Sri Braja Mohan Mishra, Purba Medinipur V. I.T.O., Ward -4, Haldia, Haldia

ITA 218/KOL/2008

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83152 (ITAT-KOLKATA)
• Duration Of Justice: 6 year(s) 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2014
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2003-2004
• Appeal Filed On: 21-02-2008
• Court: TRIBUNAL
• Department Lawyers: SNEHOTPAL DUTTA
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C , KOLKATA [BEFORE HONBLE SRI MAHAVIR SINGH, JM& HONBLE S RI SHAMIM YAHYA, AM ] ITA NO.218/KOL/2008 ASSESSMENT YEAR : 2003-04 ( APPELLANT ) (RESPONDENT) SHRI BRAJA MOHAN MISHRA ..-VS- I.T.O., WARD-4 PURBA MEDINIPUR HALDIA (PAN:AJFPM 3850 Q) FOR THE APPELLANT SHRI ANIL KOCHAR, ADVOCATE FOR THE RESPONDENT SHRI SNEHOTPAL DUTTA, JCIT, SR.DR DATE OF HEARING : 30.09.2014 DATE OF PRONOUNCEMENT : 16/ 10/2014. ORDER PER SHRI SHAMIM YAHYA, AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. C.I.T.(A)- XXXIII, KOLKATA DT. 16.01.2008 AND PERTAINS TO ASSE SSMENT YEAR 2003-04. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE RE AD AS UNDER :- 1. FOR THAT THE LD.CIT(A) ERRED IN DISMISSING THE APPEAL OF THE APPELLANT ON THE ALLEGED GROUNDS. 2. FOR THAT THE LD.CIT(A) OUGHT TO HAVE CONSIDERED THE EXPLANATION OF THE APPELLANT PROPERLY AND OUGHT TO HAVE DELETED THE ADDITION OF RS.5,17,793/- MADE BY THE AOI. 3. FOR THAT THE LD. CIT(A) ERRED IN ENHANCING THE I NCOME OF THE APPELLANT BY RS.54,358/- 4. FOR THAT FURTHER GROUNDS OF APPEAL MAY KINDLY BE ALLOWED TO BE TAKEN AT THE TIME OF HEARING OF THE APPEAL. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE STOCK HYPOTHECATED/PLEDGED BY THE ASSESSEE AGAINST THE CASH CREDIT LOAN TAKEN FROM U.B.I. KOLAGHAT WERE EXAMINED. ON VERIFICATION OF THE STOCK STATEMENT OF FEB 2003 SUBMITTED TO THE BANK WITH THE STOCK STATEMENT FOR THE MONTH OF MARCH 200 3 THE ASSESSING OFFICER DETECTED DIFFERENCE OF 94 ITEMS AMOUNTING TO RS.5,17,793/-. IN THE STOCK STATEMENT OF FEBRUARY, 2003 THE ASSESSEE HAD DECLARED 94 ITEMS AMOUNTING T O RS.5,17,793/- WHICH WAS NOT ITA.NO.218/KOL/2008 SRI BRAJA MOHAN MISHRA,KPURBA MED INIPUR A.YR.2003-04 2 FIGURING IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE. ACCORDINGLY, THE ASSESSING OFFICER RECORDED THE STATEMENT OF THE BRA NCH MANAGER, WHO CONFIRMED THAT, THE BANK HAD INSPECTED THE STOCK ON 11-3-2003 AND T HE STOCK STATEMENT SUBMITTED BY THE ASSESSEE WERE VERIFIED AND FOUND TO BE IN ORDER AND AS PER RECORD OF PURCHASE AND SALE REGISTER. HENCE THE AO ADDED RS.5,17,793/- AS UNDISCLOSED INVESTMENT MADE BY THE ASSESSEE IN STOCK U/S 69 OF THE ACT. 4. UPON ASSESSEES APPEAL IN THIS REGARD THE LD.CIT (A) AFFIRMED THE ACTION OF AO. THE LD. CIT(A) FURTHER PROCEEDED TO MAKE ENHANCEMEN T ON ACCOUNT OF GROSS PROFIT ON THE ADDITION ON ACCOUNT OF UNDISCLOSED STOCK. THIS RESULTED IN ENHANCEMENT OF RS.54,358/-. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEAL B EFORE US. 5. WE HAVE HEARD BOTH THE COUNSEL AND CAREFULLY PER USED THE RECORDS. WE FIND THAT IN THIS CASE THE AO HAS NOT FOUND ANY DEFECT WHATSO EVER IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. NO DEFECT HAS BEEN POINTED OUT IN THE PURCHASE REGISTER, SALE REGISTER AND STOCK REGISTER. NO EVIDENCE HAS BEEN BROUGHT ON REC ORD FOR ANY SUPPRESSED SALES DETECTED. AO HAS ONLY REFERRED TO THE STOCK STATEME NT OF FEBRUARY, 2003 SUBMITTED TO THE BANK. AO HAS FOUND THAT AS AGAINST THE STOCK ST ATEMENT OF FEBRUARY, 2003 SUBMITTED TO THE BANK THERE WAS DISCREPANCY AS COMP ARED TO THE ASSESSEES STOCK RECORDS AMOUNTING TO RS.5,17,793/-. IT IS TO BE NOT ED HERE THAT IT IS NOT THE CASE OF THE AO THAT THERE WAS ANY DISCREPANCY OBSERVED WITH REF ERENCE TO THE STOCK STATEMENT FOR MARCH, 2003 WHICH WAS DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME. AO HAS ONLY REFERRED TO THE SUBMISSIONS OF THE BRANCH MANA GER THAT THE BANK HAS INSPECTED THE STOCK ON 11.03.2003 AND HAS FOUND THE SAME IN A CCORDANCE WITH THE STOCK STATEMENT. HERE WE NOTE THAT IN THE STATEMENT THE B RANCH MANAGER HAS ALSO SUBMITTED THAT THE STOCK STATEMENT OF FEBRUARY, 2003 WAS VER IFIED AND FOUND THAT THE TV STOCK OF VIDEOCON AS REPORTED IN STOCK STATEMENT WAS FOUN D TO BE IN ORDER AND AS PER RECORD OF PURCHASE AND SALE REGISTER. NOW WE FIND THAT TH E STATEMENT OF THE BRANCH MANAGER WHICH HAS BEEN MADE TO BE THE BASIS OF ADDITION ALS O MENTIONS THAT THERE WAS NO DISCREPANCY IN THE STOCK RECORD AS COMPARED TO THE STOCK RECORD AND PURCHASE AND SALE REGISTER. NOW THE AO HAS CLEARLY GIVEN NO FINDING T HAT ANY DISCREPANCY WAS NOTED IN ITA.NO.218/KOL/2008 SRI BRAJA MOHAN MISHRA,KPURBA MED INIPUR A.YR.2003-04 3 THE PURCHASE AND SALE REGISTER. FROM THIS IT IS CLE AR THAT THE STATEMENT OF THE BRANCH MANGER CANNOT BE A CONCLUSIVE PROOF OF ADDITION ON ACCOUNT OF UNDISCLOSED STOCK IN THE HANDS OF THE ASSESSEE. MOREOVER NO CASE HAS BE EN MADE OUT WHETHER THERE WAS ANY DEFECT IN THE STOCK AS ON 31.03.2003 WHICH WAS THE SUBJECT MATTER OF RETURN OF INCOME FILED BY THE ASSESSEE. IN THIS VIEW OF THE M ATTER THE CASE LAWS REFERRED TO BY THE LD. CIT(A) ARE ALSO DISTINGUISHABLE, IN AS MUCH AS, THE STOCK STATEMENT IN QUESTION IS NOT AS ON THE END OF THE YEAR. 5.1. WE FIND THAT THE HONBLE PUNJAB AND HARYANA HI GH COURT IN THE CASE OF CIT VS SIDDHI RICE AND GENERAL MILLS 281 ITR 428 (P&H) HAS HELD THAT WHEN AO HAS NOT BROUGHT ANY MATERIAL TO SHOW THAT ASSESSEE IS IN FA CT POSSESSED LARGER QUANTITY OF STOCK IN THE BANK STATEMENT IS AGAINST THE STOCK IN THE B ALANCE SHEET ADDITION WAS NOT JUSTIFIED. FURTHER MORE WE NOTE THAT AS EXPOUNDED B Y THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS N.SWAMY 241 ITR 363 (MAD) THE ASSESSEES INCOME IS TO BE ASSESSED BY THE INCOME-TAX OFFICER ON THE BASIS OF THE MATERIAL WHICH IS REQUIRED TO BE CONSIDERED FOR THE PURPOSE OF ASSESSMENT AND ORDINA RILY NOT ON THE BASIS OF THE STATEMENT WHICH THE ASSESSEE MAY HAVE GIVEN TO A TH IRD PARTY UNLESS THERE IS MATERIAL TO CORROBORATE THAT STATEMENT OF THE ASSESSEE GIVEN TO A THIRD PARTY, EVEN IF IT BE A BANK. THE MERE FACT THAT THE ASSESSEE HAD MADE SUCH A STA TEMENT BY ITSELF CANNOT BE TREATED AS HAVING RESULTED IN AN IRREBUTTABLE PRESUMPTION A GAINST THE ASSESSEE. THE BURDEN OF SHOWING THAT THE ASSESSEE HAD UNDISCLOSED INCOME IS ON THE REVENUE. THAT BURDEN CANNOT BE SAID TO BE DISCHARGED BY MERELY REFERRING TO THE STATEMENT GIVEN BY THE ASSESSEE TO A THIRD PARTY IN CONNECTION WITH A TRAN SACTION WHICH WAS NOT DIRECTLY RELATED TO THE ASSESSMENT AND MAKING THAT THE SOLE FOUNDATION FOR A FINDING THAT THE ASSESSEE HAD DELIBERATELY SUPPRESSED HIS INCOME. TH E BURDEN IS ON THE REVENUE TO PROVE THAT THE INCOME SOUGHT TO BE TAXED IS WITHIN THE TAXING PROVISIONS AND THERE WAS IN FACT INCOME. 5.2. WE FURTHER NOTE THAT THE HONBLE JURISDICTIONA L HIGH COURT IN THE CASE OF CIT VS M/S. NEO CARBONS PVT. LTD. IN ITAT NO.191 OF 201 3 G.A.NO.3286 OF 2013 VIDE ORDER DATED 4 TH MARCH, 2014 HAS UPHELD THE ORDER OF THE TRIBUNAL W HEREIN THE AO HAS ITA.NO.218/KOL/2008 SRI BRAJA MOHAN MISHRA,KPURBA MED INIPUR A.YR.2003-04 4 PROCEEDED TO MAKE THE ADDITION ON THE BASIS OF THE VALUATION FURNISHED BY THE ASSESSEE TO HIS BANKER. THE CIT(APPEAL) HELD THAT SUCH VALUA TION IS NOT MATERIAL FOR THE PURPOSES OF THE INCOME TAX ACT. THE REVENUES APPEA L BEFORE ITAT WAS DISMISSED. UPON THE REVENUES APPEAL THE HONBLE JURISDICTIONA L HIGH COURT HELD THAT THEY ARE SATISFIED THAT THE ISSUES RAISED ARE ESSENTIALLY QU ESTIONS OF FACT AND THEREFORE THE HONBLE JURISDICTIONAL HIGH COURT REFUSED TO ADMIT THE CASE.. 5.3. IN THE BACKGROUND OF AFORESAID DISCUSSION AND PRECEDENT WE ARE OF THE CONSIDERED OPINION THAT WHEN AO HAS NOT BROUGHT ON RECORD ANY COGENT MATERIAL TO PROVE EXISTENCE OF UNDISCLOSED STOCK. HENCE NO ADD ITION IS WARRANTED. SINCE THE ADDITION ON ACCOUNT OF UNDISCLOSED STOCK HAS BEEN D ELETED BY US THE ORDER OF LD. CIT(A) ON ACCOUNT OF SUPPRESSED PROFIT ON UNDISCLOS ED STOCK ALSO STAND DELETED. ACCORDINGLY WE SET ASIDE THE ORDERS OF THE AUTHORIT IES BELOW AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE COURT ON 16/10/2014. SD/- SD/- [ MAHAVIR SINGH ] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 16/10/2014. R.G.(.P.S.) COPY OF THE ORDER FORWARDED TO: 1. SHRI BRAJA MOHAN MISHRA, PROP. MISHRA ELECTRONICS, VILL-KASHICURI, P.O.GOPALNAGAR, DIST.PURBA MEDINIPUR, PIN:721134. 2 I.T.O., WARD-4, HALDIA. 3 . CIT(A)-XXXII, KOLKATA. 4. CIT KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY, BY ORDER, ASST. REGISTRAR , ITAT, KOLKATA BENCHES ITA.NO.218/KOL/2008 SRI BRAJA MOHAN MISHRA,KPURBA MED INIPUR A.YR.2003-04 5