M/s. Allabaksha Mehaboob Mulla, Sangli V. Income-tax Officer, Ward - 2(1), Sangli

ITA 1464/PUN/2018

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 2831 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 13-09-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Onus to prove; Retraction
• Section: 64

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “SMC”, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT आयकर अपील सं. / ITA No.1464/PUN/2018 नधा रण वष / Assessment Year : 2009-10 Ms. Allabaksha Mehaboob Mulla, Guruwar Peth, At and Post Battis Shirala 415 408 Dist. Sangli PAN : AACFA4723A Vs. ITO, Ward-2(1), Sangli (Appellant) Respondent) आदेश / ORDER PER R.S.SYAL, VP : This appeal by the assessee is directed against the order passed by the CIT (Appeals)-1, Kolhapur on 07-08-2018 in relation to the assessment year 2009-10. 2. The assessee has raised two issues in its grounds of appeal namely, addition of Rs.8,43,230/- on account of excess stock and addition of Rs.4,00,100/- on account of excess cash - found during the course of survey. The ld. AR did not press the addition of excess cash. The same is, therefore, dismissed as ‘not pressed’. Appellant by Shri Kishor Phadke Respondent by Shri Rajesh Gawali Date of hearing 05-05-2022 Date of pronouncement 06-05-2022 ITA No. 1464/PUN/2018 M/s. Allabaksha Mehaboob Mulla 2 3. Briefly stated, the facts of the case are that the assessee was subjected to survey action u/s.133A of the Act on 09/10-02-2009. On physical verification of stock vis-a-vis tentative trading profit and loss account drawn on the date of survey, excess stock of Rs.8,43,230/- was detected. Mr. Shafi Allabaksha Mulla, partner of the assessee firm, accepted the availability of excess stock to this extent and agreed to disclose the income during the course of survey. However, no such disclosure was made in the return filed. On being called upon to explain as to why the excess stock detected at the time of survey, which was also agreed to by the partner of the assessee firm, was not offered for taxation in the return, the assessee submitted that it had, vide its letter dated 15-04-2009, put forth the contention that some purchase bills were received after the date of survey which were not considered even though the goods had been received prior to that which were included in the actual stock. The AO rejected this contention and made the addition. The ld. CIT(A) affirmed the action of the AO. 4. I have heard the rival submissions and gone through the relevant material on record. Statement of the partner was recorded at commencement as well as completion of the survey. ITA No. 1464/PUN/2018 M/s. Allabaksha Mehaboob Mulla 3 Copies of such statements have been placed at page 51 onwards of the paper book. In answer to question no.2, the assessee submitted that it was engaged in the business of Kirana items. Here it is relevant to mention that though the assessee was also in sugar business but the dispute centers around only the Kirana stock. In response to question no.5, the partner admitted that no stock book of Kirana items was maintained. In answer to question no.6, it was admitted that the books of account for the entire current year were not written. In the concluding statement, it was stated that stock was physically counted at Rs.10,53,062/-, whereas the inventory as per books of account was only Rs.2,09,832/-, leading to excess stock of Kirana items at Rs.8,43,230/-. The assessee admitted that he was not able to explain the difference and agreed to offer the additional income of Rs.8,43,230/- for the year under consideration, which was actually not offered. On 15-04-2009, i.e. after more than two months from the date of survey, the assessee wrote a retraction letter to the AO, a copy placed at page 64 of the paper book, to the effect that there were some mistakes in the stock calculation inasmuch as some purchase bills were not considered at the time of survey. Though the assessee mentioned about some purchase ITA No. 1464/PUN/2018 M/s. Allabaksha Mehaboob Mulla 4 bills not recorded, but no details of such bills were furnished. It was for the first time in the year 2011, that is, after around two years from the date of survey, that the assessee filed detail of such goods claimed to have been entered into survey stock for which the bills were not received up to the date of survey. It can be seen from such a detail that the assessee has made out a case that 23 purchase invoices dated between 5-1-2009 to 7-2-2009 worth Rs.8,92,048/- were not recorded in the books of account as these were received post-survey though the goods were included in the inventory as on the date of survey. The ld. AR, on requisition, failed to lead any evidence to the effect that the goods against such invoices were received before the date of survey but the invoices were not entered as these were received later on. Given the fact that the actual stock was counted at the time of survey, and the tentative Trading, Profit and loss account was drawn which indicated excess stock of Rs.8.46 lakh; the assessee admitted such excess stock without raising any issue at that time; later on issued a retraction letter after more than two months but still without furnishing any detail of the alleged late receipt of invoices; taking a contention after two years that 23 invoices were received later on and still failing to lead any ITA No. 1464/PUN/2018 M/s. Allabaksha Mehaboob Mulla 5 evidence to demonstrate that such invoices were received after the date of survey but the goods were received before the date of survey, entire case made by the assessee for the relief gets demolished. The contention seeking relief is based solely on the premise that certain goods were received in stock but the corresponding invoices were received after the date of survey. However, no evidence to corroborate such a version has been provided. It goes without saying that the onus to prove that the earlier admission at the time of survey was wrongly made, was on the assessee because it was he who was retracting. If this contention, not backed by any evidence, is removed from reckoning, there is nothing to justify the retraction. I am, therefore, satisfied that the authorities below were justified in making and sustaining the addition of excess stock of Rs.8,43,230/- found at the time of survey. 5. In the result, the appeal is dismissed. Order pronounced in the Open Court on 06 th May, 2022. Sd/- (R.S.SYAL) उपा य / VICE PRESIDENT प ु णे Pune; दनांक Dated : 06 th May, 2022 Satish ITA No. 1464/PUN/2018 M/s. Allabaksha Mehaboob Mulla 6 आदेश क त ल प अ े षत / Copy of the Order is forwarded to : 1. अपीलाथ / The Appellant; 2. यथ / The Respondent; 3. The CIT(A)-1, Kolhapur 4. 5. The Pr.CIT-1, Kolhapur वभागीय त न!ध, आयकर अपील"य अ!धकरण, प ु णे “SMC” / DR ‘SMC’, ITAT, Pune; 6. गाड फाईल / Guard file. आदेशान ु सार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune Date 1. Draft dictated on 05-05-2022 Sr.PS 2. Draft placed before author 05-05-2022 Sr.PS 3. Draft proposed & placed before the second member -- JM 4. Draft discussed/approved by Second Member. -- JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *