M/s. Raj Laxmi Industries, JODHPUR V. ACIT, JODHPUR

ITA 149/JODH/2009

• Counselvise Citation: 14923314 RSA 2009
• Duration Of Justice: 2 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 02-12-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 20-03-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL

Judgement Text

1 ITA 149-09 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH JODHPUR. ( BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ) ITA NO. 149/JODH/2009 ASSTT. YEAR : 2004-05. M/S. RAJ LAXMI INDUSTRIES, VS. THE ACIT, CENTRAL CIRCLE-1, E-93, MIA, IIND PHASE, BASNI, JODHPUR. JODHPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AMIT KOTHARI RESPONDENT BY : SHRI SUNIL MATHUR DATE OF HEARING : 02.12.2011. DATE OF PRONOUNCEMENT : 09.12.2011. ORDER DATED : 09/12/2011. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2004-05. 2. GROUND NOS. 1 & 2 WERE NOT PRESSED. THEREFORE, T HE SAME ARE DISMISSED AS NOT PRESSED. 3. GROUND NO. 3 IS AGAINST CONFIRMING THE ADDITION OF RS. 12,92,328/- ON ACCOUNT OF ALLEGED DIFFERENCE IN STOCK FOUND DURING THE COURSE OF SEARCH. 4. IN THIS CASE SEARCH PROCEEDINGS WERE INITIATED A ND EXCESS STOCK WAS FOUND AT RS. 33,32,663/-. ASSESSEE SURRENDERED STOCK OF RS. 20, 40,332/- IN THE RETURN OF INCOME AGAINST SURRENDER OF RS. 43,66,961/- MADE DURING TH E COURSE OF SEARCH. THE REASON WAS 2 EXPLAINED THAT STOCK FOUND IN THE CASE OF M/S. ANNA PURNA INDUSTRIES & M/S. EVERSHINE METALS, BOTH SISTER CONCERNS, FOUND SHORT WAS LYING AT THE PREMISES OF THE ASSESSEE. THEREFORE, THE STOCK WAS SURRENDERED LESS. IT WAS ALSO SUBMITTED THAT THERE WAS A MISTAKE IN TAKING THE VALUE OF STOCK AS CORRECT VALUATION W AS OF RS. 33,32,663/- AGAINST VALUATION MADE AT RS. 43,66,961/-. THE MISTAKE IN CALCULATIO N WAS ACCEPTED BY THE ASSESSING OFFICER. HOWEVER, IT WAS NOT ACCEPTED THAT STOCK OF TWO SISTER CONCERNS WERE LYING AT THE PREMISES OF THE ASSESSEE, THEREFORE, ASSESSING OFFI CER MADE AN ADDITION OF RS. 12,92,328/-. THE LD. CIT (A) HAS ALSO NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE AND ACCORDINGLY HE CONFIRMED THE ADDITION MADE BY ASSES SING OFFICER. 5. THE CONTENTION RAISED BEFORE LOWER AUTHORITIES W ERE REITERATED HERE BEFORE THE TRIBUNAL. IT WAS SUBMITTED THAT THERE WERE FOUR SI STER CONCERNS AND ALL THE CONCERNS ARE DOING THE SAME LINE OF BUSINESS. SAME ITEMS ARE MA NUFACTURED AND TRADED BY THEM AND BUSINESS PREMISES WERE COMMON. IT WAS ALSO EXPLAIN ED THAT IT WAS ADMITTED THAT IN CASE OF OTHER SISTER CONCERNS I.E. IN CASE OF M/S. ANNAP URNA INDUSTRIES AND M/S. EVERSHINE METALS, THERE WAS A SHORT OF STOCK TO THE EXTENT OF RS. 12 LACS OR ODD AND THERE WAS EXCESS OF THE STOCK OF THE SAME AMOUNT IN THE HANDS OF THE ASSESSEE. IT WAS ALSO EXPLAINED THAT DUE TO OVERSIGHT AND MISTAKE, THIS FACT COULD NOT B E REALIZED AT THE TIME OF SEARCH AND, THEREFORE, ASSESSEE FIRM SURRENDERED THE AMOUNT. TH E ASSESSING OFFICER AND LD. CIT (A) HAS CONFIRMED ON THE BASIS OF STATEMENT ONLY. HOWE VER, THEY HAVE NOT TAKEN INTO CONSIDERATION THE FACTUAL ASPECT THAT THE STOCK OF THE SAME AMOUNT WAS FOUND SHORT IN THE HANDS OF THE TWO SISTER CONCERN WHICH WAS LYING WIT H THE ASSESSEES STOCK. ATTENTION OF THE BENCH WAS DRAWN ON RECONCILIATION FILED BEFORE LD. CIT (A) AS WELL AS BEFORE ASSESSING OFFICER. 3 6. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING T HE MATERIAL ON RECORD, WE ARE OF THE VIEW THAT ASSESSEE DESERVES TO SUCCEED ON THIS ISSUE. UNDISPUTED FACTS ARE THAT STOCKS OF M/S. ANNAPURNA INDUSTRIES AND M/S. EVERSHINE ME TALS, BOTH ARE SISTER CONCERNS OF THE ASSESSEE, WERE FOUND SHORT OF THE SAME AMOUNT WHICH WAS FOUND EXCESS AT THE PREMISES OF THE ASSESSEE. ITEMS WERE ALSO THE SAME AND SIMILAR. THEREFORE, IN OUR VIEW, SHORT STOCK FOUND IN THE HANDS OF TWO SISTER CONCERNS AND EXCES S STOCK FOUND IN THE HANDS OF ASSESSEE FIRM SHOULD HAVE BEEN SET OFF, AS IN FACT, THE EXCE SS STOCK FOUND AT THE PREMISES OF THE ASSESSEE BELONGS TO TWO SISTER CONCERNS WHICH HAS A LREADY BEEN HANDED OVER TO SISTER CONCERNS AND THEY HAVE RECONCILED THEIR STOCK ALSO. ACCORDINGLY WITHOUT GOING INTO DETAILS FURTHER, WE DELETE THE ADDITION OF RS. 12,9 2,328/-. THIS GROUND OF THE ASSESSEE IS ALLOWED. 7. NEXT GROUND IS AGAINST EXCESS CASH FOUND AT RS. 19,433/- WHICH WAS ADDED BY ASSESSING OFFICER AND CONFIRMED BY LD. CIT (A). 8. DURING THE COURSE OF SEARCH, CASH OF RS. 30,05,5 60/- WAS FOUND AS AGAINST RS. 1,86,127/- RECORDED IN THE BOOKS OF ACCOUNT. OUT O F THIS, RS. 28,19,433/- REMAINED IN EXCESS. ASSESSEE SURRENDERED A SUM OF RS. 28,00,00 0/-. HOWEVER, NO EXPLANATION IN RESPECT TO RS. 19,433/- WAS GIVEN. THEREFORE, ASSE SSING OFFICER ADDED THE SAME AND LD. CIT (A) HAS CONFIRMED THE ADDITION. 9. AFTER CONSIDERING THE ORDERS OF THE ASSESSING OF FICER AND LD. CIT (A) AND SUBMISSIONS OF THE ASSESSEE, WE FIND NO INFIRMITY I N THE FINDING OF LD. CIT (A) AS THERE WAS NO DISPUTE THAT EXCESS OF RS. 28,19,433/- WAS U NEXPLAINED. ASSESSEE HAS SURRENDERED ONLY RS. 28 LACS AND NO REASON HAS BEEN GIVEN THAT WHY RS. 19,433/- WAS NOT SHOWN, NEITHER ANY EXPLANATION IS GIVEN THAT WHY THIS EXCE SS AMOUNT RS. 19,433/- REMAINED. IT 4 WAS ONLY STATED THAT THIS IS ONLY A PETTY AMOUNT. Q UESTION IS NOT OF PETTY AMOUNT, BUT QUESTION IS OF EXPLANATION. SINCE THERE WAS NO EXPL ANATION, THEREFORE, WE HOLD THAT LD. CIT (A) WAS JUSTIFIED IN CONFIRMING THIS ADDITION. ACCO RDINGLY THE SAME IS CONFIRMED. THIS GROUND OF THE ASSESSEE FAILS. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D IN PART. 11. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 09 .12.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JODHPUR, COPY FORWARDED TO :- M/S. RAJ LAXMI INDUSTRIES, JODHPUR. THE ACIT, CENTRAL CIRCLE-1, JODHPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 149/JODH/2009) BY ORDER, AR ITAT JODHPUR.