M/s Shadi Rams & Songs, Jalandhar V. The Joint Commissioner of Income Tax, Jalandhar

ITA 251/ASR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9574 (ITAT-AMRITSAR)
• Duration Of Justice: 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 02-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKAR
• Assessee Lawyers: J S BHASIN
• Keywords: Agreed addition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR (CAMP AT JALANDHAR) BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A NO.251 (ASR)/2016 ASSESSMENT YEAR: 2010-11 M/S. SHADI RAMS & SONS, VPO LAMBRA, JALANDHAR. PAN:AACFS8050L VS. JT. CIT, RANGE-IV, JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. J.S. BHASIN (ADV.) RESPONDENT BY: SH. BHAWANI SHANKAR (DR) DATE OF HEARING: 29.06.2016 DATE OF PRONO UNCEMENT: 15.09.2016 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORD ER OF LEARNED CIT(A), JALANDHAR DATED 21.03.2016 FOR ASST. YEAR: 2010-11. 2. THE ASSESSEE HAS TAKEN FOUR GROUNDS OF APPEAL, H OWEVER, AT THE TIME OF HEARING, THE LEARNED AR DID NOT PRESS GROUN D NOS. 2 TO 4, THEREFORE, GROUND NOS.2 TO 4 ARE DISMISSED AS NOT P RESSED. THE ONLY GRIEVANCE LEFT IS GROUND NO.1. 3. THE ASSESSEE IS AGGRIEVED WITH THE SUSTENANCE OF ADDITION OF RS.2,89,021/- MADE BY ASSESSING OFFICER FOR THE ALL EGED SHORTAGE IN STOCK. ITA NO.25 1 (ASR)/2016 ASST. YEA R: 2010-11 2 4. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS ENGAGED IN THE TRADING OF FOOD GRAIN ITEMS, WHICH ARE MAINLY IMPOR TED IN BULK AND ARE SOLD IN THE LOCAL MARKET ON WHOLE SALE BASIS. DURIN G THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT AS SESSEE HAD CLAIMED SHORTAGE IN RESPECT OF VARIOUS VARIETIES OF PEAS AN D LENTILS. THE ASSESSEE WAS CONFRONTED TO EXPLAIN THE SHORTAGE. THE ASSESSE E EXPLAINED THAT SUCH SHORTAGE IS UNAVOIDABLE DUE TO THE FACTORS LIKE MOI STURE, EVAPORATION, LOSS DURING LOADING AND UNLOADING, LOSS DURING PACK ING, USE OF HOOKS FOR LIFTING AND CHECKING OF STOCKS ETC. HOWEVER, THE AS SESSING OFFICER OBSERVED THAT IN THE IMMEDIATE PRECEDING YEAR THE A SSESSEE HAD AGREED FOR AN ADDITION OF RS.4 LACS ON THIS ACCOUNT, THERE FORE, HE MADE AN ADDITION OF RS.2,89,021/- AS EXCESS SHORTAGE CLAIME D BY ASSESSEE. 5. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE LEARN ED CIT(A), AND THE LEARNED CIT(A) ALSO DID NOT AGREE WITH THE CONTENTI ON OF ASSESSEE AND UPHELD THE ADDITION. 6. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 7. AT THE OUTSET, THE LEARNED AR SUBMITTED THAT ENT IRE STOCK DETAILS WERE FURNISHED BY ASSESSEE AND EXCESS AND SHORTAGE IN FEW OF THE ACCOUNTS WAS ALSO EXPLAINED. THE ASSESSING OFFICER, HOWEVER, IGNORED THE EXCESS SHOWN UNDER SOME HEADS AND SIMPLY TOOK NOTE OF THE SHORTAGE IN FEW ACCOUNTS. HE SUBMITTED THAT LEARNED CIT(A) CONF IRMED THE ADDITION ITA NO.25 1 (ASR)/2016 ASST. YEA R: 2010-11 3 BY OBSERVING THAT THE WORKING OF EXCESS SHORTAGE WA S NOT PROVIDED, AND ALSO TOOK NOTE OF SIMILAR ADDITION OF RS.4 LACS IN EARLIER YEAR. THE LEARNED AR SUBMITTED THAT ASSESSEE BEING A WHOLESALE TRADER OF FOOD GRAINS WAS MAINTAINING COMPUTERIZED RECORDS OF ALL THE COMMODI TIES TRADED. STOCKS RECEIVED IN CONTAINERS WERE STORED FOR QUITE SOME T IME AND SOLD IN SMALLER LOTS AFTER PROPER WEIGHMENT. IT WAS SUBMITT ED THAT EXACT EXCESS/SHORTAGE IN ANY GIVEN CONSIGNMENT IS REVEALE D ONLY WHEN THE TOTAL LOT IS SOLD. THEREFORE, IT IS THE ACTUAL EXCESS/LOS S WHICH IS TAKEN NOTE ON THE DISPOSAL OF EACH LOT. IT WAS SUBMITTED THAT EX CESS SHOWN AGAINST FEW ITEMS COULD EASILY HAVE BEEN SET OFF AGAINST SHORTA GE UNDER FEW OTHER HEADS, BUT THE ASSESSEE DID NOT DO SO AND HONESTLY SUBMITTED ACTUAL DETAILS, THEREFORE, IT WAS SUBMITTED THAT ADDITION ON ACCOUNT OF ACTUAL SHORTAGE AND THAT TO WITHOUT TAKING INTO ACCOUNT TH E EXCESS WAS NOT JUSTIFIED. 8. THE LEARNED DR RELIED UPON THE ORDER OF AUTHORIT IES BELOW. 9. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE AUTHORI TIES BELOW HAS MADE AND CONFIRMED THE ADDITION ONLY ON THE BASIS OF EAR LIER YEARS AGREED ADDITION OF RS.4 LACS ON THIS ACCOUNT. THE ASSESSEE BEFORE LEARNED CIT(A) HAD EXPLAINED SHORTAGE AS WELL AS EXCESS IN VARIOUS ITEMS OF COMMODITIES. IN THE SUBMISSIONS SUBMITTED BY ASSESS EE THE LEARNED CIT(A) HAS NOTED THAT THE EXCESS VOLUNTARILY OFFERE D BY ASSESSEE IN FEW ITA NO.25 1 (ASR)/2016 ASST. YEA R: 2010-11 4 COMMODITIES WAS TO THE EXTENT OF RS.24,15,961/-. TH E ASSESSEE COULD HAVE NETTED DOWN EXCESS BY SETTING OFF THE SHORTAGE IN FEW OF THE ACCOUNTS AND EVEN THEN THE NET WAS IN THE FORM OF E XCESS TO THE EXTENT OF RS.22,46,059/-. THE ACTION OF THE AUTHORITIES BELOW BY MAKING ADDITION OF SHORTAGE AND IGNORING THE EXCESS OFFERED BY ASSE SSEE IS NOT AT ALL JUSTIFIED, THEREFORE, THE ORDERS PASSED BY AUTHORIT IES BELOW ARE NOT SUSTAINABLE, AND THEREFORE, THE ORDER PASSED BY LEA RNED CIT(A) IS REVERSED AND GROUND NO.1 OF THE APPEAL IS ALLOWED. FURTHER G ROUNDS OF APPEAL BEING NOT PRESSED HAS ALREADY BEEN DISMISSED. 10. IN NUTSHELL, THE APPEAL FILED BY THE ASSESSEE I S PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 .09.2016. SD/- SD/- (A.D. JAIN) ( T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED:15.09.2016. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER