Shri Jai Prakash Lalwani, Kanpur V. Income Tax Officer-3(2), Kanpur

ITA 277/LKW/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87779 (ITAT-LUCKNOW)
• Duration Of Justice: 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-03-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 09-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O N PATHAK

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO. 277/LKW/2014 ASSESSMENT YEAR: 2006 - 07 SHRI. JAI PRAKASH LALWANI PROP. M/S BOMBAY SELECTION SAREE HOUSE 49/29, GENERAL GANJ, KANPUR V. INCOME TAX OFFICER 3(2) KANPUR T AN /PAN : AAEPL5463C (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. RAKESH GARG, ADVOCATE RESPONDENT BY: SHRI. O. N. PATHAK, D.R. DATE OF HEARING: 11 03 201 5 DATE OF PRON OUNCEMENT: 25 0 3 2015 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST T HE ORDER OF THE LD. CIT(A) ON A SOLITARY GROUND THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.3,21,756/- OUT OF DIFFERENCE IN STOCK. 2. DURING THE COURSE OF HEARING OF THE APPEAL, THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE FACT THAT THE ASSESSEE HAS NOT MAINTAINED ANY STOCK REGISTER ON ACCOUNT OF VARIETY OF ITEMS BEING SOLD BY THE ASSESSEE, AS THE ASSESSEE IS A CLOTH MERCHANT A ND ALL THE TIME STOCKS ARE VALUED ON PHYSICAL VERIFICATION. DURING THE CO URSE OF SURVEY CONDUCTED IN THE SHOP OF THE ASSESSEE UNDER SECTION 133A(1) O F THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT') ON 10. 3.2006, THE ASSESSEE WAS ASKED TO DISCLOSE THE VALUE OF STOCK AND ASSESSEE H AS STATED THAT THE STOCK WAS APPROXIMATELY RS.60 LAKHS. LATER ON, THE STOCK WAS PHYSICALLY VALUED :-2-: AT RS.63,21,576/- AFTER PREPARING THE INVENTORY OF THE TOTAL STOCKS. SINCE THERE WAS A DIFFERENCE IN THE STOCK OF RS.3,21,576/ -, THE ASSESSING OFFICER HAS MADE ADDITION OF THE SAME. 3. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT (A), BUT DID NOT FIND FAVOUR WITH HIM. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. DURING THE COURSE OF HEARING OF THE APPEAL, THE LD. COUNSEL FOR THE A SSESSEE HAS INVITED OUR ATTENTION TO THE PRELIMINARY STATEMENT OF THE ASSES SEE RECORDED DURING THE COURSE OF SURVEY, WITH THE SUBMISSION THAT THE ASSE SSEE WAS ASKED TO EXPLAIN AS TO HOW MUCH STOCK WAS AVAILABLE. IN RES PONSE THERETO, IT WAS STATED BY THE ASSESSEE THAT THE VALUE OF THE TOTAL STOCK IN THE SHOP AND GODOWN WOULD BE APPROXIMATELY RS.60 LAKHS. LATER O N, INVENTORY OF STOCK WAS PREPARED AND AS PER INVENTORY, THE STOCK WAS VA LUED AT RS.63,21,576/-. COPY OF THE STATEMENT AND INVENTORY ARE PLACED AT P AGES 31 TO 80 OF COMPILATION OF THE ASSESSEE. THE LD. COUNSEL FOR T HE ASSESSEE HAS FURTHER CONTENDED THAT THE ASSESSEE HAS NEVER STATED THE EX ACT FIGURE OF THE STOCK. HE HAS SIMPLY STATED APPROXIMATE VALUE OF THE STOCK AT RS.60 LAKHS AND ALL THE STOCK WAS VALUED AS PER INVENTORY AT RS.63,21,5 76/- AND THE DIFFERENCE IN ESTIMATION OF THE EXACT VALUE WAS EVEN LESS THAN 6%. THEREFORE, NO ADDITION ON ACCOUNT OF DIFFERENCE IN VALUE OF STOCK IS CALLED FOR. 5. THE LD. D.R., ON THE OTHER HAND, HAS PLACED RELIANC E UPON THE ORDER OF THE LD. CIT(A). 6. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER A UTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT ON ACC OUNT OF VARIOUS ITEMS, THE ASSESSEE COULD NOT MAINTAIN THE STOCK REGISTER AND EVERY YEAR THE STOCK WAS VALUED ON PHYSICAL VERIFICATION, ACCORDING TO T HE ASSESSEE AND THIS PRACTICE HAS BEEN FOLLOWED CONTINUOUSLY FOR THE LAS T SEVERAL YEARS. DURING THE COURSE OF SURVEY, THE ASSESSEE WAS ASKED TO FUR NISH THE VALUE OF STOCK :-3-: AND IN RESPONSE TO QUERY, IT WAS STATED THAT IT WOU LD BE OF RS.60 LAKHS APPROXIMATELY. THE ASSESSEE HAS NOT FURNISHED ANY EXACT FIGURE OF STOCK AND LATER ON THE STOCK WAS VALUED AS PER INVENTORY AT RS.63,21,576/-. THEREFORE, THE DIFFERENCE IN APPROXIMATE VALUE OF T HE STOCK AND VALUE OF THE STOCK PREPARED AS PER INVENTORY IS EVEN LESS THAN 6 %. IN THE LIGHT OF THESE FACTS, WE DO NOT FIND ANY MERIT IN THE ADDITION MAD E BY THE ASSESSING OFFICER ON ACCOUNT OF DIFFERENCE IN VALUE OF STOCK, AS THE ASSESSEE HAS NEVER STATED THE EXACT FIGURE OF STOCK AVAILABLE WITH IT IN ITS GODOWN AND SHOP. WE, THEREFORE, FIND NO MERIT IN THIS ADDITION AND A CCORDINGLY WE DELETE THE SAME. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DAT E MENTIONED ON THE CAPTIONED PAGE. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:25 TH MARCH, 2015 JJ:1203 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR