Appeal details
Counselvise Citation
[2016] 131 COUNSELVISE.COM (IT) 5049 (ITAT-JAIPUR)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 6 month(s) 26 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
26-09-2016
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
A
Assessment Year
2011-2012
Appeal Filed On
02-03-2015
Judgement Text
VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO.215/JP/15 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 SHRI DILIP KUMAR ARORA, M/S SHRI ARORA PLYWOOD EMPORIUM, NAGRA, NASIRABAD ROAD, AJMER. CUKE VS. THE ITO, WARD 2(2), AJMER LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AGKPA 0070 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SUBHASH PORWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VARMA.(ADDL. CIT ) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 11.07.2016 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT: 26/09/2016. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A), AJMER DATED 27.01.2015 WHEREIN THE ASSESSEE HAS TAK EN FOLLOWING GROUNDS OF APPEAL: THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A), AJMER HAS ERRED IN SUSTAINING ADDITIONS OF RS. 44,05,090/ - FOR UNEXPLAINED INVESTMENT IN EXCESS STOCK WITHOUT GOING INTO MERIT OF FACTS AND EVIDENCES. 2. BRIEF FACTS OF THE CASE ARE THAT A SURVEY IN TER MS OF SECTION 133A WAS CARRIED OUT AT THE ASSESSEES PREMISES ON 03.02.2011 AND S TOCK WAS PHYSICALLY VERIFIED & DIFFERENCE OF RS. 50,03,032.00 WAS IDENTIFIED IN PHYSICAL STOCK AS COMPARED TO STOCK AS PER BOOKS AND BROUGHT TO TAX AS UNEXPLA INED INVESTMENT IN STOCK. ITA NO. 21`5/JP/15 SHRI DILIP KUMAR ARORA, AJMER VS. IT(O), WARD 2(2 ), AJMER 2 THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE TH E LD CIT(A). TAKING INTO CONSIDERATION THE FACT THAT THE ASSESSEE HIMSELF H AD OFFERED THE PROFIT OF RS. 5,98,212.00 @ 11.70% ON UNRECORDED SALES OF RS. 51, 18,054.00 NOTED IN THE LOOSE PAPERS FOUND DURING THE COURSE OF SURVEY, THE LD CIT(A) ALLOWED SET OFF OF RS. 5,98,212.00 AND BALANCE ADDITION TO THE EXTENT OF RS. 44,05,090.00 WAS CONFIRMED. NOW, THE ASSESSEE IS IN APPEAL BEFORE US . 2.1 THE LD AR ARGUED THE MATTER AT LENGTH AND SUBM ITTED THROUGH ITS WRITTEN SUBMISSION AS UNDER: 1. THAT PHYSICAL STOCK WAS INVENTORISED & WAS VALUE D AT RS. 66,98,216.00 AS ON 03.02.2011. 2. A TRADING ACCOUNT WAS ALSO PREPARED BASED ON EN TRIES IN BOOKS FOR SALE & PURCHASES & AFTER APPLYING G.P.