D.Satyadas, Mahaboobnagar V. Income Tax Officer, Ward-2, Mahaboobnagar

ITA 143/Hyd/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8747 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 08-01-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 17-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJAT MISHRA
• Keywords: Condonation of delay
• Section: 133A; 234B; 148

Judgement Text

ITA NO 143 OF 2018 D SATYADAS MAHABOOBNAGAR. PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A SMC BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO.143/HYD/2018 ASSESSMENT YEAR: 2013-14 SHRI D. SATYADAS MAHABOOBNAGAR PAN:AGYPD0005A VS. INCOME TAX OFFICER WARD-2 MAHABOOBNAGAR (APPELLANT) (RESPONDENT) ASSESSEE BY: SMT. S. SANDHYA REVENUE BY : SRI RAJAT MISHRA, DR DATE OF HEARING: 08/01/2020 DATE OF PRONOUNCEMENT: 17/01/2020 ORDER THIS IS ASSESSEES APPEAL FOR THE A.Y 2013-14 AGAIN ST THE ORDER OF THE CIT (A)-10, HYDERABAD, DATED 31.08 .2017. 2. AT THE OUTSET IT IS SEEN THAT THERE IS A DELAY O F 12 DAYS IN FILING OF THE APPEAL AND THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY STATING THAT THE PERIOD OF 60 DAYS FOR FILING OF THE APPEAL BEFORE THE TRIBUNAL ENDED ON 05.01.2018 BUT SINCE HE WAS NOT WELL AND THE DOCTOR ADVISED HIM BED REST, H E COULD NOT FILE THE APPEAL IMMEDIATELY AND HENCE THERE IS A DE LAY OF 12 DAYS IN FILING OF THE APPEAL. A MEDICAL CERTIFICATE IS A LSO ANNEXED TO THE CONDONATION DELAY PETITION. TAKING THE SAME INTO CO NSIDERATION, I AM INCLINED TO CONDONE THE DELAY AND DISPOSE OF THE APPEAL ON MERIT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PROPRIETOR OF M/S. MADHAVA CLOTH MERCHANTS DOING CL OTH BUSINESS ITA NO 143 OF 2018 D SATYADAS MAHABOOBNAGAR. PAGE 2 OF 5 IN MAHABOOBNAGAR. THE ASSESSEE FILED HIS RETURN OF INCOME ON 12.3.2015 ADMITTING A TOTAL INCOME OF RS.8,01,219/- . THERE WAS A SURVEY ACTION U/S 133A IN THE BUSINESS PREMISES OF M/S. NEW MADHAVA CLOTH MERCHANTS, MAHABOOBNAGAR ON 7.11.2012 DURING THE COURSE OF WHICH, IT WAS FOUND THAT THE ASSESSEE WAS NOT MAINTAINING PROPER BOOKS OF ACCOUNT AND THAT AS ON THE DATE OF SURVEY, THE SAME WERE NOT UPDATED. AS PER THE INVEN TORY, THE CLOSING STOCK WAS ARRIVED AT RS.1,31,12,560/-. SINC E THE ASSESSEE DID NOT FILE THE RETURN OF INCOME FOR THE A.Y 2013- 14, A NOTICE U/S 148 WAS ISSUED TO THE ASSESSEE ON 13.01.2014, IN RE SPONSE TO WHICH, THE ASSESSEE FILED THE COPY OF THE RETURN OF INCOME ON 12.03.2015. 4. AFTER EXAMINING THE IMPOUNDED MATERIAL FOUND DUR ING THE COURSE OF SURVEY, BOOKS OF ACCOUNT AND THE INFO RMATION FILED BY THE ASSESSEE, THE AO FOUND THAT THE CLOSING STOC K AS PER THE BOOKS WAS ARRIVED AT RS.1,03,68,400/- WHEREAS THE C LOSING STOCK FOUND AT THE TIME OF SURVEY WAS RS.1,31,12,560/- AN D THEREFORE, THE DIFFERENCE IN CLOSING STOCK WAS RS.27,44,160/-. THE ASSESSEE WAS THEREFORE, ASKED TO SHOW CAUSE AS TO WHY THE DI FFERENCE OF RS.27,44,160/- SHOULD NOT BE ADDED BACK TOWARDS THE EXCESS STOCK FOUND IN THE COURSE OF SURVEY. THE LEARNED C OUNSEL FOR THE ASSESSEE EXPLAINED THAT THE STOCK SHOWN IN THE BOOK S WAS THE STOCK WHICH WAS SALEABLE IN THE MARKET WHEREAS THE STOCKS ARRIVED AT DURING PHYSICAL VERIFICATION INCLUDES ST OCKS SALABLE AS WELL AS STOCK WHICH WAS NOT SALEABLE DUE IT BEING O UT OF FASHION OR BEING FOUND WITH MANUFACTURING DEFECTS IN MATERIALS ETC., IT WAS SUBMITTED THERE WAS NO VARIATION IN STOCK AS PER TH E BOOKS AND PHYSICAL VERIFICATION. THE AO, HOWEVER, WAS NOT CON VINCED WITH THE ASSESSEES CONTENTION. HE HELD THAT THE EXCESS STOCK OF ITA NO 143 OF 2018 D SATYADAS MAHABOOBNAGAR. PAGE 3 OF 5 RS.27,44,160/- IS TO BE BROUGHT TO TAX. HE ACCORDIN GLY ADDED IT TO THE RETURNED INCOME OF THE ASSESSEE AND BROUGHT IT TO TAX. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A), WHO CONFIRMED THE ORDER OF THE AO AND THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN NOT DECIDING THE MATTER OF ISSUE OF NOTICE U/S 148 OF THE I.T ACT BEFORE THE END OF THE ASSESSMENT YEA R. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFF ICER IN HOLDING THAT THERE IS ANY DIFFERENCE IN THE PHYSICA L STOCK AND FURTHER ERRED IN ARRIVING AT THE VALUE OF SUCH STOCKS AT RS.27,44,160/- AND IN MAKING ADDITION TO THE INC OME ADMITTED. 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEAL) ERRED IN NOT CONSIDERING THE SUBMISSIONS OF THE APP ELLANT THAT THE PHYSICAL STOCK INCLUDES THE DAMAGED STOCK. 5. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING CHARGING OF INTEREST U/S 234A, 234B AND 234C OF THE INCOME-TAX ACT. 6. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME O F HEARING. 5. AS REGARDS 2 ND GROUND OF APPEAL AGAINST NOT DECIDING THE MATTER OF ISSUE OF NOTICE U/S 148 OF THE ACT, I FIND THAT THE ASSESSEE HAD NOT RAISED ANY SPECIFIC GROUND BEFORE THE CIT (A) BUT HAD RAISED ONLY AN ARGUMENT AND THE CIT (A) HAS REJ ECTED THE SAID ARGUMENT BY OBSERVING THAT THE ASSESSEE HAS NOT RAI SED ANY SPECIFIC GROUND. EVEN BEFORE THE TRIBUNAL, THE ASSE SSEE HAS NOT RAISED IT AS AN ADDITIONAL GROUND OF APPEAL. THEREF ORE, THIS GROUND CANNOT BE ENTERTAINED. ITA NO 143 OF 2018 D SATYADAS MAHABOOBNAGAR. PAGE 4 OF 5 6. AS REGARDS THE MERITS OF THE ADDITION IS CONCERN ED, THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS MADE BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW WHILE THE LEARNED DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 7. I FIND THAT THE ASSESSEE HAS FILED THE DETAILS O F THE STOCK WHICH IT CLAIMS TO BE EITHER OUT OF FASHION O R DAMAGED. HAVING GONE THROUGH THE SAME, I AM OF THE OPINION T HAT THE ENTIRE DIFFERENCE IN THE STOCK CANNOT BE CONSIDERED AS DEF ECTIVE STOCK. THE LEARNED COUNSEL FOR THE ASSESSEE HAS ALSO NOT B EEN ABLE TO FILE ANY EVIDENCE TO SHOW THAT THE ENTIRE STOCK IS DEFEC TIVE OR IS OUT OF FASHION. THEREFORE, I AM UNABLE TO ACCEPT THE SAID CONTENTION OF THE ASSESSEE. HOWEVER, SINCE THERE COULD BE SOME ST OCK WHICH COULD BE OUT OF FASHION OR DEFECTIVE, I AM, THEREFO RE, INCLINED TO ALLOW RELIEF PARTICULARLY I DIRECT THE AO TO ALLOW 20% OF THE STOCK OF RS.27,44,160/- AS DEFECTIVE STOCK AND THE BALANCE A DDITION IS CONFIRMED. THE ASSESSEES APPEAL IS ACCORDINGLY PAR TLY ALLOWED. 8. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH JANUARY, 2020. SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 17 TH JANUARY, 2020. VINODAN/SPS ITA NO 143 OF 2018 D SATYADAS MAHABOOBNAGAR. PAGE 5 OF 5 COPY TO: 1 SHRI D. SATYADAS, PROP: NEW MADHAVA CLOTH MERCHAN TS, STATION ROAD, SHAD NAGAR, MAHABOOBNAGAR 2 ITO WARD -2 NEAR DEO OFFICE, MAHABOOBNAGAR 3 CIT (A)-10 HYDERABAD 4 PR. CIT 4 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER