Mrs. Irkal Jainab Sadiq, Miraj V. ITO, Ward 1, Sangli, Sangli

ITA 147/PUN/2010

• Counselvise Citation: 14724514 RSA 2010
• Duration Of Justice: 1 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-07-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 22-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K AMBASTHA
• Section: 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI I C SUDHIR, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO 147/PN/10 (ASSTT. YEAR 2001-02) MRS IRKAL JAINAB SADIQ, .. AP PELLANT PROP. M/S RAHEEL, LAXMI MARKET, MIRAJ, DIST. SANGLI PAN AABPL8103M VS. INCOME-TAX OFFICER, .. RESPONDENT SANGLI APPELLANT BY: NONE RESPONDENT BY: SHRI S K AMBASTHA ORDER PER G.S. PANNU, AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), KOLHAPUR DATED 06.11.2009, WHICH IN TURN HAS ARISEN FROM AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE INCOM E-TAX ACT, 1961 (IN SHORT THE ACT), PERTAINING TO THE ASSESSMENT YEAR 2001-02. 2. IN THIS APPEAL, ALTHOUGH THE ASSESSEE HAS RAISED MULTI PLE GROUNDS OF APPEAL, BUT ESSENTIALLY THE DISPUTE IS WITH REGARD TO AN ADDITION OF RS 1,54,234/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF EXCESS STOCK. BRIEF LY PUT THE FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN DEALI NG OF READYMADE GARMENTS, CLOTH, ETC. A SURVEY ACTION UNDER SECTION 133A OF THE ACT WAS CARRIED OUT ON 25.7.2000 IN THE COURSE OF WHICH ASSESSEE MADE A SUR RENDER OF RS 6 LAKHS COMPRISING OF RS 5,68,100/- AND RS 31,900/- ON ACCOUN T OF DISCREPANCY IN STOCK AND PROFIT ON UNRECORDED SALES RESPECTIVELY. RETURN O F INCOME WAS FILED BY THE ASSESSEE ON A PRESUMPTIVE BASIS BY DECLARING INCOME FRO M RETAIL BUSINESS AS PER SECTION 44AF OF THE ACT. IN SO FAR AS THE INCOME SUR RENDERED DURING THE SURVEY WAS CONCERNED RELATING TO THE EXCESS STOCK, A FURTHER SUM OF RS 2 3,61,189/- ONLY WAS OFFERED AS AGAINST RS 5,68,100/ - SURRENDERED DURING THE SURVEY. THE DIFFERENCE WAS EXPLAINED ON ACCOUNT OF A TO TALING MISTAKE OF RS 52,677/- AND RS 1,54,254/-FOR WRONG ADOPTING OF OPEN ING STOCK AS ON 1.4.2000 AT THE TIME OF SURVEY. THE ASSESSING OFFICER ACCEPTED THE TOT ALING MISTAKE OF RS 52,677/- BUT DID NOT ACCEPT THE PLEA RELATING TO SHORT OPENING STOCK OF RS 1,54,234/- AND THE SAME WAS ADDED TO THE RETURNED IN COME. THE ADDITION OF RS 1,54,234/- HAS SINCE BEEN SUSTAINED BY THE COMMISSIONER O F INCOME-TAX (APPEALS) AGAINST WHICH ASSESSEE IS IN APPEAL BEFORE US. 3. BEFORE US, THE ASSESSEE HAS FURNISHED WRITTEN SUBMISSIO NS TO THE EFFECT THAT AT THE TIME OF SURVEY, THE OPENING STOCK AS ON 1. 4.2000 WAS ADOPTED AT RS 5,67,936/- HURRIEDLY ON THE BASIS OF THE AVAILABLE RE CORD, WHICH WAS NOT SUPPORTED BY SCIENTIFIC CALCULATIONS OR THE BALANCE SHEET AS ON 31.3 .2000. THE RETURN OF INCOME FOR THE YEAR ENDING 31.3.2000 WAS FINALISED AN D THE RETURN FILED SUBSEQUENT TO THE DATE OF SURVEY IN TERMS OF WHICH CLOSI NG STOCK WAS ADOPTED AT RS 6,64,117/-. IT WAS STATED THAT THE AMOUNT OF RS 6, 64,117/- WAS THEREFORE TO BE TAKEN AS AN OPENING STOCK FOR THE IMPUGNED ASSESSMENT YEA R, I.E. AS ON 1.4.2000 AS AGAINST RS 5,67,966/- ADOPTED AT THE TIME OF SURVEY, WHICH WAS ON TENTATIVE BASIS. AT THE TIME OF FILING OF THE RETURN FOR THE IMPUGNED ASSESSMENT YEAR, THE ASSESSEE EXPLAINED THAT HE CORRECTED ALL THE E RRORS AND OMISSIONS AND THEREFORE, DIFFERENCE OF RS 1,54,234/- WAS LIABLE TO B E ADJUSTED. 4. AS AGAINST THIS, THE LEARNED DEPARTMENTAL REPRESENTA TIVE, APPEARING FOR THE REVENUE, POINTED OUT THAT THE ASSESSEE HAD AGREED T O THE OPENING STOCK AS ON 1.4.2000 TO BE ADOPTED AT RS 5,67,936/- AT THE TI ME OF SURVEY AND THEREFORE, THE ASSESSING OFFICER REJECTED THE PLEA OF THE ASSESSEE MADE DURING THE ASSESSMENT PROCEEDINGS THAT THE SAME BE ADOPTED AT RS 6,64 ,117/-. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. IN OUR VIEW, IT IS A TRITE LAW THE CLOSING STOCK OF A PARTICULAR YEAR IS LIABLE TO BE ADOPTED AS OPENING STOCK FOR THE NEXT YEAR. IN THIS CASE, UNDISPUTABLY THE CLOSING STOCK AS ON 31.3.2000 AS 3 FURNISHED IN THE RETURN OF INCOME FILED IN THE ASSESSMEN T YEAR 2000-01 IS STATED TO RS 6,64,117/- WHICH IS LIABLE TO BE TREATED AS OPENI NG STOCK AS ON 1.4.2000 FOR THE ASSESSMENT YEAR 2001-02. MOREOVER, IT IS VERY MUCH E VIDENT THAT AT THE TIME OF SURVEY THE RECORDS OF THE ASSESSEE WERE NOT COMPLETE AND THE OPENING STOCK AS ON 1.4.2000 WAS TENTATIVELY CALCULATED. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE EXPLAINED THAT THERE WAS A MISTA KE IN THE ADOPTION OF OPENING STOCK AND AFTER CORRECTION OF THE ERRORS, THE CORR ECT OPENING STOCK WAS WORKED AT RS 6,64,117/-. IN OUR VIEW THE ASSESSING OFFICE R HAS NOT FOUND ANY INFIRMITY WITH REGARD TO THE PLEA OF THE ASSESSEE ON FA CTS BUT HAS MERELY DISBELIEVED HIS ASSERTION. THIS, IN OUR VIEW, IS UNJUSTIF IED AND THE ADDITION THEREUPON MADE BY THE ASSESSING OFFICER IS UNTENABLE. RESU LTANTLY, WE SET ASIDE THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AND THE ASSESSING OFFICER IS DIRECTED TO DELETE THE IMPUGNED ADDITION. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF AUGUST, 2011. SD/- SD/- (I C SUDHIR) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER PUNE: DATED: 30 TH AUGUST, 2011 B COPY OF THE ORDER IS FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. THE CIT(A) KOLHAPUR 4. THE CIT KOLHAPUR 5. THE D.R, B BENCH, PUNE 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE 4