Appeal Details
Counselvise Citation
[2018] 121 COUNSELVISE.COM (IT) 4928 (ITAT-CHANDIGARH)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
7 month(s) 7 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
14-06-2018
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
SMC
Assessment Year
2010-2011
Appeal Filed On
06-11-2017
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHA, CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.1538/CHD/2017 ASSESSMENT YEAR: 2010-11 M/S JAI LUXMI RICE AND VS. THE ITO GENERAL MILLS, WARD-III VPO- KISHANGARH CHANNA MOGA RAIKOT - 141109 PAN NO. AADFJ9282G & ITA NO.1539/CHD/2017 ASSESSMENT YEAR: 2010-11 M/S GANESH RICE AND VS. THE ITO GENERAL MILLS, WARD-III GRAIN MARKET MOGA RAIKOT - 141109 PAN NO. AAEFG1045P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. GAURAV SHARMA RESPONDENT BY : SHRI. MANOJ KUMAR DATE OF HEARING : 13/06/2018 DATE OF PRONOUNCEMENT : 14/06/2018 ORDER PER DR. B.R.R. KUMAR, A.M: BOTH THE ABOVE APPEALS HAVE BEEN FILED BY THE ASSE SSEE AGAINST THE SEPARATE ORDER OF THE LD. CIT(A)-4, LUDHIANA PERTAI NING TO ASSESSMENT YEAR 2010- 11. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUND IN ITA NO. 1538/CHD/2017: 1. THAT ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE , THE ORDER OF LEARNED CIT(A) IS BAD IN LAW. 2. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN CO NFIRMING THE ADDITION OF RS. 6,44,228/- MADE BY HIM ON ARBITRARY AND ESTIMATED B ASIS. 3. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN RE JECTING THE BOOKS OF ACCOUNTS MAINTAINED BY THE APPELLANT FIRM UNDER SECTION 145( 3) OF THE ACT. 2 4. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN MA KING AN ADDITION OF RS. 6,44,228/- ON ACCOUNT OF ALLEGED SUPPRESSION OF SAL ES IN RESPECT OF PADDY HUSK (CHHILKA) 3. THE ASSESSEE HAS RAISED FOLLOWING GROUND IN ITA NO. 1538/CHD/2017: 1. THAT ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE , THE ORDER OF LEARNED CIT(A) IS BAD IN LAW. 2. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN CO NFIRMING THE ADDITION OF RS. 7,38,660/- MADE BY HIM ON ARBITRARY AND ESTIMATED B ASIS. 3. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN RE JECTING THE BOOKS OF ACCOUNTS MAINTAINED BY THE APPELLANT, FIRM UNDER SECTION 145 (3) OF THE ACT. 4. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN MA KING AN ADDITION OF RS. 7,38,660/- ON ACCOUNT OF ALLEGED SUPPRESSION OF SAL ES IN RESPECT OF PADDY HUSK (CHHILKA) 4. SINCE THE ISSUE IS SIMILAR IN BOTH THE APPEALS T HE APPEAL NO. 1538 IS TAKEN AS THE LEAD CASE. 5. THE ASSESSEE IS RUNNING A RICE SHELLER MILLING H IS OWN PADDY AS WELL AS FOR THE GOVERNMENT AGENCIES. THE ASSESSEE HAS SHOWN 66. 33% OF YIELD IN THE RICE PROCESSING. 6. DURING THE ASSESSMENT PROCEEDINGS IT WAS OBSERVE D THAT THE AVERAGE SALE PRICE OF THE PADDY HUSK HAS SEEN SHOWN AT RS. 156/- PER QUINTAL WHEREAS THE AVERAGE RATE OF THE SAME IN THE CLOSING STOCK IS SH OWN AT RS. 225/- PER QUINTAL. AS PER THE BILLS PRODUCED THE ASSESSING OFFICER FOUND THAT THE PADDY HUSK WAS SOLD BY THE ASSESSEE @ RS. 160 TO RS. 200/- PER QUINTAL WHEREAS THE MARKET AVERAGE RANGE IS FROM RS. 218/- TO RS. 230/- BASED ON THE I NFORMATION OBTAINED BY THE ASSESSING OFFICER FROM THE OTHER MILLERS. HENCE, TH E ASSESSING OFFICER MADE ADDITION OF RS. 6,44,228/- BY APPLYING THE MINIMAL SALE PRICE @RS. 218/- PER QUINTAL. 7. THE LD. CIT(A) HAS CONFIRMED THE ADDITION HOLDIN G AS UNDER: 6.6 I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSESSING O FFICER AS MADE BY HIM IN THE -SMENT ORDER WHILE MAKING THE IMPUGNED ADDITION AS WELL AS IN THE REMAND REPORT. I HAVE ALSO CONSIDERED WRITTEN SUBMISSIONS FILED BY THE ASSESSEE FIRM THROUGH ITS LEARNED AR VIDE LETTER DATED 28.03.2016 AS WELL AS ITS COUNTER COMMENTS ON THE REPORT OF THE ASSESSING OFFICER ON THE ISSUE UNDER REFERENCE. I HAVE FURTHER CONSIDERED CONTENTS OF THE PETITION FI LED BY THE ASSESSEE FIRM FOR THE ADMISSIONS OF ADDITIONAL EVIDENCE AS WELL AS ADDITI ONAL EVIDENCES FILED BY THE ASSESSEE FIRM TO SUPPORT ITS CONTENTIONS WITH REGAR D TO SALE RATE OF PADDY HUSK SHOWN BY IT IN ITS BOOKS OF ACCOUNT. I HAVE AGAIN C ONSIDERED VARIOUS JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE LEARNED AR OF THE ASSESSEE FIRM AS WELL AS OTHER MATERIAL PLACED BY HIM ON RECORD. ON CAREFUL CONSIDERATION OF THE 3 ASSESSMENT ORDER, IT HAS BEEN NOTICED THAT THE ASSE SSEE FIRM HAS VALUED ITS OPENING STOCK OF PADDY HUSK (CHHILKA) @RS.200/- PER QUINTAL WHEREAS THE CLOSING STOCK HAS BEEN VALUED @RS.225/- PER QUINTAL. IT HAS ALSO BEEN NOTICED THAT THE AVERAGE SALE RATE OF PADDY HUSK HAS BEEN SHOWN BY T HE ASSESSEE FIRM @RS.L56/- PER QUINTAL WHICH IS FAR LESS THAN THE VALUATION MA DE BY THE ASSESSEE FIRM ITSELF AT THE BEGINNING AND END OF THE YEAR.WHEN ASKED AS TO HOW THE ASSESSEE FIRM HAD SOLD PADDY HUSK @150/- PER QUINTAL ON 01.04.2009 AND 02.04.2009 WHEN THE S AME HAS BEEN VALUED @200/- PER QUINTAL AS ON 31.03.2009 BY THE ASSESSEE FIRM I TSELF, THE ASSESSEE FAILED TO FILE ANY SATISFACTORY REPLY. WHEN ASKED AGAIN AS TO WHY SALE RATE OF PADDY HUSK SHOULD NOT BE APPLIED IN ITS CAS E @218/- PER QUINTAL AS ANOTHER ASSESSEE OF THE SAME AREA NAMELY M/S SITLA RICE AND GENERAL MILLS, JAGRAON HAS SOLD PADDY HUSK AT AN AVERAGE RATE OF 2 18/-, THE ASSESSEE FIRM AGAIN COULD NOT FILE ANY SATISFACTORY REPLY. IT HAS ALSO BEEN NOTICED THAT THE ASSESSING OFFICER HAS CONFRONTED THE AVERAGE SALE RATES OF PA DDY HUSK SHOWN BY M/S SITLA RICE & GENERAL MILLS, M/S TAJPUR RICE & GENERAL MIL LS AND M/S BANKEYBEHARI RICE MILLS, JAGRAONWHICH WERE AT RS.218/-, RS.273/- AND RS.230/- PER QUINTAL RESPECTIVELY TO THE ASSESSEE AND THE ASSESSEE FIRM COULD NOT JUS TIFY ITS AVERAGE SALE RATE SHOWN BY IT BY FILING ANY JUSTIFIABLE EXPLANATION. THE EX PLANATION FURNISHED BY THE ASSESSEE FIRM WAS FOUND TO BE OF GENERAL NATURE AND WITHOUT ANY EVIDENCE. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASS ESSEE FIRM HAD FILED MANY ADDITIONAL EVIDENCES INCLUDING SALE BILLS OF M/S GO YAL AGRO FOODS, RAIKOTAND M/S KESHAV RICE AND GENERAL MILLSWHICH HAVE ALSO SOLD P ADDY HUSK AT THE SAME RATE AS SHOWN BY THE ASSESSEE FIRM. WHEN ASKED AS TO WHE THER THE ASSESSMENT IN THE CASE OF M/S GOYAL AGRO FOODS, RAIKOT AND M/S KESHAV RICE AND GENERAL MILLS HAS ALSO BEEN COMPLETED BY THE DEPARTMENT UNDER SECTION 143(3) OF THE ACT, THE LEARNED AR OF THE ASSESSEE FIRM REPLIED IN THE NEGA TIVE. ON CAREFUL CONSIDERATION OF THE RIVAL CONTENTIONS, I AM OF THE OPINION THAT EVEN ADDITIONAL EVIDENCES PRODUCED BY THE ASSESSEE FIRM IF ADMITTED WILL NOT HELP IT AS THE CASES OF M/S GOYAL AGRO FOODS, RAIKOTAND M/S KESHAV RICE AND GEN ERAL MILLSHAVE BEEN ACCEPTED UNDER SECTION 143(1) OF THE ACT AND NO SCR UTINY ASSESSMENT HAS BEEN MADE IN THESE CASES. MOREOVER, I AM OF THE OPINION THAT IN THE ABSENCE OF SCRUTINY ASSESSMENT IN THE CASES OF M/S GOYAL AGRO FOODS, RAIKOT AND M/S KESHAV RICE AND.GENERAL MILLS, IT CANNOT BE SAID THAT M/S GOYAL AGRO FOODS, RAIKOTAND M/S KESHAV RICE AND GENERAL MILLSHAVE NOT SUPPRESSE D THE SALES IN RESPECT OF PADDY HUSK. IN VIEW OF THESE FACTS, I AM OF THE CON SIDERED OPINION THAT THE ASSESSEE FIRM HAS CERTAINLY SUPPRESSED ITS SALES IN RESPECT OF PADDY HUSK AND THE ASSESSING OFFICER IS FULLY JUSTIFIED IN REJECTING T HE BOOKS OF ACCOUNT OF THE ASSESSEE FIRM UNDER SECTION 145(3) OF THE ACT AND THEREAFTER MAKING THE ADDITION UNDER DISPUTE. UNDER SUCH CIRCUMSTANCES, THE ACTION OF TH E ASSESSING OFFICER IN REJECTING THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE FIR M AND THEREAFTER MAKING AN ADDITION OF RS.6,44,228/- IN THIS CASE ON ACCOUNT OF ALLEGED SUPPRESSION OF S ALES IN RESPECT OF PADDY HUSK (CHHILKA) CANNOT BE SAID TO B E UNJUSTIFIED AND THE ACTION OF THE ASSESSING OFFICER IN MAKING AN ADDITION OF R S.6,44,228/-IN THIS CASE IS, THEREFORE, UPHELD. IN THE RESULT, THE GROUNDS NO. 2 , 3 AND 4 OF APPEAL TAKEN BY THE ASSESSEE FIRM ARE DISMISSED. 8. FROM THE ABOVE THE FOLLOWING FACTS EMERGE AS UND ER: THE VALUE OF HUSK PER QUINTAL AS PER OPENING STOCK RS. 200/- THE VALUE OF HUSK PER QUINTAL AS PER CLOSING STOCK RS. 225/- THE VALUE OF HUSK PER QUINTAL AS PER SALE ACCOUNT RS. 156/- THE VALUE OF HUSK PER QUINTAL DETERMINED BY AO RS . 218/- THE VALUE OF HUSK PER QUINTAL AS PER MARKET AVERAGE RS. 218/- TO RS. 273/-. 9. BEFORE US, THE LD. AR ARGUED THAT THE QUALITY OF THE HUSK VARIES FROM MILL TO MILL AND HIGHER VALUE IS GIVEN TO BETTER QUALITY HU SK. SINCE EVERY MILL HAS GOT THEIR 4 OWN MANUFACTURING QUALITIES THE MARKET PRICE OF THE PRODUCT OF ONE MILL CANNOT BE COMPARED TO THE PRODUCTION OF THE ASSESSEES MIL L. HE RELIED ON A NUMBER OF CASE LAWS WHICH HAVE BEEN DULY PERUSED. 10. LD. DR RELIED ON THE ORDERS OF THE LD. CIT(A). 11. HAVING GONE THROUGH THE RECORDS AND THE ARGUMEN TS WE FIND THAT THE OPENING STOCK WAS VALUED @ RS. 200/- PER QUINTAL. T HE ASSESSEE HAS SOLD AT RS. 156/- PER QUINTAL AND THE ASSESSING OFFICER ALTERED THE SALE VALUE AT RS. 218/- . SINCE THERE CANNOT BE COMMON PRICE FOR THE PRODUCT OF DIFFERENT MILLERS IN THE MARKET, ASCRIBING THE PRICE OF ANY OTHER MILLER TO THE ASSESSEE ALSO CANNOT BE ACCEPTED. SINCE THE ASSESSEE HAS SHOWN VALUE OF THE OPENING STOCK @ RS. 200/- PER QUINTAL AND BASED ON THE ACCEPTED PRINCIPLE OF FIFO THE VALUE OF THE SALE CAN BE REASONABLY DETERMINED AT RS. 200/- PER QUINT AL AND ACCORDINGLY THE ASSESSING OFFICER IS HEREBY DIRECTED TO COMPUTE THE ADDITION BY GIVING RELIEF OF RS. 18/- PER QUINTAL. 12. AS A RESULT, BOTH THE APPEALS ARE ALLOWED FOR S TATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (DR. B.R.R. KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 14/06/2018 AG COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR
