Shri Manohar Kevalram Hotwani, Kolhapur V. Asstt.CIT, Cir.1, Kolhapur, Kolhapur

ITA 1696/PUN/2007

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2680 (ITAT-PUNE)
• Duration Of Justice: 8 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 01-04-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 17-12-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ALOK MALVIYA
• Keywords: Unexplained investment; Business income; Corroborative evidences; Tax effect; Revised return
• Section: 133A; 145

Judgement Text

] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , !, # $ BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA, AM ITA NO.1696/PN/2007 ASSESSMENT YEAR : 2004-05 SHRI MANOHAR KEVALRAM HOTWANI, PROP. M/S BHARAT FURNITURE, 1606-C BINDU CHOWK, KOLHAPUR. PAN : AAFPH0483D . APPELLANT VS. THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 1, KOLHAPUR. . RESPONDENT ITA NO.1798/PN/2007 ASSESSMENT YEAR : 2004-05 THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 1, KOLHAPUR. . APPELLANT VS. SHRI MANOHAR KEVALRAM HOTWANI, PROP. M/S BHARAT FURNITURE, 1606-C BINDU CHOWK, KOLHAPUR. PAN : AAFPH0483D . RESPONDENT ASSESSEE BY : SHRI M. K. KULKARNI DEPARTMENT BY : SHRI ALOK MALVIYA, JCIT / DATE OF HEARING : 18.01.2016 / DATE OF PRONOUNCEMENT: 17.02.2016 % / ORDER PER PRADIP KUMAR KEDIA, AM : THE AFORESAID CAPTIONED CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE ARE AGAINST THE ORDER OF CIT(A), KOLHAPUR, DATED 23.08.2007 RELATING 2 ITA NO.1696/PN/2007 ITA NO.1798/PN/2007 TO ASSESSMENT YEAR 2004-05 PASSED UNDER SECTION 143 (3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLID ATED ORDER. 3. THE ASSESSEE IN ITA NO.1696/PN/2007 HAS RAISED T HE FOLLOWING GROUNDS OF APPEAL :- 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. C.I.T. (A) KOLHAPUR WAS NOT JUSTIFIED IN CONFIRMING THE AD DITION OF RS.4,09,608/- MADE BY THE A.O. U/S.69 OF THE ACT AND THE SAME BE QUASHED. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE APPELLANT DENIES HIS LIABILITY TO PAY INTEREST U/S.234-A, 234 -B AND 234-C OF THE ACT. 3) THE APPELLANT CRAVES TO LEAVE, ADD/AMEND OR ALTE R ANY OF THE ABOVE GROUNDS OF APPEAL. 4. THE REVENUE IN ITA NO.1798/PN/2007 HAS RAISED TH E FOLLOWING GROUNDS OF APPEAL:- (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE CIT(A), HAS ERRED IN DELETING THE ADDITION OF RS.7,31,097/- RELYING ON T HE SECOND RETURN FILED WHICH WAS OUT OF TIME AND FAILED TO APPRECIATE THE FACT THAT THE ADDITION WAS RIGHTLY MADE BY THE ASSESSING OFFICER ON THE BASIS OF ORIGINAL RETURN. (2) ON THE FACTS AND CIRCUMSTANCE OF THE CASE, THE CIT(A) HAS ERRED IN APPRECIATING THE FACT THAT ASSESSEE HAS FAILED TO E STABLISH AS TO HOW A LOSS OF RS.1,67,702/- IS ARRIVED IN THE SECOND RETURN, WHEN IN ORIGINAL RETURN THE ASSESSEE DECLARED BUSINESS INCOME OF RS.7,31,097/-. (3) ON THE FACTS AND CIRCUMSTANCE OF THE CASE, THE CIT(A) HAS ERRED IN RESTRICTING THE ADDITION TO RS.4,08,608/- FROM RS.8,58,991/- WH ICH WAS MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN STOCK BY ACCEPTING THE AS SESSEES PLEA THAT SAID STOCK WAS PURCHASED FROM SISTER CONCERN. (4) ON THE FACT AND CIRCUMSTANCE OF THE CASE, THE C IT(A) ERRED IN APPRECIATING THE FACT THAT THE STAND OF THE ASSESSEE OF CREDIT B ALANCE WITH SR ENTERPRISES DOES NOT PROVE THAT THE STOCK TO THE TUNE OF RS.4,80,703/- W HICH THE ASSESSEE CLAIM TO BE HIS OWN WITHOUT ANY SUPPORTING EVIDENCE. (5) ON THE FACTS AND CIRCUMSTANCE OF THE CASE, THE CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE TRADING, PROFIT & LOSS A/C & BALA NCE SHEET NOT FURNISHED EITHER WITH ORIGINAL RETURN OR WITH SECOND RETURN AND WAS PREPARED ONLY AS AN AFTERTHOUGHT TO SUIT THE ASSESSEES REQUIREMENT. (6) THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND , MODIFY ANY OF THE GROUNDS OR RAISE ANY OTHER GROUNDS AT THE TIME OF PROCEEDIN G BEFORE THE HONBLE TRIBUNAL WHICH MAY PLEASE BE GRANTED. 3 ITA NO.1696/PN/2007 ITA NO.1798/PN/2007 ITA NO.1798/PN/2007 (BY REVENUE) : 5. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVE NUE FAIRLY ADMITTED THAT THE APPEAL OF THE REVENUE IS COVERED BY RECENT CBDT CIRCULAR NO.21 OF 2015 DATED 10 TH DECEMBER, 2015. SINCE THE TAX EFFECT IN RESPECT OF DISPUTED ISSUES RAISED BY THE REVENUE IN ITS APPEAL IS LESS THAN THE REVISED MONETARY LIMIT OF RS.10 LAKHS PRESCRIBED BY THE CBDT CIRCULA R, THE AFORESAID APPEAL OF THE REVENUE IN ITA NO.1798/PN/2007 IS NOT MAINTAINA BLE. 6. IN VIEW OF EXPRESSED CIRCULAR OF THE CBDT (SUPRA ), THE APPEAL OF THE REVENUE STANDS DISMISSED. ITA NO.1696/PN/2007 (BY ASSESSEE) : 7. NOW, WE SHALL TAKE-UP THE APPEAL OF THE ASSESSEE FOR ADJUDICATION. THE ONLY ISSUE INVOLVED IN THE ASSESSEE APPEAL IS TOWAR DS ADDITION IN RESPECT OF UNEXPLAINED INVESTMENT IN TRADING STOCK. THE ASSES SING OFFICER MADE AN ADDITION OF RS.8,58,991/- TOWARDS UNEXPLAINED INVES TMENT IN TRADING STOCK DETECTED DURING SURVEY UNDER SECTION 133A OF THE AC T. THE CIT(A) GRANTED PARTIAL RELIEF OF RS.4,50,383/- OUT OF THE AFORESAI D AMOUNT AND SUSTAINED THE ADDITION OF BALANCE OF RS.4,08,608/-. THE ASSESSEE IS IN PRESENT APPEAL AGAINST THE PART OF THE ADDITIONS SUSTAINED BY THE CIT(A). 8. TWO ASPECTS CONCERNING THE ADDITIONS WERE RAISED IN THE COURSE OF HEARING; ONE LEGAL ON VALIDITY OF REVISED RETURN AN D ANOTHER FACTUAL. 9. WE SHALL DEAL WITH THE LEGAL ASPECT FIRST. THE RELEVANT FACTS CONCERNING THE ASPECT ARE THAT THE ASSESSEE DEALS IN PURCHASE AND SALE OF FURNITURE ITEMS UNDER THE NAME BHARAT FURNITURE. IN THIS CASE, A SURVEY ACTION UNDER SECTION 133A OF THE ACT WAS CARRIED OUT BY THE DEPARTMENT O N 06.11.2003. SUBSEQUENT TO SURVEY ACTION UNDER SECTION 133A OF T HE ACT, THE ASSESSEE FURNISHED HIS RETURN OF INCOME ON 01.11.2004 FOR TH E ASSESSMENT YEAR 2004-05. THE ASSESSING OFFICER INTER ALIA ALLEGED THAT THE RETURN IS BELATEDLY FILED 4 ITA NO.1696/PN/2007 ITA NO.1798/PN/2007 OUTSIDE THE TIME STIPULATED UNDER SECTION 139(1) OF THE ACT. THE ASSESSING OFFICER OBSERVED THAT AFTER THE CASE WAS SELECTED F OR SCRUTINY, THE ASSESSEE HAS FILED A SECOND/REVISED RETURN ON 04.10.2006 FOR THE ASSESSMENT YEAR 2004-05. THE ASSESSING OFFICER BRUSHED ASIDE THE SECOND RETU RN WHICH ACCORDING TO HIM IS TIME BARRED. HE PROCEEDED ON THE BASIS OF FIRST RETURN. THE ASSESSING OFFICER REJECTED THE REVISED RETURN ON THE GROUND T HAT THE REVISED RETURN IS NOT VALID SINCE THE ORIGINAL RETURN WAS FILED BELATED. WE NOTE THAT THE CIT(A) HAS DEALT WITH THIS ASPECT AT PARA NO. 6 OF HIS ORDER A ND AFTER TAKING NOTE OF THE CBDT NOTIFICATION WHEREBY THE DUE DATE WAS EXTENDED TO 31 ST DAY OF OCTOBER, 2004 AND 31 ST DAY OF OCTOBER, 2004 BEING HOLIDAY WAS FURTHER EXT ENDED TO 01 ST DAY OF NOVEMBER, 2004, THE RETURN FILED BY THE ASSE SSEE WAS DEEMED TO HAVE BEEN FILED WITHIN DUE DATE UNDER SECTION 139(1) OF THE ACT. WE FIND NO INFIRMITY IN THE OBSERVATIONS OF THE CIT(A) IN THIS REGARD IN THE LIGHT OF THE CBDT NOTIFICATION. HENCE, WE HOLD THAT THE RETURN FILED BY THE ASSESSEE ON 01.11.2004 WAS A VALID RETURN AND IN TIME. THEREFO RE, THE ASSESSEE WAS ENTITLED IN LAW TO FILE REVISED RETURN IN TERMS OF SECTION 1 39(4) OF THE ACT. AS A COROLLARY, THE CIT(A) HAS RIGHTLY TAKEN COGNIZANCE OF THE REVISED RETURN. ACCORDINGLY, THE LEGAL ASPECT OF THE MATTER IS DECI DED IN FAVOUR OF THE ASSESSEE. 10. WE SHALL NOW DWELL UPON THE MERITS OF THE CASE. AT THE OUTSET, WE NOTICE SOME TYPOGRAPHICAL ERRORS IN THE ORDER OF THE AUTHO RITIES BELOW. ON PERUSAL OF THE ASSESSMENT ORDER AND FIRST APPELLATE ORDER, IT APPEARS TO US THAT THE CIT(A) HAS WRONGLY MENTIONED THE STOCK VALUE OF RS.4,80,70 3/- INSTEAD OF CORRECT VALUE OF RS.4,50,383/- AND SUSTENANCE OF ADDITION O F BALANCE OF RS.4,09,608/- INSTEAD OF RS.4,08,608/- RESPECTIVELY. WE ACCORDIN GLY PROCEED TO DEAL WITH ISSUE AS PER CORRECTED FIGURE AS APPEARS TO US. 11. IN THE COURSE OF SURVEY UNDER SECTION 133A OF T HE ACT, THE SURVEY PARTY INTER-ALIA INVENTORIED THE STOCK BELONGING TO THE ASSESSEES PROPRIETORY CONCERN BHARAT FURNITURE AT BINDU CHOWK SHOWROOM AND IN T HE GODOWN AT GANDHINAGAR. THE STOCK FOUND AT BINDU CHOWK SHOWRO OM WAS VALUED AT RS.4,50,383/- WHEREAS STOCK AT GODOWN AT GANDHINAGA R WAS VALUED AT 5 ITA NO.1696/PN/2007 ITA NO.1798/PN/2007 RS.4,08,608/-. THE ASSESSEE SUBMITTED BEFORE THE A SSESSING OFFICER THAT THE BUSINESS OF BHARAT FURNITURE WAS ONLY RECENTLY ST ARTED IN NOVEMBER, 2003. IN THE SAME MONTH, THE SURVEY TOOK PLACE. IT IS THE CASE OF THE ASSESSEE THAT THE BILLS FOR PURCHASE OF INVENTORY WERE NOT RECEIVED F ROM THE SUPPLIER AT THE TIME OF SURVEY. THE PURCHASES WERE MADE FROM M/S S.R. E NTERPRISES, KOLHAPUR WHICH IS A PROPRIETORY CONCERN OF THE ASSESSEES HU F. M/S S.R. ENTERPRISES IN TURN PURCHASES THE STOCK FROM M/S SUJATA INTERNATIO NAL, NEW DELHI. THE RELEVANT BILLS FOR VALUATION OF THE STOCK WERE SUBM ITTED SUBSEQUENTLY IN THE COURSE OF THE HEARING. THE ASSESSEE ASSERTED BEFOR E THE ASSESSING OFFICER THAT ENTIRE STOCK LYING AT ITS SHOWROOM AT BINDU CHOWK, KOLHAPUR AMOUNTING TO RS.4,50,383/- HAS BEEN ACCOUNTED FOR IN THE BOOKS P REPARED AFTER SURVEY AND THEREFORE ALREADY OFFERED FOR TAXATION. IN THE SAM E VAIN, THE ASSESSEE SUBMITTED THAT HE HAS NO GODOWN AT GANDHINAGAR OR KOLHAPUR AN D THEREFORE STOCK OF FURNITURE FOUND AT GODOWN AT GANDHINAGAR WHICH WERE INVENTORIED AT THE TIME OF SURVEY BELONGS TO M/S S.R. ENTERPRISES I.E. ASSE SSEES HUF. THE AFORESAID STOCK OF RS.4,08,608/- BELONGING TO HUF HAS BEEN VA LUED ONLY AS PER THE DIRECTIONS OF THE ASSESSING OFFICER. THE ASSESSEE ALSO SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE HUF IS SEPARATELY ASSESS ED UNDER A SEPARATE PAN NUMBER. THE ASSESSING OFFICER DID NOT ACCEPT THE S TAND OF THE ASSESSEE THAT STOCK FOUND AT GANDHINAGAR GODOWN DOES NOT BELONG T O THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HIMSELF HAS CONFESSED AND CONFIRMED IN WRITING ON THE INVENTORY SHEET PREPARED AT THE TIME OF SURVEY ITSE LF THAT STOCK AT GODOWN AT GANDHINAGAR BELONG TO M/S BHARAT FURNITURE. THE AS SESSEE HAS ALSO NOT TAKEN ANY OBJECTION IN THIS REGARD AT THE TIME OF SURVEY OR SUBSEQUENTLY THEREAFTER FOR ABOUT TWO YEARS OR MORE AND TOOK THIS STAND FOR THE FIRST TIME AT THE TIME OF ASSESSMENT PROCEEDINGS AS AN AFTERTHOUGHT. THE ASS ESSING OFFICER ACCORDINGLY PROCEEDED TO MAKE AN ADDITION ON ACCOUNT OF UNDISCL OSED INVENTORY FOUND BOTH AT SHOWROOM, KOLHAPUR AND GODOWN AT GANDHINAGAR AGG REGATING TO RS.8,58,991/-. 12. IN FIRST APPEAL, THE CIT(A) ANALYZED THE FACTUA L DETAILS AND OBSERVED THAT ACCOUNTS PREPARED BY THE ASSESSEE SUBSEQUENT TO SUR VEY WAS ACCEPTED IN THE COURSE OF THE ASSESSMENT AND WAS NOT REJECTED UNDER SECTION 145 OF THE ACT. 6 ITA NO.1696/PN/2007 ITA NO.1798/PN/2007 THE CIT(A) FURTHER RECORDED THAT THE ASSESSEE PRODU CED THE PROFIT & LOSS ACCOUNT AND BALANCE SHEET IN TWO PARTS, ONE UPTO TH E DATE OF SURVEY AND ANOTHER DATE OF SURVEY UPTO THE END OF THE FINANCIA L YEAR FOR BOTH M/S S.R. ENTERPRISES AND M/S BHARAT FURNITURE IN THE COURSE OF THE APPELLATE PROCEEDINGS. THE CIT(A) RECORDED