ITO WD-41(3), Kolkata, Kolkata V. Tikam Chand, Nahata, Kolkata

ITA 1597/KOL/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4523 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 14-07-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 02-11-2012
• Court: TRIBUNAL
• Department Lawyers: RAJAT KUMAR KUREEL
• Assessee Lawyers: S M SURANA
• Keywords: Rectification of order; Additional evidence
• Section: 143(3); 154

Judgement Text

I.T.A. NOS. 1597 & 1598/KOL./2012 ASSESSMENT YEAR: 2009-2010 PAGE 1 OF 10 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISHWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NOS. 1597 & 1598/KOL/2012 ASSESSMENT YEAR: 2009-2010 INCOME TAX OFFICER,................................ ................................APPELLANT WARD-41(3), KOLKATA, PODDAR COURT, 18, RABINDRA SARANI, KOLKATA-700 001 -VS.- TIKAM CHAND NAHATA,................................ ...........................RESPONDENT 13, B.T. ROAD, KOLKATA-700 050 [PAN: ABSPN 6487 H] APPEARANCES BY: SHRI RAJAT KUMAR KUREEL, JCIT, D.R., FOR THE DEPARTMENT SHRI S.M. SURANA, ADVOCATE, FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : JULY 14, 2016 DATE OF PRONOUNCING THE ORDER : SEPTEMBER 7 TH , 2016 O R D E R PER SHRI P.M. JAGTAP, A.M .: THESE TWO APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST TWO SEPARATE ORDERS PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XII, KOLKATA, BOTH DATED 18.07.2012 AND SINCE THE ISSUES INVOLVED THEREIN ARE INTER-LINKED, THE SAME HAVE BEEN HEARD TOGETHER AN D ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER. 2. FIRST WE TAKE UP THE APPEAL OF THE REVENUE BEING ITA NO. 1598/KOL/2012, GROUNDS NO. 1 & 2 OF WHICH INVOLVE A COMMON ISSUE RELATING TO THE DELETION BY THE LD. CIT(APPEALS) OF THE ADDITION OF RS.3,57,89,651/- MADE BY THE ASSESSING OFFICER ON A CCOUNT OF DIFFERENCE IN CLOSING STOCK. THE SAID GROUNDS READ AS UNDER:- (1) THE LD. CIT(A)-XII, KOLKATA HAS ERRED IN LAW AS WELL AS ON FACT IN DELETING THE ADDITION OF RS.3,57,89,651/- O N ACCOUNT I.T.A. NOS. 1597 & 1598/KOL./2012 ASSESSMENT YEAR: 2009-2010 PAGE 2 OF 10 OF CLOSING STOCK BY ADMITTING FRESH EVIDENCE IN VIO LATION OF RULE 46A. (2) THE LD. CIT(A)-XII, KOLKATA HAS ERRED IN LAW AS WELL AS ON FACT IN DELETING THE ADDITION OF RS.3,57,89,651/- A CCOUNT OF CLOSING STOCK WITHOUT APPRECIATING THE FACTS ON REC ORD THAT THE SALES AND PURCHASE, OTHER ITEMS AND CLOSING STO CKS WERE TAKEN FROM THE SAME COMPUTERIZED BOOKS OF THE ASSES SEE AND ADDITION WERE MADE TO THE EXTENT DISCREPANCY IN CLO SING STOCK REMAINED UNEXPLAINED. 3. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO IS ENGAGED IN THE BUSINESS OF TRADING IN ELECTRICAL GOODS. THE RE TURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY HIM ON 28.09. 