Appeal details
Counselvise Citation
164120514 RSA 2011
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 year(s) 9 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
25-06-2015
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
D
Next Hearing Date
16-06-2015
Assessment Year
2008-2009
Appeal Filed On
15-06-2011
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: S H RI G. D. AGRAWAL , VICE PRESIDENT AND SHR I RAJPAL YADAV , JUDICIAL MEMBER INCOME TAX OFFICER, WARD - 8(2) , SURAT (APPELLANT) VS SHIR JIT E NDRA N. KATARGAMWALA, PROP. J.K. PETROLEUM, 35/36, DHOLIKUI, VARACHHA ROAD , SURAT PAN: ADYPK6674M (RESPONDENT) REVENUE BY : SMT. SONIA KUMAR, SR. D . R. ASSESSEE BY: S H RI SAPNESH SHETH , A.R. DATE OF HEARING : 16 - 06 - 2 015 DATE OF PRONOUNCEMENT : 25 - 06 - 2 015 / ORDER P ER : RAJ PAL YADAV , JUDICIAL MEMBER : - REVENUE IS IN APPEAL BEFORE US AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 28 TH FEBRUARY, 2011 PA SSED FOR ASSESSMENT YEAR 2008 - 09 . I T A NO . 1641 / A HD/20 11 A SSESSMENT YEAR 200 8 - 09 I.T.A NO. 1641 /AHD/20 11 A.Y. 20 08 - 09 PAGE NO ITO V S. JITENDRA N. KATARGAMWALA, PROP. J.K. PETROLEUM 2 2. THE SOLITARY GRIEVANCE OF THE REVENUE IS THAT LD. COMMISSIONER O F INCOME TAX (APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS . 67,73,279/ - WHICH WAS MADE BY THE ASSESSING OFFICER WITH THE AID OF SECTION 69 OF THE INCOME TAX ACT. 3. THE BRIEF FA CTS OF THE CAS E ARE THAT THE ASSESSEE AT THE RELEVANT TIME WAS RUNNING A PROPRIETORSHIP CONCERN IN THE NAME AND STYLE OF M/S. J.K. PETROLEUM WHICH IS ENGAGED IN THE RETAIL BUSINESS OF PETROLEUM PRODUCTS LIKE PETROL, DIESEL, ENGIN E OIL ETC. THE ASSESSEE HAS FI L E D HIS RETURN OF INCOME ON 29 TH SEPTEMBER 2008 DECLARING TOTAL INCO ME OF RS. 3,22,532/ - . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND A NOTICE U/S. 143(2) OF THE INCOME TAX ACT WAS ISSUED AND SERVED UPON THE ASSESSEE. ACCORDING TO THE ASSESSING OFFICER, A NOTICE U/S. 133(6) OF THE INCOME TAX ACT WAS ISSUED TO HINDUSTAN PETROLEUM CORPORATION LTD WITH A REQUEST THAT DETAILS OF SALES MADE TO THE ASSESSEE BE FURNISHED IN A PARTICULAR FORMAT APPENDED WITH THE NOTICE. ON AN ANALYSIS OF THE DETAILS SUBMITTED BY T H E HPCL VIS - - VIS THE STOCK REGISTER OF THE A SSESSEE, LD. ASSESSING OFFICER HAS OBSERVED THAT SOME OF THE SALE ENTRIES WERE NOT REFLECTING AS PURCHASE S IN T H E STOCK OF THE ASSESSEE. HE TABULATED THOSE E NT R I ES WHICH ARE 20 IN NUMBER HAVING QUANTITY 1,64,000 LITERS. ACCORDING TO THE ASSESSING OFFICE R, THE ASSESSEE FAILED TO RE - CONCILE THIS FIGURE . ACCORDINGLY, THE ASSESSING OFFICER HAS MADE AN ADDITION OF RS . 67,73,279/ - ON ACCOUNT OF UNEXPLAINED E XPENDITURE MADE BY THE ASSESSEE . 4. DISSATISFIED WITH THE FINDING OF LD. ASSESSING OFFICER , ASSESSE E CARRIED THE MATTER BEFORE LD. COMMISSIONER OF INCOME TAX (APPEALS). IT HAS FILED A CONFIRMATION FROM HPCL AND ALLEGED THAT ASSESSING OFFICER I.T.A NO. 1641 /AHD/20 11 A.Y. 20 08 - 09 PAGE NO ITO V S. JITENDRA N. KATARGAMWALA, PROP. J.K. PETROLEUM 3 FAILED TO APPRECIATE ACCOUNTING ENTRIES AND THE DETAILS SUBMITTED BY THE HPCL BY WORKING OUT THE ALLEGED EXCESS QUANTITY OF PETROLEUM PRODUCTS PURCHASED BY THE ASSESSEE. LD. FIRST APPELLATE AUTHORITY APPRECIATED THE FACTS AND CIRCUMSTANCES AND DELETED THE ADDITION BY OBSERVING AS UNDER: - 6. I HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND THE MATERIAL AVAILAB LE ON RECORDS. AFTER GOING THROUGH THE ASSESSMENT ORDER AND HEARING THE ORAL AS WELL AS WRITTEN ARGUMENT OF THE AR OF THE APPELLANT, IT CAN BE CONSTRUED THAT THE NATURE OF BUSINESS OF THE ASSESSEE IS SUCH THAT IT IS UNDER STRICT CONTROL AND OBSERVATION O F VARIOUS CONTROLLING AUTHORITIES. I HAVE FURTHER GONE THROUGH THE COPY OF CONFIRMATION OF HPCL AND THE REPLY TO SHOW CAUSE NOTICE AND THE SUBSEQUENT DATE - WISE CONFIRMATIONS GIVEN BY HPCL. ON PERUSAL OF CONFIRMATION LETTERS SUBMITTED BY HPCL, IT IS CLEAR T HAT DIFFERENCE IN QUANTITY SHOWN BY THE COMPANY AS NEGATIVE ( - ) ENTRIES IN THEIR ACCOUNTING RECORDS HAVE BEEN PASSED TO MITIGATE THE ERROR OF INPUT AT THEIR END. SUCH GOODS WERE NEVER DELIVERED TO THE ASSESSEE AND THIS FACT REMAINS UNAMBIGUOUS AT BOTH THE ENDS I.E. WITH HPCL AND ALSO WITH THE APPELLANT. ENTERING RECTIFICATION ENTRIES TO CORRECT INPUT ERRORS CANNOT BE CONSTRUED AS BASIS TO MAKE ADDITIONS. HENCE, THE AO WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS. 67,73,279/ - AND TREATED THE SAME AS UNEXPL AINED EXPENDITURE. THEREFORE THE ADDITION MADE BY THE AO IS HEREBY DELETED AND THE GROUND OF APPEAL IS ALLOWED. 5. WITH THE ASSISTANCE OF LD. REPRESENTATIVES , WE HAVE GONE THROUGH THE RECORD CAREFULLY. SECTION 69(C) OF THE INCOME TAX ACT PROVIDES THAT WHERE IN ANY FINANCIAL YEAR , AN ASSESSEE HAS INCURRED ANY EXPENDITURE AND HE OFFERS NO EXPLANATION ABOUT THE SOURCE OF SUCH EXPENDITURE OR PART THEREOF, OR THE EXPLANATION , IF ANY, OFFERED BY HIM IS NOT, IN T H E OPINION OF THE ASSESSING OFFICER, SATISFACTOR Y, THE AMOUNT COVERED BY SUCH EXPENDITURE OR PART THEREOF, AS THE CASE MAY BE, MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR. THE QUESTION IS , WHETHER ASSESSEE HAS INCURRED ANY UNEXPLAINED EXPENDITURE FOR THE PURCHASES MADE I N RES PECT OF PETROLEUM PRODUCTS? LD. COUNSEL FOR THE ASSESSEE PLACED ON RECORD A COPY OF THE CERTIFICATE ISSUED BY HPCL FROM WHERE I.T.A NO. 1641 /AHD/20 11 A.Y. 20 08 - 09 PAGE NO ITO V S. JITENDRA N. KATARGAMWALA, PROP. J.K. PETROLEUM 4 ASSESSEE HAS PURCHASED ALL ITS PETROLEUM PRODUCTS EXCLUSIVELY (BECAUSE IT IS AN AUTHORIZED DEALER OF HPCL). IN THIS CERTIFICATE, THE HPCL HAS NARRATED 13 TRANSACTIONS VIDE WHICH QUANTITY OF PETROLEUM PRODUCTS WERE SOLD TO THE ASSESSEE. AT THE BOTTOM, THE CERTIFICATE PROVIDES CERT AIN CONDITIONS UNDER WHICH ITS ACCOUNTING IS TO BE READ. THESE CONDITIONS ARE AS UNDER: - TO SUBSTANTI ATE THE ABOVE DATA WE ENCLOSE TWO NO. PAGES OF EXCEL SHEET (DULY CERTIFIED BY US) EXTRACT OF WHICH TAKEN FROM OUR ONLINE ERP SYSTEM. COLUMN NO. 2, ORDER TYPE SIGNIFIES: - C3=PRCN(PRODUCT RETURN CREDIT NOTE) S4=PRODUCT SOLD WHENEVER S4 DOCUMENTS ARE CANCEL LED THE GENERATED DOCUMENT IS OF C3 TYPE. THE COLUMN HEADED AS QUANTITY SIGNIFIES THE TOTAL SALES TO THE DEALER FOR THAT PARTICULAR DATE FOR WHICH DATE WISE SUBTOTAL HAS BEEN TABULATED. DOCUMENT TYPE AM STANDS FOR PRODUCT RETURN CREDIT NOTE DOCUMENT CAT EGORY. DOCUMENT TYPE AI STANDS FOR SALES DOCUMENT CATEGORY. NITIN M. JOSHI SD/ - DEPOT MANAGER HPCL HAZIRA, POL DEPOT. SURAT. 6. THE LEARNED COUNSEL FOR THE ASSESSEE WITH THE HELP OF THIS CERTIFICATE SUBMITTED THAT WHENEVER ANY PRODUCT IS SOLD BY THE HPCL , THEN , S - 4 DOCUMENT IS TO BE GENERATED , W HENEVER S - 4 DOCUMENT IS CANCELLED THEN C - 3 TYPE OF DOCUMENT WILL BE GENERATED . HE TOOK THROUGH PAGE 4 OF THE CERTIFICATE AND POINTED OUT THAT ORDER NO. 7000128 IS A C - 3 DOCUMENT WHICH SUGGESTS THAT QUANTITY OF 8000 LITERS WAS NOT SUPPLIED TO THE ASSESSEE. IT IS I.T.A NO. 1641 /AHD/20 11 A.Y. 20 08 - 09 PAGE NO ITO V S. JITENDRA N. KATARGAMWALA, PROP. J.K. PETROLEUM 5 A NEGATIVE FIGURE. THE LD. ASSESSING OFFICER FAILED TO READ THESE DETAILS IN A HARMONIOUS WAY. THERE ARE NEGATIVE ENTRIES WHICH INDICATE THAT THE DOCUMENT GENERATED VIDE S - 4 WAS CANCELLED THROUGH C - 3. THUS, THE CREDIT OF C - 3 WAS NOT GIVEN BY THE ASSESSING OFFICER WHILE WORKING OUT ALLEGED EXCESS QUANTITY SOLD TO THE ASSESSEE BY HPCL. LD. DR WAS UNABLE TO CONTROVERT THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. WE ARE OF THE VIEW THAT LD. F IRST APPELLATE AUTHORITY HAS APPRECIATED THE FACTS IN RIGHT PERSPECTIVE AND HAS RIGHTLY DELETED THE ADDITION, THEREFORE, WE DO NOT FIND ANY MERIT IN THIS APPEAL. IT IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN COURT ON 25 - 06 - 2015 SD/ - SD/ - ( G.D. AGRAWAL ) ( RAJPAL YADAV ) VICE PRESIDENT JUDICIAL MEMBER AHMEDABAD : DATED 25 /06 /2015 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCE RNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,
