Smt. Parbati Das, Kendrapada V. ITO, Paradeep

ITA 287/CTK/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7184 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 07-03-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 10-06-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: R P MOHAPATRA
• Keywords: Unexplained investment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO. 287 /CTK/2015 ASSESSMENT YEAR : 2010 - 2011 PARBATI DAS, W/O, JUGAL KISHORE DAS, TIMIMUHANI, KENDRAPARA . VS. ITO, WARD 2, PARADEEP PAN/GIR NO. ABRPD 2025 J (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI R.P.MOHAPATRA, REVENUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 07 /03 / 2017 DATE OF PRONOUNCEMENT : 07/03 / 2017 O R D E R THIS IS AN APPEAL FILED BY THE ASSES SEE AGAINS T THE ORDER OF CIT(A), CUTTACK DATED 27.03.2015 , FOR THE ASSESSMENT YEAR 2010 - 2011. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. FOR THAT THE ORDER PASSED BY THE LD. CIT (APPEALS) IS ILLEGAL, ARBITRARY AND BEREFT OF ANY MERIT AND THUS, DESERVES TO BE QUASHED IN LIMINE. 2. FOR THAT THE LD. CIT (APPEALS) HAS ERRED IN RESORTING TO THE WEIGHTED AVERAGE METHOD WHEN THE APPELLANT HAS SHOWN GROSS RECEIPTS FROM RETAIL TRADING ON THE BASIS OF TURNOVER, WHICH IS NOT DISPUTED BY THE AO OR THE CIT(A) AND HAS SHOWN NET PROFIT @ 10% WHICH IS MUCH HIGHER THAN THE MINIMUM OF 5% AS HAS BEEN PROVIDED UNDER THE STATUTE. 3. FOR THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT TO THE TUNE OF RS.17,76,662/ - ON THE FLIMSY GROUND THAT THE APPELLANT COULD NOT PRODUCE ANY EVIDENCE BEFORE THE CIT(A) TO JUSTIFY THE SOURCE OF SUCH INCOME, WHEN THE APPELLANT IN TH E WRITTEN 2 ITA NO. 287 /CTK/2015 ASSESSMENT YEAR : 2010 - 2011 \ SUBMISSION HAD IN FACT DELIBERATED IN DETAIL REGARDING THE SOURCE OF THE SAME. 3. THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE, SHRI R.P.MOHAPATRA FILED AN APPLICATION FOR ADJOURNMENT OF HEARING DULY SIGNED BY SHRI SASWAT ACHARYA, SR. AUTHOR ISED REPRESENTATIVE OF THE ASSESSEE ON THE GROUND THAT HE IS UNWELL. IT IS OBSERVED FROM THE RECORDS THAT THIS APPEAL WAS ADJOURNED ON VARIOUS DATES ON ONE GROUND OR THE OTHER AT THE REQUEST OF THE A.R. OF THE ASSESSEE I.E. ON 21.10.2016,18.11.2016, 30.11 .2016 AND 11.1.2017. THEREFORE, THE ADJOURNMENT APPLICATION FILED BY THE A.R. OF THE ASSESSEE ON THE GROUND THAT HE WAS SICK WHICH WAS NOT SUPPORTED BY DOCTORS CERTIFICATE WAS REJECTED BY THE BENCH AS THE REASONS SEEKING FOR ADJOURNMENT WAS FOUND TO BE N OT A PLAUSIBLE ONE K EEPING IN VIEW THE OBSERVATION OF THE THEN CHIEF JUSTICE OF INDIA, HONBLE H.L.DATTU THAT THE PREVALENT ADJOURNMENT CULTURE IS ONE OF THE MAIN REASONS FOR THE HUGE PENDENCY IN THE COURTS . FURTHER, IN JANUARY, 2008, JUSTICE SWATANTER K UMAR, THE THEN CHIEF JUSTICE OF THE BOMBAY HIGH COURT HAD REMARKED THIS IS AN UNHAPPY STATE OF AFFAIRS AS THE DAY PROGRESSED AND MORE REQUESTS FOR ADJOURNMENT CAME IN, WITH MOST OF THEM BEING SOUGHT DUE TO THE ABSENCE OF COUNSELS OR LACK OF PREPARATION BY LAWYERS. STILL FURTHER, THE SAME SENTIMENT WAS ALSO EXPRESSED BY JUSTICE R M LODHA, THE FORMER CHIEF JUSTICE OF INDIA. ON HIS VERY FIRST DAY IN OFFICE AS CHIEF JUSTICE OF INDIA, THE LEARNED JUDGE STRONGLY CONVEYED THAT HEARING IN CASES WOULD NOT BE ADJOURNED ON THE MERE ASKING OF LAWYERS. THE CULTURE OF ADJOURNMENT HAS TO GO. SEEKING ADJOURNMENT OF SCHE DULED HEARING OF CASES AT THE DROP OF A HAT MUST GO. UNLESS A LAWYER 3 ITA NO. 287 /CTK/2015 ASSESSMENT YEAR : 2010 - 2011 \ FALLS VERY ILL, REQUESTS FOR ADJOURNMENT MUST NOT BE MADE . FURTHER, SHRI R.P.MOHAPATRA APPEARED BEFORE ME AND WAS AUTHORIZED BY VAKALATANAMA TO APPEAR AND ARGUE THE APPEAL, DID NOT MAKE ANY ARGUMENT THEREFORE, THE APPEAL WAS HEARD EXPARTE QUA THE ASSESSEE AND DISPOSED OF CONSIDERING THE SUBMISSION OF LD D.R. AND MATERIALS AV AILABLE ON RECORD. 4. THE FIRST ISSUE INVOLVED IN THIS APPEAL IS THAT THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING TH E ACTION OF THE ASSESSING OFFICER IN DETERMINING THE NET PROFIT @ 10% THAN THE RATE OF 5% PROVIDED UNDER THE STATUTE. 5. THE BRIEF FACTS OF THE CASE ARE T HAT A SURVEY OPERATION U/S.133A OF THE ACT WAS CARRIED ON IN THE BUSINESS PREMISES OF THE ASSESSEE AND THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS NOT VALUED THE CLOSING STOCK OF SILVER ORNAMENTS PROPERLY. THE ASSESSEE HAS NOT SHOWN ANY AMOUNT OF CLOSING STOCK AND SUBMITTED THAT NO BOOKS OF ACCOUNT WERE MAINTAINED. THE ASSESSING OFFICER FURTHER FOUND THAT AN AMOUNT OF INVESTMENT OF RS.17,76,662/ - WAS MADE BY THE ASSESSEE DURING THE YEAR AND THERE HAVE BEEN NO ACCOUNTS MAINTAINED FOR SUCH INVESTMENT AND SOURCE OF SUCH INVESTMENT WERE NOT EXPLAINED BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFI CER, THEREFORE, TREATED THE AMOUNT AS UNEXPLAINED INCOME OF THE ASSESSEE AND ADDED THE AMOUNT TO THE TOTAL INCOME OF THE ASSESSEE. 6. DURING THE COURSE OF APPEAL BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT THE INCOME WAS SHOWN AS PER SECTION 44AF OF THE ACT AND, THEREFORE, THE ASSESSEE WAS NOT REQUIRED T O MAINTAIN THE BOOKS OF ACCOUNT 4 ITA NO. 287 /CTK/2015 ASSESSMENT YEAR : 2010 - 2011 \ AND ONLY REQUIRED TO SHOW NET PROFIT @ 5% OF THE GROSS RECEIPTS. IT WAS SUBMITTED THAT THERE IS NO SCOPE OF CONSIDERING THE CLOSING STOCK, OPENING STOCK WITHDRAWALS FROM THE BANKS ETC. U/S. 44AF OF THE ACT. IT WAS SUBMITTED THAT THE SOURCE OF INVESTMENT OF RS.17,76,662/ - , WAS THAT SHE WA S THE ONLY LEGAL HEIR TO HER FATHER AN D THE MONEY WAS GIVEN TO HER BY HER FATHER WHO DIED IN 2009 AND THE SAME MONEY WAS INVESTED BY HER IN DIFFERENT INSTRUMENTS. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE WAS NOT SUPPOSED TO MAINTAIN BOOKS OF ACCOUNTS TO DETERMINE HER INCOME U/S. 44AF OF THE ACT. THE ASSESSING OFFICER OBSERVED THAT FOR USI NG THE PROVISIONS OF THIS SECTION , THE ASSESSEE HAS TO KEEP THE DETAILS OF TURNOVER AT LEAST. DURING SURVEY U/ S. 133 A OF THE ACT, THE ASSESSING OFFICER OBSERVED THAT THE GROSS TURNOVER OR GROSS PURCHASES W ERE NOT FOUND . THE ASSESSING OFFICER OBSERVED THAT THE CLOSING STOCK OF SILVER JEWELLERY OF RS.5,02,307/ - WAS FOUND AND SAME WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. THIS CLOSING STOCK WAS VALUED BY THE ASSESSING OFFICER ON THE MARKET PRICE. 7. ON APPEAL, THE CIT(A) OBSERVED THAT THIS BENCH OF THE TRIBUNAL IN THE CASE OF KHIMJI DAYABHAI JE WELLERS VS. ITO,WARD - L,BARIPADA IN ITA NO.501/CTK/2012 FOR AY 2008 - 09 , ORDER DATED 14.12.2012 HELD THAT IN THE GOLD ORNAMENT BUSINESS VAL UATION OF CLOSING STOCK AS PER LI FO METHOD OR FIFO METHOD WOULD NOT HOLD GOOD. THE TRIBUNAL DELETED THE ADDITION TO THE CLOSING STOCK MADE BY THE ASSESSING OFFICER BY VALUING THE SAME AS PER FIFO M ETHOD. THE TRIBUNAL ACCEPTED THE WEIGHTED AVERAGE PRICE METHOD OF VALUATION OF CLO SING STOCK AS HAS BEEN DONE BY THE ASSESSEE. THEREFORE, 5 ITA NO. 287 /CTK/2015 ASSESSMENT YEAR : 2010 - 2011 \ THE CIT(A) HELD THAT THE WEIGHTED AVERAGE PRICE METHOD OF VALUAT ION OF CLOSING STOCK WAS MORE APPROPRIATE FOR VALUATION OF GOLD AND SILVER ORNAMENTS AS THEIR PRICE IS EVER CHANGING AND DISMISSED THE GROUND OF APPEAL OF THE ASSESSEE. 8. BEFORE ME, NO EVIDENCE HAS BEEN FILED BY THE ASSESSEE TO SHOW THAT THE VALUATION OF CLOSING STOCK OF SILVER JEWELLERY OF RS.5,02,307/ - MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) WAS EXCESSIVE OR WAS NOT IN ACCORDANCE WITH THE REGULARLY ADOPTED METHOD OF ACCOUNTING BY THE ASSESSEE. THEREFORE, I DO NOT FIND ANY GOOD AND JUSTIFIABLE REASON TO INTERFE RE WITH THE ORDER OF THE CIT(A), WHICH IS HEREBY CONFIRMED AND THE GROUND OF APPEAL OF THE ASSESSEE IS DISMIS SED. 9. THE SECOND ISSUE INVOLVED IN THIS APPEAL IS THAT THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING THE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT OF RS.17,76,662/ - . 10. THE CIT(A) OBSERVED THAT THE INVESTMENT IN DIFFERENT SECURITIES WAS MADE BY THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE HAS SHOWN THAT SHE HAD MADE CASH DEPOSIT OF RS.24,00,000/ - DURING THE YEAR, WHICH HAS BEEN CLAIMED TO HAVE BEEN RECEIVED FROM THE BUSINESS AND FROM HER FAT HER. THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE REGARDING RECEIPT OF SUCH AMOUNT FROM HER FATHER AND HER TURNOVER WAS WITHIN THE LIMITS OF PROVISIONS OF SECTION 44AF OF THE ACT . ACCORDING TO THE CIT(A), TO DEPOSIT 6 ITA NO. 287 /CTK/2015 ASSESSMENT YEAR : 2010 - 2011 \ RS.17,76,662/ - , THE ASSESSEE HAD TO EA RN THAT MUCH INCOME DURING THE YEAR, WHEREAS THE ASSESSEE HAS SHOWN INCOME OF RS.3,45,312/ - . HENCE, HE CONFIRMED THE ORDER OF THE ASSESSING OFFICER AS THE STATEMENT OF THE ASSESSEE WAS WITHOUT ANY EVIDENCE. 11. SIMILARLY BEFORE ME ALSO, NO EVIDENCE WAS F ILED TO EXPLAIN THE SOURCE OF INVESTMENT OF RS.17,76,662/ - . THEREFORE, I DO NOT FIND ANY GOOD AND JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER OF THE CIT(A), WHICH IS HEREBY CONFIRMED AND GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 12 . IN THE RESULT , APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRO NOUNCED IN THE COURT ON 07/03 /2017 IN THE PRESENCE OF PARTIES. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 07/03 /2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT PARBATI DAS, W/O, JUGAL KISHORE DAS, TIMIMUHANI, KENDRAPARA. 2. THE RESPONDENT. ITO, WARD - 2, PARADEEP. 3. THE CIT(A) , CUTTACK 4. CIT , CUTTACK 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//