P.R. Products, Karnal V. ACIT, Karnal

ITA 2573/DEL/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3657 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 01-07-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 30-07-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMRENDER KUMAR
• Assessee Lawyers: VINAY GOYAL

Judgement Text

I.T.A. NO. 2573 /DEL/2008 1/5 IN THE INCOME TAX APPELLATE TRIBUNAL, NEW DELHI, BENCH F BEFORE SHRI C. L. SETHI, JUDICIAL MEMBER AND SHRI A K GARODIA, ACCOUTANT MEMBER ITA NO.2573 /DEL/2008 (ASSESSMENT YEAR 2003-04) M/S. P.R. PRODUCTS, VS. ACIT, CIRCLE SEC.12, C/O VINEY GOEL, CA, KARNAL B-2, PURSHOTAM GARDEN, NEAR CHANDRANCHAL BANQUET HALL KARNAL (APPELLANTS) (RESPONDENTS) PAN / GIR NO. AABFP 2570R APPELLANT BY: SHRI VINAY GOYAL, CA RESPONDENT BY: SHRI AMRENDER KUMAR, SR. DR ORDER PER A. K. GARODIA, AM: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) KARNAL, DATED 16.05.2008 FOR THE ASSESSMENT YEAR 2003-04. THE GROUNDS RAISED BY THE ASSESSEE READ A S UNDER: 1. A) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) KARNAL HAS ERRED ON LAW & FACTS BY CONFIRMIN G THE ADDITION OF RS.416265/- ON ACCOUNT OF SALES OUT OF BOOKS, MADE BY LD. A.O. WITHOUT ANY EVIDENCE. B) THAT THE ADDITION OF RS.416265/- WAS MADE ON SURMISES AND NO DEFECT WAS FOUND IN BOOKS OF ACCOUNTS AS WELL AS STOCK TALLY MAINTAINED BY THE ASSESSEE. I.T.A. NO. 2573 /DEL/2008 2/5 2. THE BRIEF FACTS OF THE CASE ARE THAT IT IS NOTED BY THE A.O. IN THE ASSESSMENT ORDER THAT AN INFORMATION FROM SALES TAX DEPARTMENT WAS RECEIVED AS PER WHICH, A PENALTY OF RS.1.05 LACS WAS LEVIED UPON THE ASSESSEE BY THE SALES TAX DEPAR TMENT ON 21.12.2002 U/S 37(6) OF HARYANA GENERAL SALES TAX A CT 1973. IT IS FURTHER NOTED BY THE A.O. THAT AS PER THE P & L ACCOUNT FILED BY THE ASSESSEE WITH THE RETURN OF INCOME, IT WAS NOTED THAT NO SUCH PENALTY WAS DEBITED IN THE P & L ACCOUNT. THE A.O. ADDED THIS PENALTY AMOUNT OF RS.1.05 LACS IN THE IN COME OF THE ASSESSEE ON THE BASIS THAT THE PAYMENT WAS MADE OUT OF UNDISCLOSED SOURCES. IT IS FURTHER NOTED BY THE A. O. THAT IT CAME TO THE NOTICE THAT PENALTY HAS BEEN IMPOSED ON THE MATERIAL VALUING RS.4,16,265/- BEING THE SALES MADE TO M/S. UPPER INDIA SMELTING AND REFINERY WORKS YAMAHA NAGAR. IT IS AL SO NOTED THAT THE SAID BILL NO.70 DATED 21.12.2002 WAS FOUND TO BE USED FOR THE 2 ND TIME BY THE ASSESSEE IS ALLEGED BY THE SALES TAX DEPARTMENT AND FOR THIS REASON, PENALTY OF RS.1.05 LACS WAS IMPOSED BY THE SALES TAX DEPARTMENT OF HARYANA. TH E A.O. MADE ADDITION OF THIS AMOUNT OF RS.4,16,265/- ALSO ON THE BASIS THAT THERE WAS SALE BY THE ASSESSEE OUTSIDE THE REG ULAR BOOKS OF ACCOUNTS. BEING AGGRIEVED, THE ASSESSEE CARRIED BO TH THESE MATTERS IN APPEAL BEFORE THE CIT(A) BUT WITHOUT SUC CESS AND NOW, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. BUT IN THE APPEAL BEFORE US, THE ASSESSEE HAS NOT RAISED THE I SSUE REGARDING ADDITION OF RS.1.05 LACS ON ACCOUNT OF PENALTY AND THE ONLY ISSUE RAISED BEFORE US IS THE ADDITION OF RS.4,16,265/- O N ACCOUNT OF SALES OUT OF THE BOOKS. I.T.A. NO. 2573 /DEL/2008 3/5 3. IT WAS THE SUBMISSION BY THE LD. A.R. FOR THE ASSES SEE THAT THE ACCOUNTS OF THE ASSESSEE IN THE BOOKS OF M/S. UPPER INDIA SMELTING & REFINERY WORKS TALLIED WITH THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE AND BILL NO.70 IN QUESTI ON HAS BEEN RECORDED ONCE AND THAT THERE IS NO 2 ND TIME SALES ON THE SAME BILL. IT IS ALSO SUBMITTED BEFORE US THAT EVEN IF THERE IS 2 ND TIME SALES ON THE SAME BILL, ONLY GROSS PROFIT ADDITION CAN BE MADE AND NOT THE ENTIRE SALES VALUE. RELIANCE WAS PLACE D ON THE JUDGEMENT OF HONBLE APEX COURT RENDERED IN THE CAS E OF PULLANGODE RUBBER PRODUCE CO. LTD. VS STATE OF KERA LA & ANR AS REPORTED IN (1973) 91 ITR 18 (S.C.) AND ALSO ON THE TRIBUNAL DECISION RENDERED IN THE CASE OF R K SYNTHETICS AS REPORTED IN 81 TTJ (JODHPUR) 909. 4. AS AGAINST THIS, THE LD. D.R. FOR THE REVENUE SUPPO RTED THE ORDERS OF AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED T HE MATERIAL ON RECORD AND HAVE GONE THOUGH THE ORDERS OF AUTHOR ITIES BELOW AND THE JUDGEMENTS CITED BY THE LD. A.R. FOR THE AS SESSEE. WE FIND THAT THIS IS NOT MERE ALLEGATION OF SALES TAX DEPARTMENT THAT THE ASSESSEE WAS USING BILL NO.70 DATED 21.12. 2002 OF RS.4,16,265/- FOR THE 2 ND TIME SALES BECAUSE SALES TAX DEPARTMENT HAS RECORDED STATEMENT OF THE DRIVER OF THE TRUCK W HO WAS CARRYING THIS BILL NO.70 AND HE HAS ADMITTED THESE FACTS BEFORE THE SALES TAX DEPARTMENT. THE SALES TAX DEPARTMENT HAS IMPOSED A PENALTY OF RS.1.05 LACS, WHICH HAS BEEN P AID BY THE ASSESSEE. ADDITION WAS ALSO MADE BY THE A.O. ON AC COUNT OF THIS PENALTY PAYMENT ALSO AND THIS ADDITION HAS BEE N ACCEPTED I.T.A. NO. 2573 /DEL/2008 4/5 BY THE ASSESSEE AND NO GROUND HAS BEEN RAISED BY TH E ASSESSEE BEFORE US WITH REGARD TO THIS ADDITION OF RS.1.05 L ACS ON ACCOUNT OF SALES TAX PENALTY PAID BY THE ASSESSEE. HENCE, THIS IS AN ADMITTED POSITION THAT THE ASSESSEE WAS VIOLATING S ALES TAX RULES AND WAS DISPATCHING GOODS FOR THE 2 ND TIME ON THE BASIS OF THE SAME BILL NO.70 DATED 21.12.2002 AND HENCE FOR SUCH SALES BY THE ASSESSEE OUTSIDE THE REGULAR BOOKS OF ACCOUN TS, ADDITION WAS RIGHTLY MADE BY THE A.O. AND WE FIND NO REASON TO INTERFERE IN THE ORDER OF LD. CIT(A) ON THIS ISSUE. REGARDI NG ABOVE NOTED CONTENTION RAISED BY THE LD. A.R. FOR THE ASS ESSEE THAT ADDITION SHOULD BE MADE ONLY TO THE EXTENT OF GROSS PROFIT, WE ARE NOT IN AGREEMENT WITH HIM BECAUSE FOR DISPATCHI NG THE GOODS OUTSIDE THE REGULAR BOOKS, THERE MUST HAVE BE EN OUTSIDE BOOKS PURCHASES ALSO AND THE ASSESSEE MUST HAVE MAD E PAYMENT FOR THIS PURCHASE FROM UNDISCLOSED SOURCES AND HENC E, ENTIRE SALE VALUE AS PER THIS BILL HAS TO BE ADDED TO THE INCOME OF THE ASSESSEE. 6. REGARDING THE JUDGEMENTS RELIED UPON BY THE LD. A.R . BEFORE US, WE FIND THAT THE ASSESSEE DOES NOT GET ANY HELP FORM THESE JUDGEMENTS. AS PER THE JUDGEMENT OF HONBLE APEX C OURT RENDERED IN THE CASE OF PULLANGODE RUBBER PRODUCE C O. LTD. (SUPRA), IT WAS HELD THAT AN ADMISSION IS AN EXTREM ELY IMPORTANT PIECE OF EVIDENCE BUT IT CANNOT BE SAID THAT IT IS CONCLUSIVE AND IT IS OPEN TO THE PERSON WHO MADE THE ADMISSION TO SHO W THAT IT IS INCORRECT. THERE IS NO QUARREL ON THIS LEGAL PROPO SITION BUT IN THE PRESENT CASE, THE ASSESSEE COULD NOT SATISFACTO RILY REBUT THIS ALLEGATION THAT THERE WAS 2 ND TIME SALE OF THE SAME BILL AND HENCE I.T.A. NO. 2573 /DEL/2008 5/5 SUCH SALE WAS OUTSIDE REGULAR BOOKS, THEREFORE, THI S JUDGEMENT IS OF NO HELP TO THE ASSESSEE. 7. THE 2 ND JUDGEMENT RELIED UPON BY THE ASSESSEE WAS THE TRIB UNAL DECISION RENDERED IN THE CASE OF R K SYNTHETICS (SU PRA), WHICH IS SAME BECAUSE IN THE TRIBUNAL DECISION, THE TRIBU NAL HAS SIMPLY FOLLOWED HONBLE APEX COURT DECISION RENDERE D IN THE CASE OF PULLANGODE RUBBER & PRODUCE CO. LTD. (SUPRA ) AND HENCE FOR THE SAME REASONS, THIS TRIBUNAL DECISION IS ALSO OF NO HELP TO THE ASSESSEE. 8. CONSIDERING THE FACTS OF THE PRESENT CASE, WE DO NO T FIND ANY REASON TO INTERFERE IN THE ORDER OF LD. CIT(A). 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMIS SED. 10. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT ON 1 ST DAY OF JULY 2010. SD./- SD./- (C. L. SETHI) (A K GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:01 ST JULY, 2010 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI