DCIT, Pondicherry V. Smt. V. Rajeswari, Propx: M/s. Davamangala Devi, Pondicherry

ITA 2783/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4575 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2017
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 26-09-2016
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: G BASKAR
• Keywords: Rejection of books of accounts
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . , . , ' # BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A. NO. 2783/MDS/2016 / ASSESSMENT YEAR : 2012-13 THE DEPUTY COMMISSIONER OF INCOME TAX, PONDICHERY CIRCLE NO. 378-386, MAHATMA GANDHI ROAD, PONDICHERY 605 001. VS. SMT. V. RAJESWARI, PROPX: M/S. DAVAMANAGALA DEVI MODERN RICE MILL, NO. 1, KAMBALIKARAN KUPPAM, CHELLANCHERRY POST, NETTAPAKKAM, PONDICHERRY 605 106. [PAN: ADFPR 2833Q] ( / APPELLANT) ( / RESPONDENT) % & / APPELLANT BY : SHRI SHIVA SRINIVAS, JCIT )*% & / RESPONDENT BY : SHRI G. BASKAR, ADVOCATE & /DATE OF HEARING : 09.03.2017 & /DATE OF PRONOUNCEMENT : 03.05.2017 /O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER: THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-PUDUCHERRY, IN ITA NO. 101/ CIT(A)-PDY/14-15 DATED 08.04.2016 PASSED U/S. 143(3) OF THE INCOME TAX ACT . :-2-: I.T.A. N0. 2783/MDS/2016 2. BEFORE WE PROCEEDED FOR HEARING THERE IS A DELAY OF 67 DAYS IN FILING THE APPEAL BY THE REVENUE. THE LD. DR FILED CONDONA TION PETITION AND EXPLAINED THE CIRCUMSTANCES FOR DELAY WHICH ARE NOT DELIBERAT E. FURTHER, LD. AR OF THE ASSESSEE HAS NO SERIOUS OBJECTIONS FOR CONDONATION OF DELAY. AFTER HEARING THE SUBMISSIONS, WE ARE SATISFIED WITH THE REASONABLE C AUSE EXPLAINED IN AFFIDAVIT FOR FILING THE APPEAL BELATEDLY. THEREFORE, THE DELAY IS CONDONED AND APPEAL IS ADMITTED. 3. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 2) THE LD CIT(A) HAS ERRED IN DELETING THE ESTIMATI ON OF YIELD AT 66.6% AS AGAINST ADMITTED YIELD OF 59% ON NON- COMPLIANCE OF THE ASSESSEE FOR THE DETAILS CALLED F OR. 3) THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE FACT THAT THE ASSESSEE IS NOT MAINTAINING ITEM WISE (GRA DE WISE) PURCHASE STOCK REGISTER. THE ASSESSEE IS MAINTAINI NG A SINGLE PADDY STOCK REGISTER ONLY. 4) THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE FACT THAT THE ASSESSEE IS NOT MAINTAINING ITEM WISE (GRA DE WISE) SALES REGISTER ALSO. 5) THE LD. CIT(A) HAS ERRED IN ALLOWING THE APPEAL ONLY DUE TO NON-REJECTION OF BOOKS OF ACCOUNTS BY T HE ASSESSING OFFICER. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF MODERN RICE MILL IN THE NAME OF M/S. DA VAMANGALA DEVI MODERN MILLS AND FILED THE RETURN OF INCOME ELECTRONICALLY FOR T HE ASSESSMENT YEAR 2012-13 ON :-3-: I.T.A. N0. 2783/MDS/2016 28.09.2013 WITH TOTAL INCOME OF RS. 15,49,700/- AND THE RETURN WAS PROCESSED U/S. 143(1) OF THE ACT. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTICE U/S. 143(2) OF THE ACT WAS ISSUED. IN COMPLIANCE TO NOTICE, LD. AR OF THE ASSESSEE APPEARED FROM TIME TO TIME AND P RODUCED BOOK OF ACCOUNTS AND OTHER DETAILS. THE ASSESSING OFFICER IN THE CO URSE OF ASSESSMENT PROCEEDINGS FOUND THAT THE AVERAGE RICE YIELD WORKED OUT BY ASS ESSEE FROM PADDY IS 59% AS AGAINST THE INDUSTRIAL AVERAGE BENCHMARK OF 66.6% O N COMPARISON WITH BY M/S. SHYAM MODERN RICE MILL AND M/S. JAYANTHI AGRO FEEDS . THE ASSESSEE HAS BEEN CALLED FOR EXPLANATIONS AND TO PRODUCE THE DETAILS OF PADDY YIELD FOR THE ASSESSMENT YEARS 2010-11 & 2011-12. SINCE, THE ASS ESSEE HAD NOT COMPLIED THE NOTICE, THE ASSESSING OFFICER FOUND MINIMUM YIELD E STIMATION OF 65% AS REASONABLE AGAINST 59% DECLARED BY THE ASSESSEE, MA DE DIFFERENCE OF ADDITION OF YIELD OF RICE RS. 1,60,62,555/- AND WITH OTHER ADDI TION OF RS. 5 LAKHS BEING THE DIFFERENCE IN PURCHASE VALUE OF RICE AND PASSED ASS ESSMENT ORDER U/S. 143(3) OF THE ACT DATED 02.03.2016 OF RS. 1,81,12,260/-. 5. AGGRIEVED BY THE ORDER, THE ASSESSEE FILED AN AP PEAL WITH THE CIT(A). IN THE APPELLATE PROCEEDINGS THE LD. AR ARGUED THE GRO UNDS AND REITERATED THE SUBMISSIONS OF ASSESSMENT PROCEEDINGS ON THE DISPUT ED ISSUE AND ON NET YIELD OF RICE. THE ASSESSEE FILED THE WRITTEN SUBMISSIONS R EFERRED AT PAGE 3 PARA 6 OF THE CIT(A) ORDER, AND EXPLAINED THAT THE ASSESSEE IS IN THE MANUFACTURE OF SINGLE BOILED GRADE A NICE VARIETY RICE, WHEREAS, M/S. SHY AM MODERN MILL AND M/S. JAYANTHI AGRO FEEDS, ARE IN THE MANUFACTURING OF PR OCESSING COARSE VARIETY PADDY :-4-: I.T.A. N0. 2783/MDS/2016 AND THEY WERE MANUFACTURING DOUBLE BOILED RICE. WH EREAS THE ASSESSEE IS PURCHASING DIRECTLY FROM THE AGRICULTURIST AND GOVE RNMENT MARKET COMMITTEE WHERE THE MOISTURE CONTENT IN THE PADDY IS HIGH. A ND THE LD. AR RELIED ON THE JUDICIAL DECISIONS AND SUBMITTED THE LEDGER ACCOUNT COPIES AND EVIDENCE IN RESPECT OF YIELD AND THE LETTER ISSUED BY GOVERNMEN T OF PUDUCHERRY, DEPARTMENT OF CIVIL SUPPLIES & CONSUMER AFFAIRS WITH RESPECT T O THE YIELD . THE LD. CIT(A) CALLED FOR THE REMAND REPORT AND THE ASSESSING OFFI CER SUBMITTED THE SAID REPORT DATED 18.03.2016 EXPLAINING THE YIELD WORKED OUT AT 65% AS AGAINST OFFERED BY THE ASSESSEE AT 59%. FURTHER THE LD. AR FILED COMM ENTS/OBJECTIONS ON THE REMAND REPORT REFERRED AT PARA 7.5 OF THE CIT(A) OR DER AND SUBSTANTIATED THE YIELD. THE LD. CIT(A) CONSIDERED THE FACTS AND THE COMPARED THE BOOK RESULTS AS UNDER: ASSESSMENT YEAR PADDY ISSUED FOR PRODUCTION IN QTLS RICE PRODUCTION IN QTLS YIELD 2010-11 90500 54720 60.46% 2011-12 119825 71820 59.93% 2012-13 ASST IN APPEAL ASST IN APPEAL 59.7% 2013-14 119700 71680 59.88% 2014-15 121368 72848 60.02% THE LD. CIT(A) CONSIDER THE FACTS IN REMAND REPORT AND OBJECTIONS OF THE ASSESSEE AND HELD THE YIELD ESTIMATION OF RICE AT 6 6% IS HIGHER THAN ADMITTED BY THE ASSESSEE AT 59% AND IN THE ABSENCE OF SPECIFIC DETAILS IN THE ACCOUNTS, THE LD. CIT(A) HAS DELETED THE ADDITION AND ALLOWED THE APPEAL. :-5-: I.T.A. N0. 2783/MDS/2016 5.1 AGGRIEVED BY THE ORDER OF THE LD. CIT(A), REVEN UE FILED AN APPEAL TO TRIBUNAL, THE LD. DR EXPLAINED THAT THE LD. CIT(A) HAS ERRED IN ESTIMATION OF YIELD AND THE ASSESSEE HAS NOT COMPLIED THE DETAILS AND M AINTAINING SINGLE PADDY STOCK REGISTER AND EMPHASISED ONLY ON THE NON-REJEC TION OF BOOKS OF ACCOUNTS BY THE ASSESSING AUTHORITY. WHEREAS, THE LD. AR REFE RRED TO THE LETTER ISSUED BY THE GOVERNMENT OF PUDUCHERRY DATED 24.03.2014 AT PA GE 16 AND 17 OF THE PAPER BOOK, WHERE CERTAIN FACTS MENTIONED ON THE YIELD OF PADDY OF GRADE A 60.75% AS AGAINST THE OUT TURN RATIO OF 68% FOR DOUBLE BOI LED RICE. THE LD. AR DREW ATTENTION TO THE PAGE 14 AND 15 OF THE PAPER BOOK, WHERE THE ASSESSEE HAS SUBMITTED THE STATEMENT OF SINGLE BOILED RICE AND P ADDY AND CLOSING BALANCE OF THE PADDY AND RICE. THE LD. AR DEMONSTRATED THE CO MPARISON OF THE YIELD RATIO FOR THE ASSESSMENT YEARS 2010-11 AT 60.46%, 2011-12 59.93%, 2012-13 59.7%, 2013-14 59.88%, 2014-15 60.02%. THE LD. AR FURTHER EXPLAINED THAT THE ASSESSEE HAS BEEN YIELDING SUCH PERCENTAGE OVER A P ERIOD OF TIME FOR THE EARLIER ASSESSMENT YEARS AND SUBSEQUENT ASSESSMENT YEARS AN D THE AVERAGE GRADE A PADDY YIELD AS REFERRED BY THE CIVIL SUPPLIES & CON SUMER AFFAIRS DEPARTMENT IS 60.7% AND PRAYED FOR DISMISSING OF REVENUE APPEAL. 6. WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATE RIAL ON RECORD AND JUDICIAL DECISIONS. THE LD.AR DEMONSTRATED ON YIELD WITH RATIOS AND STATEMENTS, WE ARE OF THE OPINION THAT THE ASSESSEE YIELD AT 59 % FOR THE CURRENT ASSESSMENT YEAR 2012-13 IN COMPARISON WITH THE EARLIER ASSESSM ENT YEAR AND SUBSEQUENT ASSESSMENT YEARS FALLS WITHIN AVERAGE YIELD AND FUR THER THE ASSESSEE IS IN THE :-6-: I.T.A. N0. 2783/MDS/2016 MANUFACTURING OF GRADE A PADDY, WHEREAS THE COMPA RISON MADE BY THE ASSESSING OFFICER AS PER THE SUBMISSIONS OF LD.AR I S DOUBLE BOILED RICE, WHERE THE YIELD IS OF HIGHER RATE AND BOTH CANNOT BE EQUATED AND LD.AR SUBSTANTIATED THE CLAIM IN SUPPORTING THE YIELD AT 59.9% WITH THE IND USTRIAL AVERAGE ISSUED BY THE GOVERNMENT DEPARTMENT IN LETTER DATED 24.03.2013 BE ING 60.7%. THEREFORE, WE ARE OF THE OPINION THAT THE LD. CIT(A) HAS DEALT ON THE DISPUTED ISSUE AND CONSIDERED THE FACTS, LEGAL PROVISIONS AND THE JUDI CIAL DECISIONS AND SUPPORTED MATERIAL EVIDENCE AND THE REMAND REPORT VIS-A-VIS E XPLANATIONS OF THE ASSESSEE AND DELETED THE ADDITION. ACCORDINGLY, WE ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF THE CIT(A) AND UPHELD THE SAME AND DISMISS THE GROUND OF APPEAL OF THE REVENUE APPEAL. 7. IN THE RESULT, THE REVENUE APPEAL IS DISMISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 3 RD DAY OF MAY, 2017 AT CHENNAI. SD/ - ( . ) ( A. MOHAN ALANKAMONY ) # / ACCOUNTANT MEMBER SD/ - ( . ) (G. PAVAN KUMAR) ) # /JUDICIAL MEMBER /CHENNAI, 0 /DATED: 3 RD MAY, 2017 JPV & )'23 43 /COPY TO: 1. %/ APPELLANT 2. )*% /RESPONDENT 3. 5 ( )/CIT(A) 4. 5 /CIT 5. 3 )'' /DR 6. 9 /GF