Shri Pradeep Kumar Khandelwal, V. The ITO 5 (2),

ITA 284/IND/2008

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 6020 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 01-02-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 23-06-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Assessee Lawyers: R P MANDOVARA

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH AND SHRI V.K. GUPTA, AM ITA NO.284/IND/08 A.Y. 2004-05 PRADEEP KUMAR KHANDELWAL PROP. M/S. HIRA COTTON FIBERS, INDORE (PAN ACMPK 2988 D) .APPELLANT VS ASSISTANT COMMISSIONER OF INCOME TAX 5(2), INDORE .RESPONDENT APPELLANT BY : SHRI R.P. MANDOVARA, ADV. RESPONDENT BY : SMT. APARNA KARAN, SR. DR O R D E R PER JOGINDER SINGH, JM THIS APPEAL IS BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 18.3.2008. THE FIRST GROUND RAISED IS THAT ON THE F ACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME-TAX (A PPEALS) ERRED IN ENHANCING THE ALLEGED HOUSEHOLD WITHDRAWALS FROM RS.36,000/- TO RS.1,68,000/- WHICH IS ARBITRARY AND UNWARRANTED. DURING HEARING, WE HAVE HEARD SHRI R.P. MANDOVARA, LEARNED COUNSEL FOR THE ASSESSEE AND SMT. APARNA KA RAN, LEARNED ADDL. CIT, SR. DR. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE ASSESSEE IS DEALING IN COTTON BUSINESS I.E. TRADING AND MANUFACTURING I N COTTON, GETTING IT GINNED FROM WHICH RUI AND COTTON SEEDS ARE DERIVED. THE ASSESSEE SHOWED RS.94,389/- AS 2 HOUSEHOLD WITHDRAWALS. THE ASSESSEE IS A FAMILY OF FOUR MAJOR PERSONS ALONG WITH ONE DAUGHTER OF FOUR MONTHS. THE ASSESSING OFFICER E STIMATED RS.3000/- PER MONTH APART FROM REGULAR WITHDRAWALS IN JOINT FAMILY, CON SEQUENTLY, RS.36,000/- WERE ADDED TO POCKET EXPENSES. ON APPEAL, THE LD. CIT(A) ENHANCED THE HOUSEHOLD WITHDRAWALS AND DIRECTED TO BE TAKEN AT RS.1,68,000 /-. THUS, THE AMOUNT OF RS.1,32,000/- WAS ENHANCED. ON CONSIDERATION OF TOT AL FACTS, IT WAS CLAIMED BY THE ASSESSEE THAT THERE IS NO VEHICLE MAINTAINED BY THE ASSESSEE AND ALSO NO MAID SERVANT. IN THE JOINT FAMILY, THE WITHDRAWALS OF RS .3,61,726/- WAS CLAIMED. HOWEVER, THE LD. DR POINTED OUT THAT THERE IS NO JO INT FAMILY AS THE ASSESSEE FAMILY IS LIVING SEPARATELY. WE HAVE FOUND THAT CLEAR FACT S ARE NOT OOZING OUT, THEREFORE, WITHOUT COMMENTING FURTHER, WE DIRECT THE ASSESSING OFFICER THAT IT WILL BE SUFFICIENT IF FOR THE INDIVIDUAL FAMILY OF THE ASSE SSEE, THE WITHDRAWALS ARE TAKEN AT RS.5,000/- PER MONTH FOR HOUSEHOLD EXPENSES WHICH C OMES TO RS.60,000/-, THEREFORE, THE ASSESSING OFFICER IS DIRECTED TO ADO PT THE FIGURE OF RS.60,000/- AND CALCULATE ACCORDINGLY, THEREFORE, THIS GROUND OF TH E ASSESSEE IS PARTLY ALLOWED. 2. THROUGH NEXT GROUND, THE ASSESSEE HAS CHALLENGED THE ADDITION OF RS.7,55,831/- FOR UNDERVALUATION OF CLOSING STOCK. THE CONTENTION RAISED ON BEHALF OF THE ASSESSEE IS THAT TWO KINDS OF KAPAS I.E. A & B WAS PURCHASED BY THE ASSESSEE OUT OF WHICH THE ASSESSEE ONLY GINNED A QUALITY KAP AS AND SOLD THE SAME. THE B QUALITY KAPAS WAS NOT GINNED WHICH REMAINED IN THE STOCK AND WAS VALUED AT THE COST PRICE. AS PER THE ASSESSEE, A & B QUALITIES BO TH WERE CONSIDERED BY THE ASSESSING OFFICER WHEREAS THE B QUALITY PURCHASE WA S ONLY 1/3 RD OF THE TOTAL 3 PURCHASES. IT WAS POINTED OUT THE PURCHASE PRICE OF A QUALITY COTTON WAS RS.12,523.27 AND THAT OF B QUALITY WAS ONLY RS.853. 90 ONLY. IT WAS POINTED OUT THAT THE ASSESSEE IS NOT HAVING ANY GINNING FACTORY. ON THE OTHER HAND, THE LD. SR. DR DEFENDED THE IMPU GNED ORDER BY CONTENDING THAT NO DETAILS, AS CLAIMED BY THE ASSES SEE, WERE FURNISHED, THEREFORE, THE ASSESSEE IS DELIBERATELY INTERMINGLING BOTH THE QUALITIES SIMPLY TO DEFRAUD THE REVENUE. 3. ON CONSIDERATION OF RIVAL SUBMISSIONS, WE HAVE F OUND THAT TRUE FACTS ARE NOT OOZING OUT AS THE ASSESSEE HAS NOT EXPLAINED THAT A S AND WHEN THE B GRADE KAPAS WAS PROCESSED/GINNED AND ULTIMATELY, WHAT HAPPED TO B GRADE KAPAS. IN VIEW OF THESE FACTS, IN THE ABSENCE OF THESE DETAILS, THE A SSESSEE IS DIRECTED TO FURNISH THESE DETAILS BEFORE THE ASSESSING OFFICER WHO IS DIRECTE D TO EXAMINE THE CLAIM OF THE ASSESSEE AFRESH. THE ASSESSEE IS ALSO AT LIBERTY TO FURNISH EVIDENCE, IF ANY, TO SUBSTANTIATE ITS CLAIM FOR WHICH DUE OPPORTUNITY BE PROVIDED TO THE ASSESSEE. THIS ISSUE IS, THEREFORE, ALLOWED FOR STATISTICAL PURPOS ES ONLY. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 24 TH FEBRUARY, 2010. SD SD (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER FEBRUARY 24 TH 2010 !VYAS! 4 COPY TO APPELLANT, RESPONDENT, CIT, CIT(A), DR, GUAR D FILE