The DCIT, (OSD), Range-1, Ahmedabad V. Besto Tradelink Pvt. Ltd., Ahmedabad

ITA 2312/AHD/2013

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6511 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 23-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 16-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: D K PARIKH
• Keywords: Corroborative evidences
• Section: 143(3); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SHR I AMARJIT SINGH , ACCOUNTANT MEMBER AND MS. MADHUMITA ROY , JUDICIAL MEMBER THE DCIT(OSD), RANGE - 1, AHMEDABAD (APPELLANT) VS BESTO TRADELINK PVT. LTD., 9 TH FLOOR, B.D. PATEL HOUSE, NARANPURA ROAD, AHMEDABAD PAN: AAACB6241P (RESPONDENT) REVENUE BY : S H RI MUDIT NAGPAL , SR. D . R. ASSESSEE BY: SHRI D.K. PARIKH, A.R. DATE OF HEARING : 07 - 02 - 2 019 DATE OF PRONOUNCEMENT : 25 - 02 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS REVENUE S APPEAL FOR A.Y. 2010 - 11 , ARI SES FROM ORDER OF THE CIT(A) - 6, AHMEDABAD DATED 24 - 07 - 2 013 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 2312 / A HD/20 13 A SS E SSMENT YEAR 2010 - 11 I.T.A NO. 2312 /AHD/20 13 A.Y. 2010 - 11 PAGE NO D CIT VS . BESTO TRADELINK PVT. LTD. 2 2. THE SOLITARY GROUND OF APPEAL OF THE REVENUE IS AGAINST THE DECISION OF RS. 63, 54 LACS BEING UNACCOUNTED PURCHASES OF B AUXITE. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE HAS FILED RETURN OF INCOME ON 15 TH OCTOBER, 2010 DECLARING TOTAL INCOME OF RS. 50 , 92 , 180/ - . SUBSEQUENTLY, THE CASE WAS SELECTED UNDER SECURITY BY ISSUING OF N OTICE U/S. 14 3(2) OF THE AC T ON 24 TH AUGUST, 2011. DURING THE COURSE OF ASSESSMENT , THE ASSESSING OFFICER HAS NOTICED EXCESS SALE OF 63 , 54. 69 TON S OF BAUXITE MINERALS F R O M THE STOCK SUMMARY FURNISHED BY THE ASSESSEE. THE ASSESSEE EXPLAINED THAT PURCHASE OF 34,548.053 MT OF B AUXITE PURCHASED IN THE MONTH OF OCTOBER, 2009 WAS RECORDED IN THE BOOKS OF ACCOUNT IN THE MONTH OF NOV, 2009 DUE TO WHICH THERE WAS SHORT OF STOCK IN THE MONTH OF OCTOBER, 2009. HOWEVER , THE SAME SQUARED UP IN THE MONTH OF NOV, 2009 AND ULTIMATELY STOCK OF 703 TON WAS REMAINED AT THE END OF THE YEAR. THE ASSESSEE HAS ALSO EXPLAINED T HAT THERE WAS EXCESS WEIGHT OF B AUXITE DUE TO MOISTURE AND WATER CONTENTS. THE ASSESSING OFFICER HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE AND M ADE ADDITION OF RS. 63 , 54 , 690/ - BY TREATING THE AFORESAID DISCREPANCY AS UNACCOUNTED PURCHASES MADE BY THE ASSESSEE. 4. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE. THE RELEVANT PART OF THE DECISION OF THE LD. CIT(A) IS REPRODUCED AS UNDER: - 3.3 L HAVE CONSIDERED THE OBSERVATIONS OF THE A.O AND THE CONTENTIONS OF THE APPELLANT. THE EXPLANATION OFFER ED BY THE APPELLANT IS TWO FOLD . FIRST ONE WAS THAT THE BAUXITE KEPT IN THE OPEN PLO T ABSORBED MOISTURE FROM THE ATMOSPHERE, THEREBY INCREASING ITS WEIGHT BY 941 MT. A.O AT PARA - 5.4 OF THE ASSESSMENT ORDER OBSERVED THAT SIMILAR EXPLANATION WAS NOT ACCEPTED IN THE PRECEDING ASSESSMENT YEAR 2009 - 10. RELYING ON THE ASSESSMENT ORDER FOR THAT YEAR, A.O DID NOT ACCEPT THE EXPLANATION IN THE YEAR UNDER CONSIDERATION ALSO. THIS ISSUE WAS ADJUDICATED IN MY ORDER N O.CIT(A) - VI / ITO.WD.L (2)208/11 - 12 DTD. 24/07/2013 FOR A.Y. 2009 - 10 WHEREIN IT WAS HELD AS FOLLOWS: I.T.A NO. 2312 /AHD/20 13 A.Y. 2010 - 11 PAGE NO D CIT VS . BESTO TRADELINK PVT. LTD. 3 '3.4 HAVING CONSIDERED THE FACTS OF THE MATTER I AM INCLINED TO ACCEPT THE CONTENTIONS OF T HE LD. A.R. APPELLANT IS TRADING IN BAUXITE. BAUXITE CANNOT BE PURCHASED LIKE ANY OTHER COMMODITY IN THE OPEN MARKET. THE CONTENTION THAT BAUXITE GAINS WEIGHT WHEN KEPT IN THE OPEN