A.C.I.T., Circle-1, Gwalior V. Sh. Omprakash Kukreja, Gwalior

ITA 241/AGR/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89217 (ITAT-AGRA)
• Duration Of Justice: 4 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-07-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 24-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BELU SINHA

Judgement Text

I.T.A. NO.241/AGRA/2011 ASSESSMENT YEAR:2007-08 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE: SHRI G.C. GUPTA, VICE-PRESIDENT AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO.241/AGRA/2011 ASSESSMENT YEAR:2007-08 A.C.I.T., CIRCLE-1, VS. SHRI OM PRAKASH KUKREJA , GWALIOR. PROP. M/S. METRO FIRE WORKS, IND. JANAKGANJ, LASHKAR, GWALIOR. [PAN : ADXPK 3742 K] APPELLANT BY : SMT. BELU SINHA, SR. D.R. RESPONDENT BY : NONE DATE OF HEARING : 20.07.2015 DATE OF PRONOUNCEMENT : 24.07.2015 O R D E R THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEA R 2007-08 IS DIRECTED AGAINST THE ORDER OF THE CIT(A). 2. AT THE TIME OF HEARING OF THIS APPEAL, NONE APPE ARED ON BEHALF OF THE ASSESSEE-RESPONDENT AND THEREFORE, THE APPEAL OF TH E REVENUE IS BEING DECIDED EXPARTE QUA THE ASSESSEE-RESPONDENT ON MERI TS AFTER HEARING THE LEARNED DR. 3. THE ONLY GROUND OF APPEAL OF THE REVENUE IS AS U NDER : 1. WHETHER ON THE FACT AND IN CIRCUMSTANCES OF THE CASE, THE CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.24,09,475/- MADE ON ACCOUNT OF UNDISCLOSED INCOME SURRENDERED. 4. THE LEARNED DR SUBMITTED THAT SURVEY OPERATION W AS CONDUCTED IN THIS CASE BY THE DEPARTMENT ON 05.10.2006 AND A DIFFEREN CE IN THE STOCK WAS FOUND AS COMPARED TO THE RECORD OF THE ASSESSEE. TH E ASSESSEE MADE A SURRENDER AT THE TIME OF SURVEY OF RS.24,75,000/-. HOWEVER, THE ASSESSEE I.T.A. NO.241/AGRA/2011 ASSESSMENT YEAR:2007-08 PAGE 2 OF 3 AFTER A LAPSE OF ONE YEAR RETRACTED ITS STATEMENT O N 05.10.2007. THE INORDINATE DELAY ITSELF JUSTIFIES THE ADDITION MADE ON ACCOUNT OF DIFFERENCE IN STOCK IN THE HANDS OF THE ASSESSEE. SHE SUBMITTED T HAT PHYSICAL VERIFICATION WAS DONE IN THIS CASE OF THE STOCK FOUND AT THE TIM E OF SURVEY AND, THEREFORE, THE ADDITION IS NOT DEPENDENT MERELY ON THE STATEME NT OF THE ASSESSEE. SHE REFERRED TO PAGES NOS. 15 TO 17 OF THE COMPILATION WHICH CONTAIN THE STATEMENT OF THE ASSESSEE RECORDED ON 16.10.2006 BY THE ASSESSING OFFICER AND ALSO THE LIST OF INVENTORY OF STOCK AS FILED IN THE COMPILATION BEFORE THE TRIBUNAL. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNE D DR AND HAVE PERUSED THE ORDER OF THE AO AND THE CIT(A). WE FIND THAT IT IS A CASE WHERE ADDITION WAS MADE ON ACCOUNT OF DIFFERENCE IN THE S TOCK FOUND AS A RESULT OF SURVEY AND AS PER THE RECORD OF THE ASSESSEE. THE V ALUE OF THIS STOCK WAS WORKED OUT AT THE TIME OF SURVEY ON THE BASIS OF PH YSICAL VERIFICATION AND THE GOODS FOUND WITH THE ASSESSEE AND THEREFORE, WE ARE UNABLE TO SUSTAIN THE ORDER OF THE CIT(A) IN HOLDING THAT THERE WAS NO JU STIFICATION FOR MAKING THE ADDITION ON ACCOUNT OF STOCK AND THE ADDITION WAS M ADE SOLELY AND WHOLLY ON THE BASIS OF STATEMENT RECORDED ON 16.10.2006 AND T HE SURRENDER MADE THERE-UNDER BY THE ASSESSEE. HOWEVER, IT IS ALSO TR UE THAT THE ENTIRE ADDITION OF RS.24,09,475/- MADE BY THE AO WAS NOT JUSTIFIED. THE STOCK WAS DESCRIBED AND VALUED BY THE SUPERVISOR OF THE ASSESSEE MS SAN DHU JAISWANI. SHE HAS STATED IN RESPECT OF MOST OF THE ITEMS OF STOCK THA T SHE HAS NO KNOWLEDGE OF THEIR PRICE AND IT IS ONLY THE ASSESSEE WHO CAN GIV E THE SAID DETAILS. WE FIND THAT THE CIT(A) HAS RECORDED A FINDING THAT INVENTO RY OF STOCK PREPARED ON THE DATE OF SURVEY ON 05.10.2006 DOES NOT MENTION THE L OCATION IN WHICH THE SAID RAW MATERIAL HAS BEEN FOUND AND INVENTORISED WHEN T HE SAME RAW MATERIAL HAS ALREADY BEEN INVENTORISED AT PAGE NO. 2 OF THE LIST, AS REPRODUCED BY THE CIT(A) AT PAGE 5 AND 6 OF HIS APPELLATE ORDER.THE C IT(A) HAS RECORDED THAT ON 05.10.2007, AFTER RECEIVING COPY OF STOCK STATEM ENT AND VALUATION OF STOCK AS ON 05.09.2007, THE ASSESSEE HAS RETRACTED FROM T HE STATEMENT MADE ON ACCOUNT OF STOCK VIDE LETTER DATED 05.10.2007. IN T HESE FACTS OF THE CASE, WE I.T.A. NO.241/AGRA/2011 ASSESSMENT YEAR:2007-08 PAGE 3 OF 3 ARE OF THE VIEW THAT THE ACCOUNT BOOKS OF THE ASSES SEE COULD NOT BE RELIED UPON AS THE SAME DO NOT REFLECT CORRECT STATE OF AF FAIRS OF THE ASSESSEE. HOWEVER, THE ADDITION MADE OF RS.24,09,475/- WAS ON HIGHER SIDE DUE TO THE FACTS NARRATED ABOVE AND THE ENDS OF JUSTICE SHALL MET IF THE ADDITION IS RESTRICTED TO RS.10,00,000/- BY WAY OF ESTIMATE AND PREPONDERANCE OF PROBABILITIES AS AGAINST RS.24,09,475/- MADE BY THE AO ON ACCOUNT OF STOCK VARIATION FOUND AT THE TIME OF SURVEY. ACCORDINGLY, GROUND NO. 1 OF APPEAL OF THE REVENUE IS PARTLY ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH JULY, 2015. SD/- SD/- INTURI RAMA RAO G.C. GUPTA (ACCOUNTANT MEMBER) (VICE- PRESIDEN T) DATED: AGRA: 24 TH JULY, 2015 *AKS/- COPIES TO: (1) THE APPELLANT (2) THE RESPONDE NT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA