M/s. Jai Bhole Shanker Rice Mills, Jakhal V. Tax Recovery Officer, Fatehabad

ITA 1806/DEL/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2211 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 16-12-2009
• Assessment Year: 2004-2005
• Appeal Filed On: 04-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUSHA KHURANA
• Section: 143(3); 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D : NEW DELHI BEFORE SHRI RAJPAL YADAV, JM AND SHRI R.C.SHARMA, A M ITA NO.1806/DEL/2009 ASSESSMENT YEAR : 2004-05 M/S JAI BHOLE SHANKER RICE MILLS, BALRAN ROAD, JAKHAL. PAN NO.AAAFJ9786A. VS. TAX RECOVERY OFFICER, SIRSA, HQ AT FATEHABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.SAMPATH, ADVOCATE. RESPONDENT BY : MS.ANUSHA KHURANA, SR.DR. ORDER PER R.C.SHARMA, AM : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(A) DATED 20.3.2009 FOR THE AY 2004-05, IN THE MATTER OF ORDE R PASSED U/S 143(3) OF THE IT ACT. 2. THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO TH E ADDITION MADE U/S 69 AMOUNTING TO RS.2,65,156/- ALLEGED TO BE UNEXPLAINE D INVESTMENT. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. FROM THE RECORD, WE FOUND THAT ON THE BASIS OF INFORMATION RECEIVED FROM MARKET COMMITTEE, THE AO STATED THAT ASSESSEE HAS PAID COMPOSITE FEES OF RS.500/- IN ADDITION TO THE MARKET FEES OF RS.5,089/-. THE ALLEGATION OF THE A O WAS THAT MARKET COMMITTEE HAS FOUND EXCESS STOCK OF PADDY VALUING RS.2,54,478 /- DURING THE COURSE OF INSPECTION. THE AO MADE ADDITION U/S 69 OF IT ACT. WE FOUND THAT ASSESSEE WAS RUNNING BUSINESS OF RICE SELLING FOR THE LAST TEN Y EARS. ON 12.12.2003, MARKETING BOARD STAFF CAME TO THE ASSESSEES PREMISES AND ASK ED TO DEPOSIT THE ADDITIONAL MARKET FEE AS THERE WAS SHORTAGE OF COLLECTION AS P ER THE BUDGET GIVEN TO THEM AND ITA-1806/DEL/2009 2 THE ASSESSEE FIRM DEPOSITED FEES OF RS.5,089/- ON T HAT DAY ON THE REQUEST OF SUCH OFFICERS TO COOPERATE WITH THE MARKETING BOARD STAF F. THERE WAS NO ACTUAL STOCK TAKING BY THE MARKETING BOARD STAFF AT THE TIME OF INSPECTION. THUS, THERE WAS NO EXCESS OF STOCK AS ALLEGED BY THE AO. TOTAL STOCK AVAILABLE WITH THE ASSESSEE ON THE DATE OF INSPECTION WAS 23,422 QTLS. THE ASSESS EE ASKED THE REASONS TO THE AO FOR REOPENING THE ASSESSMENT, BUT THE AO DID NOT SU PPLY DETAILS OF INVENTORY MADE BY THE MARKETING BOARD STAFF ON WHICH SUCH DIFFEREN CE OF EXCESS STOCK WAS POINTED OUT TO THE ASSESSEE. THE AO SUPPLIED PHOTOCOPY OF M-FORM, A-FORM AND SANDHI FORM. THE AO SUMMONED MARKETING BOARD STAFF ON 6.1 2.2007 AND EXAMINED THEM. THE SECRETARY, MARKET COMMITTEE ATTENDED AO S OFFICE WHO FAILED TO PRODUCE THE STOCK INVENTORY ON THAT DAY. THE AO FA ILED TO SUPPLY THE DETAILS OF STOCK INVENTORIES EVEN AFTER SUMMONING MARKET COMMI TTEE SECRETARY. UNDER THESE CIRCUMSTANCES, THE ADDITION MADE BY THE AO BY ALLEG ING EXCESS STOCK WAS NOT JUSTIFIED. SIMILAR ISSUE HAS BEEN DEALT BY THE AMR ITSAR BENCH OF ITAT IN THE CASE OF JAI BHARAT RICE MILLS, JALALABAD (2005) 26 IT REP 158 (ITAT ASR) WHEREIN IT WAS HELD THAT SUCH ADDITIONS ARE NOT SUSTAINABLE AS PER THE REPORT OF MANDI MARKET BOARD STAFF. THE FACTS OF THE INSTANT CASE ARE IN PARI-MATERIA, RESPECTFULLY FOLLOWING THE SAME, WE DO NOT FIND ANY JUSTIFICATIO N IN THE ADDITION SO MADE. THE LEARNED AR DRAWN OUR ATTENTION TO THE STATEMENT OF THE EO CUM SECRETARY, MARKET COMMITTEE, JAKHAL, WHO ATTENDED AOS OFFICE AND WHO SE STATEMENT WAS RECORDED. OUR ATTENTION WAS ALSO DRAWN TO THE CROSS EXAMINATI ON OF HIS STATEMENT BY SHRI D.K.SINGLA, ADVOCATE. WE HAVE GONE THROUGH THE STA TEMENT SO RECORDED BY THE AO AND FOUND THAT MARKET COMMITTEE FORM A, F AND SA NDHI FORM AND DETAILS OF STOCK WERE PRODUCED BEFORE THE AO. IN THESE FORMS, THERE WAS NO DETAIL OF ANY STOCK HAVING BEEN FOUND IN EXCESS OR SHORT. SINCE THERE WAS NO EXCESS STOCK AS PER THE STATEMENT OF THE CONCERNED OFFICER OF MARKET CO MMITTEE RECORDED BY THE AO, THERE IS NO REASON FOR MAKING ADDITION IN THE HANDS OF THE ASSESSEE. 4. EVEN IF WE SEE THE DISCREPANCY POINTED OUT BY TH E AO, THE SAME WORKS OUT TO BE JUST 2% OF THE TOTAL STOCK WHICH WAS ALSO STA TED TO BE ON ESTIMATE BASIS ITA-1806/DEL/2009 3 WITHOUT ANY FACTS AND FIGURES BROUGHT ON RECORD BY THE AO ON THE BASIS OF ANY COGENT EVIDENCE IN THE SHAPE OF FORMS OF MARKET COM MITTEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. DECISION PRONOUNCED IN THE OPEN COURT ON 16 TH DECEMBER, 2009. SD/- SD/- (RAJPAL YADAV) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 16.12.2009. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT DEPUTY REGISTRAR ITA-1806/DEL/2009 4