Chilumkuru Jewellery , Chittoor V. Income Tax Officer, Ward-1, Chittor

ITA 155/Hyd/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4757 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-B
• Next Hearing Date: 14-05-2019
• Assessment Year: 2009-2010
• Appeal Filed On: 05-02-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NILANJAN DEY
• Keywords: Retraction
• Section: 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD SMC BENCH, HYDERABAD BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER ITA NO. 15 5 / HYD/ 201 9 (ASST. YEAR : 20 09 - 1 0 ) M/S. CHILUMKURU JEWELLERY, NO. 12 - 61, BAZAAR STREET, CHITTOOR. V S . ITO, WARD - 1, CHITTOOR. P AN NO. AACFC 5467 F (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SHRI NILANJAN DEY DR DATE OF HEARING : 14 / 05 /201 9 . DATE OF PRONOUNCEMENT : 17 / 0 5 /201 9 . O R D E R TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) , TIRUPATI , DATED 10 /0 5 /201 8 FOR THE ASSESSMENT YEAR 20 09 - 1 0 . 2. THERE IS A DELAY OF 198 DAYS IN FILING THE APPEAL. THE ASSESSEE HAS FILED AN AFFIDAVIT TO CONDONE THE DELAY WHEREIN HE HAS SUBMITTED THAT HE SIGNED THE APPEAL PAPERS ON 12/07/2018, FEE WAS ALSO MADE ON 17/07/2018, THE SAME WAS FORWARDED TO THE CA TO FILE THE PAPERS. THE CONCERNED CA HAS NOT FILED THE APPEAL ON THE GROUND THAT THE PAYMENT RECEIPT WAS NOT AVAILABLE. WHEN IT CAME TO THE 2 ITA NO. 155 / HYD /201 9 ( M/S. CHILUMKURU JEWELLERY ) NOTICE OF THE ASSESSEE, HE VERIFIED THE SAME AND HANDED OVER TO THE CONCERNED CA AND FINALLY A PPEAL WAS FILED ON 04/02/2019, THEREFORE THERE IS A DELAY OF 198 DAYS IN FILING THE APPEAL. 3 . I HAV E VERIFIED THE CHALLAN FILED BY THE ASSESSEE ALONG WITH DELAY CONDONATION PETITION. IT IS A FACT THAT THE ASSESSEE HAS PAID NECESSARY FEE ON 17/07/2018, THEREFORE THE INTENTION OF THE ASSESSEE IS TO FILE THE APPEAL IN TIME . H OWEVER, THERE IS A MISCOMMUNICATION BETWEEN THE ASSESSEE AND THE CONCERNED CA WITH REGARD TO COPY OF CHALLAN, THERE IS A DELAY IN FILING THE APPEAL. I FIND THAT THERE IS A SUFFICIENT CAUSE TO CONDONE THE DELAY. ACCOR D I N G L Y , DELAY IS CON D ONED. 4 . SO FAR AS MERITS OF THE CASE IS CONCERNED, THE ASSESSEE FIRM ENGAGED IN THE BUSINESS OF SALE OF GOLD AND SILVER JEWELLERY , HAS FILED ITS RETURN OF INCOME BY DECLARING TOTAL INCOME OF RS. 2,35,000/ - A SURVEY U/S. 133A OF THE ACT WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE - FIRM ON 10/02/2009 . SUBSEQUENTLY, ASSESSMENT WAS COMPLETED ON 30/12/2011 U/S. 143(3) OF THE ACT BY DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS. 12,09,723/ - IN THE ASSESSMENT ORDER , THE ASSESSING OFFICER HAS NOTED THAT DURING THE SURVEY ACTION AT THE PREMISES OF THE ASSESSEE, HUGE DISCREPANCIES IN TERMS OF STOCK, UNACCO UNTED PURCHASE, UNACCOUNTED SALES WERE NOTICED. AS A RESULT OF SURVEY ACTION, THE 3 ITA NO. 155 / HYD /201 9 ( M/S. CHILUMKURU JEWELLERY ) ASSESSING OFFICER RECORDED STATEMENT FROM ONE OF THE PARTNERS OF THE FIRM ON 28/12/2011, WHEREIN PARTNER WAS QUESTIONED ON THE DISCREPANCIES NOTICED. IN REPLY TO THE SEVERAL QUESTIONS, THE ASSESSEE CAME FORWARD TO DISCLOSE AN INCOME OF RS. 12,09,723/ - ON SEVERAL COUNTS. THEREAFTER, ON 30/12/2011 THE PARTNER OF THE FIRM HAD AGAIN AGREED FOR A DDITION OF RS. 12,09,723/ - BY PUTTING HIS SIGNATURE IN THE ORDER SHEET ON 30/12/2011 . S UBSEQUENTLY , THE ASSESSMENT WAS FRAMED BY MAKING ADDITION OF RS. 12,09,723/ - ON THE BASIS OF ADMISSION MADE BY ONE OF THE PARTNERS IN THE COURSE OF SURVEY ACTION. 5. ON APPEAL BEFORE THE LD.CIT(A), IT WAS SUBMITTED THAT THE ADDITION MADE BY THE ASSESSING OFFICER WAS NOT BASED ON THE FACTS , THEREFORE SAME HAS TO BE DELETED. THE LD.CIT(A) BY CONSIDERING THE EXPLANATION GIVEN BY THE ASSESSEE HAS OBSERVED THE COUNSEL FOR THE ASSESSEE IS UNABLE TO EXPLAIN AS TO WHETHER ANY RETRACTION WAS MADE AGAINST THE ADMISSION MADE BY THE PARTNER OF THE ASSESSEE . THE ASSESSEE HAS NOT EXPLAINED BEFORE THAT LD.CIT(A) THAT WHY RETRACTION IS NOT MADE. THE LD.CIT(A) BY POINTING OUT CERTAIN DISCREPANCIES IN RESPECT OF EXCESS STOCK OF SILVER , ASKED EXPLANATION FROM THE AR OF THE ASSESSEE. THE AR OF THE ASSESSEE WAS NOT ABLE TO EXPLAIN BEFORE THE LD.CIT(A), THEREFORE LD.CIT(A) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 4 ITA NO. 155 / HYD /201 9 ( M/S. CHILUMKURU JEWELLERY ) 6 . ON APPEAL BEFORE ME , NONE APPEARED ON BEHALF OF THE ASSESSEE AND FILED ONLY WRITTEN SUBMISSIONS WHEREIN THE ASSESSEE IS NOT ABLE TO EXPLAIN WHETHER ANY RETRACTION IS MADE BEFORE THE ASSESSING OFFICER. WE FIND THAT ONE OF THE PARTNERS OF THE ASSESSEE FIRM HAS ADMITTED BEFORE THE ASSESSING OFFICER TO DISCLOSE THE INCOME OF RS. 12,09,723/ - ON SEVERAL COUNTS. HE AGAIN ALSO ADMITTED FOR THE SAID ADDITION ON 30/12/2011 BY PUTTING HIS SIGNATURE ON ORDER S HEET . EVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS AL SO , THE ASSESSEE HAS NOT RAISED ANY OBJECTION IN RESPECT OF ADDITION AGREED. THE ASSESSEE HAS RAISED FOR THE FIRST TIME BEFORE THE LD.CIT(A) THAT THE ADDITION MADE BY THE ASSESSING OFFICER IS NOT CORRECT BECAUSE THERE IS NO IRREGULARITY OR INCONSISTENCY I N THE STOCK MAINTAINED BY THE ASSESSEE. THE LD.CIT(A) HAS SPECIFICALLY POINTED OUT INCONSISTENCY IN RESPECT OF EXCESS STO C K OF SILVER AND CONFIRMED THE ORDER OF THE ASSESSING OFFICER. THE RELEVANT PORTION OF THE LD.CIT(A)S ORDER IS EXTRACTED AS UNDER: - 4. ALL THE GROUNDS OF APPEAL FILED BY THE APPELLANT ARE AGAINST ADDITION OF RS.12,09,723/. MADE BY THE AO. THE AO OBSERVED THAT DURING THE COURSE OF SURVEY ACTION AT THE PREMISES OF THE ASSESSEE, HUGE DISCREPANCIES IN TERMS OF STOCK, UNACCOUNTED PURCHASE, UNACCOUNTED SALES WERE NOTICED. AS A RESULT OF SURVEY ACTION, THE AO RECORDED STATEMENT FROM ONE OF THE PARTNERS OF THE FIRM ON 28.12.2011, WHEREIN PARTNER WAS QUESTIONED ON THE DISCREPANCIES NOTICED. IN REPLY TO THE SEVERAL QUESTIONS, THE APPELLANT CAME F ORWARD TO DISCLOSE AN INCOME OF RS.12,09,723/ - ON SEVERAL COUNTS. 5 ITA NO. 155 / HYD /201 9 ( M/S. CHILUMKURU JEWELLERY ) THEREAFTER, ON 30.12.2011, THE PARTNER OF THE FIRM HAD AGAIN AGREED FOR ADDITION OF RS.12,09,723/ - BY PUTTING SIGNATURE IN THE ORDER SHEET ON 30.12.2011. SUBSEQUENTLY, THE ASSESSMENT WAS FRA MED MAKING ADDITION. DURING THE COURSE OF APPELLATE PROCEEDINGS, AR OF THE APPELLANT CONTENDED THAT THE STATEMENT RECORDED BY THE AO WAS NOT BASED ON THE FACTS, AND ADDITION NEEDS TO BE DELETED. HOWEVER, I FIND THAT AR OF THE APPELLANT IS UNABLE TO EXPLAIN AS TO WHETHER ANY RETRACTION' WAS MADE AGAINST THE ADMISSION OF THE APPELLANT DURING THE COURSE OF SWORN STATEMENT RECORDED BY THE AO AND ALSO NOTINGS MADE IN THE ORDER SHEET. IN SUPPORT OF THE CONTENTION, THE AR OF THE APPELLANT BROUGHT FEW INCONSISTENCI ES LIKE, ADDITION OF RS. 4,00,297/. UNDER THE HEAD 'EXCESS STOCK OF SILVER', ON THE GROUND THAT THERE WAS NO EXCESS STOCK. IT WAS THE CONTENTION OF THE AR OF THE APPELLANT THAT THE STOCK ADMITTED BY THE APPELLANT IS MORE THAN THE PHYSICAL STOCK. I HAVE PER USED THE QUESTION PUT BY THE OFFICER IN QUESTION NO.9 & ANSWER NO.9 OF THE STATEMENT RECORDED IN COURSE OF SURVEY PROCEEDINGS CAREFULLY. I FIND THAT THE APPELLANT HAD RECORDED THE SILVER STOCK IN THE SALES REGISTER ONLY UPTO 31.12.2008. ON RECONCILIATION, THE SILVER STOCK AS PER THE WORKING SHEET IS 78287.390 GMS, WHEREAS, PHYSICAL STOCK OF SILVER WAS 59,135 GMS, LEAVING THEREBY GAP OF RS. 19,153 GMS AND THE VALUE OF THE SAME COMES TO RS. 4,00,297/ - . THOUGH THE AO AND ASSESSEE TREATED THE SAME AS EXCESS ST OCK BUT ON THE FACTS, IT IS APPARENT THAT THERE WAS A DEFICIT STOCK WORTH OF RS. 4,00,297/ - . THE APPELLANT COULD NOT EXPLAIN WHY THERE WAS A DEFICIT STOCK AS ON THE DATE OF SURVEY ACTION. THE APPELLANT WAS FOUND TO BE NOT MAINTAINING COMPLETE STOCK REGIST ER, RECORDING ALL THE TRANSACTIONS TILL THE DATE OF SURVEY. HENCE, DEFICIT STOCK OF SILVER REPRESENTS UNACCOUNTED SALES OF THE ASSESSEE. THEREFORE, AN ADDITION OF RS. 4,00,297/ - MADE BY THE AO SHALL BE CONSTRUED AS ADDITION ON ACCOUNT OF UNRECORDED SALES A ND HENCE, THE CONTENTION OF THE AR OF THE APPELLANT NEEDS TO BE REJECTED. REGARDING INFLATED PURCHASE OF GOLD AND UNACCOUNTED PURCHASE OF SILVER, THE AR OF THE APPELLANT COULD NOT SUBSTANTIATE WITH ANY EVIDENCE IN THE COURSE OF APPELLATE PROCEEDINGS. REG ARDING ADDITION ON ACCOUNT OF SUNDRY CREDITORS, THE APPELLANT DID NOT FURNISH COMPLETE ADDRESSES OF THE CREDITORS, AND ALSO DID NOT EXPLAIN THE NATURE OF THE CREDIT WITH DOCUMENTARY EVIDENCE EVEN DURING THE APPELLATE PROCEEDINGS. REGARDING INTEREST PAID TO THE BANK, THE AR CLAIMS THAT ASSESSEE HAD OBTAINED FORM NO. 15G BUT NO EVIDENCE WAS FURNISHED EITHER BEFORE AO OR BEFORE THE UNDERSIGNED, IN SUPPORT OF CLAIM. REGARDING DISALLOWANCE OF INTEREST OF RS.1 0,750/ - ALSO, THE AR OF THE APPELLANT DID NOT SUBSTAN TIATE WITH AN EVIDENCE, AS TO HOW THE HUGE DRAWINGS WERE ONLY OUT OF THE CAPITAL BALANCE. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, I CONFIRM THE ADDITION MADE BY THE AO. 6 ITA NO. 155 / HYD /201 9 ( M/S. CHILUMKURU JEWELLERY ) 7 . I FIND THAT THE LD.CIT(A) HAS CONSIDERED ALL THE FACTS AND CIRCUM STANCES OF THE CASE CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. THUS, NO INTERFERE IS WARRANTED IN THIS CASE. SO FAR AS CASE - LAW RELIED ON BY THE ASSESSEES COUNSEL IN THE WRITTEN SUBMISSION, HAS NO APPLICATION TO THE FACTS OF THE PRESENT CASE. THUS, THIS APPEAL FILED BY THE ASSESSEE IS DISMISSED. 8 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON TH IS 1 7 TH DAY OF MAY , 201 9 . S D/ - ( V. DURGA RAO ) JUDICIAL MEMBER DATED : 17 TH MAY , 201 9 . VR/ - COPY TO: 1. THE ASSESSEE - M/S. CHILUMKURU JEWELLERY, NO. 12 - 61, BAZAAR STREET, CHITTOOR. 2. THE REVENUE - ITO, WARD - 1, CHITTOOR. 3. THE PR. CIT , TIRUPATI. 4. THE CIT(A) , TIRUPATI . 5. THE D.R . , HYDERABAD. 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY, ITAT, HYDERABAD .