M/s Maheshwari Book Shoppe, Agra V. I.T.O.-1(2), Agra

ITA 234/AGR/2011

• Counselvise Citation: 23420314 RSA 2011
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 02-03-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 20-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SOHAIL AKHTAR
• Assessee Lawyers: VITHAL DAS
• Keywords: Reopening of assessment
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA(SMC) BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 234/AGRA/2011 ASST. YEAR : 2000-2001 M/S. MAHESHWARI BOOK SHOPPE, VS. INCOME-TAX OFFICE R 1(2), 14/10, EMPORIUM BLOCK, AGRA. SANJAY PLACE, AGRA. (PAN : AAGFM 9972 K) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VITHAL DAS, ADVOCATE RESPONDENT BY : SHRI SOHAIL AKHTAR, JR. D.R. DATE OF HEARING : 16.03.2012 DATE OF PRONOUNCEMENT : 23.03.2012 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A)-I, AGRA DATED 15.02.2011 FOR THE ASSESSMENT YEAR 2000- 01, CHALLENGING THE ADDITION OF RS.2,87,289/- ON ACCOUNT OF UNEXPLAINED STOCK. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE DEALS IN BOOKS AND STATIONERY. ON 23.06.2000, SURVEY U/S. 133A WAS CON DUCTED AND STOCK INVENTORY WAS PREPARED AND ACCORDING TO THE SAME, VALUATION O F THE STOCK COMES TO RS.17,47,400/-. THE SURVEY WAS CONDUCTED IN SUBSEQU ENT ASSESSMENT YEAR 2001-02 AND THE ASSESSEE PREPARED THE ACCOUNTS FOR ASSESSME NT YEAR UNDER APPEAL AND ITA NO. 234/AGRA/2011 2 PRODUCED BEFORE THE AO TO SHOW THAT THERE WERE NO D ISCREPANCIES IN THE STOCK. HOWEVER, THE AO FOUND THAT IN THE NEW BOOKS OF ACCO UNT, PAYMENTS HAVE BEEN SHOWN IN CASH WITH SOME INTERVAL AND RETURN FOR ASS ESSMENT YEAR UNDER APPEAL WAS FILED, WOULD SHOW THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE NOT RELIABLE AND CANNOT BE ACCEPTED. THE AO, THEREFORE, TREATED UNEX PLAINED PURCHASE OF RS.2,47,747/- OUTSIDE THE BOOKS OF ACCOUNT AND CONS IDERED UNEXPLAINED STOCK OF RS.2,87,289/- AND, ACCORDINGLY, MADE ADDITION IN AS SESSMENT YEAR 2001-02. THE AO FURTHER NOTED THAT DURING THE SURVEY ASSESSEE HA S NOT PRODUCED THE BOOKS OF ACCOUNT AND VOUCHERS AND STOCK COULD NOT BE TALLIED . RETURN WAS ALSO FILED LATER ON 30.03.2002. THE AO, THEREFORE, OBSERVED THAT FOR TH E ASSESSMENT YEAR UNDER APPEAL, I.E., 2000-01, NEW BOOKS WERE PREPARED WHICH WERE D IFFERENT FROM THE STOCK AND BOOKS FOUND DURING THE COURSE OF SURVEY, THEREFORE, THE BOOKS OF ACCOUNT OF THE ASSESSEE CANNOT BE RELIED UPON. SINCE SUBSTANTIVE A SSESSMENT WAS MADE OF RS.2,87,289/- IN SUBSEQUENT ASSESSMENT YEAR 2001-02 , THEREFORE, PROTECTIVE ASSESSMENT OF THE SAME AMOUNT WAS MADE IN ASSESSMEN T YEAR UNDER APPEAL, I.E., 2000-01. THE LD. CIT(A) NOTED THE DETAILS OF UNACCO UNTED STOCK FOUND IN THE SURVEY IN PARA 3.1 OF THE APPELLATE ORDER. THE LD. CIT(A), THEREAFTER, DISCUSSED THE ISSUE OF REOPENING OF THE ASSESSMENT WHICH IS NOT I N CHALLENGE BEFORE ME, WHEREBY REOPENING OF ASSESSMENT WAS HELD TO BE VALID. THE L D. CIT(A), THEREAFTER, DECIDED THE ISSUE ON MERITS AND FURTHER NOTED THAT IN ASSES SMENT YEAR 2001-02, ITAT, AGRA ITA NO. 234/AGRA/2011 3 BENCH CONSIDERED THE SIMILAR ISSUE OF UNACCOUNTED S TOCK OF RS.2,87,289/- FOR THE ASSESSMENT YEAR 2001-02 AND DELETED THE ADDITION. T HE LD. CIT(A), HOWEVER, NOTED IN PARA 4.1.4 OF THE IMPUGNED ORDER THAT DECISION O F THE TRIBUNAL WAS DELIVERED ON THE BASIS OF FACTS WRONGLY PRESENTED BY THE ASSESSE E BEFORE THE TRIBUNAL THAT THE PURCHASES RECORDED IN THE BOOKS, PREPARED AFTER THE DATE OF SURVEY, WERE CREDIT PURCHASES MADE FOR THE ASSESSMENT YEAR 2000-01. IT WAS, THEREFORE, NOTED THAT ON THE BASIS OF WRONG FACTS PRESENTED BY THE ASSESSEE BEFORE THE TRIBUNAL FOR THE ASSESSMENT YEAR 2001-02, THE ASSESSEE ULTIMATELY GO T RELIEF. THE LD. CIT(A) NOTED THAT IN THE ASSESSMENT ORDER, IT WAS NOTED THAT PUR CHASES WERE MANIPULATED BY MAKING CASH PURCHASES, BUT THE TRIBUNAL NOTED THE F ACT OF MAKING CREDIT PURCHASES. THE LD. CIT(A), THEREFORE, DID NOT RELY UPON THE OR DER OF TRIBUNAL FOR THE ASSESSMENT YEAR 2001-02 AND NOT ONLY CONFIRMED THE ADDITION BUT ALSO DIRECTED THE AO TO MAKE ADDITION SUBSTANTIVELY FOR THE ASSESSMEN T YEAR UNDER APPEAL OF THE SAME AMOUNT, FOR WHICH ADDITION IS ALREADY DELETED BY THE TRIBUNAL. 3. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND CONTENDED THAT SIMILAR ISSUE IS CONS IDERED BY THE TRIBUNAL IN THE ASSESSMENT YEAR 2001-02 IN ITA NO. 2 OF 2005 IN THE CASE OF THE SAME ASSESSEE AND VIDE ORDER DATED 24.10.2005, THE SAME ADDITION HAS BEEN DELETED. THEREFORE, NO ADDITION WOULD SUSTAIN IN THE ASSESSMENT YEAR UNDER APPEAL. HE HAS SUBMITTED THAT ITA NO. 234/AGRA/2011 4 THE LD. CIT(A) IS BOUND TO FOLLOW THE ORDER OF TRIB UNAL AND SHOULD NOT HAVE COMMENTED UPON THE SAME IN THE APPELLATE ORDER. 4. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT SINCE THE PURCHASES MADE IN ASSESSME NT YEAR UNDER APPEAL COULD NOT HAVE BEEN RECONCILED, THEREFORE, THE ADDITION WAS R IGHTLY MADE. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MATE RIAL ON RECORD AND HAVE ALSO GONE THROUGH THE EARLIER ORDER OF THE TRIBUNAL DATE D 24.10.2005 (SUPRA). IT IS NOT IN DISPUTE THAT SURVEY WAS CONDUCTED ON 23.06.2000, WH ICH RELATES TO THE ASSESSMENT YEAR 2001-02. THEREFORE, IT IS ADMITTED FACT THAT N O SURVEY IS CONDUCTED IN ASSESSMENT YEAR UNDER APPEAL, I.E., ASSESSMENT YEAR 2000-01. THE EXCESS STOCK, IF ANY, WAS, THUS, ALLEGED TO HAVE BEEN FOUND IN SUBSE QUENT ASSESSMENT YEAR 2001-02 IN A SUM OF RS. 2,87,289/-. THE INVENTORY WAS PREPA RED OF EXCESS STOCK, THE DETAILS OF WHICH HAVE BEEN REPRODUCED IN PARA 3.1 OF THE IM PUGNED ORDER, IN WHICH THE STOCK AVAILABLE ON THE DATE OF SURVEY AS PER ASSESS EE IS STATED TO BE RS.12,88,016/- AND UNEXPLAINED PURCHASES WERE REDUCED AND AS SUCH THE SAME CAME TO RS.10,48,269/-. FURTHER, THE VALUE OF STOCK AT THE TIME OF SURVEY WAS FOUND TO BE RS.17,47,400/- AND AFTER GRANTING REDUCTION OF OLD EDITION BOOKS, SPECIMEN COPIES AND GROSS PROFIT, THE ACTUAL STOCK WAS COUNTED AT R S.13,35,557/-. THUS, UNEXPLAINED ITA NO. 234/AGRA/2011 5 STOCK WAS COMPUTED AT RS.2,87,289/- IN THE ASSESSME NT YEAR 2001-02. THE AO MADE SUBSTANTIVE ADDITION OF UNEXPLAINED STOCK IN S UBSEQUENT ASSESSMENT YEAR 2001-02 TO WHICH THE SURVEY RELATES. IN ASSESSMENT YEAR 2001-02, THE MATTER REACHED THE TRIBUNAL AND VIDE ORDER DATED 24.10.200 5 (SUPRA), THE TRIBUNAL DELETED THE SAME ADDITION OF UNEXPLAINED STOCK OF RS.2,87,2 89/-. THE TRIBUNAL BELIEVED THE EXPLANATION OF THE ASSESSEE REGARDING CREDIT PURCHA SES MADE IN THE EARLIER YEAR AND CONSIDERING IT TO BE PART OF CLOSING STOCK, DELETED THE ADDITION IN ASSESSMENT YEAR 2001-02. THE FINDINGS OF FACT RECORDED BY THE TRIBU NAL IN ASSESSMENT YEAR 2001-02 ARE RELEVANT AND BINDING ON THE INCOME-TAX AUTHORIT IES BEING SUBORDINATE IN JUDICIAL HIERARCHY. UNLESS THE ORDER OF THE TRIBUNA L FOR SUBSEQUENT YEAR IS REVERSED BY HONBLE HIGH COURT OR SUPREME COURT, THE REVENUE AUTHORITIES HAVE NO RIGHT TO COMMENT UPON THE ORDER OF THE TRIBUNAL. IT IS, T HEREFORE, UNFORTUNATE TO NOTE THAT THE LD. CIT(A) INSTEAD OF FOLLOWING THE ORDER OF TR IBUNAL COMMENTED UPON THE FINDING OF THE TRIBUNAL WITHOUT HAVING ANY AUTHORIT Y BY LAW TO DO SO. SINCE THE TRIBUNAL BELIEVED THE PURCHASES MADE IN EARLIER YEA R, I.E., ASSESSMENT YEAR UNDER APPEAL, THEREFORE, NO EXCESS STOCK WAS HELD TO BE F OUND DURING THE COURSE OF SURVEY. SINCE NO SURVEY IS CONDUCTED IN THE ASSESSM ENT YEAR UNDER APPEAL AND THE SURVEY WAS CONDUCTED ONLY IN THE SUBSEQUENT ASSESSM ENT YEAR 2001-02, THEREFORE, THE FINDING OF FACT RECORDED BY THE TRIBUNAL FOR SU BSEQUENT ASSESSMENT YEAR WOULD BE RELEVANT AND BINDING ON THE AUTHORITIES BELOW. I N VIEW OF THE FINDING GIVEN BY ITA NO. 234/AGRA/2011 6 THE TRIBUNAL THAT THERE WAS NO EXCESS STOCK FOUND D URING THE COURSE OF SURVEY, THERE IS NO JUSTIFICATION TO SUSTAIN ANY PROTECTIVE ASSESSMENT IN THE ASSESSMENT YEAR UNDER APPEAL. THE AO MADE PROTECTIVE ASSESSMENT FOR THE ASSESSMENT YEAR UNDER APPEAL OF THE SIMILAR AMOUNT, WHICH IS DELETED BY T HE TRIBUNAL IN THE SUBSEQUENT YEAR ON SUBSTANTIVE BASIS. THEREFORE, THE LD. CIT(A ) WAS NOT JUSTIFIED IN DIRECTING THE AO TO CONFIRM SUBSTANTIVE ASSESSMENT IN ASSESSM ENT YEAR UNDER APPEAL. CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES , WE DO NOT FIND ANY JUSTIFICATION TO SUSTAIN THE ORDER OF THE LD. CIT(A). WE ACCORDI NGLY, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ADDITION OF RS.2,8 7,289/-. NO OTHER POINT IS ARGUED OR PRESSED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE ASSISTANT REGISTRAR TRUE COPY