BY LD.A.O AT RS.2,82,339/- FOR DIFFERENCE IN PURCHASE . THE ALLEGED ADDITION MADE BY LD. CIT(A) HAS NOT BEEN CHALLENGED BEFORE US AND ONLY THE REVENUE IS IN APPEAL AGAINST THE DELETION OF ADDITION MADE AT RS.46,11,148/-. 6. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUE D SUPPORTING THE FINDING OF LD.A.O. 7. PER CONTRA THE LD. COUNSEL FOR THE ASSESSEE RELI ED ON THE FINDING OF LD.CIT(A) AND ALSO SUBMITTED THAT NECES SARY RECONCILIATION STATEMENT OF PURCHASE DULY FILED WHI CH INDICATED THAT THE PURCHASES AS SHOWN IN THE BOOKS OF ACCOUNT ARE ALMOST SAME TO THE PURCHASES APPEARING IN FORM 26AS EXCEPT FOR A D IFFERENCE OF RS.2,82,399/-. GENDA LAL HAZARILAL & COMPANY ITA NO.1320/IND/2016 4 8. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. THE REVENUE IS IN APPEAL AGAINST THE FINDING OF LD.CIT(A) DELETING THE ADDITION OF RS.46,11,148/- M ADE BY THE LD.A.O BY APPLYING THE GROSS PROFIT RATE @ 32.97% O N THE ESTIMATED UNACCOUNTED SALE OF LIQUOR AT RS.1,39,85,890/- WHIC H WAS BASED ON THE ALLEGED DIFFERENCE IN PURCHASES AMOUNTING TO RS .84,49,668/- APPEARING IN THE BOOKS OF ACCOUNTS VIS--VIS PURCHA SES APPEARING IN FORM 26AS FOR THE TAX COLLECTED AT SOURCE. 9. WE FIND THAT THE FOLLOWING RECONCILIATION OF STA TEMENT FOR PURCHASE WAS FILED BEFORE LD.CIT(A) BY THE ASSESSEE ; S.NO. PARTICULARS AMOUNT 1 PURCHASES AS PER BOOKS 16,13,98,798 2 AS PER FORM NO.26AS THE PURCHASES ARE RS.167881298/- AND NOT RS.16,98,48,464/- . HENCE THE DIFFERENCE RS.1967166 19,67, 166 3 AMOUNT OF TRADE/QUANTITY DISCOUNT CREDITED IN OUR LEDGER IN PURCHASES IFFL ACCOUNT 44,60,671 4 AMOUNT OF PURCHASES ON WHICH NO ISSUE FOR LIQUOR IS LIFTED AS PER CERTIFICATE OF EXCISE DEPARTMENT 17,37,492 TOTAL ADJUSTED AMOUNT OF PURCHASES AS PE R BOOKS OF ACCOUNTS 16,95,66,125 10. WE FURTHER FIND THAT THE FOLLOWING FINDING OF L D.CIT(A) DELETING THE ADDITION OF RS.46,11,148/- HAS NOT BEEN CONTRO VERTED BY LD. GENDA LAL HAZARILAL & COMPANY ITA NO.1320/IND/2016 5 DEPARTMENTAL REPRESENTATIVE. 4.6 I HAVE CONSIDERED THE REASONING GIVEN IN THE A SSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE AO HAS NOT DI SCUSSED OR REBUTTED THE EXPLANATION GIVEN BY THE ASSESSEE DURING ASSESS MENT PROCEEDINGS. THE ADDITION HAS BEEN MADE SIMPLY STATING THAT THE ASSESSEE COULD NOT SUBSTANTIATE THE DIFFERENCE OF RS.84,49,668 WITH DO CUMENTARY EVIDENCE. IT IS SEEN THAT THE ONLY DOCUMENT AVAILABLE WITH THE A O WHICH HAS BEEN MADE THE BASIS FOR THE ADDITION IS FORM 26AS GIVING DETAILS OF TCS ON THE VALUE OF PURCHASES MADE BY THE APPELLANT DURING THE F. Y. 2008-09. THE AO HAS FIRST ESTIMATED THAT AGAINST THE DIFFERENCE IN PURCHASES AMOUNTING TO RS.84,49,668/-, THE CORRESPONDING UNACCOUNTED SA LE OF LIQUOR WOULD HAVE BEEN RS.1,39,85,890/-. THEREAFTER, HE HAS ESTI MATED THE GROSS PROFIT ON THE ESTIMATED SALES OF RS. 1,39,85,590/- @ 32.97 % AND THUS MADE AN ADDITION OF RS.46,11,148 AS UNDISCLOSED GROSS PROFI T. THE ADDITION OF RS.46,11, 148/- IS THUS AN ESTIMATE OF GROSS PROFIT ON ESTIMATED SALES. THE BOOKS OF ACCOUNTS HAVE NOT BEE N REJECTED U/S 145(2). THE ADDITION IS BASED SOLELY UPON THE DIFFERENCE IN PURCHASES AS PER FORM 26AS AND AS SHOWN IN THE P & L ACCOUNT. REGARDING IMFL, THE SUBMISSION OF THE APPELLANT THA T THE PURCHASES REFLECTED IN .FORM 26AS ARE RS.16,78,81,298/- AND N OT RS.16,98,48,464/- AS TAKEN BY THE AO IN FOUND TO BE CORRECT. FURTHER, A REFERENCE TO THE PURCHASE ACCOUNT OF IMFL SHOWS THAT THE TOTAL PURCH ASES DEBITED TO THE PURCHASE ACCOUNT ARE TO THE TUNE OFRS.2,98,85,4701- . AT THE SAME TIME, CREDIT NOTES TOTALING RS.44,60,6711- HAVE BEEN CRED ITED TO THE PURCHASE ACCOUNT OF IMFL. IT LEAVES THE NET PURCHASES AT RS. 2,54,24,7991-. SINCE THE APPELLANT HAS CLAIMED LESS PURCHASES THAN THE P URCHASES AS PER FORM NO. 26AS, THERE IS NO ELEMENT OF UNDER- DISCLOSURE OF INCOME. GENDA LAL HAZARILAL & COMPANY ITA NO.1320/IND/2016 6 REGARDING THE PURCHASE OF COUNTRY LIQUOR, THE APPEL LANT HAS FILED A CERTIFICATE FROM THE STATE EXCISE DEPARTMENT, DISTT . SEHORE, CONFIRMING THAT DURING THE F.Y. 2008-09, THE APPELLANT DEPOSITED LI CENSE FEE OF RS.13,71,76,887 IN RESPECT OF COUNTRY LIQUOR. HOWEV ER, STOCKS WERE LIFTED FOR RS.13,54,39,395/- ONLY AND STOCKS WERE NOT LIFT ED FOR RS.17,37,492/-. AS STATED BY LD. AR, SINCE THE STOCKS WERE NOT LIFT ED, THE AMOUNT OF RS.17,37,492/- WAS NOT SHOWN UNDER THE HAD PURCHASE S BUT UNDER THE HAD LICENSE FEE PAID. THE EXPLANATION OF THE APPELL ANT IS ACCEPTABLE IN VIEW OF THE CERTIFICATE OF THE EXCISE AUTHORITIES. IN VIEW OF THE ABOVE FACTS, IT IS HELD THAT THE APP ELLANT HAS SATISFACTORILY EXPLAINED DIFFERENCE IN PURCHASES TO THE EXPENT OF RS. 19,67,166 + RS.44,60,671 + RS.L7,37,4.92 = RS.16,95,66,125/-. T HE ADDITION OF RS.46,11,148/- MADE BY THE AO ON ACCOUNT OF GROSS P ROFIT ON ESTIMATED SALES CORRESPONDING TO THE DIFFERENCE IN PURCHASES IS DELETED. 11. WE THEREFORE IN THE GIVEN FACTS AND CIRCUMSTAN CES OF THE CASE AS WELL AS GOING THROUGH THE FINDING OF LD.CIT(A) A RE OF THE VIEW THAT THE ASSESSEE HAS SUCCESSFULLY PROVED THAT THERE IS NO MAJOR DIFFERENCE IN THE PURCHASES AS REFLECTED IN FORM 26 AS AND THE BOOKS OF ACCOUNTS EXCEPT FOR A MINOR DIFFERENCE OF RS.2,82,389/- WHICH HAS ALREADY BEEN ADDED BY LD.CIT(A) TO THE IN COME DISCLOSED BY THE ASSESSEE AND THE FINDING OF THE LD.CIT(A) HA S NOT BEEN CONTROVERTED BY THE DEPARTMENTAL REPRESENTATIVE. W E THEREFORE FIND NO REASON TO INTERFERE IN THE FINDING OF LD.CIT(A) DELETING THE ADDITION OF RS.46,11,148/- MADE BY THE LD.A.O ON AC COUNT OF GENDA LAL HAZARILAL & COMPANY ITA NO.1320/IND/2016 7 ESTIMATION OF GROSS PROFIT ON THE ESTIMATED SALES C ALCULATED ON THE BASIS OF ALLEGED DIFFERENCE IN PURCHASES. 12. IN THE RESULT THE APPEAL OF THE REVENUE STANDS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 11.12.20 18. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 11 DECEMBER, 2018 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE