M/s. Vimalnath Rice Mills, Ahmedabad V. The Income tax Officer,Ward-6(3), Ahmedabad

ITA 1471/AHD/2012

• Counselvise Citation: 147120514 RSA 2012
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-11-2012
• Assessment Year: 2009-2010
• Appeal Filed On: 03-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVETIA
• Keywords: Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD A BENCH BEFORE: SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTAN T MEMBER I.T.A. NO.1471/AHD/2012 A.Y.2009-10 M/S VIMALNATH RICE MILLS, OPP. HAJARI MATA MANDIR, SANAND-382110 DIST: AHMEDABAD PAN: AAAFV7185P APPELLANT VS. THE I.T.O., WARD-6(3) AHMEDABAD RESPONDENT DEPARTMENT BY : SHRI VIVEK ANAND OJHA, SR. D.R. ASSESSEE BY : SHRI S.N. DIVETIA, A.R. DATE OF HEARING : 08.11.2012 DATE OF PRONOUNCEMENT : 23.11.2012 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF LD. CIT(A)-XI, AHMEDABAD DATED 25.05.2012. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPE AL:- 1.1 THE ORDER PASSED U/S 250 ON 25.5.2012 FOR A.Y. 2009-10 BY CIT(A), UPHOLDING THE ADDITION AS UNEXPLAINED PURCHASES OF RS.13,14,579/- IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 2.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN NOT ADJU DICATING THE GROUND THAT UNLESS THE BOOKS OF ACCOUNTS WERE REJECTED, NO ADDITION COULD BE MADE. 3.1 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE ADDITION OF RS.13,14,579/- UPHELD WITHOUT REJECTION OF THE BOOK RESULT BY AO WAS WHOLLY ILLEGAL AND UNLAWFUL. 4.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN UPHOLDING THE SO-CALLED EXCESS CONSUMPTION OF PADDY OF 1239 Q TLS AS WORKED OUT BY A.O., THOUGH THE MISTAKES IN ITS WORKING WERE POINT ED OUT. I.T.A. NO.1471/AHD/2012 A.Y.2009-10 2 5.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN UPHOLDIN G THE ADDITION OF RS.13,14,579/- AS EXCESS CONSUMPTION OF PADDY. 3. THE A.O. IN THIS CASE MADE AN ADDITION OF RS.37, 55,211/- ON ACCOUNT OF UNEXPLAINED PURCHASES. WHILE MAKING THIS ADDITION HE HAS OBSERVED AS UNDER:- '3.DISALLOWANCE OF DIFFERENCE IN PRODUCTION AND CON SUMPTION:- DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ON VER IFICATION OF THE PRODUCTION AND CONSUMPTION DETAILS FOLLOWING IRREGU LARITIES WERE NOTICED:- AS PER SCHEDULE: 5 OF THE AUDITED BALANCE SHEET, CO NSUMPTION & PRODUCTION OF THE ASSESSEE IS AS CALCULATED AS UNDE R- CONSUMPTION 22904.15 QUTLS. PRODUCTIONS RICE RICE BRAN (KUSKI) VATLA (KANKI) FOTRY TOTAL 10864.25 QTLS 2782.90 QTLS 4089.25 QTLS. 4720 QTLS. 22456.40 QTLS 47.43% 12.14. % 17.85% 20.60% 98.05% SHORTAGE 447.75 QTLS. 1.95% 2. THE ASSESSEE'S ABOVE PERCENTAGE IS VARIES (DIF FERS) MONTH TO MONTH AS UNDER: (I) NOVEMBER-2008: CONSUMPTION: 4271.45 QUTS. & PRODUCTION IS AS UNDER : RICE RICE BRAN (KUSKI) VATLA (KANKI) FOTRY TOTAL 1978.25 QTLS 546.56 QTLS 879.65 QTLS. 960 QTLS. 4364.46 QTLS. PRODUCTION FOR THE MONTH 102.17 % CONSUMPTION SHORT BY - 93.01 QUTS 2.17% THERE BY THE ASSESSEE HAS CONCEALED THE PURCHASE OF 93.01 QUINTALS (II) DECEMBER-2008 I.T.A. NO.1471/AHD/2012 A.Y.2009-10 3 CONSUMPTION: 8637.55 QUTS. & PRODUCTION IS AS UNDER: RICE RICE BRAN (KUSKI) VATLA (KANKI) FOTRY TOTAL 3906.90 QTLS 972.42 QTLS 1704.10 QTLS. 2080 QTLS. 10332.42 QTLS. PRODUCTION FOR THE MONTH 119.62 % CONSUMPTION SHORT BY- 1694.87 QTLS 19.62 % THEREBY THE ASSESSEE HAS CONCEALED THE PURCHASE OF 1694.87 QUNITALS. (III) JANUARY-2009 CONSUMPTION: 4115.30 QUTS. & PRODUCTION IS AS UNDER : RICE RICE BRAN (KUSKI) VATLA (KANKI) POTTY TOTAL 2019.75 4.5 QTLS. 660.95 QTLS 2080 QTLS. 4760.45 PRODUCTION FOR THE MONTH 115.67 % CONSUMPTION SHORT BY- 645.15 QUINTALS 15.67% THEREBY THE ASSESSEE CONCEALED THE PURCHASE OF 1694 .87 QUINTALS (IV) FEBRUARY-2009 CONSUMPTION: 2757.85 QUTS. & PRODUCTION IS AS UNDER : THEREBY THE ASSESSEE HAS CONCEALED THE PURCHASE OF 480.10 QUINTALS (V) MARCH-2009 CONSUMPTION: 2005 QUTS. & PRODUCTION IS AS UNDER: RICE RICE BRAN (KUSKI) VATLA (KANKI) FOTRY TOTAL RICE RICE BRAN (KUSKI) VATLA (KANKI) FOTRY TOTAL 1442.85 QTLS 58.40 QTLS 456.50 QTLS. 520 QTLS. 2277.75 QTLS. PRODUCTION FOR THE MONTH 82.59 % CONSUMPTION EXCEEDS BY -480.10 QUTS 17.41 % I.T.A. NO.1471/AHD/2012 A.Y.2009-10 4 1036.50 QTLS 257.04 QTLS 233.75 QTLS. 360 QTLS. 1887.29 QTLS. PRODUCTION FOR THE MONTH 94.12 % CONSUMPTION EXCEEDS BY- 117.71 QUTS 5.88% THEREBY THE ASSESSEE HAS CONCEALED THE PURCHASED OF 117.71 QUINTALS & NOT RECORDED IN BOOKS OF ACCOUNTS. 3. MONTH WISE DIFFERENCE IN PURCHASE IS CALC ULATED AS UNDER: MONTH VARIATION IN QTLS. RATE PER QTL. TOTAL VALUE NOV. 2008 93.01 DEC. 2008 1694.87 JAN. 2009 645. 15 FEB. 2009 480.10 MARCH 2009 117.71 TOTAL 3030.84 RS.1239/- RS.3755211/- 4. IN THIS REGARDS, THE ASSESSEE VIDE NOTICE DATED 21.12.2011 WAS REQUESTED TO SHOW CAUSE AS TO WHY THE DIFFERENCE IN PURCHASE OF 3030.84 QUTS., VALUE OF WHICH COMES TO RS.37, 55,211/- SHOU LD NOT BE TAKEN AS CONCEALED PURCHASE. 5. THE ASSESSEE HAS FURNISHED REPLY VIDE ITS LETTER S DATED 26.12.2011 & 27-12-2011. I HAVE CONSIDERED CAREFULLY REPLY FURNI SHED BY THE ASSESSEE IT IS NOT ACCEPTABLE. THERE IS NO MISTAKE IN ANY FI GURE REFLECTS IN CALCULATION GIVEN, IT IS BASED ONLY ON SUBMISSIONS MADE BY THE ASSESSEE. IT IS NOT BELIEVABLE THAT THE DISCREPANCIES ARE BEC AUSE OF THE SALES OF FOTARI. CALCULATIONS GIVEN BY THE ASSESSEE BY ATTAC HING SCHEDULES ARE NOT CORRECT. 6. CONSIDERING THE ABOVE FACTS, THE DIFFERENCE IN P URCHASE OF 3030.84 QUINTALS AT THE RATE OF RS.1239/- IS CALCULATED AT RS.3755211/-. SAME IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE FOR THE Y EAR UNDER CONSIDERATION. THE PENAL PROCEEDINGS U/S 271(1)(C ) OF THE ACT ARE INITIATED FOR CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME. I.T.A. NO.1471/AHD/2012 A.Y.2009-10 5 4. BEFORE LD. CIT(A) ASSESSEE MADE SUBMISSIONS WHIC H HAVE BEEN REPRODUCED BY HIM IN PARA-3 OF HIS ORDER. AFTER TAKING INTO CO NSIDERATION THESE SUBMISSIONS OF THE ASSESSEE LD. CIT(A) CONFIRMED THE ADDITION TO T HE EXTENT OF RS.13,14,579/- AGAINST ADDITION OF RS.37,55,211/- MADE BY THE A.O. THIS ADDITION HAS BEEN CONFIRMED MAINLY ON THE GROUND THAT THE DISCREPANCI ES FOR THE MONTHS OF NOVEMBER AND DECEMBER, POINTED OUT BY THE A.O., WER E PROPERLY EXPLAINED BY THE ASSESSEE WHILE THE EXCESS CONSUMPTION WORKED OUT BY THE A.O. FOR THE MONTHS FROM JANUARY TO MARCH, 2009 WAS NOT PROPERLY EXPLAI NED. HENCE, OUT OF THE CONSUMPTION OF 8878.15 QTLS. OF PADDY FOR THE MONTH OF JANUARY TO MARCH, 2009, THE REASONABLE WASTAGE WAS 2% IS TO BE ALLOWED AND THE BALANCE EXCESS CONSUMPTION WORKED OUT TO 1.06 QUINTALS, THE ADDITI ON OF RS.13,14,579/- WAS SUSTAINED. 5. BEFORE US IT WAS SUBMITTED BY LD. COUNSEL OF THE ASSESSEE THAT LD. CIT(A) HAS FAILED TO APPRECIATE THAT IN RESPECT OF CONSUMPTION FOR THE MONTHS OF JANUARY TO MARCH, 2009 WERE FILED BY THE ASSESSEE BEFORE THE A .O. VIDE ITS REPLY DATED 27.12.2011 AND AGAIN IN ANOTHER LETTER DATED 26.12. 2012. ALL THESE LETTERS HAVE BEEN FILED BY THE ASSESSEE IN HIS PAPER BOOK. IT W AS FURTHER SUBMITTED THAT ON THE SAME LINES THE EXPLANATION WAS OFFERED BEFORE LD. C IT(A) ALSO BUT HE ALSO FAILED TO APPRECIATE THE SUBMISSIONS OF THE ASSESSEE. HE CON CLUDED HIS ARGUMENT BY SUBMITTING THAT DURING THE MONTH OF JANUARY TO MARC H ALSO THERE WAS NO DISCREPANCY IN THE PURCHASES OF THE ASSESSEE AND TH EREFORE LD. CIT(A) SHOULD HAVE DELETED THE ENTIRE ADDITION INSTEAD OF RESTRICTING IT TO THE 13,14,579/-. LD. D.R. ON THE OTHER HAND VEHEMENTLY SUPPORTED THE ORDER PASSE D BY LD. CIT(A). I.T.A. NO.1471/AHD/2012 A.Y.2009-10 6 6. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD WE FIND FORCE IN THE CONTENTION OF LD. COUNSEL OF THE ASSESSEE THAT EXPL ANATION OFFERED BY THE ASSESSEE IN RESPECT OF FIGURES OF CONSUMPTION TAKEN FOR THRE E MONTHS I.E. JANUARY TO MARCH WERE NOT PROPERLY LOOKED INTO BY THE LOWER AUTHORIT IES. HOWEVER, SINCE THESE FIGURES REQUIRE VERIFICATION FROM THE BOOKS OF ACCO UNT OF THE ASSESSEE, WE DEEM IT PROPER THAT THE MATTER BE RESTORED BACK TO THE FILE OF THE A.O. WE HOLD ACCORDINGLY. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 23 .11.2012 SD/- SD/- (A.MOHAN ALANKAMONY) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY N.K. CHAUDHARY, SR. P.S. COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD 6. THE GUARD FILE BY ORDER AR,ITAT,AHMEDABAD