2009 DECLARING TOTAL INCOME OF RS.5,94,090/-. A SURVEY UNDER SECTION 133 A WAS CARRIED OUT IN THE CASE OF THE ASSESSEE ON 04.09.2009. AS FOUND DU RING THE COURSE OF THE SURVEY, COMPUTERIZED STOCK RECORD WAS MAINTAINED BY THE ASSESSEE AND THE PRINTOUT TAKEN OF SUCH RECORD REVEALED THAT THE CLOSING STOCK AS ON 31.03.2009 WAS RS.4,07,48,440/-. IN THE FINAL ACCOU NTS FILED ALONG WITH THE RETURN OF INCOME, THE ASSESSEE, HOWEVER, HAD SH OWN THE CLOSING STOCK OF RS.49,58,789/- AS ON 31.03.2009. THE ASSESSEE, T HEREFORE, WAS CALLED UPON BY THE ASSESSING OFFICER TO EXPLAIN THE DIFFER ENCE IN THE CLOSING STOCK AS REFLECTED IN THE COMPUTERIZED STOCK RECORD AND AS SHOWN IN THE BOOKS OF ACCOUNT. IN REPLY, IT WAS SUBMITTED BY THE ASSESSEE THAT THE COMPUTER DATA RELATING TO STOCK WAS CORRUPTED AND T HIS FACT WAS BROUGHT TO THE NOTICE OF THE SURVEY TEAM EVEN AT THE TIME O F SURVEY. IN ORDER TO SUBSTANTIATE THIS STAND, IT WAS POINTED OUT BY THE ASSESSEE THAT THE STOCK AS PER THE COMPUTERIZED RECORD AS ON 01.04.2004 WAS SHOWN AT RS.3,46,58,517/-, WHEREAS HIS BUSINESS WAS ACTUALLY STARTED ONLY ON 11.10.2004. IT WAS SUBMITTED THAT THERE WAS THUS NO STOCK AS ON 01.04.2004 AS REFLECTED IN THE COMPUTERIZED STOCK R ECORD AND THIS FACT ITSELF WAS SUFFICIENT TO SHOW THAT THE COMPUTERIZED STOCK RECORD WAS CORRUPTED AND WAS NOT RELIABLE. THIS EXPLANATION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE BY THE ASSESSING OFFICER FOR THE F OLLOWING REASONS GIVEN IN HIS IMPUGNED ORDER:- I.T.A. NOS. 1597 & 1598/KOL./2012 ASSESSMENT YEAR: 2009-2010 PAGE 3 OF 10 (1) THE ASSESESE HAS FAILED TO PRODUCE TRADE LICEN SE TO SUBSTANTIATE THEIR CLAIM OF STARTING OF BUSINESS ON 11.10.2004. THE ASSESSEE HAS ONLY FILED A COPY OF T HE TELEPHONE BILL WHICH CANNOT BE CONSIDERED AS A VALI D EVIDENCE OF STARTING OF BUSINESS IN GROUND SITUATION THAT (A ) TELEPHONE FROM BSNL CAN BE INSTALLED AFTER STARTING OF BUSINE SS AND (B) THE ASSESSEE MAY HAVE TELEPHONE CONNECTION OF OTHER SERVICE PROVIDER FOR OPERATING THE BUSINESS. (2) AS AND WHEN THE ASSESSEE IS MAINTAINING HIS BOO KS OF ACCOUNTS IN COMPUTER, IT IS HARD TO BELIEVE THAT TH E ASSESSEE IS DOING BUSINESS, EVEN AS ON 31.07.2009, WITH A CO RRUPTED SOFTWARE. FOR THE REASONS GIVEN ABOVE, THE CONTENTION RAISED BY THE ASSESSEE WHILE EXPLAINING THE DIFFERENCE IN STOCK RELATING TO THE CORRUPTNESS OF COMPUTER DATA WAS NOT ACCEPTED BY THE ASSESSING OFFICER AND THE DIFFERENCE OF RS.3,57,89,651/- IN STOCK WAS ADDED BY HIM TO THE T OTAL INCOME OF THE ASSESSEE IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 29.12.2011. 4. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEF ORE THE LD. CIT(APPEALS) DISPUTING, INTER ALIA, THE ADDITION OF RS.3,57,89,651/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF THE ALLEGED DIFFERENCE IN CLOSING STOCK. DURING THE COURSE OF APPELLATE PROCEEDINGS B EFORE THE LD. CIT(APPEALS), THE STAND TAKEN BEFORE THE ASSESSING OFFICER WHILE EXPLAINING THE DIFFERENCE IN STOCK WAS REITERATED B Y THE ASSESSEE AND KEEPING IN VIEW THE SAME AS WELL AS THE MATERIAL BR OUGHT ON RECORD BY THE ASSESSEE IN SUPPORT, THE LD. CIT(APPEALS) DELETED T HE ADDITION MADE BY THE ASSESSING OFFICER ON THIS ISSUE FOR THE FOLLOWI NG REASONS GIVEN IN HIS IMPUGNED ORDER:- DURING THE COURSE OF HEARING THE AR. HAS FILED A C OPY OF THE TRADE LICENSE NO. 380 CERTIFICATE NO. B/1280 DT. 08 -11-2004 ISSUED BY THE EXECUTIVE OFFICER, BARANAGAR MUNICIPA L OFFICE, 87, DESBANDHU RD. (EAST), KOL-35. IN THE CERTIFICATE M/ S. MULTI CHANNEL ELECTRONICS (NORTH), PROP. TIKAM CHAND NAHA TA OF 13, B.T. RD., KOL-50 HAS BEEN AUTHORIZED TO RUN OF SHOP OF ELECTRONIC GOODS FOR ONE YEAR W.E.F. 8.11.2004 TO 7.11.2005 AT 13, B.T. ROAD, KOLKATA-50. THE A.R. HAD FURTHER SUBMITTED A COPY O F BANK I.T.A. NOS. 1597 & 1598/KOL./2012 ASSESSMENT YEAR: 2009-2010 PAGE 4 OF 10 ACCOUNT NO. 050902000010359 IN THE INDIAN OVERSEAS BANK AT GOAL PARK, KOLKATA IN THE NAME OF MULTI CHANNEL ELE CTRONICS (NORTH) AT 13, B.T. ROAD, KOL-50. THIS ACCOUNT WAS OPENED ON 11- 10-2004 BY DEPOSITING CASH OF RS.1,100/-. THE AR. H AS SUBMITTED THAT THIS WAS THE FIRST BANK ACCOUNT OPENED BY THE ASSESSEE FOR THE BUSINESS OF ITS ELECTRONIC SHOP. FROM THE CERTIFICATE ISSUED BY THE EXECUTIVE OFFICE R, BARANAGAR MUNICIPAL OFFICE, 87, DESBANDHU RD. (EAST ), KOL-35 AND THE BANK STATEMENT WHICH SHOWS THAT THE ACCOUNT WAS OPENED IN THE NAME OF THE M/S. MULTI CHANNEL ELECTR ONICS(NORTH) ON 11-10-2004 IT IS CLEAR THAT THE BUSINESS OF THE ASSESSEE WAS STARTED W.E.F. 11-10-2004. THUS, THE COMPUTER DATA SHOWING OPENING STOCK AS ON 01-04-2004 HAS GOT NO VALUE, BE CAUSE ON THAT DAY THE BUSINESS OF THE ASSESSEE WAS NOT IN EX ISTENCE. THEREFORE, ASSESSEE'S CONTENTION THAT THE DATA AVAI LABLE IN THE COMPUTER WAS CORRUPTED ONE, SEEMS TO BE CORRECT. TH E AR HAS FURTHER SUBMITTED THAT DURING THE SURVEY A STOCK FO UND WAS DULY INVENTORIZED BY THE SURVEY PARTY AT RS.4331315/- WH ICH WAS THE SAME AS PER THE REGULAR BOOKS OF ACCOUNTS AND, THER EFORE, THERE WAS NO DISCREPANCY FOUND BY THE SURVEY PARTY EXCEPT THE PRINT OUT OF CORRUPTED DATA FROM THE COMPUTER. I HAVE CONSIDERED THE FINDING OF THE A.O. REJECTING THE CLAIM OF THE ASSESSEE THAT A COPY OF TRADE LICENSE AND OTHER RELEVANT PROVE WERE NOT PRODUCED AT THE TIME OF ASS ESSMENT SHOWING THE START OF BUSINESS W.E.F. 11-10-2004. TH E AR. HAS SUBMITTED A COPY OF THE TRADE LICENSE AS WELL AS TH E BANK ACCOUNT OF THE ASSESSEE SHOWING THAT THE BUSINESS COMMENCED ON 11-10- 2004. FURTHER, SINCE NO DISCREPANCY OF THE ACTUAL S TOCK INVENTORIZED AT THE TIME OF SURVEY AND THE PHYSICAL STOCK REGISTER PRODUCED BY THE ASSESSEE AT THE TIME OF SURVEY AS B EEN POINTED OUT OR BROUGHT OUT BY THE AO. THEREFORE, THE ASSESS EE'S CLAIM THAT THE DATA OF OPENING STOCK AS ON 01-04-2004 FOU ND IN THE COMPUTER WAS CORRUPTED ONE SEEMS TO BE CORRECT. THE BOOKS OF ACCOUNT IMPOUNDED AT THE TIME OF SURVEY OPERATION W AS NOT REJECTED BY THE AO DURING THE ASSESSMENT