The ACIT,A'bad Circle-3, Ahmedabad V. M/s. Keshav Till Factory, Ahmedabad

ITA 19/AHD/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50967 (ITAT-AHMEDABAD)
• Duration Of Justice: 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 04-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: TUSHAR P HEMANIAR
• Keywords: Income from undisclosed sources; Procedural lapse

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD .., !'# $ $ $ $ %% % &, ' ( # BEFORE SHRI G.D.AGARWAL, VICE-PRESIDENT AND SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER $./ I.T.A. NO.19/AHD/2011 ( * * * * / / / / ASSESSMENT YEAR : 2007-08) THE ACIT CIRCLE-3 AHMEDABAD / VS. M/S.KESHAV TILL FACTORY 215, GIDC PHASE-IV NARODA, AHMEDABAD '+ (, $./- $./ PAN/GIR NO. : AACFK 9263 B ( +. / // / APPELLANT ) .. ( /0+. / RESPONDENT ) +. 1 ( / APPELLANT BY : SHRI SAMIR TEKRIWAL, SR.D.R. /0+. 2 1 ( / RESPONDENT BY : SHRI TUSHAR P.HEMANI, A.R. % 3 2 &, / / / / DATE OF HEARING : 02/12/2011 45* 2 &, / DATE OF PRONOUNCEMENT : 02/12/2011 (6 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE WHICH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-XVI, AHMEDAB AD DATED 08/11/2010 AND THE ONLY GROUND READS AS FOLLOWS:- 1. THE LD CIT(A) ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION MADE BY AO OF RS.12,87,560/- ON ACCOUNT O F UNDISCLOSED STOCK AS PER STATEMENT IN RESPECT OF SU RVEY U/S.133A CONDUCTED ON 17-01-2007. 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) OF THE I.T. ACT, 1961 DATED 18 /12/2009 WERE THAT THE ITA NO. 19/AHD/2011 ACIT VS. M/S.KESHAV TILL FACTORY ASST.YEAR - 2007-08 - 2 - ASSESSEE-COMPANY IS IN THE BUSINESS OF MANUFACTUR ING OF TILL A SURVEY WAS CONDUCTED U/S.133A OF THE I.T.ACT ON 17/01/2007 . A DISCREPANCY IN THE STOCK WAS NOTICED BY THE REVENUE DEPARTMENT. I T WAS FOUND THAT THE STOCK WAS EXCESS BY RS.50,05,510/-. IN THE STATEME NT RECORDED U/S.133A OF THE I.T.ACT, ONE OF THE PARTNER HAS ADMITTED THA T PURCHASES WERE MADE DURING THE YEAR WHICH WERE NOT ACCOUNTED FOR IN THE BOOK ON THE DATE OF SURVEY. HE HAS REFERRED THAT THERE WERE THREE BILL S WHICH WERE NOT CONSIDERED WHILE RECORDING THE STOCK. THE EXPLANAT ION OF THE ASSESSEE WAS THAT THE CONSIGNMENT WAS RECEIVED ON 17/01/2007 , I.E. THE DATE WHEN THE SURVEY WAS CONDUCTED. IT WAS ALSO INFORMED THA T IN ROUTINE, THE ENTRIES ARE MADE IN THE BOOKS OF ACCOUNT AFTER TWO- THREE DAYS, HOWEVER, BILLS ETC. WERE AVAILABLE AND THE GOODS WERE UNLOAD ED FROM THE TRUCK ON THAT VERY DAY. IT WAS ALSO EXPLAINED THAT MERELY B ECAUSE OF PROCEDURAL LAPSE, THE ADDITION SHOULD NOT HAVE BEEN MADE. HOW EVER, THE ASSESSING OFFICER WAS NOT CONVINCED AND ADDED THE AMOUNT AS P ER THE FOLLOWING OBSERVATION:- 5. I HAVE CONSIDERED THE CLAIM OF THE ASSESSEE. THE ASSESSEE'S CLAIM IS NOT ACCEPTABLE ON THE BASIS OF THE FACTS MENTIONED. THE ASSESSEE HAS FURNISHED COPY OF AHMEDABAD MUNICIPAL CORPORATION R ECEIPT OF PAYMENT OF OCTROI IN RESPECT OF TRUCK NO.GJ-20-T-4833 & RJ- 05G4007. THE RECEIPT DATED 17.1.2007 SHOW THE TIME AT 8.19 A.M. FOR THE TRUCK NO.GJ-20-T- 4833. THE WEIGH BRIDGE COPY FOR THE SAME TRUCK SHOW S TWO SEPARATE TIMES, ONE AT 10.32 AND ANOTHER TIME IS SHOWN AT 15 .13 OF THE SAME DATE I.E. 17.1.2007. THEREFORE, THE ASSESSEE'S CLAIM THA T THE GOODS RECEIVED BY THE TRUCK NO.GJ=20-T-4833 AND DISPATCHED BY M/S.SAK SHI TRADERS, M.P. IS NOT SUPPORTED BY THE EVIDENCES BECAUSE THE SURVE Y OPERATION WAS STARTED AT 12.15 P.M. ON 17.1.2007 THAT IS THE DAY ON WHICH THE TRUCK SEEMS TO HAVE BEEN ARRIVED AT AMC OCTROI NAKA AND T HE WEIGH BRIDGE RECEIPT SHOWS THAT IT WAS NOT REACHED TO THE GODOWN TILL 15.13 A.M. OF THE SAME DAY. SIMILARLY, THE WEIGH BRIDGE RECEIPT IN RE SPECT OF TRUCK RJ- 05G4007 CLAIM TO HAVE BROUGHT THE GOODS DISPATCHED BY POOJA TRADING, M.P. IS ALSO DATED 17.1.2007 AND THE TIME IS REFLEC TED ONE AT 9.54 AND ANOTHER TIME AT 12.00 OF THE SAME DAY I.E. 17.1.200 7. THUS, BOTH THESE TRUCKS WERE NOT IN A POSITION TO REACH THE ASSESSEE 'S BUSINESS / GODOWN PREMISES AND THAT THE GOODS HAVE BEEN UNLOADED BEFO RE THE SURVEY ITA NO. 19/AHD/2011 ACIT VS. M/S.KESHAV TILL FACTORY ASST.YEAR - 2007-08 - 3 - OPERATION WHICH WAS STARTED AT 12.15 PM. IN RESPECT OF GOODS PURCHASED FROM RAJKOT THE ASSESSEE COULD PRODUCE ONLY A COPY OF BILL OF PATEL CHHAGNLAL MANJIBHAI & CO. WHICH IS DATED 16.1.2007 WITH TRUCK NO,GJ- 18-T-9090. NO PROOF REGARDING OCTROI PAYMENT AND WE IGH BRIDGE RECEIPT HAVE BEEN FILED BY THE ASSESSEE IN SUPPORT OF ITS C LAIM. FURTHER, THE INVENTORY OF STOCK PREPARED AT THE TIME OF SURVEY R UNS FROM ANNEXURE S-1 TO S-6. THE PAGE NO.S-7 IS SUMMARY OF TOTAL STOCK F OUND AS PER S-1 TO S- 6. IN ALL THESE ANNEXURES THERE IS NO MENTION OF GO ODS LYING IN TRUCK OR ANY REFERENCE REGARDING THE GOODS BEING UNLOADED. CONSI DERING THESE FACTS, THE ASSESSEE'S CLAIM FOR RECEIPT OF THESE GOODS AT HIS BUSINESS PREMISES BEFORE THE START OF THE SURVEY OPERATION IS NOT ACC EPTABLE. THE UNEXPLAINED EXCESS STOCK WORKED OUT AT THE TIME OF SURVEY WAS CORRECTLY ARRIVED AT RS.50,05,510/-. ACCORDINGLY, THE UNDISCL OSED INVESTMENT IN THIS UNACCOUNTED STOCK AMOUNTING TO RS.50,05,510/- IS TR EATED AS UNACCOUNTED INCOME OF THE ASSESEE BEING AMOUNT OF I NVESTMENT IN STOCK ETC. NOT FULLY DISCLOSED IN THE BOOKS OF ACCOUNTS A S PER PROVISIONS OF SECTION 69B OF THE I. T. ACT AND THE AMOUNT OF RS. 12,87,560/- IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE OVER AND ABOVE THE AMOUNT OF RS.37,17,950/- DECLARED BY THE ASSESSEE IN ITS RETU RN OF INCOME. PENALTY PROCEEDINGS U/S.271(1)(C) OF THE I.T.ACT, 1961 ARE INITIATED FOR CONCEALMENT OF INCOME. 2.1. BEING AGGRIEVED THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 3. BEFORE THE FIRST APPELLATE AUTHORITY, IT WAS EXP LAINED THAT THE GOODS WERE RECEIVED AS PER THE BILLS ALONG WITH DETAILS O F THE TRUCK NUMBER, WEIGHT AND THE TIME ON WHICH THE GOODS WERE DELIVER ED ON THE DATE WHEN THE SURVEY WAS CONDUCTED. IT WAS ALSO INFORMED THA T ON THE VERY NEXT DAY, I.E. ON 18/01/2007 THE BILLS WERE TAKEN INTO A CCOUNT. THE LEARNED CIT(APPEALS) HAS APPRECIATED THOSE FACTS AND DECIDE D IN FAVOUR OF THE ASSESSEE AS PER FOLLOWING PARAGRAPH:- 2.3. I HAVE CONSIDERED THE SUBMISSION MADE BY THE APPELLANT AND OBSERVATION OF THE AO. IT IS CLEAR THAT IN ANSWER TO QUESTION NUMBER 18 ON THE DATE OF SURVEY MR.MOHANBHAI HAD CL EARLY ITA NO. 19/AHD/2011 ACIT VS. M/S.KESHAV TILL FACTORY ASST.YEAR - 2007-08 - 4 - MENTIONED THAT THREE BILLS WERE NOT ENTERED IN THE BOOKS OF ACCOUNTS, WHEREAS THE PHYSICAL STOCK WAS INCLUDED I N THE PHYSICAL INVENTORY. WHILE FINDING THE EXCESS STOCK, THESE T HREE BILLS SHOULD HAVE BEEN INCLUDED IN THE STOCK AS PER REGISTER. F URTHER ON THE VERY NEXT DAY, THE APPELLANT HAD WRITTEN A LETTER T O THE AO, POINTING OUT THIS FACT. IN VIEW OF THE STATEMENT OF MR.MOHA NBHAI, I AGREE WITH THE APPELLANT THAT THE ADDITION MADE BY THE AO IS NOT CORRECT. THE SAME IS HEREBY DELETED. THIS GROUND OF APPEAL IS ALLOWED. 4. FROM THE SIDE OF THE REVENUE LD.DR MR.SAMIR TEKR IWAL AND FROM THE SIDE OF THE RESPONDENT-ASSESSEE LD.AR MR.TUSHAR P.HEMANI APPEARED AND RESPECTIVELY PLACED RELIANCE ON THE ORDERS OF A SSESSING OFFICER AND THE LD.CIT(A). 5. ON HEARING BOTH THE SIDES, WE FIND NO FORCE IN T HE SAID GROUND OF THE REVENUE BECAUSE THE ASSESSEE HAD GIVEN AN EXPLA NATION ALONG WITH COGENT EVIDENCES IN RESPECT OF THE STOCK FOUND AT T HE TIME OF SURVEY. THE EXPLANATION OF THE ASSESSEE WAS THAT ON THE DATE OF SURVEY, I.E. ON 17/01/2007, THE ALLEGED EXCESS STOCK WAS NOTHING BU T THE STOCK RECEIVED ON THAT VERY DAY. IN THIS REGARD, THE RELEVANT BIL LS WERE PLACED BEFORE THE REVENUE AUTHORITIES. FURTHER, IT WAS ALSO EXPLAINE D THAT THE GOODS WERE UNLOADED AT THE TIME OF SURVEY. THE ASSESSEE HAS A LSO FURNISHED THE DETAILS OF TRUCK NUMBERS AND THE OCTROI PAYMENTS. NOT ONLY THIS, ON THE NEXT DAY, THE SAID BILLS WERE DULY RECORDED IN THE BOOKS OF ACCOUNT AND PLEADED THAT THERE WAS NO EXCESS STOCK AT ALL AS TH E STOCK HAS TALLIED WITH THE BOOKS OF ACCOUNT. THE LEARNED CIT(APPEALS) HAS RIGHTLY ACCEPTED THE SAID EXPLANATION OF THE ASSESSEE BASED UPON THE FACTUAL FINDINGS. WE ITA NO. 19/AHD/2011 ACIT VS. M/S.KESHAV TILL FACTORY ASST.YEAR - 2007-08 - 5 - FIND NO FALLACY IN THE VIEW TAKEN BY THE LEARNED CI T(APPEALS), HENCE, AFFIRM THE SAME AND DISMISS THIS GROUND OF THE REVE NUE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 02/12/2011 SD/- SD/- ( G.D. AGARWAL ) ( MUKUL KR. SHR AWAT ) VICE PRESIDENT J UDICIAL MEMBER AHMEDABAD; DATED 02 / 12 /2011 7.. , . ../ T.C. NAIR, SR. PS (6 2 /&8 (8*& (6 2 /&8 (8*& (6 2 /&8 (8*& (6 2 /&8 (8*&/ COPY OF THE ORDER FORWARDED TO : 1. +. / THE APPELLANT 2. /0+. / THE RESPONDENT. 3. $$ & %9 / CONCERNED CIT 4. %9() / THE CIT(A)-XVI, AHMEDABAD 5. 8<= /& , , / DR, ITAT, AHMEDABAD 6. = >3 / GUARD FILE. (6 % (6 % (6 % (6 % / BY ORDER, 08& /& //TRUE COPY// ! !! !/ // / $ $ $ $ ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION.. 02/12/11 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 02/12/11 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 2/12/11 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 2/12/11 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER