The ITO, Ward-2(4), Bhavnagar V. Jay Mahakali Ginning, Bhavnagar

ITA 210/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6062 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 29-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALBINUS TIRKEY
• Keywords: Depreciation

Judgement Text

ITA NOS.209, 210 & 211/AHD/2016 A.YS. 2012-13 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO.209/AHD/2016 ASSESSMENT YEAR: 2012-13 INCOME TAX OFFICER, VS. KAILASH GINNING FACTORY, WARD-2(4), BHAVNAGAR. TAJALA-BHAVNAGAR-NH 8E, VELAVADAR, TALUKA: TALAJA, DISTT. BHAVNAGAR - 364 140. [PAN AAJFK 0996 Q] ITA NO.210/AHD/2016 ASSESSMENT YEAR: 2012-13 INCOME TAX OFFICER, VS. JAY MAHAKALI GINNING, WARD-2(4), BHAVNAGAR. SURVEY NO.91/2 PAIKI-1, SHOBHAVAD, TALAJA, DISTT. BHAVNAGAR - 364 140. [PAN AAGFJ 0023 L] ITA NO.211/AHD/2016 ASSESSMENT YEAR: 2012-13 INCOME TAX OFFICER, VS. RAGHUVIR GINNING FACTORY, WARD-2(4), BHAVNAGAR. PALITANA ROAD, TALAJA, DISTT. BHAVNAGAR - 364 140. [PAN AAJFR 9099 K] (APPELLANT) (RESPONDENTS) APPELLANT BY : ALBINUS TIRKEY, SR. D.R. RESPONDENTS BY : SAKAR SHARMA DATE OF HEARING : 21.02.2018 DATE OF PRONOUNCEMENT : 23.02.2018 O R D E R PER N.K. BILLAIYA, ACCOUNTANT MEMBER 1. THESE ARE APPEALS BY THE REVENUE PREFERRED AGAIN ST THE ORDERS OF CIT(A)-6, AHMEDABAD DATED 30.11.2015 PERTAINING TO ASSESSMENT YEAR 2012-13. THE IMPUGNED APPEALS RELATE TO THREE DIFFERENT ASSESSEE S BUT SINCE THE FIRST APPELLATE ITA NOS.209, 210 & 211/AHD/2016 A.YS. 2012-13 PAGE 2 OF 3 AUTHORITY DISMISSED ALL THESE APPEALS BY A COMMON O RDER, ALL THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CO MMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. THE COMMON GRIEVANCE IN ALL THESE APPEALS RELATE TO THE ALLOWANCE OF SET OFF OF BUSINESS LOSS AND THE DEPRECIATION FROM THE UNDI SCLOSED INCOME. 3. THE COMMON FACTS IN THE IMPUGNED APPEALS RELATE TO THE DISCLOSURE MADE DURING THE COURSE OF SURVEY PROCEEDINGS IN THE BUSI NESS PREMISES OF THE ASSESSEE AND THE DISCLOSURE RELATE TO THE EXCESS STOCK FOND ON ACCOUNT OF PHYSICAL INVENTORY TAKEN BY THE OFFICIAL OF THE SURVEY TEAM BY COMPARI NG INVENTORY AS ON DATE OF SURVEY AS PER BOOKS. 4. IN ITS RETURN OF INCOME, THE ASSESSEE INCLUDED T HE AMOUNT DISCLOSED ON ACCOUNT OF UNACCOUNTED STOCK BUT CLAIMED SET OFF OF LOSSES IN OTHER HEADS OF INCOME FROM THE INCOME SO DISCLOSED. THE ASSESSING OFFICE R WAS OF THE FIRM BELIEF THAT THE AMOUNT DISCLOSED BY THE ASSESSEE IS NOT ELIGIBLE FO R THE SET OFF OF LOSSES FROM ANY OTHER SOURCE OF INCOME. DRAWING SUPPORT FROM THE D ECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF FAKIR MOHMED HAJI HASAN VS. CI T, 247 ITR 290 (GUJ), THE ASSESSING OFFICER DENIED THE SET OFF OF LOSSES AND TAXED THE ENTIRE INCOME DISCLOSED DURING THE SURVEY PROCEEDINGS. 5. THE ASSESSEE STRONGLY AGITATED THE MATTER BEFORE THE CIT(A). AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, THE CIT( A) WAS CONVINCED THAT THE DISCLOSED AMOUNT IS ASSESSABLE UNDER ONE OF THE HEA D OF INCOME, LOSS AND DEPRECIATION CAN BE SET OFF AGAINST INCOME DISCLOSE D DURING THE SURVEY. THE CIT(A) ACCORDINGLY DIRECTED THE ASSESSING OFFICER TO ASSES S THE DISCLOSED INCOME UNDER ONE OF THE HEAD AND ALLOWED THE SET OFF OF BUSINESS LOS S AND DEPRECIATION. 6. AGGRIEVED BY THIS, THE REVENUE IS IN APPEAL BEFO RE US. LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE FINDINGS OF T HE ASSESSING OFFICER AND ONCE AGAIN RELIED UPON THE DECISION OF HONBLE HIGH COUR T OF GUJARAT IN THE CASE OF FAKIR MOHMED HAJI HASAN (SUPRA). PER CONTRA, LEARNED COU NSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN STATED BEFORE THE LOWER AU THORITIES. 7. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE IN SO FAR AS THE DISCLO SURE MADE AT THE TIME OF SURVEY. ITA NOS.209, 210 & 211/AHD/2016 A.YS. 2012-13 PAGE 3 OF 3 THE ASSESSEE ADMITTED THE EXCESS STOCK AS ITS UNDIS CLOSED INCOME. SINCE THE EXCESS STOCK RELATED TO THE BUSINESS OF THE ASSESSE E, THERE REMAINS NO DOUBT THAT UNDISCLOSED INCOME OFFERED FOR TAXATION RELATED TO THE BUSINESS OF THE ASSESSEE. THE ASSESSING OFFICER HAS WRONGLY CONSTRUED THE SAME AS NOT ELIGIBLE FOR SET OFF. IN OUR CONSIDERED OPINION, IF THERE WERE LOSSES FROM OTHER SOURCE OF INCOME, THE SAME HAD TO BE SET OFF AGAINST THIS INCOME AND THE DEPRECATI ON WAS ALSO ALLOWABLE TO BE DEDUCTED FROM THIS UNDISCLOSED INCOME. THE DECISIO N RELIED UPON BY THE ASSESSING OFFICER AND THE DEPARTMENTAL REPRESENTATIVE IS ON A DIFFERENT SET OF FACTS AND, THEREFORE, NOT APPLICABLE IN THE CASE IN HAND. 8. CONSIDERING THE FACTS IN TOTALITY, WE DO NOT FIN D ANY ERROR OR INFIRMITY IN THE FINDINGS OF THE CIT(A). 9. ALL THE IMPUGNED APPEALS ARE ACCORDINGLY DISMISS ED. (ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF FEBRUARY, 2018) SD/- SD/- RAJPAL YADAV N.K. BILLAIYA (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD, THE 23 RD DAY OF FEBRUARY, 2018 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER E COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD