M/s. Kerala Jewellers, Trichy V. ITO, Trichy

ITA 141/CHNY/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4906 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 15-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 11-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JR
• Assessee Lawyers: V D GOPAL
• Keywords: Tax effect

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL CHENNAI D BENCH, CHENNAI. BEFORE SHRI U.B.S. BEDI, J.M. & SHRI N.S. SAINI, A. M. I.T.A. NO. 141/MDS/2010 ASSESSMENT YEAR: 2006-07 KERALA JEWELLERS, NO. 49, BARATHIAR SALAI, CANTONMENT, TRICHY 620 001. [PAN:AADFK4775K] VS. THE INCOME TAX OFFICER, WARD I(2), RANGE I, NO.4, WILLIAMS ROAD, TRICHIRAPALLI 620 001. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI V.D. GOPAL REVENUE BY : SHRI K.E.B. RENGARAJAN, JR. STANDING COUNSEL ORDER PER U.B.S. BEDI, J.M. THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE LD. CIT(A), TIRUCHIRAPALLI DATED 24.12.2009 RELEVANT TO THE ASSESSMENT YEAR 2006-07, WHEREBY ADDITION OF ` .3,08,340/- MADE AS SALES SUPPRESSION BASED ON THE FINDINGS OF THE SALES TAX AUTHORITIES HAS BEEN CHAL LENGED BY RAISING FOLLOWING 5 GROUNDS: I. THE ORDER OF THE COMMISSIONER (APPEALS), TRICHY, IN ITA NO. 240/08 -09 DATED 24.12.2009, TO THE EXTENT IT IS AGAINST THE APPELLA NT, IS AGAINST LAW, FACTS OF THE CASE AND MATERIAL EVIDENCES ON RECORD. II. THE CIT (A) SHOULD HAVE APPRECIATED THE SUBMI SSION THAT THE VOLUME OF BUSINESS DURING THE PREVIOUS YEAR WAS MORE THAN 11 CORES, MI NOR VARIATION AT .002% IN STOCK WAS UNAVOIDABLE CONSIDERING THE NATURE AND VO LUME OF BUSINESS AND APPELLANT ACCEPTED THE ORDER OF SALES TAX AUTHORITI ES AS THE TAX EFFECT WAS ONLY RS.3,389. III. THE CIT (A) OUGHT TO HAVE APPRECIATED THAT T HE SALES TAX AUTHORITIES MADE AN ADDITION OF RS.L,69,340 TO THE REPORTED TURNOVER ON THE ALLEGED GROUND THAT THEY FOUND EXCESS STOCK TO THAT TUNE AT THE TIME OF INSP ECTION, THAT THE SALES TAX AUTHORITIES DUPLICATED THE SAME ADDITION IN A SUM O F RS.1,39,000 (1,69,340 - GP) ITA ITAITA ITA NO. NO. NO. NO.1 11 14 44 41 11 1/MDS/ /MDS/ /MDS/ /MDS/1 11 10 00 0 2 TOWARDS COST OF PURCHASE OF SUCH EXCESS STOCK AND T HAT THE INCOME TAX OFFICER CONSIDERED THE ENTIRE SALES TAX ADDITION OF RS.3,08 ,340 AS INCOME OF THE APPELLANT. IV. THE CIT (A) SHOULD HAVE ACCEPTED THE SUBMISSI ON THAT SALES TAX AUTHORITIES DID NOT NOTICE ANY PURCHASE OMISSION OR SALES SUPPRESSI ON, THE ADDITION WAS BASED ON ROUGH STOCK TAKEN AT THE TIME OF INSPECTION AND THA T THE INCOME TAX OFFICER WOULD HAVE BEEN JUSTIFIED IN MAKING AN ESTIMATED GROSS PR OFIT ADDITION ON THE ALLEGED ESCAPED TURNOVER. V. THE CIT (A) OUGHT TO HAVE HELD THAT DUPLICATE ADDIT ION IN A SUM OF RS.L,39,000 TOWARDS COST OF EXCESS STOCK ALLEGED TO HAVE BEEN F OUND, WHICH WAS ASSESSED IN A SUM OF RS.L,69,340, WAS UNWARRANTED AND UNJUSTIFIED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASS ESSEE SUBMITTED THAT THE ORDER OF THE ASSESSING OFFICER OF COMMERCIAL TAX DE PARTMENT PASSED UNDER SALES TAX LAW AND FIRST APPELLATE AUTHORITY WERE PL ACED BEFORE THE ASSESSING OFFICER, BUT HE DID NOT CONSIDER THOSE ORDERS PROPE RLY. THEREFORE, IN THE INTEREST OF JUSTICE ORDERS OF AUTHORITIES BELOW SHOULD BE SET A SIDE AND MATTER SHOULD BE RESTORED BACK ON THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO RECONSIDER THE ISSUE AFRESH AND THE LD. DR DID NOT OBJECT TO S UCH PLEA OF THE ASSESSEE AND PLEADED THAT THE MATTER CAN GO BACK TO THE ASSESSIN G OFFICER FOR RECONSIDERATION. 3. AFTER HAVING HEARD BOTH THE SIDES AND CONSIDERI NG THE MATERIAL ON RECORD AS WELL AS GROUNDS RAISED IN HE APPEAL AND ORDERS P ASSED UNDER SALES TAX LAW, WE FIND THAT THE ASSESSING OFFICER HAS NOT PROPERLY DEALT WITH THE ISSUE AS RAISED BY THE ASSESSEE IN THE LIGHT OF ORDER OF FIRST APPE LLATE ASSISTANT COMMISSIONER (CT) UNDER SALES TAX LAW, WHEN THE SAME WAS PRODUCE D BEFORE THE ASSESSING OFFICER AS STATED BY THE LD. COUNSEL FOR THE ASSESS EE AND NOT REFUTED BY THE LD. DR. THEREFORE, KEEPING IN VIEW THE ENTIRETY OF FACT S, CIRCUMSTANCES AND MATERIAL ON RECORD, WE ARE OF THE VIEW THAT IT WOULD MEET TH E ENDS OF JUSTICE IN CASE THE ITA ITAITA ITA NO. NO. NO. NO.1 11 14 44 41 11 1/MDS/ /MDS/ /MDS/ /MDS/1 11 10 00 0 3 ORDERS OF AUTHORITIES BELOW ARE SET ASIDE AND MATTE R IS RESTORED BACK ON THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO REDECID E THE ISSUE AFTER CONSIDERING RELEVANT MATERIAL AND APPELLATE ASSISTANT COMMISSIO NER (CT), TRICHYS ORDER DATED 18.06.2007 AFTER GIVING DUE OPPORTUNITY TO TH E ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. 4. AS A RESULT, THE APPEAL OF THE ASSESSEE GETS AC CEPTED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED SOON AFTER THE CONCLUSION OF HEAR ING ON 15.06.2011. SD/- SD/- (N.S. SAINI) ACCOUNTANT MEMBER (U.B.S. BEDI) JUDICIAL MEMBER VM/- DATED : 15.06.2011. COPY TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.