SHRI RADHEY SHYAM LADDHA, KOTA V. ASSISTANT COMMISSIONER OF INCOME TAX, KOTA

ITA 233/JPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3675 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 29-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 15-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Assessee Lawyers: B L BHOJWANI

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 FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 233/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2013-14 SHRI RADHEY SHYAM LADDHA PROP. M/S RAJA INDIA CO. D-263, BHAMASHAH MANDI ANANTPURA, KOTA, CUKE VS. THE ACIT, CIRCLE-2, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAHPL 3516 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI B.L. BHOJWANI (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI S.K. JAIN (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 14/06/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 18/06/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 08.11.2017 OF LD. CIT(A), KOTA FOR THE ASSESSMENT Y EAR 2013-14. 2. THERE IS DELAY OF 2 DAYS IN FILING THE PRESENT APPEAL. THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION O F DELAY WHICH HAS BEEN SUPPORTED BY AN AFFIDAVIT AS WELL AS MEDICAL C ERTIFICATE OF THE ASSESSEE. ITA NO. 233/JP/2018 SH. RADHEY SHYAM LADDHA VS. ACIT 2 3. WE HAVE HEARD THE LD. AR AS WELL AS THE LD. DR AND CAREFULLY PERUSED THE REASONS EXPLAINED BY THE ASSESSEE FOR D ELAY OF 2 DAYS IN FILING THE PRESENT APPEAL. WE FIND THAT THE PRESENT APPEAL WAS SENT BY THE ASSESSEE THROUGH SPEED POST DATED 09.02.2018 HO WEVER, THE APPEAL PAPERS WERE RECEIVED BY THE REGISTRY OF THE TRIBUNA L ON 15.02.2018 AND HENCE, THE REGISTRY HAS COMPUTED THE LIMITATION AS ON THE DATE OF RECEIPT OF APPEAL PAPER. ACCORDINGLY, IN VIEW OF TH E FACTS AND CIRCUMSTANCES OF THE CASE THAT THE DELAY IN FILING THE PRESENT APPEAL OF 2 DAYS IS ATTRIBUTED TO THE TIME TAKEN BY THE POSTAL AUTHORITY IN DELIVERY OF THE SPEED POST MADE BY THE ASSESSEE ON 09.02.2018 W HICH WAS DELIVERED ON 15.02.2018. HENCE, WE CONDONE THE DELA Y OF 2 DAYS IN FILING THE PRESENT APPEAL. 4. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. THAT THE LEARNED ASSESSING OFFICER HAS ERRED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW IN VALU ING THE CLOSING STOCK AT AVERAGE PURCHASES PRICE EVEN THOUGH THE AS SESSEE WAS CONSISTENTLY VALUING THE STOCK AT MARKET PRICE AND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) TOO HAS SIMILA RLY ERRED IN CONFIRMING THE ACTION OF THE LEARNED ASSESSING OFFI CER. 2. WITHOUT PREJUDICE TO GROUND NO. 1: THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE IN SUSTAINING THE ADDITION TO THE EXTENT OF RS. 3,00,0 00/- OUT OF THE ADDITION OF RS. 15,28,990/- MADE BY THE LEARNED ASS ESSING OFFICER ITA NO. 233/JP/2018 SH. RADHEY SHYAM LADDHA VS. ACIT 3 ON ACCOUNT OF ENHANCEMENT IN THE VALUATION OF VARI OUS ITEMS OF CLOSING STOCK. 5. THE DISPUTE IN THE CASE IS REGARDING THE ADDITIO N OF RS. 3 LACS SUSTAINED BY THE LD. CIT(A) MADE DUE TO THE VALUAT ION OF CLOSING STOCK OF VARIOUS ITEMS. 6. WE HAVE HEARD THE LD. AR AS WELL AS THE LD. DR A ND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET WE N OTE THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED AND DECIDED BY THIS TRIBU NAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2011-12 VIDE ORDER DATED 21.05.2018 IN ITA NO. 97/JP/2017 IN PARA 3 & 4 AS UNDER:- 3. THE LD. CIT(A) HAS GIVEN PART RELIEF TO THE ASS ESSEE BY HOLDING AS UNDER: I HAVE GONE THROUGH ASSESSEES SUBMISSION AND AOS FINDINGS. AS REGARDS GROUND OF APPEAL NO. 1, THE SAME ISSUE O F VALUATION OF CLOSING STOCK HAD ALSO COME INTO CONSIDERATION IN T HE ASSESSEES CASE FOR A.Y 2009-10 AND MY PREDECESSOR CIT (A) VID E APPEAL ORDER NO 551/11-12 DATED 26.02.2013 HAD TAKEN THE V ALUE OF CLOSING STOCK ON ESTIMATION BASIS IN RESPECT OF MOS T OF THE ITEMS/COMMODITIES MENTIONED IN THIS GROUND. FOLLOWING THE SAME LINE OF DECISION, I AM OF THE OP INION THAT SINCE THE PRICING OF THESE ITEMS ARE VERY VOLATILE AND FL UCTUATE YEAR TO YEAR, THE ONLY METHOD OF VALUATION CAN BE ESTIMATIO N IN THE ABSENCE OF PROPER AND MINUTE DETAILING ADOPTED BY T HE ASSESSEE ITA NO. 233/JP/2018 SH. RADHEY SHYAM LADDHA VS. ACIT 4 AS WELL AS THE A.O, WHO ADOPTED THE AVERAGE PRICING METHOD. FURTHER, SINCE THE ASSESSEE HAS BEEN FOLLOWING THE SAME METHOD YEAR AFTER YEAR, THE LEGAL PRECEDENTS ON THE METHOD ARE IN HIS FAVOUR. LOOKING TO THE TOTALITY OF THE FACTS INVOLVED, SINC E THE ASSESSEE HAS ALSO NOT BEEN ABLE TO JUSTIFY HIS ARGUMENTS REG ARDING MOST OF THE BARDANA BEING USED AND OLD, THE VALUATION IS ENHANCED FROM 11/- PER BAG ADOPTED BY HIM TO RS. 16/- PER BAG BUT REDUCED FROM THE FIGURE OF RS. 26.27/- TAKEN BY THE A.O BEI NG VEIY HIGH AND BASED ON AVERAGE OF TOTAL PURCHASES WHEN AVERAG E SALE RATE IS 27/-. THE ADDITION WOULD BE 20,210 BAGS *5/- WHICH WOULD BE EQUAL TO RS. 101, 050/-. THE BALANCE ADDITION OF RS. 1,87,34 7/- IS TO BE DELETED. AS REGARDS THE ADDITION ON CLOSING STOCK IN THE GUNWAR ACCOUNT, IT IS SEEN THAT IN THE EARLIER YEAR ORDER REFERRED ABOVE, THE CIT (A) HAD CONFIRMED A LUMP SUM AMOUNT TOWARDS THIS COMMOD ITY. IN THE CURRENT APPEAL ALSO, THE VALUATION TAKEN BY THE A.O APPEARS TO BE ON THE HIGHER SIDE CONSIDERING THE SUBMISSION MADE BY THE ASSESSEE AND THE FACTS EXAMINED. THE ADDITION IN TH E VALUATION OF CLOSING STOCK IS RESTRICTED TO RS. 1,00,000/-. THE BALANCE ADDITION OF RS. 8, 01,064/- IS DIRECTED TO BE DELETED. AS REGARDS THE ADDITION ON ACCOUNT OF OIL SEEDS ALSO THE A.O CANNOT TAKE THE AVERAGE PURCHASE PRICE AS THE BASIS IN THE ABSENCE OF QUALITATIVE AND COMMODITY WISE ANALYSIS. THE ADDITION IS ACCORDINGLY RESTRICTED TO RS. 50,000/-. THE BALA NCE ADDITION OF RS. 1,23,346/- IS DIRECTED TO BE DELETED. AS REGARDS THE ADDITION MADE IN RESPECT OF KIRANA ITEMS, THE QUANTUM BEING VERY LOW, THE ACTION OF THE A.O IS NO T HELD TO BE UNJUSTIFIED AND THE ADDITION OF RS. 9,164/-IS ACCOR DINGLY CONFIRMED. ITA NO. 233/JP/2018 SH. RADHEY SHYAM LADDHA VS. ACIT 5 AS REGARDS THE ADDITION MADE IN RESPECT OF DALHAN ACCOUNT, MY PREDECESSOR HAD HELD IN THE ABOVE REFERRED APPEAL O RDER THAT SINCE THE ASSESSEE DID NOT MAINTAIN A STOCK REGISTE R, AN ESTIMATED ADDITION WAS REQUIRED TO BE SUSTAINED. FOLLOWING TH E SAME LINE OF DECISION, I AM OF THE VIEW THAT IN THE PRESENT APPE AL, IT WILL BE FAIR TO RESTRICT THE ADDITION TO RS. 1, 00,000/-. THE BA LANCE ADDITION OF RS. 5, 98,854/- IS DIRECTED TO BE DELETED. AS REGARDS THE ADDITION MADE ON MAIZE/JOWAR ACCOUNT, THE QUANTUM BEING VERY LOW, THE ACTION OF THE A.O IS NO T HELD TO BE UNJUSTIFIED AND THE ADDITION OF RS. 11,038/- IS ACC ORDINGLY CONFIRMED. AS REGARDS THE ADDITION MADE IN RESPECT OF WHEAT ACCOUNT ALSO THE A.O CANNOT TAKE THE AVERAGE PURCHASE PRICE AS T HE BASIS IN THE ABSENCE OF QUALITATIVE AND COMMODITY WISE ANALY SIS. THE ADDITION IS ACCORDINGLY RESTRICTED TO RS. 25,000/-. THE BALANCE ADDITION OF RS. 1,30,904/- IS DIRECTED TO BE DELETE D. THUS, THE TOTAL ADDITION CONFIRMED ON THIS GROUND C OMES TO RS.3,96,252/- AND THE BALANCE ADDITION OF RS. 18,61 ,725/- IS DIRECTED TO BE DELETED. 4. AFTER HEARING BOTH THE SIDES AT LENGTH AND CONSI DERING THE VARIOUS FACTUAL ASPECTS OF THE MATTER, WE ARE OF TH E VIEW THAT THE LD. CIT(A) HAS SUSTAINED SMALL ADDITIONS. THE FACTS REGARDING THE BARDANA USED AND OLD THE VALUE ADOPTED BY THE ASSES SEES A.O. AND AVERAGE PRICE HAS BEEN SPECIFICALLY DEALT BY TH E LD. CIT(A). SINCE THIS ITEM WAS USED/OLD HENCE THE COST OR MARK ET VALUE CANNOT BE THE BASIS OF VALUATION FOR STOCK. THE LD. CIT(A) HAS ADOPTED THE REASONABLE BASIS TO VALUE IT AND THE AD DITION OF RS. 1,01,050/- HAS BEEN RIGHTLY SUSTAINED. HOWEVER, ADD ITIONS IN THE CASE OF VALUATION OF CLOSING STOCK OF OTHER ITEMS, HAS BEEN SUSTAINED ON AD HOC BASIS. IN VIEW OF THESE FACTS, THE ADDITION IN RESPECT OF CLOSING STOCK FOR THE GUNWAR, OIL SEEDS, KIRANA, DALHAN, MAIZE/JOWAR AND WHEAT ARE SUSTAINED ON AD HOC BASIS WHICH IS ITA NO. 233/JP/2018 SH. RADHEY SHYAM LADDHA VS. ACIT 6 NOT JUSTIFIED. ACCORDINGLY, WE DIRECT TO DELETE THE ADDITION SO SUSTAINED BY THE LD. CIT(A). THE LD. AR OF THE ASSESSEE HAS POINTED OUT THAT EXC EPT THE ADDITION MADE ON ACCOUNT OF VALUATION OF BARDANA STOCK THE T RIBUNAL HAS DELETED THE ADDITION SUSTAINED BY THE LD. CIT(A) FOR THE AS SESSMENT YEAR 2011- 12. FOR THE YEAR UNDER CONSIDERATION THE ASSESSEE H AS NOT RAISED ANY ISSUE BEFORE THE LD. CIT(A) REGARDING ADDITION ON A CCOUNT OF VALUATION OF CLOSING STOCK OF BARDANA (PACKAGING MATERIAL). THE LD. DR HAS NOT DISPUTED THE FACTS THAT THE ADDITION ON ACCOUNT OF VALUATION OF CLOSING STOCK HAS BEEN MADE BY THE AO ON ADHOC BASIS WHICH WAS THOUGH REDUCED BY THE LD. CIT(A) HOWEVER, THE RESTRICTION OF THE ADDITION BY THE LD. CIT(A) IS ALSO ON ADHOC BASIS . IN VIEW OF THE DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2011-12 WE DELETE THE ADDITION SUSTAINED BY THE LD. CIT(A) ON ACCOUNT OF VALUATION STOCK OF VARIOUS ITEMS. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/06/2018 SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR ITA NO. 233/JP/2018 SH. RADHEY SHYAM LADDHA VS. ACIT 7 FNUKAD@ DATED:- 18/06/2018. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI RADHEY SHYAM LADDHA, KOTA. 2. IZR;FKHZ@ THE RESPONDENT- ACIT. CIRCLE-2, KOTA. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 233/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR