M/s. Maa Tarini Bastralaya, Khurda V. ITO, Sard-2(2), Bhubaneswar, Bhubaneswar

ITA 280/CTK/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 5953 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 14-08-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: P K PATNAIK
• Keywords: Principle of natural justice; Difference of opinion; Set aside
• Section: 143(3); 13; 263

Judgement Text

P A G E 1 | 6 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK SMC BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG , JUDICIAL MEMBER ITA NO 280 /CTK/201 9 ASSESSMENT YEAR : 2012 - 13 M/S. MAA TARINI BASTRALAYA, PLOT NO.78, BUDHA NAGAR, BHUBANESWAR. VS. ITO, WARD 2(2), BHUBANESWAR. PAN/GIR NO. AAGFM 8838 G (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI P.K.PATNAIK , AR REVENUE BY : SHRI SUBHENDU DUTTA, DR DATE OF HEARING : 14 / 1 2 / 20 20 DATE OF PRONOUNCEMENT : 3 / 2 /20 2 1 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A),1, BHUBANESWAR DATED 19.6.2019 FOR THE ASSESSMENT YEAR 2012 - 13 . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT THE ORDER OF THE LEARNED INCOME TAX OFFICER, WARD - 2(2),BHUBANESWAR PASSED FOR THE ABOVE YEAR U/S 143(3)/263 OF THE IT. ACT 1961 IS NOT JUST AND FAIR ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 2. THAT THE LEARNED I.T.O IS NOT JUSTIFIED IN THE DETERMI NING THE TOTAL INCOME OF THE APPELLANT FOR THE ABOVE YEAR AT RS. 24, 29,210.00 ONLY BY ADDING A SUM OF RS.17, 18,792.00 ONLY AS UNEXPLAINED CLOSING STOCK WITH THE INCOME ASSESSED EARLIER ON 31.03.2015 U/SL43 (3) OF THE I.T.ACT 1961 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 3. THAT THE EXPLANATIONS AND CLOSING STOCK STATEMENTS SUBMITTED BY THE APPELLANT REGARDING THE ALLEGED DISCREPANCY IN CLOSING STOCK ON THE DATE OF ITA NO280/CTK/2019 ASSESSMENT YEAR : 2012 - 13 P A G E 2 | 6 SURVEY AS HAS NOT BEEN CONSIDERED BY THE LEARNED I.T.O IS ILLEGAL AND ARBITRAR Y ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 4. THAT DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDING FOR THE ABOVE YEAR U/S 143(3) OF THE I.T. ACT 1961 ALL THE BOOKS OF ACCOUNTS INCLUDING PURCHASE AND SALE REGISTERS WERE PRODUCED BEFORE THE ASSESSING OFFICER AND AFTER DULY VERIFIED THE ASSESSMENT WAS COMPLETED AND INCOME WAS DETERMINED AT RS. 7,10,420.00 ONLY AND EXCESS AMOUNT OF ADVANCE TAX PAID WAS REFUNDABLE TO THE APPELLANT. SO UNDER SUCH CIRCUMSTANCES FURTHER ADDITION WHICH IS BASED ON DIFFERENCE OF OPINION IS ILLEGAL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 5. THAT THE ADDITION AS HAS BEEN MADE BY THE LEARNED I.T.O NOW BASING ON THE STATEMENT RECORDED F ROM ONE OF THE PARTNER OF THE APPELLANT FIRM ON THE DATE OF SURVEY IS NOT C ORRECT BECAUSE THE SAID STATEMENT WAS ALSO WITH THE POSSESSION OF THE LEARNED I.T.O AT THE TIME OF ORIGINAL ASSESSMENT MADE EARLIER U/S 143(3) OF THE I.T.ACT 1961 WHICH WERE CONSIDERED BY HIM DURING THE SAID ASSESSMENT PROCEEDING AND THE EXPLANATIONS SUBMI TTED BY THE APPELLANT REGARDING THE ALLEGED DISCREPANCY IN CLOSING STOCK WERE CONSIDERED AND ACCEPTED BY THE ASSESSING OFFICER. 6. THAT ON THE DATE OF SURVEY THE PARTNER OF THE APPELLANT FIRM GOT NERVOUS IN THE PRESENCE OF SO MANY DEPARTMENT OFFICERS AND HE WAS PRESSURIZED TO SIGN ON THE STATEMENT RECORDED BY THE DEPARTMENT OFFICERS AND ALSO TO GIVE POST DATED CHEQUE FOR THE PAYMENT OF ADVANCE TAX AS PER THEIR ESTIMATE. UNDER SUCH SITUATION THE PARTNER OF THE APPELLANT FIRM HAD NO OTHER OPTION AND THE SIGNED THE STATEMENT AND ISSUED POST DATED CHEQUE THOUGH HE WAS NOT LIABLE TO PAY SO MUCH AMOUNT OF TAX CONSIDERING ITS INCOME. 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE ORDER PASSED BY THE ITO U/S.143(3)/263 OF THE I.T.ACT,19 61 FOR THE YEAR IS ILLEGAL AND LIABLE TO BE QUASHED. 2. BRIEF FACTS OF THE CASE ARE THAT THE ORIGINAL ASSESSMENT WAS COMPLETED U/S.143(3) OF THE I.T.ACT, 1961 ON 31.3.2015 DETERMINING THE TOTAL INCOME AT RS.7,10,420/ - . THEREAFTER, THE LD CIT - 1, BHUBAN ESWAR OBSERVED THAT THE ASSESSING OFFICER HAS NOT CONSIDERED THE UNEXPLAINED CLOSING STOCK FOUND DURING THE COURSE OF SURVEY U/S.133A OF THE ACT AMOUNTING TO RS.17,18,792/ - , THEREFORE, HE SET ASIDE THE SAID ASSESSMENT ITA NO280/CTK/2019 ASSESSMENT YEAR : 2012 - 13 P A G E 3 | 6 ORDER U/S.143(3) DT.31.3.2015 VIDE ORDER U/S.263 DATED 2.3.2016 WITH A DIRECTION TO THE AO TO MAKE THE ASSESSMENT DENOVO . PURSUANT TO THE ORDER U/S.263 OF THE ACT, THE ASSESSING OFFICER MADE THE ASSESSMENT U/S.143(3)/263 OF THE ACT ON 14.12.2017 DETERMINING THE TOTAL IN COME AT RS.24,29,210/ - , INTER ALIA, MAKING ADDITION OF RS.17,18,792/ - ON ACCOUNT OF EXPLAINED CLOSING STOCK, WHICH WAS CONFIRMED IN FIRST APPEAL. 3. LD A.R. OF THE ASSESSEE SUBMITTED THAT REGULAR BOOKS OF ACCOUNT WERE PRODUCED BEFORE THE ASSESSING OFFICER AT THE TIME OF ORIGINAL ASSESSMENT MADE UNDER SECTION 143(3) OF THE ACT AND EXPLANATIONS WERE FURNISHED BEFORE THE AO. HENCE, IT WAS HIS SUBMISSION THAT THE ASSESSMENT IN PURSUANCE TO ORDER UNDER SECTION 263 OF THE ACT IS BAD IN LAW AND DESERVES TO BE ANN ULLED. 4. LD A.R. OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE MAKES THE VALUATION OF CLOSING STOCK ON THE BASIS OF PURCHASE VALUE OF THE MATERIALS WHEREAS DURING THE COURSE OF SURVEY OPERATION, THE REVENUE OFFICERS HAVE DETERMINED THE VALUE OF CLOSING STOC K ON THE BASIS OF SALE VALUE OF THE MATERIALS AND ON THE BASIS OF STATEMENT OF STAFF OF SALES COUNTER, WHO HAVE NO IDEA ABOUT THE PURCHASE VALUE OF THE MATERIALS ON ASSUMPTIONS AND PRESUMPTION. FOR THE ABOVE REASONS, THERE WAS DIFFERENCE BETWEEN THE ACTUA L VALUE OF CLOSING STOCK AS ON 23.3.2002 AND THE VALUE OF CLOSING STOCK DETERMINED BY THE DEPARTMENT SURVEY PARTY. ON THE COMPELLING SITUATION, THE ASSESSEE WAS FORCED TO SIGN THE STATEMENT RECORD ED AND TO PAY A POST - ITA NO280/CTK/2019 ASSESSMENT YEAR : 2012 - 13 P A G E 4 | 6 DATED CHEQUE FOR PAYMENT OF ADVANCE TA X AND ORIGINAL ASSESSMENT U/S.143(3) OF THE ACT WAS NOT ON THE BASIS OF ESTIMATE. THEREFORE, IT WAS HIS PRAYER THAT THE ADDITION OF RS.17,18,792/ - MADE AS UNEXPLAINED CLOSING STOCK MAY BE DELETED. 5. REPLYING TO ABOVE, LD D.R. SUPPORTED THE ORDERS OF LOWE R AUTHORITIES. LD D.R. SUBMITTED THAT DURING THE COURSE OF ASSESSMENT, THE ASSESSEE HAS ADMITTED THAT THERE WAS EXCESS STOCK OF RS.17,18,792/ - AS ON THE DATE OF SURVEY. HE SUBMITTED THAT THE CONTENTION OF LD A.R THAT THE ASSESSEE WAS PRESSURISED TO SIGN T HE STATEMENT RECORDED AND GIVE POST - DATED CHEQUE FOR PAYMENT OF ADVANCE TAX IS FALSE AND BASELESS AS THERE IS NOTHING ON RECORD TO SUBSTANTIATE THAT THE ASSESSEE WAS COMPELLED TO DO ABOVE ACT. 6. ON CAREFUL CONSIDERATION OF THE RIVAL SUBMISSIONS, FIRST OF ALL, I MAY POINT OUT THAT THE ASSESSING OFFICER HAS MADE ADDITION ON ACCOUNT OF UNEXPLAINED CLOSING STOCK OF RS.17,18,792/ - FOUND ON THE DATE OF SURVEY ON 23.12.2012 ON THE BASIS OF DISCREPANCY OF THE ACTUAL STOCK AND THE STOCK AS RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. TO ADJUDICATE THIS ISSUE, IT HAS TO BE FOUND OUT THAT WHETHER AT THE TIME OF SURVEY, THERE WAS EXCESS STOCK OR NOT. IT IS THE CONTENTION OF THE ASSESSEE THAT THE ASSESSEE MAKES THE VALUATION OF CLOSING STOCK ON THE BASIS OF PURCH ASE VALUE OF THE MATERIALS AND THE DEPARTMENT HAS DETERMINED THE VALUE OF CLOSING STOCK ON THE BASIS OF SALE VALUE. THE LD A.R. OF THE ASSESSEE HAS SUBMITTED COPIES OF PURCHASE AND SALE STATEMENT FOR THE PERIOD FROM 1.4.2011 TO 22.3.2012 AND ITA NO280/CTK/2019 ASSESSMENT YEAR : 2012 - 13 P A G E 5 | 6 1.4.2011 TO 3 1.3.2012 AND CLOSING STOCK STATEMENTS AS ON 22.3.2012 AND 31.3.2012, AS CLAIMED TO BE FURNISHED BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS. BUT NOWHERE, IN THE ASSESSMENT ORDER, IT IS REFLECTED THAT THE ASSESSEE HAS FURNISHED THE ABOVE DOCUMENTS BEFO RE THE ASSESSING OFFICER. IT IS NOT DISPUTED THAT THE ASSESSEE HAS AGREED BEFORE THE SURVEY TEAM THAT THERE WAS EXCESS STOCK OF 17,18,792/ - , AND ADVANCE TAX WAS PAID BY THE ASSESSEE. THE CONTENTION OF THE ASSESSEE THAT SUBSEQUENTLY THE STOCK WAS FOUND TA LLIED WITH ITS BOOKS OF ACCOUNT IS AN AFTERTHOUGHT AND NO EVIDENCE IN THIS REGARD WAS PRODUCED BEFORE THE LOWER AUTHORITIES IMMEDIATELY AFTER THE SURVEY. THE SURVEY WAS DONE IN THE PRESENCE OF THE ASSESSEE AND HENCE, IT CANNOT BE ALLEGED THAT THE ASSESSEE WAS FORCED TO SIGN THE RECORDED STATEMENT. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, I FIND NO INFIRMITY IN THE ORDER OF THE LD CIT(A) IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER. HENCE, I DISMISS THE GROUNDS OF AP PEAL OF THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 3 / 2 /20 2 1 . SD/ - ( CHANDRA MOHAN GARG) JUDICIAL MEMBER CUTTACK; DATED 3 / 2 /20 2 1 B.K.PARIDA, SPS (OS) ITA NO280/CTK/2019 ASSESSMENT YEAR : 2012 - 13 P A G E 6 | 6 COPY OF THE ORDER FORWARDED TO : BY ORDER SR . PVT. S ECRETARY ITAT, CUTTACK 1. THE APPELLANT : M/S. MAA TARINI BASTRALAYA, PLOT NO.78, BUDHA NAGAR, BHUBANESWAR 2. THE RESPONDENT. ITO, WARD 2(2), BHUBANESWAR. 3. THE CIT(A) - 1 BHUBANESWAR 4. PR.CIT - 1 , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//