M/s. Punit Proteins Pvt. Ltd., V. The ACIT., Circle-4, Baroda

ITA 2723/AHD/2005

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 9091 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 04-02-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 26-12-2005
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: M J SHAH
• Keywords: Unexplained investment; Principle of natural justice
• Section: 143(3); 133A

Judgement Text

1 ITA NO. 2723/AHD/2005 IN THE INCOME TAX APPELLATE TRIBUNAL : D BENCH : A HMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HONBLE SH RI D.C. AGRAWAL, A.M.) I.T.A. NO. 2723/AHD./2005 ASSESSMENT YEAR : 2002-2003 PUNIT PROTEINS PVT. LTD., BARODA -VS.- ASSISTANT COMMISSIONER OF INCOME TAX, (PAN : AABCP 8996 Q) CIRCLE-4, BARODA (APPELLANT) (R ESPONDENT) APPELLANT BY : SHRI M.J. SHAH RESPONDENT BY : SHRI ANIL KUMAR, CIT O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER DATED 27.09.2005 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-III, BARODA FOR THE ASSESSMENT YEAR 2002-03 CONFIRMING THE ADDITION OF RS.3,29,442/- MADE BY THE A.O. ON A CCOUNT OF UNACCOUNTED INVESTMENT IN STOCK. 2. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE I S A COMPANY PRIMARILY ENGAGED IN THE BUSINESS OF PROCESSING AND TRADING OF TUVERDAL. A SURVEY UNDER SECTION 133A OF THE ACT WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSE E ON 05.02.2002. DURING THE COURSE OF SURVEY, UNACCOUNTED INVESTMENT ADMITTED AT RS.2,69,678/-. T HE A.O. FRAMED THE ASSESSMENT UNDER SECTION 143(3) ON 31.12.2004, WHEREIN HE WORKED OUT THE UNACCOUNTED DIFFERENCE IN STOCK AT RS.3,29,442/-. THE DETAILED WORKING IS GIVEN BY THE A.O. IN PARA 8 ON PAGE 6 OF THE ASSESSMENT ORDER. 3. ON APPEAL BEFORE THE LEARNED COMMISSIONER OF INC OME TAX(APPEALS), IT WAS CONTENDED THAT DURING THE COURSE OF SURVEY, THE ASSESSEE-COMP ANY ADMITTED UNDISCLOSED INCOME OF RS.2,69,678/- TOWARDS STOCK DUE TO PSYCHOLOGICAL PR ESSURE AND TENSION AT THE TIME OF SURVEY. HE SUBMITTED THAT ON SUBSEQUENT VERIFICATION OF THE RE CORDS IT WAS FOUND THAT THERE WAS NO DISCREPANCY IN THE PHYSICAL STOCK AND THE STOCK AS PER STOCK REGISTER. IT WAS, THEREFORE, CONTENDED THAT THE ADDITION OF STOCK ADMITTED TO THE EXTENT O F RS.2,69,678/- BE DELETED. WITH REGARD TO THE BALANCE ADDITION OF RS.59,764/-, IT WAS CONTENDED T HAT THIS ADDITION WAS MADE IN VIOLATION OF 2 ITA NO. 2723/AHD/2005 DOCTRINE OF NATURAL JUSTICE. HE SUBMITTED THAT A.O. SHOULD HAVE ALLOWED ADJUSTMENT OF EXCESS STOCK OF FINISHED GOODS FROM THE DEFICIT OF RAW MAT ERIAL STOCK AS THE RAW MATERIAL STOCK IS ALSO OF TUVERDAL AND, THEREFORE, THERE IS ALL POSSIBILITY OF HUMAN ERROR IN COUNTING THE NUMBER OF BAGS AND THAT TOO IN A SPAN OF TWO TO THREE HOURS, PARTI CULARLY WHEN THE STOCK OF RAW MATERIAL AND FINISHED DAL AND CHUNI WERE PACKED SIDE BY SIDE . 4. AFTER CONSIDERING THE AFORESAID SUBMISSION, IN T HE IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CONFIRMED THE A DDITION FOR THE DETAILED REASONS GIVEN IN PARA 4.3 TO 4.3.7 ON PAGES 4 TO 11. AGGRIEVED BY TH IS ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS), THE ASSESSEE IS IN APPEAL BEFORE US. 5. AT THE TIME OF HEARING, ON BEHALF OF ASS ESSEE SHRI M.J. SHAH APPEARED AND CONTENDED THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) OUGHT TO HAVE DELETED THE ENTIRE ADDIT ION OF RS.3,29,442/- INCLUDING ADDITION ADMITTED TO THE EXTENT OF RS.59,764/-. ALTERNATIVEL Y, THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ADDITION BE RESTRICTED TO THE DIFFERENCE IN CLO SING STOCK ADMITTED TO THE EXTENT OF RS.2,69,678/- 6. ON THE OTHER HAND, SHRI ANIL KUMAR, CIT APPEARIN G ON BEHALF OF REVENUE SUPPORTED THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS ). 7. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS UNBELIEVABLE THAT UNDISCLOSED STOCK WA S ADMITTED BY THE ASSESSEE-COMPANY UNDER PSYCHOLOGICAL PRESSURE AND TENSION. THE A.O. HAS GI VEN DETAILED WORKING FOR MAKING THE ADDITION OF RS.3,29,442/-. WE DO NOT FIND ANY INFIRMITY IN T HE SAID WORKING OR REASONING GIVEN BY THE AUTHORITIES BELOW FOR MAKING AND CONFIRMING THE ADD ITION. WE, THEREFORE, DECLINE TO INTERFERE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 04.02.201 0 SD/- SD/- (D.C. AGRAWAL) (T.K. SHARMA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 04/ 02 / 2010 3 ITA NO. 2723/AHD/2005 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A) CONCERNED, (4) CIT CONCERNED, (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER LAHA/SR.P.S. DEPUTY REGISTRAR, ITAT, AHMEDA BAD