DHRUV CHAND, AMBEDKAR NAGAR V. INCOME TAX OFFICER, AMBEDKAR NAGAR

ITA 280/ALLD/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1843 (ITAT-ALLAHABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 17-07-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K SINGHSR
• Assessee Lawyers: PRAVEEN GODBALE
• Keywords: Unexplained investment; Set aside
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, ALLAHABAD BENCH, ALLAHABAD (THROUGH VIRTUAL COURT) BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO.76/ALLD/2018 ASSESSMENT YEAR: 2010-11 SRI SHIV SHANKAR DIXIT PROP., S/SHRI MISHRA TYRES PIRANPUR, FATEHPUR V. INCOME TAX OFFICER, RANGE-II(4), FATEHPUR TAN/PAN:ACLPD1395G (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI PRAVEEN GODBALE, ADVOCATE RESPONDENT BY: SHRI A. K. SINGH,SR. DR DATE OF HEARING: 07. 12. 2020 DATE OF PRONOUNCEMENT: 08.12. 2020 O R D E R PER SHRI VIJAY PAL RAO, JUDICIAL MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 21.12.2017 PASSED BY COMMISSIONER OF INCOME TAX (APPEALS), ALLAHABAD FOR THE ASSESSMENT YEAR 2010-11. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: I. THAT IN ANY VIEW OF THE MATTER THE EX-PARTE ASSESSMENT ORDER DATED 28.02.2014 U/S 144 OF THE IT ACT AS PASSED BY THE ASSESSING OFFICER AND HIS ACTIONS AS CONFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE HIS ORDER DATED 21.02.2017 ARE BAD BOTH ON THE FACTS AND IN LAW AND THEREFORE SO DETERMINED AND CONFIRMED INCOME AT RS. 11,37,403/- AS AGAINST THE RETURNED INCOME OF RS. ,1,37,403/- IS HIGHLY UNJUSTIFIED AND ILLEGAL IN THE FACTS AND CIRCUMSTANCES OF THE CASE. II. THAT IN VIEW OF THE MATTER OBSERVATIONS AND FINDINGS OF THE TWO LOWER AUTHORITIES IN THEIR ORDERS FOR MAKING AND CONFIRMING THE ARBITRARY ADDITIONS BY IGNORING ALL FACTS AND NORMS ARE HIGHLY UNJUSTIFIED, VAGUE, INCORRECT AND CONTRARY TO THE ACTUAL FACTS OF THE CASE AND HENCE THE SAME ARE LIABLE TO BE SPONGED OFF IN ALL FAIRNESS AND INTEREST OF JUSTICE. III. THAT IN ANY VIEW OF THE MATTER THE ADDITION OF RS. 9,38,353/- AS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED DEFERENCE IN STOCK AND HIS ACTION AS CONFIRMED BY THE CIT(A) ITA NO.76/ALLD/2018 ASSESSMENT YEAR:2010-11 2 IN ARBITRARY MANNER IGNORING THE CORRECT FACTS AND CITED CASE LAWS IS HIGHLY UNJUSTIFIED AND ILLEGAL, HENCE THE ADDITION IS LIABLE TO BE DELETED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. IV. THAT IN ANY VIEW OF THE MATTER THE ADDITION OF RS. 80,000/- MADE AND CONFIRMED ON ACCOUNT OF LIC PREMIUM BY THE TWO LOWER AUTHORITIES WITHOUT APPRECIATING THE CORRECT FACTS IS HIGHLY UNJUSTIFIED AND INCORRECT, HENCE THE ADDITION IS LIABLE TO BE DELETED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. V. THAT IN ANY VIEW OF THE MATTER THE INTEREST CHARGED UNDER DIFFERENT SECTIONS OF THE IT ACT IS HIGHLY UNJUSTIFIED AND ILLEGAL IN THE FACTS AND CIRCUMSTANCES OF THE CASE. VI. THAT IN ANY VIEW OF THE MATTER THE APPELLANT RESERVES HIS RIGHT TO TAKE ANY FRESH GROUND BEFORE HEARING OF THE APPEAL. 2. GROUND NOS. 1, 2 & 3 ARE REGARDING ADDITION MADE BY THE AO ON ACCOUNT OF DISCREPANCY IN THE CLOSING STOCK AS ON 31 ST MARCH, 2009 AND OPENING STOCK AS ON 1 ST APRIL, 2009. 3. THE ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN TRADING BUSINESS OF TYRES AND TUBES OF VARIOUS COMPANIES. DURING THE SCRUTINY ASSESSMENT, THE AO NOTED THAT THE ASSESSEE HAS SHOWN CLOSING STOCK OF RS. 03,03,250/- AS ON 31 ST MARCH, 2009 WHEREAS THE ASSESSEE HAS SHOWN OPENING STOCK OF RS. 13,01,604/- IN THE PROFIT AND LOSS ACCOUNT FOR THE YEAR UNDER CONSIDERATION. THE AO NOTED THAT THERE IS A DIFFERENCE OF RS. 09,98,353/- WHICH WAS ADDED BY THE AO TO THE INCOME OF THE ASSESSEE. THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE CIT(A) AND EXPLAINED THAT THE AO HAS TAKEN THE FIGURE FROM AUDIT REPORT IN WHICH A MISTAKE HAS CREPT IN RESPECT OF THE OPENING STOCK AS ON 01.04.2009 BECAUSE THE PURCHASES WERE ALSO INCLUDED IN THE SAID AMOUNT. THE CIT(A) DID NOT ACCEPT THIS EXPLANATION OF THE ASSESSEE AND UPHELD THE ORDER OF THE ASSESSING OFFICER ON THE GROUND THAT ASSESSEE HAS FAILED TO SUBSTANTIATE THIS EXPLANATION BY PRODUCING ANY EVIDENCE. 4. BEFORE THE TRIBUNAL, THE LEARNED AR OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS DULY EXPLAINED THE DISCREPANCIES NOTED BY THE AO IN RESPECT OF THE CLOSING STOCK AS ON 31 ST MARCH, 2009 AND OPENING STOCK ON 1 ST APRIL, 2009 WHICH WAS ITA NO.76/ALLD/2018 ASSESSMENT YEAR:2010-11 3 OCCURRED DUE TO MISTAKE IN THE AUDIT REPORT. THE LEARNED AR FURTHER SUBMITTED THAT AO HAS TAKEN ALL THESE FIGURES FROM THE AUDIT REPORT AND NOT CONSIDERED THE BOOKS OF ACCOUNTS. THUS HE HAS PRAYED THAT THE ASSESSEE MAY BE GIVEN ONE MORE OPPORTUNITY TO PRODUCE THE BOOKS OF ACCOUNTS AND RECONCILIATION OF THE ALLEGED DIFFERENCES IN THE CLOSING STOCK AS ON 31 ST MARCH, 2009 AND OPENING STOCK ON 01 ST APRIL, 2009. 5. ON THE OTHER HAND, THE LEARNED DR HAS OPPOSED THE MORE OPPORTUNITY TO BE GIVEN TO THE ASSESSEE AND CONTENDED THAT THE AO HAS GRANTED MORE THAN SUFFICIENT OPPORTUNITIES TO THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNTS AND OTHER DETAILS. HE HAS REFERRED TO THE ASSESSMENT ORDER AND SUBMITTED THAT THE ASSESSING OFFICER HAS STATED THAT DESPITE VARIOUS OPPORTUNITIES, THE ASSESSEE HAS NEVER PRODUCED BOOKS OF ACCOUNTS AND OTHER REQUIRED VOUCHERS FOR VERIFICATION. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 6. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD, IT IS NOTED THAT THE AO HAS MADE THE ADDITION OF RS. 09,98,353/- ON ACCOUNT OF DIFFERENCES IN THE CLOSING STOCK AS ON 31 ST MARCH, 2009 AND OPENING STOCK SHOWN IN THE PROFIT AND LOSS ACCOUNT FOR THE YEAR UNDER CONSIDERATION. IT IS EVIDENT FROM THE RECORD THAT THE ASSESSEE DID NOT PRODUCE THE BOOKS OF ACCOUNTS BEFORE THE AO AND THESE TWO FIGURES OF THE CLOSING STOCK AS ON 31 ST MARCH, 2009 AND OPENING STOCK ON 01 ST APRIL, 2009 WERE TAKEN BY THE AO FOR THE AUDIT REPORT. THE ASSESSEE HAS EXPLAINED BEFORE THE CIT(A) THAT DUE TO SOME MISTAKE IN THE AUDIT REPORT REGARDING THE OPENING STOCK, THE AO TOOK THE HIGHER FIGURE OF OPENING STOCK. SINCE THE BOOKS OF ACCOUNTS WERE NOT PRODUCED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AND THIS IS AN ISSUE PURELY BASED ON THE FACTS AS RECORDED IN THE BOOKS OF ACCOUNTS, THEREFORE, THIS ISSUE REQUIRES A PROPER VERIFICATION OF FACTS AND RECORD. ACCORDING, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE, THE ASSESSEE IS GRANTED ONE MORE OPPORTUNITY TO PRODUCE THE BOOKS OF ACCOUNTS AND NECESSARY DETAILS BEFORE THE ASSESSING OFFICER FOR VERIFICATION AND CONSIDERATION. THE AO SHALL RE-ADJUDICATE THIS ISSUE AFTER ITA NO.76/ALLD/2018 ASSESSMENT YEAR:2010-11 4 CONSIDERING THE BOOKS OF ACCOUNTS AND OTHER DETAILS TO BE PRODUCED BY THE ASSESSEE. NEEDLESS TO SAY THE ASSESSEE BE GIVEN AN APPROPRIATE OPPORTUNITY OF HEARING BEFORE PASSING THE FRESH ORDER. 7. GROUND NO. 4 IS ADDITION MADE BY THE AO ON ACCOUNT OF LIC PREMIUM PAID BY THE ASSESSEE OF RS. 80,000/- BY TREATING THE SAME AS UNEXPLAINED INVESTMENT. 8. I HAVE HEARD THE LEARNED AR AS WELL AS LEARNED DR AND PERUSED THE IMPUGNED ORDER OF THE AUTHORITIES BELOW. THE ASSESSING OFFICER HAS MADE ADDITION OF RS. 80,000/- ON ACCOUNT OF LIC PREMIUM PAID BY THE ASSESSEE OF RS. 80,000/- BY TREATING THE SAME AS UNEXPLAINED INVESTMENT ON THE GROUND THAT THE ASSESSEE HAS NOT PRODUCED EVIDENCE TO SHOW THAT THE SAME HAS BEEN DONE THROUGH BOOKS OF ACCOUNTS. THUS FOR WANT OF BOOKS OF ACCOUNTS, THE AO TREATED THE INVESTMENT AS UNEXPLAINED. SINCE THE ISSUE REGARDING ADDITION ON ACCOUNT OF DISCREPANCY IN THE CLOSING STOCK AS ON 31 ST MARCH, 2009 AND OPENING STOCK ON 01 ST APRIL, 2009 HAS BEEN SET ASIDE TO THE RECORD OF THE AO TO BE DECIDED AFRESH AFTER VERIFICATION OF BOOKS OF ACCOUNTS, THEREFORE THIS ISSUE IS ALSO REQUIRED TO BE RE-ADJUDICATED AFTER VERIFICATION OF BOOKS OF ACCOUNTS TO BE PRODUCED BY THE ASSESSEE. THUS, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 08/12/2020. SD/- [VIJAY PAL RAO] JUDICIAL MEMBER DATED: 08/12/2020 SH ITA NO.76/ALLD/2018 ASSESSMENT YEAR:2010-11 5 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) - 4. CIT 5. DR - BY ORDER ASSISTANT REGISTRAR