A FINDING THAT ST OCK VALUED AT RS.4,80,703/- (CORRECT FIGURE OF RS.4,50,383/-) HAS BEEN DULY ACC OUNTED FOR IN THE BOOKS AND ACCORDINGLY DELETED THE ADDITION FOR THIS AMOUNT. HOWEVER, HE DID NOT AGREE WITH THE CONTENTION OF THE ASSESSEE THAT STOCK WORT H RS.4,08,608/- FOUND AT GODOWN AT GANDHINAGAR BELONGS TO HUF AND NOT TO ASS ESSEE HEREIN. THE RELEVANT FINDINGS OF THE CIT(A) IN THE ISSUE INVOLV ED IS REPRODUCED HEREUNDER :- 19. I HAVE CONSIDERED THE SUBMISSIONS. THE APPELLA NT AT THE TIME OF SURVEY HAD STATED UNDER OATH THAT THE BUSINESS IS NEW AND PURC HASE BILLS HAD NOT BEEN RECEIVED EXCEPT ONE BILL. THAT WAS WHY HE HAD NOT MAINTAINED BOOKS. IN RESPONSE TO INVESTMENT IN PURCHASES, HE 'HAD STATED THAT THE GOODS WERE PURCHASED FROM S.R. ENTERPRISES. IN RESPONSE TO QUE STION NO.10, HE STATED THAT THE GOODS OF BHARAT FURNITURE HAD NOT BEEN KEPT ANY WHERE EXCEPT THE SHOP PREMISES (BINDU CHOWK). IN THE STATEMENT ITSELF, TH E APPELLANT HAD MENTIONED ABOUT THE PURCHASES FROM S.R. ENTERPRISES AND ABOUT NOT HAVING ANY GODOWN IN GANDHINAGAR. SINCE THE ABOVE WERE STATED AT THE TIM E OF SURVEY IT CANNOT BE SAID THAT THE EXPLANATION WAS ON AFTERTHOUGHT. THE ENTIRE ADDITION MADE WITH RESPECT TO STOCK HINGES ON THE FACT THAT THE APPELL ANT HAD WAS MENTIONED IN THE STOCK INVENTORY OF STOCK LYING IN THE GANDHINAGAR G ODOWN THAT THE STOCK BELONGED TO BHARAT FURNITURE. ON EXAMINATION OF THE STOCK INVENTORY HOWEVER, IT IS SEEN THAT THE ABOVE SENTENCE IS WRITTEN BY THE SURV EY PARTY AT THE TOP OF THE INVENTORY. THE APPELLANT HAS PUT HIS SIGNATURE AT T HE BOTTOM OF THE PAGE INDIRECTLY ACCEPTING THE STATEMENT. IT IS POSSIBLE THAT THE APPELLANT DID NOT REALIZE THE IMPORTANCE OF THE STATEMENT WHILE AFFIX ING HIS SIGNATURE TO THE INVENTORY. IN ANY CASE, THE STOCK BELONGED TO S.R. ENTERPRISES, HIS OWN HUF CONCERN. AT THE SAME TIME, HOWEVER, THE APPELLANT H AD IN HIS STATEMENT RULED OUT THAT STOCKS OF BHARAT FURNITURE WERE KEPT ANYWHERE ELSE OTHER THAN THE SHOP PREMISES AT BINDU CHOWK. 20. THE APPELLANT HAS PRODUCED DURING THE APPELLATE PROCEEDINGS, THE PROFIT AND LOSS ACCOUNTS AND THE BALANCE-SHEETS IN THE TWO PARTS, ONE, UP TO THE DATE OF SURVEY AND ANOTHER, AFTER THE DATE OF SURVEY TO THE END OF THE YEAR, FOR BOTH S.R. ENTERPRISES AND BHARAT FURNITURE. IT MAY BE ST ATED HERE THAT THE ACCOUNTS PREPARED BY THE APPELLANT SUBSEQUENT TO THE SURVEY HAVE BEEN ACCEPTED IN THE ASSESSMENT. ACCOUNTS HAVE BEEN NOT REJECTED U/S.14 5 OF THE I.T. ACT. ACCORDING TO THE TRADING ACCOUNT PREPARED TILL THE DATE OF SURVE Y, PURCHASES ARE SHOWN AT ONLY RS.31,623/- SINCE ONLY ONE BILL WAS RECEIVED TILL T HAT DATE. AT THE END OF THE YEAR THE TOTAL PURCHASES ARE SHOWN AT RS.4,79,1 91/- AND THE CLOSING STOCK IS RS.62050/-. THE ENTIRE PURCHASES HAVE BEEN DEBIT ED AFTER THE DATE OF SURVEY SINCE THE BILLS FROM S.R. ENTERPRISES WERE RECEIVED ONLY AFTER THAT DATE ON 5.12.2003. THE FACT THAT THE STOCK WAS RECEIVED EAR LIER IS EVIDENT FROM THE TRANSPORT DOCUMENTS SHOWING THE GOODS TRANSPORTED F ROM SUJATA INTERNATIONAL AT DELHI TO THE APPELLANTS PREMISES. 7 ITA NO.1696/PN/2007 ITA NO.1798/PN/2007 21. SINCE THE APPELLANT HAD NOT MAINTAINED THE BOOK S OF ACCOUNTS, THE QUESTION OF THE STOCK FOUND BEING UNACCOUNTED IS IR RELEVANT SINCE THERE WAS NO ACCOUNT IN THE FIRST PLACE. IN THIS SITUATION, IT H AS TO BE SEEN WHETHER THE STOCKS FOUND DURING SURVEY COULD BE EXPLAINED AS TO THEIR SOURCE OF INVESTMENT. 22. ON 10.09.2003, THE APPELLANT RECEIVED A CHEQUE DRAWN ON JANTA SAH. BANK AMOUNTING TO RS.8,01,000/- FROM A GROUP CONCER N, BHARAT ELECTRICALS. ON THE SAME DAY THE AMOUNT OF RS.8,00,600/- WAS TRA NSFERRED TO THE BANK ACCOUNT OF S.R. ENTERPRISES. IN THE ACCOUNT OF S.R. ENTERPRISES IN THE BOOKS OF THE APPELLANT, PURCHASES MADE FROM S.R ENTERPRISES HAVE BEEN DEBITED AND ADVANCE GIVEN OF RS.800,600 CREDITED. THE CLOSING B ALANCE ON THE ACCOUNT IS 5,02,397/-(CR) THE PURCHASES DEBITED TO THIS ACCOUN T AMOUNTING TO RS.4,80,703/- ARE THUS EXPLAINED HAVING BEEN FUNDED BY THE AMOUNT OF RS.8 LACS RECEIVED FROM BHARAT ELECTRICALS ON 10.09.2003 . THIS LEAVES THE BALANCE OF AMOUNT OF PURCHASES OF RS.4,08,608/- UNEXPLAINED. T HE TRADING ACCOUNT OF BHARAT FURNITURE SHOWS THE TOTAL PURCHASES ONLY AT RS.4,80,703/-. THE BALANCE PURCHASES OF RS.4,08,608/- ARE NOT ACCOUNTED IN THE BOOKS OF BHARAT FURNITURE. THE APPELLANTS CLAIM IS THAT THIS AMOUNT HAS BEEN SHOWN IN THE BOOKS OF S.R. ENTERPRISES. THE CLAIM OF THE APPELLANT HOWEVER, CANNOT BE VERIF IED SINCE S.R. ENTERPRISES WAS NOT COVERED DURING THE SURVEY ALTHOUGH THE GODOWN O F S.R. ENTERPRISES AT GANDHINAGAR WAS SURVEYED. THERE WAS ANOTHER GODOWN OF S.R. ENTERPRISES, WHICH WAS NOT COVERED. THUS, THERE IS NO COMPLETE INVENTO RY OF STOCKS BELONGING TO S.R. ENTERPRISES ON THE DATE OF SURVEY TO VERIFY THE CLA IM OF THE APPELLANT. IT CANNOT BE OVERLOOKED THAT THE APPELLANT DURING THE SURVEY HAS SIGNED THE STOCK INVENTORY WHICH SAID THAT THE STOCK OF RS.4,08,608/- FOUND IN THE G ANDHINAGAR GODOWN BELONGED TO BHARAT FURNITURE. THERE WAS NOTHING TO PREVENT HIM TO STATE THAT THE STOCK BELONGED TO S.R. ENTERPRISES, IF THAT WAS THE FACT. 23. IN VIEW OF THE ABOVE DISCUSSION, IT IS HELD THA T STOCK VALUED AT RS.4,80,703/- HAS BEEN ACCOUNTED IN THE BOOKS WHEREAS STOCK AMOUN TING TO RS.4,09,608/- REMAINS UNEXPLAINED. THE ADDITION U/S.69, IS SUSTAINED TO THE EXTENT OF RS.4,08,608/-. THUS, PARTIAL RELIEF WAS GRANTED TO THE ASSESSEE. 13. AGGRIEVED BY THE PARTIAL RELIEF, THE ASSESSEE H AS PREFERRED PRESENT APPEAL BEFORE US. 14. BEFORE US, THE LD. AUTHORIZED REPRESENTATIVE FO R THE ASSESSEE REITERATED THE FACTS AND SUBMITTED THAT THE STOCK AT GANDHINAG AR DOES NOT BELONG TO THE ASSESSEE BUT TO ITS HUF WHICH IS SEPARATELY ASSESSE D TO TAX. HE THEREFORE SUBMITTED THAT CIT(A) IS NOT JUSTIFIED IN DENYING T HE RELIEF TOWARDS RS.4,08,608/- 15. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REV ENUE, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE CIT(A) AND SUBMI TTED THAT NO INTERFERENCE IS CALLED FOR. 8 ITA NO.1696/PN/2007 ITA NO.1798/PN/2007 16. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND MATERIAL PLACED ON RECORD ON THE ISSUE. WE FIND THAT THE CIT(A) HA S RECORDED A FINDING OF FACT THAT STOCK VALUED WITH REFERENCE TO SHOWROOM AT KOL HAPUR AMOUNTING TO RS.4,50,383/- FORMS PART OF THE REGULAR BOOKS OF AC COUNT AND FOUND TO BE EXPLAINED. HOWEVER, AS REGARDS THE BALANCE ADDITIO N OF RS.4,08,608/- SUSTAINED, THE CIT(A) NOTED THAT THE CLAIM OF THE A SSESSEE THAT THE AFORESAID STOCK BELONGS TO M/S S.R. ENTERPRISES IS NOT VERIFI ABLE. HE OBSERVED THAT M/S S.R. ENTERPRISES ARE NOT COVERED DURING THE SURVEY AND THERE IS NO COMPLETE INVENTORY OF STOCK BELONGING TO M/S S.R. ENTERPRISE S ON THE DATE OF SURVEY IS AVAILABLE FOR VERIFICATION OF THE CLAIM OF THE ASSE SSEE. HE ALSO NOTED THAT THE ASSESSEE HIMSELF HAS SIGNED THE STOCK INVENTORY FOU ND AT GANDHINAGAR GODOWN AS BELONGING TO M/S BHARAT FURNITURE I.E. ASSESSEE. THE ASSESSEE DID NOT CLAIM AT THE TIME OF SURVEY THAT STOCK BELONG TO M/S S.R. ENTERPRISES. WE FIND THAT THESE FACTS REMAIN UNCONTROVERTED. AFTER CAREFUL C ONSIDERATION OF THE OBSERVATIONS MADE BY CIT(A), WE FIND THAT THE CIT(A ) HAS SUSTAINED PART ADDITION AT RS.4,08,608/- OUT OF TOTAL ADDITION OF RS.8,58,991/- TOWARDS UNEXPLAINED INVESTMENT IN STOCK ON OBJECTIVE APPREC IATION OF RELEVANT FACTS AND MATERIAL ON RECORD AS NOTED ABOVE. THE CONCLUSION ARRIVED AT BY THE CIT(A) IS LOGICAL AND CONSISTENT WITH FACTS IN ISSUE. WE FIN D NO INFIRMITY IN THE CONCLUSION ARRIVED AT BY THE CIT(A) ON THESE FACTS. ACCORDINGLY, NO INTERFERENCE IS CALLED FOR. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. 18. RESULTANTLY, THE APPEAL OF THE ASSESSEE AS WELL AS APPEAL OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON THIS 17 TH DAY OF FEBRUARY, 2016. SD/- SD/- ( SUSHMA CHOWLA ) ( PRADIP KUMAR KEDIA ) / JUDICIAL MEMBER # / ACCOUNTANT MEMBER PUNE ; DATED : 17 TH FEBRUARY, 2016. 9 ITA NO.1696/PN/2007 ITA NO.1798/PN/2007 % & '() S *)' / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A), KOLHAPUR; 4) THE CIT-II, KOLHAPUR; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. %+ / BY ORDER , //TRUE COPY// ! '# / SR. PRIVATE SECRETARY $ %& %'' , / ITAT, PUNE