% AT 11.70% (AS PER LAST YEAR) STOCK AS ON 03.02.2011 WAS DETERMINED AT RS. 16,95,184.00 AS PE R BOOKS. 3. THUS THE A.O. HAS ALLEGED EXCESS STOCK AT RS . 50,03,032.00 (66,98,216.00 16,95,184.00) & HAS PREFERRED TO MA KE ADDITION OF SAME. IT WAS ALSO BEEN ALLEGED THAT SINCE THE ASSESSEE HIMSE LF HAS SURRENDERED THE SAME DURING SURVEY PROCEEDINGS HENCE THIS IS THE FI NAL ADDITION & NO RETRACTION BASED ON EVIDENCES ARE TO BE ACCEPTED. WHEREAS SURV EY DOES NOT EMPOWER ANY INCOME TAX OFFICER TO EXAMINE ANY PERSON ON OAT H, STATEMENTS RECORDED U/SEC. 133A HAS NO EVIDENTIARY VALUE. ADDITIONAL CA NNOT BE MADE MERELY ON SUCH BASIS OF STATEMENT. CIT V/S KHADAR KHAN & SONS (2012) 210 TAXMAN 248/79 DTR 184 (SC). 2.2 THE LD AR FURTHER SUBMITTED THAT NO CARE FOR F OLLOWING FACTS / EVIDENCE EVEN GRANTED: ITA NO. 21`5/JP/15 SHRI DILIP KUMAR ARORA, AJMER VS. IT(O), WARD 2(2 ), AJMER 3 (A) THAT THOUGH TRADING ACCOUNT AS PER RECORDS WAS PREP ARED BUT CERTAIN PURCHASES BILLS OF GOODS JUST RECEIVED BEFORE SURVE Y COULD NOT BE POSTED BY ACCOUNTANT FOR RS. 10,89,385.00 DETAILS AS PER CHAR T ENCLOSED. RS. 2,67,429.00 SIMILARLY FREIGHT EXPENSES OF SUCH GOODS WAS ALSO N OT FOUND ENTERED IN BOOKS. THE MISTAKE WAS OF COMPUTER OPERATOR & ASSESSEE WAS NOT AWARE OF THESE FACTS AT THE TIME OF SURVEY; NOR HE WAS ASKED ANYTH ING ABOUT UNPAID / UNPOSTED BILLS / EXPENSES. THUS TOTAL PURCHASES OF RS. 13,56,814.00 WAS LESS ENTERED BY THE TIME ON SURVEY IN BOOKS. THE BILLS O F PURCHASES & TRANSPORTATION EXPENSES. WERE ALSO AVAILABLE AT THE TIME OF SURVEY . (B) SIMILARLY ON GOING THROUGH THE VALUATION SHEET OF PHYSICAL STOCK FOUND AT THE TIME OF SURVEY; LATER ON COMPARISON FROM PUR CHASES BILLS (FOR VALUATION AT COST (LANDED VALUE) IT WAS ASCERTAINED THAT FE W OF THE ITEMS HAVE BEEN VALUED AT MUCH HIGHER VALUE THAN ACTUAL LANDED COS T. THE A.O. HAS ALLEGED THAT THE RATES WERE SINCE INTIMATED BY ASSESSEE HEN CE HAVE BEEN TAKEN ACCORDINGLY FOR VALUATION; HOWEVER THE RATES WERE N EVER REFERRED FOR VALUATION AS PER BILLS & ONLY MEMORY BASED RATES WERE INTIMAT ED; THE ACTUAL VALUATION SHOULD BE AS PER COST. ACCORDINGLY AFTER REPLACING THE COST AS BASIS OF PHYSICAL INVENTORY; BASED ON PURCHASES BILLS THE ACTUAL VALUE OF PHYSICAL INVENT ORY SHOULD BE RS. 19,27,685.00 (DETAILS AS PER SHEET ENCLOSED; (PAGE 81 HARD WOOD SILLY, AAM WOOD CHIRAN & BAMBOO WOOD) THUS THE PHYSICAL STOCK WAS OVERVALUED BY RS. 35,08,865.00 [5436550.00 (VALUE AS PER SURVEY SHEET OF 3 ITEMS FOR COST VARIATION) 1927685.00 REVISED VALUE OF PHYSICAL S TOCK AS PER COST]; (C) THUS IF BOTH THE AFORESAID PARA (A) & (B) FACTORS A RE CONSIDERED; AS BASED ON EVIDENCES THE BOOK STOCK (AS PER RECORDS) WOULD BE RS. 30,51,998.00 (RS. ITA NO. 21`5/JP/15 SHRI DILIP KUMAR ARORA, AJMER VS. IT(O), WARD 2(2 ), AJMER 4 16,95,184.00 BEING STOCK AS PER RECORDS AS PER SURV EY TEAM + RS. 13,56,814.00 BEING PURCHASES UNPOSTED IN BOOKS AT TIME OF SURVEY ). SIMILARLY FINAL VALUE OF PHYSICAL INVENTORY SHOULD BE TAKEN RS. 31,89,351.00 = (66,98,216.00 (TOTAL ACTUAL PHYSICAL STOCK VALUE) 35,08,865.00 (STOCK OF 3 ITEMS OVER VALUED)) & AT THE MOST THE VARIATION / D IFFERENCE IN STOCK WOULD BE ONLY RS. 1,37,353.00 = (31,89,351.00 (STOCK SHOULD BE AS PER PHYSICAL) 30,51,998.00 (REVISED BOOK STOCK). AGAINST THIS EXCESS STOCK OF RS. 1,37,353.00 SINCE THE ASSESSEE HAS ALREADY SURRENDERED A SUM OF RS. 5,98,812.00 (BEING G.P.% A T 11.70% ON UNRECORDED SALES OF RS. 51,18,054.00 AS PER LOOSE PAPERS) AND RS. 2,13,953.00 FOR UNREALIZED SALES / DEBTOR & AS PER LOOSE SLIPS. THU S A SUM OF RS. 8,12,765.00 (5,98,812.00 + 2,13,953.00) HAS ALREADY BEEN CONSID ERED AS INCOME VOLUNTARILY & DUE TO SET OFF NO FURTHER ADDITION TO THIS EX TENT NEEDED. THE A.O. WHILE JUSTIFYING HIS DECISION FOR NOT ACCE PTING THE VERSION OF ASSESSEE FOR REVISED VALUATION ARE MAINLY THAT FEW PURCHAS ES BILLS AS MENTIONED IN HIS ORDER PAGE 13 & 14 ARE OF SIMILAR GOODS (NATURE ) & THERE VALUE ARE AS SIMILAR AS PER PHYSICAL INVENTORY SHEET; WHEREAS TH ESE ALL BILLS ARE FOR DIFFERENT ITEMS & NOT FOR IDENTICAL GOODS; THE COPIES OF BILL S & COMPARATIVE CHART IS AS ENCLOSED; WHICH JUSTIFIES THAT A.O. HAS MADE A WRON G CONCLUSION & HAVE IGNORED THE FACTS. WITH REGARD TO PURCHASE BILLS FOUND NOT POSTED IN R ECORDS, THE LD AR SUBMITTED THAT THE A.O. HAS ALLEGED THAT SUCH BILLS WERE NOT FOUND DURING SURVEY; NOR ANY EXPLANATION; MADE THEREON IS AGAIN A WRONG INTERPRE TATION; SINCE THESE BILLS & FREIGHT BUILTY ALL WERE AVAILABLE THERE; SINCE NOT IMPOUNDED; NOR INVENTORISED HENCE THE A.O. IS NOT ACCEPTING THE AVAILABILITY OF SAID BILLS AT THE TIME OF SURVEY ON 03.02.2011 WHEREAS JUST AFTER SURVEY WHEN COMPLE TE RECONCILIATION OF ITA NO. 21`5/JP/15 SHRI DILIP KUMAR ARORA, AJMER VS. IT(O), WARD 2(2 ), AJMER 5 ACCOUNTS WERE MADE & ASSESSEE REALIZED THE MISTAKE THE FACTS WERE INTIMATED TO A.O. WITH A DETAILED LETTER & EVIDENCES ON 30.03 .2011 IN WRITING STATING ALL FACTS & EVIDENCES BUT NO CARE MADE. THE A.O. WAS ALSO REQUESTED TO ENQUIRE THE EVIDENCE S BROUGHT ON FILE U/SEC. 133(6) OF INCOME TAX ACT, 1961 TO VERIFY THE FACTS BUT A.O. HAS NOT DONE ANYTHING. THE COPY OF CONFIRMATION LETTER CUM EVIDE NCE OF M/S MAHALAXMI TRADERS BISWAN (SITAPUR) WAS ALSO FILED BEFORE A.O. FOR VERIFICATION TO THIS EFFECT. THE A.O. WITHOUT TAKING CARE OF ALL THESE FACTS & E VIDENCES HAVE ONLY HAD HIS OWN SURMISES AND HAS OVERLOOK THE FACTS & FOR ADDIT ION SAKE HAS MADE ADDITIONS. HONBLE SUPREME COURT IN CASE OF CIT V/S S. KADAR K HAN & SONS (2012) 210 TAXMAN 248 / 25 TAXMAN.COM 413 (SC) HAVE HELD THAT SINCE STATEMENTS RECORDED UNDER SURVEY IN TERMS OF SECTION 133A OF I NCOME TAX ACT, 1961 IS SINCE NOT ON OATH SO HAS NO EVIDENTIARY VALUE AND A NY ADMISSION MADE DURING SUCH STATEMENT CANNOT BE MADE BASIS OF ADDITION. FURTHER IN THE DECISION IN PULLANGODE RUBBER PRODUCE CO. LTD. V/S STATE OF KERALA (1973) 91 ITR 18 ; THE APEX COURT HELD THAT AN ADMISSION IS EXTREMEL Y AN IMPORTANT PIECE OF EVIDENCE, BUT IT CANNOT BE SAID THAT THIS IS CONCLUSIVE AND IT IS OPEN TO THE PERSON WHO MADE THE ADMISSION TO SHO W THAT IT IS INCORRECT. SIMILAR VIEWS HAVE BEEN HELD IN CASE OF DR. S.C. GUPTA V/S CIT (2001) 248 ITR 782 (ALLAHABAD HIGH COURT) & PAUL MATHEWS AND SONS V/S CIT (2003) 263 ITR 101 . 2.3 THE LD AR FURTHER SUBMITTED THAT ALTERNATIVELY , IT IS WORTHWHILE TO NOTE THAT AT YEAR ENDED ON 31.03.2011 THE WHOLE CLOSING STOCK IS NIL E.G. THE STOCK ITA NO. 21`5/JP/15 SHRI DILIP KUMAR ARORA, AJMER VS. IT(O), WARD 2(2 ), AJMER 6 AS ON 03.02.2011 AS PER PHYSICAL HAS SINCE BEEN SOL D; IF HIGHER VALUATION IS CONSIDERED OF OPENING STOCK AS ON 03.02.2011 THAN T HERE IS A TRADING LOSS & SINCE A.O. HAS ACCEPTED THE BOOK RESULTS HENCE TH E BALANCING LOSS AS INCURRED SHOULD BE SET OFF FROM SUCH ADDITION SIN CE A.O. HAS ACCEPTED THE SALES & RECORDS. 3. HAVING CONSIDERED THE SUBMISSIONS OF THE APPELL ANT, WE NOW REFER TO DECISION OF LD CIT(A). BASED ON ABOVE FACTS & EVID ENCES THE LD. CIT(A) HAS STATED THAT IT IS SEEN THAT SURVEY WAS CONDUCTED ON 03.02.2011 AND ASSESSEE HAD ACCEPTED THE VALUE OF THE CLOSING STOCK AS PER THE BOOKS OF ACCOUNTS RS. 16,95,184.00 AND VALUE OF THE PHYSICAL STOCK AT RS. 66,98,216.00 AND ASSESSEE SURRENDERED THE DIFFERENCE OF RS. 50,03,032.00 AS P OINTED OUT BY THE A.O. AND A.O. HAS REPRODUCED THE STATEMENT OF SHRI ANKUR ARO RA AND DILIP KUMAR ARORA IN THIS REGARD. THE LD CIT(A) HELD THAT THERE WAS NO IMMEDIATE RETR ACTION ON ACCOUNT OF SURRENDER. HOWEVER, THE ASSESSEE FILED THE LETTER D ATED 30.03.2011 RETRACTING THE SURRENDERED MADE BY CLAIMING UN-ENTERED PURCHAS E BILL AND EXPENSES IN THE BOOKS OF ACCOUNTS, EXCESS VALUATION OF THE STOCK ET C. SUCH A DELAYED CLAIM OF THE ASSESSEE ITSELF SHOWS THAT THE SAID RETRACTION IS N OT RELIABLE. FURTHER, THE ASSESSEE HAD CONTENDED AS PER LETTER D ATED 30.03.2011 (WHILE THE SURVEY WAS CONDUCTED ON 03.02.2011) THAT CERTAIN BI LLS FOR PURCHASE AND TRANSPORT EXPENSES TOTALING TO RS. 13,56,814.00 WER E NOT POSTED IN THE BOOKS OF ACCOUNTS. HOWEVER IN THE RETURN FIELD BY THE ASSESS EE ON 14.07.2012, THE ASSESSEE HAS CLAIMED THAT PURCHASES AND TRANSPORT E XPENSES OF RS. 18,82,930.00 HAVE NOT BEEN POSTED IN THE BOOKS OF A CCOUNTS AS UNDER;- (I) URD PURCHASES AND EXPENSES RS. 6,59,145.00 ITA NO. 21`5/JP/15 SHRI DILIP KUMAR ARORA, AJMER VS. IT(O), WARD 2(2 ), AJMER 7 (II) PURCHASES FROM MAHALXMI TRADERS RS. 10,89,385.00 (III) TRANSPORT EXPENSES RS. 1,34,400.00 ------------------------------- TOTAL RS. 18,82,930.00 FROM ABOVE, IT IS APPARENT THAT ASSESSEE HIMSELF HA S TAKEN FLUCTUATION STAND REGARDING CLAIM OF UNENTEREED PURCHASES AND EXPENSE S. AT THE TIME OF SURVEY, ASSESSEE SIMPLY SURRENDERED THE WHOLE OF EXCESS STO CK FOR TAXATION OF RS. 50,03,032.00. THEREAFTER ON 30.03.2011, THE ASSESSE E CLAIMED THAT EXPENSES AND PURCHASES OF RS. 13,56,814.00 HAVE NOT BEEN ENT ERED. THEN AGAIN WHILE FILING THE RETURN ON 14.07.2012, ASSESSEE HAS CLAIM ED THE UNENTERED PURCHASES AND EXPENSES AT RS. 18,82,930.00 IT MAY BE MENTIONED THAT AT THE TIME OF SURVEY IN T HE STATEMENT RECORDED OF THE ASSESSE VIDE QUESTION NO. 8, SHRI ANKUR ARORA WHO A S MANAGING THE AFFAIRS OF THE ASSESSEE CONCERN WAS REQUIRED TO STATE THAT WHE RE ARE THE BILLS AND VOUCHERS RELATING TO PERIOD AFTER 26.01.2011 FOR EN TERING IN THE CASH BOOK AND HE WAS ASKED AS TO WHERE ARE THE PRIMARY BILLS AND VOUCHERS FOR PREPARING THE CASH BOOK. HOWEVER HE HAS STATED THAT HE DOES NOT H AVE ANY EVIDENCE BASED ON WHICH THE CASH BOOK WILL BE COMPLETED. FROM THIS, I T IS APPARENT THAT NO SUCH CLAIM WAS MADE BY THE ASSESSEE THAT THERE ARE ANY P URCHASE BILLS OR TRANSPORT EXPENSES WHICH ARE TO BE ENTERED IN THE BOOKS OF AC COUNTS. FURTHER NO SUCH BILLS AND BILLS AND VOUCHERS WHICH HAVE BEEN SUBMITTED DU RING THE ASSESSMENT WERE FOUND AT THE TIME OF SURVEY. THE ASSESSEES CLAIM THAT ASSESSEE HAS CLAIMED THAT ASSESSEE HAD MADE THE URD PURCHASES AND EXPENSES THEREON OF RS. 6,57,645. 