M/s Solar Power & Lubricants, V. Income TAx Officer Ward 1,

ITA 169/JAB/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2150 (ITAT-JABALPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 15-07-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 143(3); 133A

Judgement Text

I.T.A. NO.1 69 /JAB/201 6 ASSESSMENT YEAR:2007-08 1 IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER I.T.A. NO.169/JAB/2016 ASSESSMENT YEAR:2007-08 M/S SOLAR POWER AND LUBRICANTS, SEONI ROAD, SUKLUDHANA, CHHINDWARA. PAN:AADFT 8827 H VS. INCOME TAX OFFICER, WARD-1, CHHINDWARA. (APPELLANT) (RESPONDENT) O R D E R PER MANISH BORAD, A.M. THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF CIT(A)-I, JABALPUR DATED 03/03/2016 ARISING OUT OF ORDER U/S 143(3) DATED 30/12/2009 FRAMED BY INCOME TAX OFFICER-1, CHHINDWA RA RELATING TO ASSESSMENT YEAR 2007-08. 2. BRIEFLY STATED, THE FACTS AS CULLED OUT FROM THE RECORDS, ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM. A SURVEY U/S 133A WAS CONDUCTED ON 19/03/2007 AT THE BUSINESS PREMISES OF THE ASSESSEE . E-RETURN WAS FILED ON 13/07/2009 DECLARING INCOME OF RS.2,22,400/-. T HE ASSESSEE DERIVES INCOME FROM SALE OF OIL AND LUBRICANTS. DURING THE COURSE OF SURVEY, PARTNER SHRI ANIL RATHI SURRENDERED RS.3.50 LAKHS A S INCOME FOR PURCHASE OF ITEMS FOR WHICH BILLS WERE NOT AVAILABLE. THERE WA S NO INCRIMINATING APPELLANT BY SHRI G. N. PUROHIT, SR. ADVOCATE SHRI ABHISHEK OSWAL, ADVOCATE RESPONDENT BY SHRI I. B. KHANDEL, D.R. DATE OF HEARING 08/11/2017 DATE OF PRONOUNCEMENT 09 /11/2017 I.T.A. NO.1 69 /JAB/201 6 ASSESSMENT YEAR:2007-08 2 MATERIAL FOUND IN THE COURSE OF SURVEY SUPPORTING T HE SURRENDER OF RS.3.50 LAKHS. THIS AMOUNT WAS NOT SHOWN IN THE RETURN OF INCOME FILED BY THE ASSESSEE. ACCORDINGLY THE ASSESSING OFFICER MADE T HE ADDITION FOR RS.3.50 LAKHS FOR THE SURRENDER AMOUNT NOT SHOWN IN THE RET URN OF INCOME. ADDITION WAS ALSO MADE TOWARDS UNEXPLAINED DEBTORS AT RS.76,352/- AS WELL AS GROSS PROFIT ADDITION OF RS.5,732/- ON SHORTAGE OF STOCK. AFTER MAKING ADDITION OF RS.4,32,094/-, INCOME ASSESSED AT RS.6, 54,490/-. APPEAL FILED BEFORE THE CIT(A) DID NOT FIND ANY FAVOUR AND THE S AME WAS DISMISSED. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL R AISING VARIOUS GROUND OF APPEAL. 3. GROUND NO. 1 OF THE APPEAL IS AGAINST CONFIRMING THE ADDITION OF RS.3.50 LAKHS ON ACCOUNT OF SURRENDER DURING THE CO URSE OF SURVEY. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SURRENDER WAS MADE BY ANIL RATHI AND THE SAME WAS RETRACTED BY THE ASS ESSEE. THERE WAS NO INCRIMINATING MATERIAL FOUND DURING COURSE OF SURVE Y WHICH COULD SUBSTANTIATE THE SURRENDER FOR UNACCOUNTED PURCHASE S OF RS.3.50 LAKHS. LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT STATEMENT DURING THE COURSE OF SURVEY HAVE NO EVIDENTIARY VALUE AS H ELD BY HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. KHADER KHAN SON [ 2008] 300 ITR 157 (MAD) AS WELL AS HON'BLE KERALA HIGH COURT IN THE C ASE OF PAUL MATHEWS AND SONS VS. CIT [2003] 263 ITR 101 (KER). 4. ON THE OTHER HAND LEARNED D.R. SUPPORTED THE ORD ERS OF THE LOWER AUTHORITIES. 5. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD PLACED BEFORE US. THE ISSUE RAISED IN THIS GROUND RELATES TO ADDITION OF RS.3.50 LAKHS MADE BY THE ASSESSING OFFICER ON THE BASIS OF STATEMENT GIVEN BY THE PARTNER OF THE ASSESSEE FIRM DURING THE COURSE OF S URVEY TOWARDS UNACCOUNTED PURCHASES. IT IS NOT DISPUTED THAT THE RE WAS NO INCRIMINATING I.T.A. NO.1 69 /JAB/201 6 ASSESSMENT YEAR:2007-08 3 MATERIAL FOUND DURING THE COURSE OF SURVEY WHICH CO ULD SUBSTANTIATE THE BASIS OF THE ALLEGED ADDITION. WE FURTHER FIND THA T DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAD FULLY EXPLA INED THE PURCHASE OF OIL AND LUBRICANTS. THE ASSESSING OFFICER HAS NOT REFERRED TO ANY CORROBORATIVE EVIDENCE TO SUBSTANTIATE THAT THERE W AS IN FACT ANY UNACCOUNTED PURCHASE OF OIL AND LUBRICANTS. 5.1 WE FURTHER OBSERVE THAT IT HAS BEEN CONSISTENTL Y BEEN HELD BY HON'BLE COURTS THAT THE STATEMENT RECORDED DURING T HE COURSE OF SURVEY ARE NOT SACROSANCT AND CANNOT BE RELIED AGAINST THE ASS ESSEE FOR MAKING ADDITION UNLESS SUPPORTED BY CORROBORATIVE EVIDENCE . 5.2 WE, THEREFORE, RESPECTFULLY FOLLOWING THE DECIS IONS LAID DOWN BY VARIOUS COURTS AS WELL AS IN THE GIVEN FACTS AND CI RCUMSTANCES OF THE CASE, ARE OF THE VIEW THAT THE ADDITION OF RS.3.50 LAKHS HAVE NO LEGS TO STAND AS IT IS MERELY BASED ON THE STATEMENT GIVEN DURING TH E COURSE OF SURVEY WITHOUT ANY SUPPORTING INCRIMINATING MATERIAL. WE ACCORDINGLY DELETE THE IMPUGNED ADDITION OF RS.3,50,000/- AND ALLOW GROUND NO. 1 RAISED BY THE ASSESSEE. 6. GROUND NO. 2 OF THE APPEAL RELATES TO THE ADDITI ON OF RS.5,732/- ON ACCOUNT OF GROSS PROFIT ON SHORTAGE IN STOCK OF RS. 95,528/-. DURING THE COURSE OF HEARING OF APPEAL THIS GROUND WAS NOT PRE SSED BY LEARNED COUNSEL FOR THE ASSESSEE THEREFORE, WE DISMISS GROU ND NO. 2 AS NOT PRESSED. 7. IN GROUND NO. 3 THE ASSESSEE HAS CHALLENGED THE ADDITION OF RS.76,363/- MADE BY THE ASSESSING OFFICER ON ACCOUN T OF DIFFERENCE IN THE ACCOUNT WITH PETROLEUM SERVICE CENTRE, SAUSAR. THE ASSESSING OFFICER OBSERVED THAT AS PER THE DEBTORS LIST FURNISHED BY THE ASSESSEE, DEBIT I.T.A. NO.1 69 /JAB/201 6 ASSESSMENT YEAR:2007-08 4 BALANCE IN THE NAME OF PETROLEUM SERVICE CENTRE AS ON 31/03/2007 ARE SHOWN AT RS.91,421/- WHEREAS IN THE CONFIRMATION LE TTER SUPPLIED BY THIS PARTY, THE BALANCE SHOWN IS RS.1,67,783/-. HE, THE REFORE, ADDED THE DIFFERENCE AT RS.73,363/-. THE CIT(A) CONFIRMED TH E SAME. DURING THE HEARING BEFORE THE TRIBUNAL, LEARNED COUNSEL FOR TH E ASSESSEE SUBMITTED THAT THERE SEEMS TO BE AN ARITHMETICAL MISTAKE COMM ITTED BY THE ASSESSING OFFICER BECAUSE THERE IS NO SUCH DIFFERENCE BETWEEN THE AMOUNT SHOWN IN THE BOOKS OF ACCOUNT AND THE CONTRA ACCOUNT APPEARI NG IN THE BOOKS OF ACCOUNT PETROLEUM SERVICE CENTRE. LEARNED COUNSEL F OR THE ASSESSEE AGREED TO GO BEFORE THE ASSESSING OFFICER FOR NECESSARY VE RIFICATION IF THE OPPORTUNITY IS SO PROVIDED. LEARNED D.R. DID NOT R AISE ANY OBJECTION TO THIS REQUEST. 7.1 WE, THEREFORE, LOOKING TO THE ISSUE RELATING TO ALLEGED DIFFERENCE IN THE DEBIT BALANCE OF RS.73,363/- AND THE CONTENTION OF LEARNED COUNSEL FOR THE ASSESSEE FOR THE ALLEGED ARITHMETICAL MISTAKE, FIND IT JUSTIFIED TO RESTORE THE ISSUE RAISED IN THIS GROUND TO THE FILE OF THE ASSESSING OFFICER TO CARRY OUT NECESSARY VERIFICATION AND ALSO DIRECT THE ASSE SSEE TO PRODUCE NECESSARY EVIDENCE INCLUDING THE CONFIRMATION ACCOU NT AND THE LIST OF SUNDRY DEBTORS FOR NECESSARY RECONCILIATION SO AS T O SATISFY THE ASSESSING OFFICER. THUS GROUND NO. 3 IS ALLOWED FOR STATISTI CAL PURPOSES. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON 09/11/2 017 SD/. SD/. (PARTHA SARATHI CHAUDHURY) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:09/11/2017 I.T.A. NO.1 69 /JAB/201 6 ASSESSMENT YEAR:2007-08 5 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., ASST T. REGISTRAR