M/s Anad Sales, BHILAI(CG) V. Income taxOfficer-4, BHILAI(CG)

ITA 206/BIL/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2426 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 17-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHITAL S VERMA
• Section: 143(3)

Judgement Text

, RA IPUR IN THE INCOME TA X A PPELLA TE TRIBUNA L, RA IPUR BEFORE S/SHRI MUKUL SHRAW AT ( JM) SHAMIM YAH Y A (AM) , , ./ I.T.A. NO. 206/BLPR/2012 ( / ASSESSMENT YEAR : 2008 - 09 ) M/S. ANAND SALES, STEEL NAGAR, CAMP - 1, BHILAI / VS. ITO - 4, BHILAI ./ ./ PAN/GIR NO. : AAJFA 0009 Q ( / AP PELLANT ) .. ( / RESPONDENT ) / A PPELLANT BY : SHRI SUNIL KUMAR AGARWAL / RESPONDENT BY : SMT. SHITAL S VERMA / DATE OF HEARING : 1 6 - 02 - 2016 / DATE OF PRONOUNCEMENT : 17 - 02 - 2016 / O R D E R PER MUKUL SHRAWAT, JM THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATING FROM AN ORDER OF THE LD CIT(A), RAIPUR DATED. 21.9.2012 , FOR THE ASSESSMENT YEAR 2008 - 09. . T HE G ROUND S ARE HEREBY DECIDED AS FOLLOWS : 2. GROUND NO.1 IS AS UNDER: ON T HE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A) ERRED IN MAKING AN ADDITION OF RS.1,17,219/ - IN RESPECT OF ALLEGED UNDERVALUATION OF CLOSING STOCK AND LD CIT(A) GROSSLY ERRED IN CONFIRMING THE SAME TO THE EXTENT OF RS.1,14,210/ - WITHOUT APPREC IATING THE FAC T S IN ITS RIGHT PERSPECTIVE. 2 3. IN RESPECT OF THIS GROUND, THE ONLY ISSUE AS POINTED OUT BY THE AO WHILE PASSING THE ORDER UNDER SECTION 143(3) OF THE ACT D A TED 18.8.2010 WAS THAT THE INVENTORY OF STOCK WAS UNDERVALUED BY A SUM OF RS.62,089 / - . I N RESPECT OF THIS ISSUE, THE EXPLANATION OF THE ASSESSEE WAS THAT THE VAT WAS WRONGLY INCLUDED BY THE AO. HOWEVER, WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, TH E ACTION OF THE AO WAS CONFIRMED. 4. THIS ISSUE IS NOW SETTLED BY SEVERAL DECISIONS VIZ; DYANAVIS ION L T D., (2012) 26 TAXMAN N.COM 40(SC). A N AL TERNATE PLEA HAS ALSO BEEN RAISED THAT THE AO WAS NOT JUSTIFIED IN ALLE GING THAT THE CLOSING STOCK W AS UNDERVALUED WITHOUT MAKING ANY ADJUSTMENT IN THE VAL UE OF THE OPENING STOCK. HOWEVER, CONSI DERING THE METH OD OF VALUATION ADOPTED BY THE ASSESSEE, AS PER THE ACCOUNTS AS WELL AS RESPECT FULLY FOLLOWING THE VI EW EX PRESSED BY HONBLE COURT , W E HEREBY ACCEPT THE EXPLANATION OF THE ASSESSEE TO THIS EXTENT AND DIRECT THE AO TO DELETE THE ADDITION. 4.1 IN THIS GROUND, THE ASSESSEE HAS ALSO CH ALLENGED THE WORKING OF THE VAL U A TION OF CLOSING STOCK IN RESPECT OF COAL AND COKE. T HE AO HAS CHALLENGED THE R A TE AT WHICH THE STOCK OF COAL AND COKE WAS VALUE D BECAUSE THE ASSESSEE HAD ADOPTED THE RATE ON WHICH THE COAL WAS SOLD SUBSEQUENTLY. ACCORDING T O THE AO, THE SAID METHOD WAS INCORRECT BECAUSE THE C OAL AND COKE P RICE VARIES IN VARIOUS GRADES. T HE ASSESSEE HAD NOT BROUGHT ON RECORD ANY EV IDENCE TO 3 INDICATE THAT THE CLOSING STOCK INV ENTO RY CONSISTED THE SAME GRADE F OR WHICH IT WAS LATER ON SOLD. 5. HAVING HEAR D THE SUBMISSIONS OF BOTH THE PA RT IES AND IN THE LIGHT OF THE FINDINGS GIVEN BY THE A O AS WELL AS LD CITA), WE HERE BY HOLD THAT THIS PA RT OF THE ADDITION WAS RIGHTLY SUSTAINED BY L D CIT(A). A CCORDING TO US, NO INTERFERENCE IS REQUIRED. RESULTANTLY, GROUND NHO.1 IS PARTLY ALLOWED. 6. GROUND N \ O.2 IS AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CIT(A) FURTHER ERRED IN DISALLOWING RS.95,601/ - OUT OF SITE EXPENSES AN D THE LD CIT(A) GROSSLY ERRED IN CONFIRMING THE SAME WITHOUT APPRECIATING THE FACTS IN ITS RIGHT PERSPECTIVE. 7. AN EXPENDITURE OF RS.1,25, 815/ - WAS DEBITED PERTAINING TO PAYMENT TO EMPLOYEES UNDER THE HEAD F REIGHT, LOADING AND UNLOADING EXPENSES. T HE ALLEGATION OF THE AO WAS THAT THE EXPENDITURE WAS INCURRED BY SELF MADE VOUCHERS. I N THIS REGARD, THE EXPLANATION OF THE ASSESSEE WAS THAT THE BOOKS OF ACCOUNT WERE DULY AUDITED U/S.44AB OF THE ACT. T HE AO HAD MADE THE DISALLOWANCE OF RS.95,601/ - , WHIC H WAS CONFIRMED BY LD CIT(A). AFTER HEARING THE SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE VIEW THAT THE ASSESSEE IS IN THE BUSINESS OF TRADING OF COAL AND COKE FOR WH ICH LOADING AND UNLOADING CHARGES WERE STATED TO HAVE BEEN INCURRED. T HE AO HAS ALLOW ED PART OF THE EXPENDITURE BUT A PORTION WAS DISALLOWED MERELY ON THE GROUND THAT THE EXPENDITURE WAS CORROBORATED BY SELF MADE VOUCHERS. A PART FROM THIS ALLEGATION, THE AO HAD NOT OBJECTED THE NATURE OF THE EXPENDITURE THAT WHETHER IT WAS CONNECTED WITH THE 4 BUSINESS ACTIVITIES OF THE ASSESSEE. IN SUCH A SITUATION, WHEN THE ACCOUNTS OF THE ASSESSEE HAVE BEEN AUDITED U/S.44AB, AND THE AUDITOR HAS N OT RECORDED ANY DISSATISFACTION , THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT THERE WAS NO LEGAL REQUIREM ENTS TO INTERFERE WITH THE EXPENDITURE CLAIMED BY THE ASSESSEE. AS A RESULT, WE HEREBY REVERSE THE FINDINGS OF THE REVENUE AUTHORITIES AND DIRECT TO DELETE THE ADDITION. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 /02/2016 . SD/ - SD/ - ( , ) ( , ) SHAMIM Y AHY A , ACCOUNT ANT MEMBER MUKUL SHRA WA T , JUDICIAL M EM BER RAIPUR , DATED 17 / 02 /20 1 6 . . ./ PARIDA , SR. PS ` / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT : M/S. ANAND SALES, STEEL NAGAR, CAMP - 1, BHILAI 2. / THE RESPONDENT : ITO - 4 BHILAI 3. ( ) / THE CIT(A) - , BILASPUR 4. / CIT , BILASPUR 5. , , / DR, ITAT , RAIPUR 6. / GUARD FILE. / BY ORDER, //TRUE COPY// SR. PS, ITAT, CAMP: RAIPUR