PLOT IS TENABLE. AS SEEN FROM THE APPELLANT'S INVOICE TO FOREIGN BUYER NAMELY TA YI INTERNATIONAL LTD [SAMOA], TAIWAN DT D. 08/02/2008 Y FREE MOISTURE DURING NON - MONSOON PERIOD WAS MENTIONED AT 6% AND FREE MOISTURE DURING MONSOON PERIOD WAS MENTIONED AT 10%. IT IS SEEN FURTHER THAT PENALTY WOULD BE DEDUCTIBLE FROM THE SALE - PRICE, IF THE MOISTURE CONTENT IN THE BAUXITE BEING EXPORTED EXCEEDED ALLOWABLE 5%. THUS BAUXITE CONTAINING MOISTURE IS A NATURAL AND C OMMERCIALLY ACCEPTED PHENOMENON . IN THE ASSESSMENT ORDER A.O DID NOT OFFE R ANY ADVERSE COMMENTS ON THE SAID INVOICE FURNISHED TO HIM. THEREFORE I AM OF THE VIEW THAT A.O'S INFERENCE THAT APPELLANT HAD MADE UNACCOUNTED PURCHASE OF BAUXITE DOE NOT STAND TO REASON, IMPUGNED ADDITION IS DELETED. THIS GROUND OF APPEAL IS ALLOWED. ' FACTS REMAINING THE SAME IN THE YEAR UNDER CONSIDERATION, THE ADDITION MADE ON THIS ISSUE IS DELETED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD CAREFULLY. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD SHOWN SALES OF RS. 4316 9 .883 MT OF BAUXITE TILL THE MONTH OF OCTOBER, 2009 AS AGAINST T H E STOCK OF 3618. 193 MT. WITH THE ASSISTANCE OF THE LD. COUNSEL, WE HAV E GONE THROUGH THE MATERIAL ON RECOR D AND IT IS NOTICED T H A T 5413.450 MT OF BAUXITE WAS RECEIVED BY THE ASSESSEE ON VARIOUS DA T ES IN THE MONTH OF OCTOBER AND SAME WAS AVAILABLE IN ACTUAL STOCK FOR SALE, HOWEVER, THE INVOICE FOR 5413.450 WAS RECEIVED AND ACCOUNTED FOR IN THE MONTH OF NOV, 2019. WE HAVE ALSO NOTICED THAT ABOVE POS ITION OF STOCK HAS BEEN ALSO DEMONSTRATE D IN THE A NN. 1 FOR DETAIL OF MONTHLY OPENING STOCK , PURCHASE , SALE AND CLOSING STOCK WHEREIN IN THE MONTH OF NOV, 2009 QUANTITY OF PURCHASE OF BAUXITE OF 5413.450 WAS REFLECTED . THE PURCHASE OF ABOVE BAUXITE WAS A LSO SHOWN IN THE LEDGER ACCOUNT OF THE SUPPLIER M/S. MANAKSIA LTD. ON 11/11/2009. THE LD. CIT(A) HAS CONSIDERED THE AFORESAID MATERIAL FACT ALONG WITH SUPPORTING EVIDENCES I . E. BILL DATED 11 - 11 - 2009 GATE PASS NO. TRUCK NO. GROSS AND N ET WEIGHT BEFORE ADJU DICATING THE ISSUE. REGARDING NEGATIVE STOCK AT THE END OF THE NOVEMBER AT 941.240 AND FINALLY OF 703.153 AT THE END OF THE YEAR THE I.T.A NO. 2312 /AHD/20 13 A.Y. 2010 - 11 PAGE NO D CIT VS . BESTO TRADELINK PVT. LTD. 4 ASSESSEE HAS DEMONSTRATED THE STOCK POSITION IN THE MONTH - WISE STOCK STATEMENT. THE LD. CIT(A) CIT(A) HAS ADJUDICATED THE SIMILAR ISSUE IN THE CA SE OF THE ASSESSEE FOR ASSESSMENT YEAR 2009 - 10 THAT THERE WAS USE TO INCREASE IN THE WEIGHT OF BAUXITE DUE TO MOISTURE. IT WAS EXPLAINED THAT BAUXITE ARE STORED IN OPE N AND BE CAUS E OF ITS NATURE IT ABSORB S MOISTURE AND WATER WHICH RESULT S IN INCREASE IN THE WEIGHT OF STOCK OF BAUXITE. THE LD. CIT(A) HAS VERIFIED THIS ISSUE IN DEPTH AND STATED THAT FREE MIXTURE DURING NON - MONSOON PERIOD WAS MENTIONED AT 6% AND FREE MOISTURE DURING MONSOON PERIOD WAS MENTIONED AT 10%. IN THE LIGHT O F THE ABOVE FACT, WE FIND FORCE IN THE FINDINGS OF THE LD. CIT(A) THAT BAUXITE GAINS WEIGHT WHEN KEPT IN THE OPEN PLOT AND THE MERE REASON F OR THE INCREASE IN THE WEIGHT WAS THE AMOUNT OF MOISTURE IT HAD OBSERVED. CONSIDERING THE AFORESAID MATERIAL FACT, WE DO NOT FIND ANY INFIRMITY IN T H E DECISION OF THE LD. CIT(A) , THEREFORE , THE APPEAL OF THE REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 25 - 02 - 201 9 SD/ - SD/ - ( MADHUMITA ROY ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 25 /02 /2019 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) I.T.A NO. 2312 /AHD/20 13 A.Y. 2010 - 11 PAGE NO D CIT VS . BESTO TRADELINK PVT. LTD. 5 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,