00 HOWEVER NO SUCH BILLS HAVE BEEN PUT ON RECORD BY THE ASSESSEE. FURTHER AS SESSEE HAS CLAIMED THAT PURCHASES OF RS. 10,89,385.00 AND TRANSPORT EXPENSE S THEREON OF RS. ITA NO. 21`5/JP/15 SHRI DILIP KUMAR ARORA, AJMER VS. IT(O), WARD 2(2 ), AJMER 8 1,34,000.00 WERE ALL MADE FROM A SINGLE PARTY I.E. MAHALAXMI TRADERS, BISWAN, SITAPUR. ALL THESE BILLS ARE IN HANDWRITING OF SING LE PERSON. NO SUCH BILLS WERE FOUND AT THE TIME OF SURVEY. THE ASSESSEE HAS NOT M AINTAINED ANY STOCK OF REGISTER. AS SUCH THE CLAIM OF THE ASSESSEE REGARDI NG THE UNENTERED BILLS EXPENSES IS NOT ACCEPTABLE. IN VIEW OF ABOVE DISCUSSION, THE ASSESSEES CLAIM O F UNENTERED BILLS AND EXPENSES IS REJECTED. FURTHER THE ASSESSEE HAS CLAIMED THAT EXCESSIVE PUR CHASE RATES OF THREE ITEMS HAVE BEEN TAKEN. I. HARD WOOD (SILLY) II. AAM WOOD (CHIRAN) III. BAMBOOL WOOD (CHIRAN + SILLY) THE A.O. HAS GIVEN THE ASSESSES CONTENTIONS REGARD ING EXCESS RATE OF THE WOOD ADOPTED BY THE A.O. AT THE TIME OF SURVEY AS PER TH E TABLE 1 ON PAGE NO. 12 AND 13 OF THE ASSESSMENT ORDER. AS PER THIS TABLE, THE ASSESSEE HAS VALUED ALL THE THREE TYPES OF ABOVE WOODS BETWEEN RS. 125 TO RS. 1 35 PER CUBIC FT. ONLY WHILE AT THE TIME OF SURVEY THE SAME WERE STATED TO BE RA NGING FROM RS. 326 TO RS. 450 PER CUBIC FT. AS ADOPTED BY THE A.O. IN THIS RE GARD, IT MAY BE MENTIONED THAT THE ASSESSEES CLAIM OF THE LOWER RATES IS BAS ED ON THE SAME BILLS OF M/S MAHALAXMI TRADERS, BISWAN I.E. BILL NO. 74,66 AND 6 9 WHCH WERE CLAIMED TO BE NOT ENTERED IN THE BOOKS OF ACCOUNTS AND THESE BILL S HAVE ALREADY BEEN HELD TO BE UNRELIABLE AS NO SUCH BILLS WERE FOUND AT THE TI ME OF SURVEY OR CLAIMED TO BE ENTERED AT THE TIME OF SURVEY. IT MAY BE MENTIONED THAT THE A.O. HAS QUOTED CERTAI N BILLS OF OTHER CONCERNS REGARDING THE PURCHASE PRICES OF THE WOOD BY THE AS SESSEE IN THE TABLE 2 ON ITA NO. 21`5/JP/15 SHRI DILIP KUMAR ARORA, AJMER VS. IT(O), WARD 2(2 ), AJMER 9 PAGE 13 AND 14 OF THE ASSESSMENT ORDER. IN THIS BIL L, NONE OF THE WOOD PURCHASED BY THE ASSESSEE FALLS IN THE RANGE OF RS. 125 TO 135 AS CLAIMED BY THE ASSESSEE AND RANGE NOTED IN THESE BILLS VARIES FROM RS. 250 TO RS. 750. IN ABOVE CIRCUMSTANCES, THE CLAIM OF THE ASSESSEE REGARDING SUCH A LOW RATE OF THE WOOD IS NOT ACCEPTABLE. THE ASSESSEE HAS NOT BEEN ABLE T O SHOW FROM THE BOOKS AND RELEVANT DOCUMENTS FOUND AT THE TIME OF SURVEY THAT PREVAILING RATE OF THE WOOD WAS BETWEEN RS. 125 TO RS. 135 PER CUBIC FT. FURTHER IT MAY BE MENTIONED THAT DURING SURVEY PROC EEDINGS, SHRI ANKUR ARORA HIMSELF HAD STATED THAT RATE IN THE INVENTORY HAVE BEEN NOTED AS PER THE PURCHASE BILLS OF THE RESPECTIVE ITEMS AS IS EVIDEN T FROM ANSWER TO QUESTION NO. 13 AND ASSESSEE SHRI DILIP ARORA HAD AGREED TO ALL THE ABOVE FACTS. AS SUCH, THE RATES ADOPTED BY THE A.O. ARE HELD TO BE REASONABLE . AS REGARDING ASSESSEES CLAIM OF LOSS AFTER THE SUR VEY BASED UPON STOCK VALUE ADOPTED AS THERE WAS NIL CLOSING STOCK, THE SAID CL AIM IS REJECTED HOLDING THAT THE SAID STOCK HAS BEEN SOLD AFTER CHARGING SIMILAR G.P. RATE 11.70% AS OFFERED BY THE APPELLANT AND BOOKS OF APPELLANT HAVE BEEN R EJECTED U/S. 145(3) OF THE INCOME TAX ACT, 1961. IN VIEW OF ABOVE DISCUSSION, THE ADDITION MADE BY T HE A.O. ON ACCOUNT OF UNACCOUNTED STOCK OF RS. 50,03,302.00 IS CONFIRMED. HOWEVER THE ASSESSEE HIMSELF HAD OFFERED THE PROFIT OF RS. 5,98,212.00 @ 11.70% ON UNRECORDED SALES NOTED IN THE LOOSE PAPERS FOUND DURING SURVEY OF RS . 51,18,054.00 SO THE SET OFF OF THE SAME MAY BE GIVEN AS ASSESSEE HAD CLAIMED TH AT SUCH PROFITS EARNED HAVE BEEN INVESTED IN THE EXCESS STOCK ITSELF AS NO TED IN THE ASSESSMENT ORDER ON PAGE 10. AS SUCH, THE ASSESSEE IS ALLOWED SET OF F OF RS. 5,98,212.00 AND BALANCE ADDITION TO THE EXTENT OF RS. 44,05,090.00 IS CONFIRMED. ITA NO. 21`5/JP/15 SHRI DILIP KUMAR ARORA, AJMER VS. IT(O), WARD 2(2 ), AJMER 10 4. IN RESPONSE TO LD CIT(A) OBSERVATIONS AND FINDI NGS, THE LD. AR HAS SUBMITTED THAT THE LD. CIT(A) HAS NOT CONSIDERED TH E FOLLOWING ASPECTS: (A) RECORDS E.G. CASH BOOK, LEDGER ETC WERE INCOMP LETE AT THE TIME OF SURVEY & IT WAS MADE CLEAR TO SURVEY TEAM ALSO; WHEREAS RE PLY TO Q.NO. 8 OF STATEMENTS OF MANAGER ANKUR ARORA THAT THE BILLS O R VOUCHERS YET TO BE ENTERED IN THE BOOKS. (B) FURTHER THESE STATEMENTS / REPLIES WERE FOR P HYSICAL CASH AND INCOMPLETE RECORDS, THERE WAS NOTHING ABOUT UNPOST ED BILLS FOR PURCHASES; THESE FACTS WERE IMMEDIATELY ON RECONCILIATION WERE INTIMATED TO DEPARTMENT. (C) FOR RATE DIFFERENCE (VALUATION OF STOCK) THE AO S REMAND REPORT IS ITSELF CLEAR THAT THE RATES FOR VALUATION EITHER DO NOT MATCH OR HAVE BEEN TAKEN ON HIGHER VALUES; EVEN RECENT QUOTATIONS WERE ALSO SUBMITTED DURING REMAND REPORT FOR VERIFICATION OF RATES. THUS MERELY THE LD. CIT(A)S ON PRETEXT THAT NO IMM EDIATE RETRACTION MADE JUST AFTER SURRENDER; WHEREAS IT IS NOT A CASE OF RETRAC TION BUT ONLY RECONCILIATION AND MATCHING OF FACTS & EVIDENCES FOR WHICH NEITHER THE A.O. HAS DENIED NOR LD. CIT(A) COULD FIND ANY TECHNICAL / PROCEDURAL FA ULT. FURTHER THE LD. CIT(A) HAS ALSO OBSERVED IN HIS ORD ER THAT ASSESSEE HAS NOT BEEN ABLE TO SHOW FROM THE BOOKS AND RELEVANT DOCUMENTS FOUND AT THE TIME OF SURVEY THAT PREVAILING PRICE OF WOOD WAS BETWEEN RS . 125 TO RS. 135 PER CUBIC FT; WHEREAS COMPLETE COPIES OF BILLS, FREIGHT RECEI PTS & CONFIRMATION OF SUPPLIER WAS FILED BEFORE A.O. AS WELL AS LD CIT(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFUL LY PERUSED THE MATERIAL AVAILABLE ON RECORD. IN TERMS OF LD ARS CONTENTION THAT THERE WAS NO RETRACTION BUT RECONCILIATION OF FACTS AND FIGURES AS COMPARED TO WHAT HAS BEEN STATED ITA NO. 21`5/JP/15 SHRI DILIP KUMAR ARORA, AJMER VS. IT(O), WARD 2(2 ), AJMER 11 AND DOCUMENTED AT THE TIME OF SURVEY, IT IS NOTED T HAT THOUGH THE LD CIT(A) HAS INITIALLY MADE AN OBSERVATION THAT THERE WAS NO IMM EDIATE RETRACTION AND IT IS A CASE OF DELAYED RETRACTION AND NOT RELIABLE. AT TH E SAME TIME, HE HAS GONE THROUGH THE ASSESSEES LETTER DATED 30.03.2011 RELA TING TO UNRECORDED PURCHASE BILLS AT THE TIME OF SURVEY AND EXPENSES I N THE BOOKS OF ACCOUNTS, EXCESS VALUATION OF THE STOCK ETC., COMPARED IT WIT H THE POSITION IN THE RETURN OF INCOME, TAKEN INTO CONSIDERATION THE REMAND REPO RT OF THE AO AND GONE THROUGH EACH OF THE CONTENTIONS RAISED BY THE LD AR ALONG WITH THE REJOINDER TO THE REMAND REPORT IN TERMS OF UNRECORDED PURCHASES, VALUATION, SET OFF ETC AND HAS COME TO A WELL-REASONED DECISION. WE SEE NO RE ASON TO INTERFERE WITH THE ORDER OF LD CIT(A) AND THE SAME IS HEREBY CONFIRMED . IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26/ 09/2016. SD/- SD/- ( KUL BHARAT ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 26/09/2016 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI DILIP KUMAR ARORA, AJMER 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD 2(2), AJMER 3. VK;DJ VK;QDR@ CIT AJMER 4. VK;DJ VK;QDRVIHY@ THE CIT(A)-AJMER 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.215 /JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR ITA NO. 21`5/JP/15 SHRI DILIP KUMAR ARORA, AJMER VS. IT(O), WARD 2(2 ), AJMER 12