PROCEEDING S. THE IMPOUNDED BOOKS ALSO INCLUDED THE STOCK REGISTER WH ICH TALLIED ALL THE STOCKS FOUND AT THE TIME OF THE SURVEY OPER ATION. SINCE AO. HAS ACCEPTED PURCHASES, SALES AND EXPENDITURE A ND OTHER ITEMS OF THE SAME BOOKS OF ACCOUNTS WHICH INCLUDED THE STOCK REGISTER ALSO. THEREFORE, ON THE ONE HAND, THE AO A CCEPTED BOOKS OF ACCOUNTS AND STOCK REGISTER AND ON THE OTHER MAD E ADDITION ON THE BASIS OF CORRUPTED DATA FOUND DURING THE SUR VEY OPERATION. BOTH THESE THINGS CANNOT GO TOGETHER. TH US, ADDITION MADE ON THE BASIS OF CORRUPTED DATA OF RS.35789651/ - IS DELETED. ASSESSEE'S S APPEAL ON GROUND NO. 2 AND 3 ARE ALLOW ED. 5. THE LD. D.R. CONTENDED THAT THE EXPLANATION OFFE RED BY THE ASSESSEE WHILE EXPLAINING THE DIFFERENCE IN CLOSING STOCK AS REFLECTED IN THE I.T.A. NOS. 1597 & 1598/KOL./2012 ASSESSMENT YEAR: 2009-2010 PAGE 5 OF 10 COMPUTERIZED STOCK RECORD AND AS SHOWN BY THE ASSES SEE IN HIS BOOKS OF ACCOUNT BASED ON HIS CLAIM OF CORRUPTION OF RELEVAN T COMPUTER DATA WAS NOT PROPERLY SUPPORTED AND SUBSTANTIATED BEFORE THE ASSESSING OFFICER. HE CONTENDED THAT IF THERE WAS SOME PROBLEM WITH TH E COMPUTERIZED STOCK RECORD RIGHT FROM F.Y. 2004-05 AS CLAIMED BY THE ASSESSEE, IT IS BEYOND COMPREHENSION AS TO HOW AND WHY THE ASSESSEE DID NOT RECTIFY THE SAME AND STILL CONTINUED TO MAINTAIN THE COMPUTERIZ ED STOCK RECORD. HE SUBMITTED THAT EVEN THE CLAIM OF THE ASSESSEE OF HA VING COMMENCED THE BUSINESS ON 11.10.2004 WAS NOT SUPPORTED BY ANY EVI DENCE FILED BEFORE THE ASSESSING OFFICER AND THE COPY OF THE RELEVANT TRADE LICENCE TO SUBSTANTIATE THE SAID CLAIM WAS FILED BY THE ASSESS EE FOR THE FIRST TIME BEFORE THE LD. CIT(APPEALS). HE CONTENDED THAT THE LD. CIT(APPEALS), HOWEVER, DID NOT GIVE ANY OPPORTUNITY TO THE ASSESS ING OFFICER TO VERIFY THE SAME BEFORE ACCEPTING THE CLAIM OF THE ASSESSEE BY RELYING ON THE SAID ADDITIONAL EVIDENCE, WHICH IS IN CLEAR VIOLATION OF RULE 46A OF THE INCOME TAX RULES. 6. LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, SUBMITTED THAT THE STOCK OF THE ASSESSEE AT THE TIME OF SURVEY WAS PHY SICALLY VERIFIED BY THE SURVEY TEAM AND THE SAME WAS FOUND TO BE TALLIED WI TH THE BOOKS OF ACCOUNT REGULARLY MAINTAINED BY THE ASSESSEE. HE SU BMITTED THAT THE COMPUTERIZED STOCK RECORD MAINTAINED BY THE ASSESSE E WAS CORRUPTED AS CLAIMED BY THE ASSESSEE AT THE TIME OF SURVEY ITSEL F AND THIS POSITION WAS DULY SUBSTANTIATED BY THE FACT THAT THE STOCK AS ON 01.04.2004 AS PER THE COMPUTERIZED RECORD WAS SHOWN AT RS.3,46,58,517/- W HILE THE BUSINESS OF THE ASSESSEE HAD NOT EVEN COMMENCED ON THAT DATE. H E CONTENDED THAT THIS ANOMALY WAS BROUGHT TO THE NOTICE OF THE ASSES SING OFFICER BY THE ASSESSEE AND EVIDENCE IN THE FORM OF TELEPHONE BILL WAS ALSO FILED BY THE ASSESSEE TO SHOW THAT HIS BUSINESS WAS COMMENCED ON LY ON 11.10.2004. HE CONTENDED THAT THE ASSESSING OFFICER, HOWEVER, D ID NOT FIND THE SAID EVIDENCE TO BE RELIABLE TO ACCEPT THE CLAIM OF THE ASSESSEE AND REJECTED THE SAME BY OBSERVING THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO PRODUCE THE RELEVANT TRADE LICENCE TO SUBSTANTIA TE HIS CLAIM OF HAVING I.T.A. NOS. 1597 & 1598/KOL./2012 ASSESSMENT YEAR: 2009-2010 PAGE 6 OF 10 STARTING THE BUSINESS ON 11.10.2004. HE CONTENDED T HAT THE ASSESSEE, THEREFORE, FILED THE COPY OF THE TRADE LICENCE BEFO RE THE LD. CIT(APPEALS) IN ORDER TO FURTHER CORROBORATE HIS CLAIM OF HAVING STARTED THE BUSINESS ON 11.10.2004 BEFORE THE LD. CIT(APPEALS) AND THE A CTION OF THE LD. CIT(APPEALS) IN ALLOWING THE RELIEF TO THE ASSESSEE BY RELYING ON THE SAID EVIDENCE, WHICH WAS FILED TO CORROBORATE THE STAND TAKEN BY THE ASSESSEE BEFORE THE ASSESSING OFFICER, CANNOT BE SAID TO BE IN VIOLATION OF RULE 46A OF INCOME TAX RULES. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT THE STOCK AVAILABLE IN THE PREMISES OF THE ASSESSEE AT THE TI ME OF SURVEY CARRIED OUT ON 04.09.2009 WAS PHYSICALLY VERIFIED BY THE SURVEY TEAM AND THE SAME WAS FOUND TO BE TALLIED WITH THE BOOKS OF ACCOUNT O F THE ASSESSEE. THE COMPUTERIZED STOCK RECORD MAINTAINED BY THE ASSESSE E, HOWEVER, DISPLAYED THE VALUE OF STOCK AS ON 31.03.2009 AT RS .4,07,48,440/- AS FOUND BY THE SURVEY TEAM AND SINCE THE STOCK AS ON 31.03.2009 WAS SHOWN AT RS.49,58,789/- AS PER THE BOOKS OF ACCOUNT OF TH E ASSESSEE, THE ASSESSEE WAS CALLED UPON TO EXPLAIN AND RECONCILE T HE SAID DIFFERENCE. IN THIS REGARD, THE EXPLANATION OFFERED BY THE ASSESSE E RIGHT DURING THE COURSE OF SURVEY WAS THAT THE COMPUTERIZED DATA REL ATING TO STOCK RECORD HAD BEEN CORRUPTED AND THE SAME, THEREFORE, WAS NOT RELIABLE. IN ORDER TO SUPPORT AND SUBSTANTIATE THIS EXPLANATION, A SPECIF IC DISCREPANCY AS APPEARING IN THE COMPUTERIZED STOCK RECORD WAS POIN TED OUT BY THE ASSESSEE BY SHOWING THAT THE STOCK AS ON 01.04.2004 WAS SHOWN IN THE COMPUTERIZED RECORD AT RS.3,46,58,517/-, WHILE THE BUSINESS OF THE ASSESSEE HAD NOT EVEN COMMENCED ON THE SAID DATE AN D IT WAS COMMENCED ONLY ON 11.10.2004. IN THIS REGARD, EVIDENCE IN THE FORM OF TELEPHONE BILL WAS ALSO PRODUCED BY THE ASSESSEE IN SUPPORT OF HIS CLAIM OF HAVING STARTED THE BUSINESS ACTUALLY ON 11.10.2004. THE AS SESSING OFFICER, HOWEVER, DID NOT FIND THE SAID EVIDENCE TO BE RELIA BLE ON A VERY FLIMSY GROUND AND DID NOT ACCEPT THE VERY PATENT AND GLARI NG MISTAKE POINTED OUT BY THE ASSESSEE IN THE COMPUTERIZED STOCK RECOR D WHICH BY ITSELF WAS I.T.A. NOS. 1597 & 1598/KOL./2012 ASSESSMENT YEAR: 2009-2010 PAGE 7 OF 10 SUFFICIENT TO EXPLAIN THE DIFFERENCE IN STOCK SUBST ANTIALLY. WHILE DOING SO, THE ASSESSING OFFICER OBSERVED THAT THERE WAS FAILU RE ON THE PART OF THE ASSESSEE TO PRODUCE THE RELEVANT TRADE LICENCE TO S UBSTANTIATE HIS CLAIM OF HAVING STARTED THE BUSINESS ON 11.10.2004. AS SUBMI TTED BY THE LD. COUNSEL FOR THE ASSESSEE BEFORE US, NO OPPORTUNITY IN THIS REGARD WAS AFFORDED BY THE ASSESSING OFFICER TO THE ASSESSEE T O PRODUCE SUCH TRADE LICENCE AND, THEREFORE, THE ASSESSEE COULD PRODUCE THE SAME ONLY BEFORE THE LD. CIT(APPEALS) IN ORDER TO CORROBORATE HIS ST AND ALREADY TAKEN BEFORE THE ASSESSING OFFICER OF HAVING COMMENCED TH E BUSINESS ON 11.10.2004. MOREOVER, A PERUSAL OF THE RELEVANT POR TION OF THE IMPUGNED ORDER OF THE LD. CIT(APPEALS), WHICH IS REPRODUCED HEREINABOVE CLEARLY SHOWS THAT THE RELIEF ON THIS ISSUE HAS BEEN ALLOWE D BY HIM NOT ONLY ON THE BASIS OF THE COPY OF RELEVANT TRADE LICENCE FIL ED BY THE ASSESSEE BUT MAINLY ON THE BASIS THAT THE ADDITION MADE BY THE A SSESSING OFFICER ON THE BASIS OF CORRUPTED COMPUTERIZED DATA WITHOUT REJECT ING THE BOOKS OF ACCOUNT REGULARLY MAINTAINED BY THE ASSESSEE WAS NO T SUSTAINABLE. WE, THEREFORE, FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) ALLOWING THE RELIEF TO THE ASSESSEE ON THIS ISSUE A ND UPHOLDING THE SAME, WE DISMISS GROUNDS NO. 1 & 2 OF THE REVENUES APPEA L. 8. IN GROUND NO. 3, THE REVENUE HAS CHALLENGED THE ACTION OF THE LD. CIT(APPEALS) IN DELETING THE ADDITION OF RS.3,29,74 0/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISCOUNT ALLOWED TO CUSTOMERS. 9. IN THE PROFIT & LOSS ACCOUNT FILED ALONG WITH TH E RETURN OF INCOME, A SUM OF RS.10,94,947/- WAS DEBITED BY THE ASSESSEE O N ACCOUNT OF DISCOUNT ALLOWED TO CUSTOMERS AGAINST PURCHASE OF DIFFERENT ITEMS. IN THIS REGARD, THE ASSESSING OFFICER NOTED THAT THE ENTIRE DISCOUN T RECEIVED BY THE ASSESSEE FROM HIS SUPPLIERS WAS PASSED OVER TO THE CUSTOMERS. HE, THEREFORE, HELD THAT THE DISCOUNT ALLOWED BY THE AS SESSEE TO THE CUSTOMERS WAS EXCESSIVE AND DISALLOWED THE SAME TO THE EXTENT OF RS.3,29,740/- BEING 0.4% OF THE SALES. I.T.A. NOS. 1597 & 1598/KOL./2012 ASSESSMENT YEAR: 2009-2010 PAGE 8 OF 10 10. ON APPEAL, THE LD. CIT(APPEALS) DELETED THE SAI D DISALLOWANCE HOLDING THAT IT WAS DONE BY THE ASSESSING OFFICER P URELY ON ESTIMATE BASIS WITHOUT BRINGING ANY EVIDENCE TO SUPPORT AND SUBSTA NTIATE THE SAME. 11. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES A ND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS RIGHTLY H ELD BY THE LD. CIT(APPEALS), THE IMPUGNED DISALLOWANCE OUT OF DISC OUNT OFFERED TO THE CUSTOMERS WAS MADE BY THE ASSESSING OFFICER PURELY ON ESTIMATE BASIS WITHOUT BRINGING ANY EVIDENCE TO SUPPORT AND SUBSTA NTIATE THE SAME AND THIS POSITION CLEARLY EVIDENT FROM THE ORDER OF THE ASSESSING OFFICER HAS NOT BEEN REBUTTED OR CONTROVERTED EVEN BY THE LD. D .R. WE, THEREFORE, FIND NO JUSTIFIABLE REASON TO INTERFERE WITH THE IMPUGNE D ORDER OF THE LD. CIT(APPEALS) GIVING RELIEF TO THE ASSESSEE ON THIS ISSUE AND DISMISS GROUND NO. 3 OF THE REVENUES APPEAL. 12. NOW WE TAKE UP THE APPEAL OF THE REVENUE BEING ITA NO. 1597/KOL/2012, WHICH IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(APPEALS)-XII DATED 18.07.2012, WHEREBY HE DELET ED THE ENHANCED ADDITION OF RS.3,64,56,910/- INSTEAD OF RS.3,57,89, 651/- ON ACCOUNT OF DIFFERENCE IN STOCK AS MADE BY THE ASSESSING OFFICE R BY WAY OF RECTIFICATION ORDER PASSED UNDER SECTION 154. 13. AFTER HAVING MADE AN ADDITION OF RS.3,57,89,651 /- TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF DIFFERENCE IN CLOSING STOCK IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) VIDE AN O RDER DATED 29.12.2011, THE ASSESSING OFFICER REALIZED THAT THE ACTUAL ADDITION LIABLE TO BE MADE TO THE TOTAL INCOME OF THE ASSESSEE ON T HIS ISSUE WAS RS.3,64,56,910/-. HE, THEREFORE, PASSED AN ORDER DA TED 19.01.2012 UNDER SECTION 154 RECTIFYING THIS MISTAKE. AGAINST THE OR DER PASSED BY THE ASSESSING OFFICER UNDER SECTION 154, AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) AND KEEPING IN VIEW THAT THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT O F DIFFERENCE IN STOCK IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) WA S ALREADY DELETED BY I.T.A. NOS. 1597 & 1598/KOL./2012 ASSESSMENT YEAR: 2009-2010 PAGE 9 OF 10 HIM HOLDING THE SAME TO BE UNSUSTAINABLE BY A SEPAR ATE APPELLATE ORDER PASSED WHILE DISPOSING OF THE APPEAL OF THE ASSESSE E FILED AGAINST THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3), THE LD. CIT(APPEALS) HELD THAT THE FURTHER INCREASE IN THE SAID ADDITION AS MADE BY THE ASSESSING OFFICER BY WAY OF RECTIFICATION UN DER SECTION 154 WAS LIABLE TO BE DELETED. HE ACCORDINGLY ALLOWED THE AP PEAL OF THE ASSESSEE FILED AGAINST THE ORDER OF THE ASSESSING OFFICER PA SSED UNDER SECTION 154 AND AGGRIEVED BY THE SAME, THE REVENUE HAS PREFERRE D THIS APPEAL BEFORE THE TRIBUNAL. 14. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES A ND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. SINCE WE HAV E ALREADY UPHELD THE ORDER OF THE LD. CIT(APPEALS) DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DIFFERENCE IN STOCK IN THE AS SESSMENT COMPLETED UNDER SECTION 143(3) HOLDING THE SAME TO BE UNSUSTA INABLE, THE INCREASE IN THE SAID ADDITION AS MADE BY THE ASSESSING OFFIC ER BY WAY OF RECTIFICATION UNDER SECTION 154 IS LIABLE TO BE DEL ETED AS A NECESSARY COROLLARY. WE, THEREFORE, UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) ON THIS ISSUE AND DISMISS THE APPEAL O F THE REVENUE BEING ITA NO.1597/KOL/2012. 15. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON SEPTEMBER 7 TH , 2016. SD/- SD/- (S.S. VISHWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT ME MBER KOLKATA, THE 7 TH DAY OF SEPTEMBER, 2016 ORDER PRONOUNCED BY SD/- SD/- (J.M.) (A.M.) S.S.V.R. W.A. COPIES TO : (1) INCOME TAX OFFICER, WARD-41(3), KOLKATA, PODDAR COURT, 18, RABINDRA SARANI, KOLKATA-700 001 (2) TIKAM CHAND NAHATA, 13, B.T. ROAD, KOLKATA-700 050 I.T.A. NOS. 1597 & 1598/KOL./2012 ASSESSMENT YEAR: 2009-2010 PAGE 10 OF 10 (3) COMMISSIONER OF INCOME TAX (APPEALS)-XII, KOL KATA; (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.