Shri Babulal Jain, Ujjain V. The I.T.O., Ujjain

ITA 144/IND/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2840 (ITAT-INDORE)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 22-03-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN LD
• Assessee Lawyers: H P VERMA

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, SMC-I BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER ITA NO.144/IND/2010 AY: 2005-06 SHRI BABULAL JAIN UJJAIN (PAN ABNPJ-7940E) ..APPELLANT V/S. INCOME TAX OFFICER 2(1), UJJAIN ..RESPONDENT ASSESSEE BY : SHRI H.P. VERMA AND SHRI ASHISH GOYAL DEPARTMENT BY : SMT. APARNA KARAN, LD.SR. DR ORDER THIS APPEAL IS BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 5.2.2010 ON THE GROUNDS AS CONTAINED I N THE GROUNDS OF APPEALS. DURING HEARING OF THIS APPEAL, GROUND NO. 1, 5 AND 6 WERE NOT PRESSED BY THE LD. COUNSEL FOR ASSESSEE, THEREFORE, THESE GROUNDS ARE DISMISSED AS NOT PRESSED. THE ONLY GROUND SURVIVE F OR CONSIDERATION ARE GROUND NOS. 2 TO 4 WHICH ARE ALSO INTER-CONNECTED W HEREIN SUSTENANCE OF ADDITION OF RS.1,02,817/- ON ACCOUNT OF ALLEGED EXCESS SHORTAGE OF MILK HAS BEEN CHALLENGED BY THE ASSESSEE. 2 2. THE CONTENTION RAISED ON BEHALF OF THE ASSESSEE IS THAT THE ASSESSEE PURCHASES MILK IN PLASTIC CARATS AND SUPPL IES THE SAME TO THE DISTRIBUTORS IN ABOUT 500 CENTRES, CLAIMED TO BE IN REMOTE AREAS. THE CRUX OF ARGUMENT IS THAT DURING TRANSPORTATION CERT AIN POUCHES/PACKETS LEAK THEREBY CAUSING LOSS TO THE ASSESSEE. IT WAS A LSO PLEADED THAT IN ORDER TO CONTROL THE COST MEASURES, THE ASSESSEE IM PLEMENTED A SYSTEM WHEREBY MAXIMUM LEAKAGE ALLOWABLE TO STAFF WAS 5 PA CKETS PER 2000 PACKETS WHICH WORKS OUT TO 0.25% AND ANY EXCESS LEA KAGE WOULD BE BORNE BY THE CONCERNED EMPLOYEE HIMSELF. MY ATTENT ION WAS INVITED TO THE LEAKAGE OF EARLIER YEARS ALSO. ON THE OTHER HA ND, THE LEARNED SR. DR STRONGLY DEFENDED THE IMPUGNED ORDER BY CONTENDING THAT EXCESSIVE SHORTAGE HAS BEEN SHOWN BY THE ASSESSEE SIMPLY TO D EFRAUD THE REVENUE WITH THE INTENTION TO REDUCE THE TAX LIABILITY. EVE N THE CLAIMED 5 PACKETS WERE ARGUED TO BE EXCESSIVE AS IN THE MODERN TIME B ETTER QUALITY OF PACKETS/POUCHES ARE AVAILABLE, WHEREIN THERE IS A R EMOTE POSSIBILITY OF LEAKAGE. 3. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERU SED THE MATERIAL AVAILABLE ON FILE. BRIEF FACTS ARE THAT THE ASSESS EE PURCHASES MILK IN PLASTIC POUCHES/PACKETS OF DIFFERENT CAPACITY AND T HE SAME ARE SUPPLIED TO APPROXIMATELY 500 DISTRIBUTORS, WHICH WERE CLAIM ED TO BE IN REMOTE 3 AREAS AND THE ASSESSEE EARNED COMMISSION INCOME THE REFROM. THIS IS AN ADMITTED FACT THAT DURING TRANSPORTATION/HANDLING O F CARATS, THERE IS A POSSIBILITY OF LEAKAGE RESULTING INTO SHORTAGE OF M ILK. THE CRUX OF THE MATTER IS ONLY THAT WHAT SHOULD BE THE APPROXIMATE SHORTAGE OF MILK DUE TO LEAKAGE OR MISHANDLING. IN THE PRESENT APPEAL, THE ADDITION OF RS.1,02,817/- ON ACCOUNT OF ALLEGED EXCESS SHORTAGE WAS SUSTAINED BY THE LEARNED CIT(A). THE ASSESSEE DISCLOSED 25,440 LITRES AS SHORTAGE WHICH IS 0.22% OF THE TURNOVER. HOWEVER, THE LEARN ED AO ESTIMATED THE SAME AT 18,250 LITRE (50 LT. X 365) AND THE BALANCE SHORTAGE OF RS.7,190/- LITRES WAS CONSIDERED AS SALE OUTSIDE TH E BOOKS AND BY QUANTIFYING THE MILK AT THE RATE OF RS. 14.30 PER L ITRE MADE THE ADDITION OF RS.1,02,817/-. THE REJECTION IS ON THE GROUND TH AT THE SHORTAGE SHOWN BY THE ASSESSEE IS EXCESSIVE. THE STAND OF T HE ASSESSEE IS THAT THE SHORTAGE IN STOCK IN EARLIER AND SUBSEQUENT YEA R IS SIMILAR AND THE SAME HAVE BEEN ACCEPTED. ADMITTEDLY, WHILE IT IS A CASE OF ESTIMATION AND NO CLEAR-CUT JACKET PROOF FORMULA CAN BE DEVISED FOR SUCH ESTIMATION, THEREFORE, TO PUT AN END TO THE LITIGAT ION, THE ADDITION IS REDUCED TO RS.52,000/-, THEREFORE, THIS GROUND OF T HE ASSESSEE IS PARTLY ALLOWED. FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLO WED. 4 ORDER PRONOUNCED IN THE OPEN COURT ON 2.6.2010. SD/- (JOGINDER SINGH) JUDICIAL MEMBER DATED: 2.6.2010 COPY TO: APPELLANT/RESPONDENT/CIT/CIT(A)/DR/GUARD F ILE D/-