M/S Sandeep Industries, Jamshedpur V. DCIT, Circle-1, Jamshedpur

ITA 210/RAN/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 1082 (ITAT-RANCHI)
• Duration Of Justice: 3 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 14-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 250; 143(2)

Judgement Text

ITA No. 210/RAN/2019 A.Y. 2008-2009 M/s. Sandeep Industries, Jamshedpur 1 IN THE INCOME TAX APPELLATE TRIBUNAL, ‘RANCHI’ BENCH, KOLKATA [VIRTUAL COURT HEARING AT KOLKATA] Before Shri Rajpal Yadav, Vice-President (KZ) & Shri Manish Borad, Accountant Member I.T.A. No. 210/RAN/2019 Assessment Year: 2008-2009 M/s. Sandeep Industries,.........................................................Appellant Plot No. 1, Tata Kandra Road, Adityapur, Jamshedpur-832109 [PAN:AAEFS2827F] -Vs.- Deputy Commissioner of Income Tax,.....................................Respondent Circle-1, Jamshedpur Appearances by: N o n e, appeared on behalf of the assessee Shri N.K. Khalkho, Sr. D.R., appeared on behalf of the Revenue Date of concluding th e hearing : Ma y 11 , 2022 Date of pro nouncing the orde r : Ma y 26 , 2022 O R D E R Per Rajpal Yadav, Vice-President (KZ):- The assessee is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax (Appeals), Jamshedpur dated 25.02.2019 passed for assessment year 2008-09. 2. The assessee has taken eight grounds of appeal, which read as under:- (1) For that the order as passed by the Ld. CIT (A), Jamshedpur is contrary to the facts on record. (2) For that the Ld. CIT (A) has wholly erred in confirming adding Rs. 40,66,673/- u/s 69 on account of alleged undisclosed stock. ITA No. 210/RAN/2019 A.Y. 2008-2009 M/s. Sandeep Industries, Jamshedpur 2 (3) For that the Ld. CIT (A) has failed to appreciate that the entire inventorization of stock was made on visual inspection and without actual weighment and hence it has no evidentiary value in the eyes of law. (4) For that the Ld. CIT (A) has erred in rejecting the detailed explanation of the appellant along with corroborative evidences and reconciliation by holding it to be having no merit. (5) For that the Ld. CIT (A) has erred in not considering the remand report of the jurisdictional Assessing Officer without any material on record. (6) For that the order of Ld. CIT(A), Jamshedpur confirming the addition of Rs. 40,66,673/- as made by Ld. A.O. is wrong, illegal and unjustified on the facts and in the circumstances of the appellants case. (7) For that the Ld. CIT(A), wholly erred himself by not allowing the claim of Rs. 52,36,392/- on account of element of Central Excise Duty in Closing Stock by invoking the provisions of Section 145A. (8) For that the Ld. CIT(A), has erred himself by not considering the appellant submission that Jurisdictional ITAT, in the case of Apex Auto Ltd. Jamshedpur Vs. DCIT, Circle-1 Jamshedpur, in ITA No. 32/RAN/2012 had allowed the appeal in similar facts and circumstances. 3. In response to the notice of hearing, no one has come present on behalf of the assessee. Thereafter notice was sent through the Department, which according to the Revenue was served upon the assessee. A report in this connection has been filed by the ld. Addl. CIT, Income Tax (Sr. D.R.), ITAT, Ranchi dated 10.05.2022. Inspite of this service of notice, no one has come present on behalf of the assessee. We, therefore, decided to dispose of this appeal ex-parte qua the assessee. 4. With the assistance of the ld. D.R., we have gone through the report carefully. It emerges out from the record that the assessee has filed its return of income on 30.09.2008 declaring total income at Rs.24,27,320/-. This return was selected for scrutiny assessment and a notice under section 143(2) was issued and served upon the assessee. The ld. Assessing Officer has passed a scrutiny assessment and determined the total income of the assessee at Rs.1,16,77,400/-. The ld. Assessing Officer ITA No. 210/RAN/2019 A.Y. 2008-2009 M/s. Sandeep Industries, Jamshedpur 3 has made two additions namely Rs.40,66,673/- on account of excess stock found on the date of survey operation and Rs.52,36,390/- on account of understatement of excise duty in the closing stock. Dissatisfied with the two additions, the assessee carried the matter in appeal before the ld. CIT(Appeals), which did not bring any relief to the assessee. 5. A perusal of the impugned order would suggest that it is running into 12 pages. In the first six pages, ld. CIT(Appeals) has reproduced the assessment order. From page no. 7 upto page 11, he reproduced the statement of facts, grounds of appeal and written submissions filed by the assessee. Thereafter the ld. CIT(Appeals) has recorded the following finding:- “3. Upon due consideration of the facts/material available on record, including the above reproduced written submissions of the appellant, I find that there is no merit in the grounds of appeal related to the appellant’s investment in unaccounted for/undisclosed stock of Rs.40,66,673/-. Hence, these grounds are dismissed and the addition is confirmed. 3.1. Regarding the addition of Rs.52,36,392/-, made on account of inclusion of Central Excise in the closing stock, I find that the appellant has only claimed that it follows the exclusive method for Central Excise, i.e. it is not claimed as an expense, hence, not includible in the closing stock, but has not substantiated the claim. Nevertheless, in the interest of justice AO is directed to verify the issue thoroughly and decide the issue as per law. Therefore, the related grounds are treated as partly allowed. 4. In the result, the appeal is partly allowed. 6. Section 250 of the Income Tax Act provides the procedure require d to be followed by the ld. 1 s t Appellate Authority. Sub-section (6) is relevant for our purpose and, therefore, we deem it appropriate to take note of this clause, which reads as under:- “The order of the Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision”. ITA No. 210/RAN/2019 A.Y. 2008-2009 M/s. Sandeep Industries, Jamshedpur 4 7. A perusal of this clause would suggest that ld. 1 s t Appellate Authority is required to formulate the points and thereafter gave reasons on those points. The finding extracted (supra) is nowhere in consonance with the mandate of section 250(6) of the Income Tax Act. There is no analytical application of mind by the ld. 1 s t Appellate Authority on the submissions of the assessee as well as on the issue raised. He simply concurred with the finding of the ld. Assessing Officer. Therefore, it is not sustainable. We, therefore, set aside the finding of the ld. 1 s t Appellate Authority and restore this issue to the file of the ld. CIT(Appeals) for fresh adjudication. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on May 26 t h , 2022. Sd/- Sd/- (Manish Borad) (Rajpal Yadav) Accountant Member Vice-President (KZ) Kolkata, the 26 th day of May, 2022 Copies to : (1) M/s. Sandeep Industries, Plot No. 1, Tata Kandra Road, Adityapur, Jamshedpur-832109 (2) Deputy Commissioner of Income Tax, Circle-1, Jamshedpur (3) Commissioner of Income Tax (Appeals), Jamshedpur (4) Commissioner of Income Tax , (5) The Departmental Representative (6) Guard File TRUE COPY By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S.