DCIT, V. Shree Hanumn Rice & General Mills,

ITA 2657/DEL/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 7059 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2010
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 21-09-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 07-08-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G K DHALL
• Keywords: Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI A.K. GARODIA I.T.A. NO. 2657/DEL/2008 ASSESSMENT YEAR: 2005-06 DEPUTY COMMISSIONER OF IT, VS. M/S. SHREE HANUMAN RICE & BHIWANI GENERAL MILLS, HANSI ROAD, ( HARYANA ) SAFIDON (JIND) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI GK DHALL, SR .DR RESPONDENT BY: SHRI MAN OJ KUMAR, CA ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORDE R OF LEARNED CIT(APPEALS) DATED 26.05.2008 PASSED FOR ASSESSMENT YEAR 2003-04. IN THE FIRST GROUND OF APPEAL, IT IS PLEADED BY THE REVENU E THAT LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.7,00,315 WHICH WAS ADDED BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPL AINED INVESTMENT IN PURCHASE OF PADDY AMOUNTING TO RS.6,36,650 PLUS THE PROFIT IT HAS EARNED ON THE SALE OF SUCH PADDY. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FIRM HAS FILED ITS RETURN OF INCOME ON 5 TH SEPTEMBER 2005 DECLARING AN INCOME OF RS.56,500. D URING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSING OFF ICER HAS CONFRONTED THE ASSESSEE THAT LEARNED CITS OFFICE HAS RECEIVED AN INFORMATION FROM OFFICIAL OF THE HARYANA STATE MARKETING BOARD EXHIBITING THE FACT THAT SUCH AUTHORITY HAD CARRIED OUT A SURVEY ON THE PREMISES OF THE ASS ESSEE ON 8 TH JULY 2002 AND 2 DETECTED EVASION OF MARKET FEE TO THE TUNE OF RS.12 ,733. THE ASSESSEE HAS CONTENDED THAT NO INSPECTION WAS EVER CONDUCTED ON ITS PREMISES. ASSESSING OFFICER WITHOUT VERIFYING THIS ASPECT HAS OBSERVED THAT ASSESSEE FAILED TO PRODUCE ANYTHING IN WRITING FROM THE HARYANA STATE MARKETING BOARD, SHOWING THAT NO SURVEY WAS CONDUCTED ON ITS PREMISE S, HE PROCEED ON TO ESTIMATE THE STOCK AVAILABLE WITH THE ASSESSEE BY M ULTIPLYING THE ALLEGED FEE EVASION OF MARKET FEE WITH 50 AND WORKED OUT THE VA LUE OF EXCESS STOCK OF RS.6,36,650. HE ESTIMATED THE PROFIT ON THIS STOCK AT 10% AND MADE A FURTHER ADDITION OF RS.63,665. IN THIS WAY, AN ADDITION OF RS.7,00,315 HAS BEEN MADE. 3. DISSATISFIED WITH THE ACTION OF THE ASSESSING OF FICER, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(APPEALS ). IT HAS OBTAINED A CERTIFICATE FROM THE MARKET BOARD INDICATING THE FA CT THAT NO EXCESS FEE WAS EVER CHARGED FROM THE ASSESSEE AND NO SURVEY WAS CO NDUCTED UPON THE PREMISES OF THE ASSESSEE AS ALLEGED BY THE ASSESSIN G OFFICER. LEARNED CIT(APPEALS) CALLED FOR A REMAND REPORT. ASSESSING OFFICER COULD NOT CONTROVERT THE CONTENTION OF THE ASSESSEE AND, THER EFORE, LEARNED CIT(APPEALS) DELETED THE ADDITION. 4. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. WE DO NOT FIND ANY MERIT IN THE GROUND RAISED BY THE REVENUE BECAUSE IT IS THE DUTY OF THE ASSESSING OFF ICER TO ESTABLISH THAT 3 ASSESSEE WAS HAVING EXCESS STOCK AT THE CLOSE OF TH E ACCOUNTING YEAR. HE SIMPLY HARPING UPON ON A HEARSAY EVIDENCE. HE WAS N OT POSSESSING ANY CONCURRENT MATERIAL WHICH WOULD BE SUFFICIENT FOR C HARGING THE ASSESSEE WITH TAX LIABILITY. WHEN ASSESSEE DISPUTED THAT NO INSPE CTION WAS CARRIED OUT BY THE MARKETING BOARD ON ITS PREMISES THEN IT IS THE DUTY OF THE ASSESSING OFFICER TO ESTABLISH THE FACTUM OF INSPECTION ON TH E PREMISES OF THE ASSESSEE INSTEAD OF DOING THAT DUTY HE PUT THE ONUS UPON THE ASSESSEE TO DEMONSTRATE THAT NO INSPECTION WAS CARRIED OUT UPON THE PREMISE S OF THE ASSESSEE. LEARNED CIT(APPEALS) HAS RIGHTLY CONSIDERED THE CON TENTIONS OF THE ASSESSEE AND DELETED THE ADDITION. 5. IN THE SECOND GROUND OF APPEAL, THE GRIEVANCE OF REVENUE IS THAT LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDI TION OF RS.50,000. THE BRIEF FACTS OF THE CASE ARE THAT THE IN THE AUDITE D ACCOUNTS, ASSESSEE HAS SHOWN JOB WORK CHARGES AT RS.21,89,528. ACCORDING T O THE ASSESSEE, IT WAS A CLERICAL MISTAKE, IN FACT, THE CHARGES WERE OF RS.2 2,39,520. ASSESSING OFFICER HAS MADE THE ADDITION OF THE DIFFERENCE IN THE MILL ING ACCOUNT. 6. BEFORE THE LEARNED CIT(APPEALS), IT WAS CONTENDE D BY THE ASSESSEE THAT LESSER AMOUNT WAS REPORTED BY THE CHARTERED AC COUNTANT WHICH HAS BEEN RECTIFIED SUBSEQUENTLY. IT WAS A CLERICAL MISTAKE. LEARNED CIT(APPEALS) HAS ACCEPTED THIS CONTENTION AND DELETED THE ADDITION. 4 7. DURING THE COURSE OF HEARING BEFORE US, WE HAVE CONFRONTED THE LEARNED COUNSEL FOR THE ASSESSEE TO DEMONSTRATE THE MATERIAL WHICH IS RESPONSIBLE FOR SUCH CLERICAL MISTAKE. THE AMOUNTS EARLIER REPORTED WERE ALSO REPORTED BY ITS TAX-CONSULTANT. THE SUBSEQUENT CERT IFICATE IS ALSO BY THE TAX CONSULTANT. WE INVITED THE LEARNED COUNSEL FOR THE ASSESSEE TO SHOW US THE DETAILS AND HOW AN ERROR HAS CREPT IN. HE WAS UNABL E TO DEMONSTRATE THE DETAILS. IN THE ABSENCE OF THE DETAILS OF EXPENSES, IT IS DIFFICULT TO RECORD A FINDING OF FACT WHICH AMOUNT IS CORRECT AMOUNT FOR CLAIMING THE DEDUCTION. BOTH THE ITEMS WERE REPORTED BY THE TAX-CONSULTANT. THE ONE ITEM HAS BEEN RELIED UPON BY THE ASSESSING OFFICER WHEREAS SECOND REPORT HAS BEEN RELIED UPON BY THE LEARNED CIT(APPEALS). FACED WITH THIS D IFFICULTY, WE DEEM IT APPROPRIATE TO SET ASIDE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION AND READJUDICATION. THIS GROUND OF APP EAL IS, THEREFORE, ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS PART LY ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 08.10.201 0 ( A.K. GARODIA ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 08/10/2010 MOHAN LAL 5 COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR