M/s Aliason Industries, V. The Dy. C I T Sp. R -2,

ITA 141/IND/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1518 (ITAT-INDORE)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2009
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 01-10-2009
• Assessment Year: 1994-1995
• Appeal Filed On: 19-03-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Assessee Lawyers: H P VERMA
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHR I V.K. GUPTA, ACCOUNTANT MEMBER PAN NO. : AAFFA0540A I.T.A.NO. 141/IND/2006 A.Y. : 1994-95 M/S. ALIASONS INDUSTRIES, ACIT 75,H-SECTOR INDUSTRIAL AREA, 1(2), GOVINDPURA, BHOPAL BHOPAL APPELLANT RESPONDENT APPELLANT BY : SHRI H.P.VERMA, ADV. AND SHRI ASHISH GOYAL, C.A. RESPONDENT BY : SMT. APARNA KARAN, ADDL. CIT DR O R D E R PER GUPTA, A.M. THIS APPEAL FILED BY THE ASSESSEE ARISES OUT OF ORDE R OF THE LD. CIT(A)-I, BHOPAL, DATED 16.12.2008, FOR THE ASSESS MENT YEAR 1994-95. -: 2 :- 2 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. 3. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED BY THE DECISION OF THE LD. CIT(A) IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DIFFERENCE IN V ALUATION OF CLOSING STOCK AND IN IGNORING THE AFFIDAVIT FILED BY THE ASSESSEE IN REGARD TO NON SERVICE OF THE NOTICE OF HEARING, W HILE FRAMING THE ASSESSMENT ORDER. 4. THE FACTS, IN BRIEF, ARE THAT IN ORIGINAL ASSESSMEN T PROCEEDINGS, THE LD. CIT(A) HAD DELETED THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF VALUATION OF ST OCK. HOWEVER, THE TRIBUNAL RESTORED THE MATTER BACK TO TH E FILE OF THE A.O. IN THE APPEAL FILED BY THE DEPARTMENT. IN THE C OURSE OF ASSESSMENT IN COMPLIANCE TO THE SAID ORDER OF THE TRI BUNAL, THE A.O. ISSUED THREE NOTICES TO THE ASSESSEE ON 2.9.200 4, 29.10.2004 AND ON 20.2.2006, WHICH REMAINED UNCOMPLIED. THE A.O., ACCORDINGLY, FRAMED THE ASSESSMENT ON THE BASIS OF M ATERIAL ON -: 3 :- 3 RECORD AND MADE THE SAME ADDITION AGAIN. AGGRIEVED BY T HIS, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) , WHEREIN IT WAS SUBMITTED THAT THERE WERE DISPUTES BETWEEN THE PARTNERS, WHICH RESULTED IN TO CLOSURE OF FACTORY AND CONSEQUEN TLY, NOTICES REMAINED UNSERVED AND, THEREFORE, THE ASSESSE E COULD NOT COMPLY, HOWEVER, THERE WERE MATERIAL ON RECORD O N THE BASIS OF WHICH THE A.O. COULD HAVE CORRECTLY VALUED THE CLOSING STOCK. THE ASSESSEE ALSO SUBMITTED DETAILS TO JUSTIFY THE VALUATION OF CLOSING STOCK DONE BY THE ASSESSEE ON THE BASIS OF PRINCIPLE OF COST OR MARKET PRICE, WHICHEVER IS LOWER AND BY A DOPTING AVERAGE COST TO DETERMINE THE COST. THE LD. CIT(A), H OWEVER, HELD THAT THERE WAS NO MERIT IN THE CONTENTIONS OF T HE ASSESSEE REGARDING DENIAL OF OPPORTUNITY AS THE ASSESSMENT OR DER ON THE SAME ADDRESS HAD BEEN SERVED. THE LD. CIT(A) ALSO UPHELD THE ORDER OF THE A.O. ON MERITS. STILL AGGRIEVED, THE ASS ESSEE IS IN APPEAL BEFORE US. -: 4 :- 4 5. THE LEARNED COUNSEL FOR THE ASSESSEE NARRATED THE FA CTS AND SUBMITTED THAT AN AFFIDAVIT HAD BEEN FILED BEFORE TH E LD. CIT(A) NARRATING THE CIRCUMSTANCES IN WHICH NOTICE REMAINED UNSERVED. HOWEVER, THE LD. CIT(A) DID NOT TAKE ANY COG NIZANCE OF THE SAME, HENCE, IN THE ABSENCE OF PROPER SERVIC E OF NOTICE BY OTHER MODES AS WELL, THE ACTION OF THE REVENUE A UTHORITIES WAS NOT JUSTIFIED. IN REGARD TO NECESSITY OF PROPER SERVICE OF NOTICE, HE PLACED RELIANCE ON THE DECISION OF THE HON 'BLE BOMBAY HIGH COURT IN THE CASE OF RASIK LAL AMRITLAL DOSHI, AS REPORTED IN 42 ITR 35 AND ALSO ON THE DECISION OF M.P. HIGH COURT IN THE CASE OF CIT VS. SATRAM DAS MOHANSIDDI A S REPORTED IN 230 ITR 591. THE LEARNED COUNSEL FOR THE ASSESSEE , THEREAFTER, JUSTIFIED THE VALUATION OF CLOSING STOCK BY DRAWING OUR ATTENTION TO PURCHASE BILLS DATED 14.2.1994 AND 26.2.1994 PLAC ED AT PAGES 13 & 12 OF THE PAPER BOOK RESPECTIVELY. HE AL SO DREW OUR ATTENTION TO THE EARLIER ORDER OF THE TRIBUNAL, WHER EIN THE TRIBUNAL HAD DIRECTED THE A.O. TO VERIFY RATES FROM P URCHASE BILLS -: 5 :- 5 AND TO PROVIDE OPPORTUNITY OF BEING HEARD TO THE ASSES SEE AND IN THE LIGHT OF THESE DIRECTIONS, HE CONTENDED THAT T HE MATTER COULD BE RESTORED BACK TO THE FILE OF A.O. AGAIN. 6. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, CONTENDED THAT ONLY TWO BILLS HAD BEEN SUBMITTED A ND THAT TOO PERTAINED TO ONLY TWO ITEMS. HENCE, THE A.O . RIGHTLY ADOPTED THE COST PRICE AS PER OPENING RATE. SHE ALSO CONTENDED THAT ONCE THE ASSESSMENT ORDER COULD BE SERVE D ON THE SAME ADDRESS, WHY THE NOTICES COULD NOT BE SERVED, WHICH FACT SHOWED THAT IT WAS AN INTENTIONAL ACTION ON THE PART OF THE ASSESSEE TO NOT TO RECEIVE THE NOTICES, HENCE, IT W AS NOT A CASE OF NO OPPORTUNITY OF HEARING AS CANVASSED BY THE ASS ESSEE. SHE FURTHER PLACED STRONG RELIANCE ON THE ORDER OF THE LD. CIT(A). 7. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES. IT IS NOTED THAT THIS ISSUE AROSE BEFORE THE TRIBUNAL, WHEREIN THE METHOD OF VALUATION OF STOCK AT COST OR MARKET P RICE WAS ACCEPTED. HOWEVER, THE TRIBUNAL FOUND THAT MARKET PRI CE WAS -: 6 :- 6 NOT PROPERLY ESTABLISHED BEFORE THE A.O. AND IN THA T CIRCUMSTANCES, THE TRIBUNAL RESTORED THE MATTER BACK TO THE FILE OF THE A.O. FOR PROPER VERIFICATION OF THE MARKET R ATES/PURCHASE RATES FOR THE PURPOSE OF PROPER VALUATION OF CLOSI NG STOCK. THE TRIBUNAL ALSO DIRECTED THE A.O. TO GIVE AN ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. IT IS NOTED THAT THE ASSESSMENT ORDER IN COMPLIANCE TO THE TRIBUNALS DIRE CTION HAS BEEN PASSED ON 24.3.2006, WHICH HAS BEEN RECEIVED BY THE ASSESSEE. HOWEVER, NOTICE OF HEARING ISSUED BY THE ASSESSING OFFICER ON 20 TH MARCH, 2006, HAS REMAINED UNSERVED, WHICH MAKES IT ABUNDANTLY CLEAR THAT THE ASSESSEE DID NOT R ECEIVE THE NOTICE INTENTIONALLY. HENCE, THE CONTENTION OF THE ASSESSEE REGARDING DENIAL OF OPPORTUNITY IS NOT ACCEPTABLE. W E FURTHER FIND THAT IN THE AFFIDAVIT FILED BY THE ASSESSEE, IT IS MENTIONED THAT THE FACTORY WAS CLOSED SINCE SEPTEMBER, 2004, A ND REMAINED CLOSED TILL DATE OF AFFIDAVIT I.E. 14.9.2006, WHICH FACT FURTHER SUPPORT THE VIEW EXPRESSED BY US HEREIN BEFO RE. WE -: 7 :- 7 FURTHER FIND THAT NO SPECIFIC DATE OF SEPTEMBER, 2004 , HAS BEEN MENTIONED AND, THEREFORE, THIS AFFIDAVIT DOES NOT JUS TIFY THE CLAIM OF THE ASSESSEE REGARDING DENIAL OF OPPORTUNIT Y AS FIRST NOTICE AS PER THE ASSESSMENT ORDER HAS BEEN ISSUED ON 2 ND SEPTEMBER, 2004. HAVING STATED SO, NOW ON MERITS, WE FIND THAT ONLY TWO BILLS HAVE BEEN PRODUCED BEFORE THE A.O. IN THE COURSE OF ORIGINAL PROCEEDINGS AND AFTER CONSIDERING THOSE TWO BILLS, THE TRIBUNAL SENT THE MATTER BACK TO THE FIL E OF THE A.O. HOWEVER, NO OTHER EVIDENCE IN THE FORM OF QUOTATIONS OF NEWS PAPERS OR PURCHASE/SALE BILLS IN THE MONTHS OF MARC H, 2004 OR APRIL, 2004, TO SUBSTANTIATE ITS CLAIM REGARDING TH E RATE ADOPTED BY THE ASSESSEE FOR VALUING CLOSING STOCK, HAVE BEE N PRODUCED AT ANY STAGE. HENCE, WE DO NOT FIND ANY MERIT IN THIS CONTENTION OF THE ASSESSEE, HENCE, THE SAME REJECTED. AS REGARDS THE MERITS OF THE ISSUE, WE FIND THAT IN THE ABSENCE OF PROPER EVIDENCES, BEING BROUGHT ON RECORD BY THE ASSESSEE TH E RATE -: 8 :- 8 ADOPTED BY THE ASSESSING OFFICER HAS TO BE ACCEPTED. ACCORDINGLY, WE CONFIRM THE ORDER OF THE LD. CIT(A). 8. THUS, ALL THE GROUNDS FILED BY THE ASSESSEE STAND DISMISSED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 9 TH OCTOBER , 2009. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED :9 TH OCTOBER, 2009. CPU* 1D510