Sarvjit Singh, V. DCIT Circle 25 (1),

ITA 2744/DEL/2007

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81986 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 15-09-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 31-05-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R R KUMAR
• Keywords: Retraction

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G , NEW DELHI) BEFORE SHRI I. C. SUDHIR, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.2744 /DEL/2007 ASSESSMENT YEAR : 2004-05 SARVJIT SINGH, VS. DCIT, CIRCLE 25(1), PROP. M/S. RAJENDRA FASHIONS, NEW DELHI 34/72, PUNJABI BAGH (WEST), NEW DELHI 110 026 GIR / PAN:AATPS4856M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI V.P. GUPTA, ADV. RESPONDENT BY : SHRI BRR KUMAR, SR. DR ORDER PER T.S. KAPOOR, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A) DATED 08.03.2007. THE ASSESSEE HAS TAKEN 15 GROUND S OF APPEAL WHICH ARE NOT IN ACCORDANCE WITH THE RULES AND THE SAME ARE D ESCRIPTIVE IN NATURE. HOWEVER, THE CRUX OF GROUNDS OF APPEAL IS THE CONFI RMATION OF ADDITION MADE BY THE A.O. OF RS.40,52,433/- BY LD. CIT(A) ON ACCO UNT OF DIFFERENCE IN VALUE OF CLOSING STOCK AS PER BOOKS OF ACCOUNT AND AS PER PHYSICAL INVENTORY PREPARED BY SURVEY TEAM AT THE TIME OF SURVEY AS ON 25.02.2004. 2. AT THE OUTSET, THE LD. A.R. SUBMITTED THAT ON SI MILAR FACTS AND CIRCUMSTANCES IN THE CASE OF M/S. RAJENDRA ENTERPRI SES WHERE THE ASSESSEE IS A PARTNER, THE MATTER WAS REMITTED BACK BY ITAT VID E ITS ORDER DATED 11.03.2013. THEREFORE, IN THE INTEREST OF JUSTICE, THIS MATTER MAY ALSO BE REMITTED BACK TO THE FILE OF A.O. FOR READJUDICATIO N. ITA NO.2744/DEL/2007 2 3. REGARDING MERITS OF THE CASE, THE LD. A.R. EXPLA INED THAT ADDITION WAS MADE ON THE BASIS OF PHYSICAL STOCK AS ON THE DATE OF SURVEY ON 25.02.2004, AND THE DIFFERENCE WAS SURRENDERED AT THE TIME OF S EARCH BUT THE STATEMENT WAS RETRACTED ON 01.03.2004. THE ASSESSEE HAD PREP ARED REVISED TRADING ACCOUNT. IT WAS SUBMITTED THAT IN FACT, THERE WAS NO DIFFERENCE IN STOCK AS THE DIFFERENCE HAD OCCURRED DUE TO THE FACT THAT THE AS SESSEE HAD NOT ENTERED SOME BILLS IN THE BOOKS OF ACCOUNT AND STOCK OF WHI CH WAS ALREADY INCLUDED IN THE PHYSICAL LIST. 4. THE LD. D.R. ON THE OTHER HAND SUBMITTED THAT TH E ADDITION WAS NOT ONLY MADE ON ACCOUNT OF STATEMENT BUT IN FACT THERE WAS DIFFERENCE IN THE PHYSICAL STOCK AND STOCK AS PER BOOKS OF ACCOUNT. THEREFORE, LD. CIT(A) HAD RIGHTLY CONFIRMED THE ACTION OF THE A.O. 5. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROUG H THE MATERIAL PLACED ON RECORD. WE FIND THAT THE ASSESSEE HAD SURRENDER ED AN AMOUNT OF RS.40,52,433/- WHILE RECORDING HIS STATEMENT ON OAT H AT THE TIME OF SURVEY ON 25.02.2004. HOWEVER ON 01.03.2004 ITSELF, THE A SSESSEE HAD FILED A LETTER WITH THE ADDITIONAL COMMISSIONER, INCOME TAX WHEREI N HE HAD RETRACTED HIS STATEMENT AND HAD ALSO FILED A REVISED TRADING ACCO UNT AND IT WAS SUBMITTED THAT THE ASSESSEE HAD NOT MADE ANY PURCHASES AFTER 25.02.2004 AND EXPORT SALE AMOUNTING TO RS.39.70 LACS BETWEEN THE PERIOD 26.02.2004 TO 31.03.2004 WAS MADE OUT OF STOCK AS ON 25.02.2004. THE ASSESSEE HAD FURTHER EXPLAINED TO LD. CIT(A) THAT THERE WERE CER TAIN BILLS WHICH WERE NOT ENTERED IN THE BOOKS OF ACCOUNT AS THE SAME WERE LY ING WITH THE STORES PERSONNEL FOR VERIFICATION AND THEREFORE, AFTER ENT ERING THE SAME IN THE BOOKS OF ACCOUNT, THERE WAS NO DIFFERENCE IN THE STOCK AN D HENCE, THE ADDITION WAS NOT JUSTIFIED. HOWEVER, LD. CIT(A) DID NOT AGREE W ITH THE CONTENTION OF THE ITA NO.2744/DEL/2007 3 ASSESSEE AND UPHELD THE ADDITION OBSERVING THAT THE ASSESSEE HAD HIMSELF SURRENDERED AT THE TIME OF SURVEY AND THERE WAS CON SIDERABLE DELAY IN RETRACTION OF STATEMENT. WE FURTHER FIND THAT IN T HE CASE OF M/S. RAJENDER ENTERPRISES, IN WHICH THE ASSESSEE HIMSELF IS A PAR TNER, A SIMILAR ADDITION WAS MADE AND THE TRIBUNAL, VIDE ITS ORDER DATED 01.03.2 013 HAD REMITTED THE ISSUE BACK TO A.O. BY OBSERVING AS UNDER: 6.1 HOWEVER, IN THE RETURNS FOR THE' CONCERNED ASS ESSMENT YEAR 2004-05 THE ABOVE AMOUNTS WERE NOT OFFERED FOR TAXA TION. THESE WERE ADDED BY THE ASSESSING OFFICER IN THE ASSESSMENT PR OCEEDINGS AS THE INCOME OF THE ASSESSEE. BEFORE THE LD. COMMISSIONER OF INCOME TAX (A) ASSESSEE SUBMITTED VARIOUS SUBMISSIONS. LD. COM MISSIONER OF INCOME TAX (A) CALLED FOR REMAND REPORT IN THIS CON NECTION. AFTER CONSIDERING' THE SUBMISSIONS IN THIS REGARD, THE LD . COMMISSIONER OF INCOME TAX (A) OPINED THAT ADDITION ON ACCOUNT OF E XCESS STOCK, SAMPLE DEVELOPMENT CHARGES AND DYEING CHARGES COULD NOT BE SUSTAINED AS THE ASSESSEE HAS EXPLAINED THE FACTS I N THIS REGARD. HOWEVER, LD. COMMISSIONER OF INCOME TAX (A) NOTED T HAT ASSESSING OFFICER HAS NOT MADE ANY EFFORT, EITHER DURING THE ASSESSMENT PROCEEDINGS OR REMAND PROCEEDINGS, TO MAKE INDEPEND ENT INQUIRIES FROM THE ABOVE MENTIONED PARTIES NAMELY M/S GIRNAR HOSIERY WORKS, M/S GUDIYA ENTERPRISES AND DHAM DYEING -AND BLEACHI NG MILLS. FURTHERMORE, LD. COMMISSIONER OF INCOME TAX (A) DEL ETED THE ADDITIONS HOLDING THAT ASSESSEE HAS DULY EXPLAINED ALL THE FACTS AND THE ABOVE DISCREPANCIES HAVE BEEN TAKEN INTO ACCOUN T WHILE PREPARING THE BOOKS OF ACCOUNTS AT THE END OF THE FINANCIAL Y EAR. 6. WE FIND THAT IN THIS CASE ALSO, THE ASSESSEE HAD TAKEN THE SAME ARGUMENTS THAT CERTAIN BILLS WERE NOT ENTERED IN TH E BOOKS OF ACCOUNT AT THE TIME OF SURVEY AND THEREFORE IF THE SAME WERE INCLU DED IN THE BOOKS OF ACCOUNT, THERE WAS NO DIFFERENCE IN THE PHYSICAL ST OCK AND THE STOCK AS PER BOOKS OF ACCOUNT. HOWEVER, THE A.O. AND LD. CIT(A) DID NOT AGREE WITH THIS CONTENTION OF THE ASSESSEE AND ALSO DID NOT CA RRY OUT ANY ENQUIRY REGARDING THESE PURCHASES. THEREFORE, IN THE INTER EST OF SUBSTANTIAL JUSTICE, ITA NO.2744/DEL/2007 4 WE ARE OF THE OPINION THAT THE CASE MAY BE REMITTED TO THE A.O. FOR RE- ADJUDICATION WHO AFTER GOING THROUGH THE PURCHASE B ILLS SUBMITTED BY THE ASSESSEE WILL ARRIVE AT THE DECISION REGARDING THE GENUINENESS AND CORRECTNESS OF THE SAME. THEREFORE, WE ORDER ACCOR DINGLY. NEEDLESS TO SAY THAT NECESSARY OPPORTUNITY WILL BE GIVEN TO THE ASS ESSEE. 7. IN VIEW OF THE ABOVE, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 8. ORDER PRONOUNCED IN THE OPEN COURT ON 31SST OCT. , 2014. SD./- SD./- (I. C. SUDHIR ) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 31 ST OCT., 2014 SP COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). ITA NO.2744/DEL/2007 5 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 28/10 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 29,30/10 SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUS SED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT SR. PS/PS 7 FILE SENT TO BENCH CLERK SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER