Kaliash Lal Chowdhary, Howrah V. ITO, Ward-48(4), Kolkata, Kolkata

ITA 30/KOL/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87701 (ITAT-KOLKATA)
• Duration Of Justice: 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 09-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

I.T.A. NO . 30 / KOL ./201 5 ASSESSMENT YEAR: 200 8 - 20 0 9 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA SMC BENCH, KOLKATA BEFORE SHRI GEORGE MATHAN , JUDICIAL MEMBER I.T.A. NO. 30 / KOL / 20 1 5 ASSESSMENT YEAR : 200 8 - 20 0 9 KAILASH LAL CHOWDHURY,................. .... ....... .... ............. .. .APP ELL ANT PROP. OF M/S. UNIVERSAL SALES CORPORATION, 4, STATION ROAD, LILUAH, HOWRAH - 711 204 [ PAN : A BYPC 8427 E ] - VS. - INCOME TAX OFFICER , ........................... ................... ... . RESPONDENT WARD - 48 ( 4 ), KOLKATA , 3, GOVERNMENT PLACE (WEST), KOLKATA - 700 0 01 APPEARANCES BY: SHRI MIRAJ D. SHAH, ADVOCATE , FOR THE ASSESSEE S HRI RAJESH KUMAR , J CIT, SR. D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : FEBRUARY 2 7 , 2 01 5 DATE OF PRONOUNCING THE ORDER : FEBRUARY 2 7 , 201 5 O R D E R PER GEORGE MATHAN : THIS IS AN APPEAL FILED BY THE ASSESSE E AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) - X XX , KOLKATA IN APPEAL NO. 347 / CIT(A) - X XX/WD - 48(4)/2010 - 11 D ATED 10 . 11 .201 4 FOR THE ASSESSMENT YEAR 200 8 - 0 9 . 2. SHRI MIRAJ D. SHAH, ADVOCATE, REPRESEN TED ON BEHALF OF THE ASSESSEE AND S HRI RAJESH KUMAR , JCIT, SR. D.R. REPRESENTED ON BEHALF OF THE REVENUE. 3. AT THE TIME OF HEARING, IT WAS SUBMITTED BY THE LD. A.R. THAT THE ONLY ISSUE IN THE ASSESSEE S APPEAL WAS AGAINST THE ACTION OF THE LD. CIT(APPEA LS) IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER OF AN AMOUNT OF RS.2,31,119/ - REPRESENTING UNACCOUNTED STOCK. IT WAS THE SUBMISSION THAT THERE WAS A SURVEY ON THE PREMISES OF THE ASSESSEE ON 18.07.2007. IT WAS THE SUBMISSION THAT THE ASSESSEE IS IN THE BUSINESS OF I.T.A. NO . 30 / KOL ./201 5 ASSESSMENT YEAR: 200 8 - 20 0 9 PAGE 2 OF 4 TRADING IN CHEMICALS AND MINERALS AS ALSO MANUFACTURING IN SMALL SCALE LIQUID SOAP AND LAKE COLOURS THROUGH HIS PROPRIETORSHIP BUSINESS . IT WAS THE SUBMISSION THAT ON THE DATE OF SURVEY, THE ASSESSEE WAS IN CHENNAI FOR THE MEDICAL TRE ATMENT OF HIS AILING WIFE. THE ASSESSEE S SON WAS PRESENT AT THE PREMISES. PHYSICAL STOCK WAS FOUND AND THE SAME WAS VALUED AT RS.12,99,366/ - , WHEREAS THE ASSESSEE S BOOK VALUE SHOWED THE SAME AT RS.10,68,247/ - . IT WAS THE SUBMISSION THAT THE STATEMENT WAS RECORDED FROM THE ASSESSEE S SON AND ON THE BASIS OF THE STATEMENT THE ADDITION HAS BEEN MADE. IT WAS THE SUBMISSION THAT AT THE OUTSET, IN THE COURSE OF STATEMENT RECORDED, NO STATEMENT FROM THE ASSESSEE S SON REGARDING EXCESS STOCK WAS TAKEN. FURTHER TH E ASSESSEE S SON IS NOT CONNECTED WITH THE ASSESSEE S BUSINESS AND IS NOT EVEN THE EMPLOYEE OF THE ASSESSEE AND CONSEQUENTLY HIS STATEMENT COULD NOT HAVE BEEN RELIED UPON. IT WAS THE FURTHER SUBMISSION THAT THE VALUATION AS DONE BY THE SURVEY TEAM WAS ON E STIMATE BASIS AND NOT BY APPLYING THE PRINCIPLES OF FIFO AND LIFO. IN FACT, THE ASSESSEE WAS FOLLOWING THE COST ON MARKET VALUE WHICHEVER WAS LOWER. HE PLACED BEFORE ME THE COPY OF THE STATEMENT RECORDED FROM THE ASSESSEE S SON DATED 18.07.2007. IT WAS THE SUBMISSION THAT THE ADDITION MADE ON THE BASIS OF THE SAID SURVEY STATEMENT WAS LIABLE TO BE DELETED. 4. IN REPLY, LD. SR. D.R. VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND LD. CIT(APPEALS). IT WAS THE SUBMISSION THAT EXCESS STOCK TO AN EX TENT OF RS.2,31,119/ - WAS FOUND IN THE COURSE OF SURVEY. IT WAS THE SUBMISSION THAT THE ADDITION WAS LIABLE TO BE CONFIRMED. 5. IN REPLY, LD. A.R. SUBMITTED THAT IN THE COURSE OF ASSESSMENT ALSO, THE ASSESSEE HAD PRODUCED QUANTITATIVE ANALYSIS OF PURCHASE S AND SALES. IT WAS ALSO THE SUBMISSION THAT AS ON THE CLOSE OF THE BUSINESS ON 18.07.2007, THE BOOK STOCK WAS RS.11,35,797/ - AND THE SURVEY TEAM HAD VALUED THE STOCK AT RS.12,99,366/ - . IT WAS THE FURTHER SUBMISSION THAT CERTAIN STOCK HAS ALSO BEEN CONSIDE RED IN WHICH THE ASSESSEE NEVER DEALT. I.T.A. NO . 30 / KOL ./201 5 ASSESSMENT YEAR: 200 8 - 20 0 9 PAGE 3 OF 4 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT THE OUTSET, A PERUSAL OF THE STATEMENT RECORDED IN THE COURSE OF SURVEY FROM SHRI MUKESH CHOWDHURY, THE SON OF THE ASSESSEE, CLEARLY SHOWS THAT THOUGH THE STATEMENT HAS BEEN RECORDED, THE ASSESSEE S SON HAS SPECIFICALLY MENTIONED THAT HE DOES NOT AGREE WITH THE STOCK AS TAKEN. FURTHER THE ASSESSEE S SON HAS BEEN COMPELLED TO GIVE FIVE CHEQUES BEARING CHEQUE NOS.274488 TO 274492 TOWARDS THE ESTIMATED TAX LIABILITY AND THES E CHEQUES WERE ALSO UNSIGNED. THE COMMITMENT SEEMS TO HAVE BEEN TAKEN FROM THE ASSESSEE S SON I.E. FATHER WILL COME AND SIGN THE CHEQUES ON A LATER DATE BEING 03.08.2007. NOW COMING TO THE STOCK INVENTORY TAKEN IN CONNECTION WITH THE SURVEY OPERATION AT TH E BUSINESS PREMISES OF THE ASSESSEE ON THE ITEMS FROM VARNISH, NITRIC ACID, COAL TAR, LIME STONE, TAR ACID, ULTRA OIL, UREA, ETC., THERE ARE 53 ITEMS IN THE STOCK STATEMENT. INTERESTINGLY THE QUANTITIES OF ALL THESE ITEMS ARE IN ROUND FIGURES. THIS ITSELF SHOWS THAT THE STOCK TAKEN IS ALSO PURELY ON AN ESTIMATE BASIS AND IS NOT TO THE ACTUAL STOCK AS PER PHYSICAL VERIFICATION. IN THESE CIRCUMSTANCES, I AM OF THE VIEW THAT NO ADDITION ON ACCOUNT OF THE DIFFERENTIAL OF STOCK CAN BE MADE IN SO FAR AS NO ACTUAL SPECIFIC DIFFERENCE HAS BEEN POINTED OUT. EVEN THE RATE WHICH HAS BEEN APPLIED IS NOT SUPPORTED BY ANY DOCUMENTS OR METHODS. THIS STATEMENT HAS BEEN RECORDED FROM A THIRD PARTY WHO HAS NO RELATION TO THE BUSINESS OF THE ASSESSEE. FURTHER EVEN AFTER TAKING FIVE CHEQUES THE ASSESSING OFFICER COULD RAISE ADDITIONAL DEMAND OF RS.50,000/ - ON THE ASSESSEE, WHICH ITSELF SHOWS THAT THE SURVEY DID NOT ACTUALLY BRING OUT ANY UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE. IN THESE CIRCUMSTANCES, THE ASSESSING OFFIC ER IS DIRECTED TO DELETE THE ADDITION MADE IN RESPECT OF THE UNDISCLOSED STOCK. 7 . IN THE RESULT, THE APPEAL FILED BY THE ASSEESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 7 TH FEBRUARY , 201 5 . SD/ - GEORGE MATHAN ( JUDICIAL MEMBER) KOLKATA, THE 2 7 TH D AY OF FEBRUARY , 201 5 I.T.A. NO . 30 / KOL ./201 5 ASSESSMENT YEAR: 200 8 - 20 0 9 PAGE 4 OF 4 COPIES TO : (1) KAILASH LAL CHOWDHURY, PROP. OF M/S. UNIVERSAL SALES CORPORATION, 4, STATION ROAD, LILUAH, HOWRAH - 711 204 (2) INCOME TAX OFFICER, WARD - 48(4), KOLKAT A, 3, GOVERNMENT PLACE (WEST), KOLKATA - 700 001 (3) COMMISSIONER OF INCOME - TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX ( 5 ) THE DEPARTMENTAL REPRESENTATIVE ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S .