ACIT, New Delhi V. M/s Shree Bihari Forgings Pvt. Ltd., Delhi

ITA 3025/DEL/2010

• Counselvise Citation: 302520114 RSA 2010
• Duration Of Justice: 1 year(s) 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 08-09-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 15-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUSHA KHURANA
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH G GG G : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI R.P.TOLANI, JM AND SHRI K.G.BANSAL, AM R.P.TOLANI, JM AND SHRI K.G.BANSAL, AM R.P.TOLANI, JM AND SHRI K.G.BANSAL, AM R.P.TOLANI, JM AND SHRI K.G.BANSAL, AM ITA NO. ITA NO. ITA NO. ITA NO.3025 3025 3025 3025/DEL/201 /DEL/201 /DEL/201 /DEL/2010 00 0 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 200 200 200 2006 66 6- -- -07 0707 07 ASSTT.COMMISSIONER OF ASSTT.COMMISSIONER OF ASSTT.COMMISSIONER OF ASSTT.COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -8(1), 8(1), 8(1), 8(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. M/S SHREE BIHARI FORGIN M/S SHREE BIHARI FORGIN M/S SHREE BIHARI FORGIN M/S SHREE BIHARI FORGINGS PVT.LTD., GS PVT.LTD., GS PVT.LTD., GS PVT.LTD., D DD D- -- -31, MAIN MARKET, 31, MAIN MARKET, 31, MAIN MARKET, 31, MAIN MARKET, GALI DHARAMSHALA WALI, GALI DHARAMSHALA WALI, GALI DHARAMSHALA WALI, GALI DHARAMSHALA WALI, SHAKARPUR, SHAKARPUR, SHAKARPUR, SHAKARPUR, DELHI DELHI DELHI DELHI 110 092. 110 092. 110 092. 110 092. PAN : PAN : PAN : PAN : AAICS2507F. AAICS2507F. AAICS2507F. AAICS2507F. (APPELLANT) (RESPONDENT) APPELLANT BY : MS.ANUSHA KHURANA, SR.DR. RESPONDENT BY : SHRI SANDEEP SAPRA, ADVOCATE. ORDER ORDER ORDER ORDER PER PER PER PER R.P.TOLANI R.P.TOLANI R.P.TOLANI R.P.TOLANI, JM , JM, JM , JM : : : : THIS IS REVENUES APPEAL. FOLLOWING GROUNDS ARE R AISED:- 1. LD.COMMISSIONER OF INCOME TAX (APPEALS) ERRED, IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE, IN DELETING THE ADDITION OF RS.38,21,194/- MADE BY THE AO ON ACCOUNT OF DIFFERENCE IN CLOSING STOCK. 2. LD.COMMISSIONER OF INCOME TAX (APPEALS) ERRED, I N LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE, IN DELETING THE ADDITION OF RS.63,17,730/- MADE BY THE AO ON ACCOUNT OF ENHANCED COST OF PRODUCTION. 2. LEARNED DR RELIED ON THE ORDER OF THE ASSESSING OFFICER AND CONTENDS THAT THE CIT(A) HAS NOT GIVEN ANY REASONS FOR ALLOWING THE CLAIM OF THE ASSESSEE AND ONLY ON NON-SUBMISSION OF THE REMAND REPORT BY THE ASSESSING OFFICER, THE ASSESSEES APPEAL HAS BEEN ALLOWED. 3. LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, CONTENDS THAT THERE WAS A TYPOGRAPHICAL MISTAKE IN THE AUDIT ED STATEMENTS. ITA-3025/DEL/2010 2 ATTENTION IS INVITED TO PAGE 13 OF THE PAPER BOOK, ACCORDING TO WHICH, (A) THE STOCK OF FINISHED GOODS COMES TO 32,85,071 (B) AND THAT OF STOCK OF RAW MATERIAL COMES TO 88,96,360 (B). DUE TO INADVERTENT ERROR, THE FIGURES OF STOCK OF FINISHED GOODS AND R AW MATERIAL GOT INTERCHANGED WHILE FINALIZING THE STATEMENTS INASMU CH AS IN THE PROFIT & LOSS ACCOUNT, INSTEAD OF INCREASE/DECREASE IN STO CK OF FINISHED GOODS OF `32,85,071/- SHOULD HAVE BEEN PLACED AND IN RESP ECT OF SCHEDULE J, THE CLOSING STOCK OF RAW MATERIAL SHOULD HAVE BEEN `88,96,360/- INSTEAD OF `38,21,194/-. THE ASSESSING OFFICER WI THOUT ASKING THE ASSESSEES EXPLANATION MADE THE ADDITION. THIS POS ITION WAS EXPLAINED TO THE LEARNED CIT(A) BY FILING ADDITIONAL EVIDENCE IN THE FORM OF CORRECTED FIGURE. THE CIT(A) CALLED FOR THE REMAND REPORT OF THE ASSESSING OFFICER WHO KEPT A SILENCE. THE RELEVANT REMARK OF CIT(A) IS AS UNDER:- 2.3 REMAND REPORT :- A REMAND REPORT WAS SOUG HT FROM THE AO I.E. DCIT/ACIT, CIRCLE 8(1) VIDE THIS O FFICE NO.484 DATED 20/03/09. HE WAS ASKED TO FILE A REPO RT WITHIN 10 DAYS BUT TO NO AVAIL. A REMINDER WAS SEN T TO THE AO VIDE THIS OFFICE LETTER NO.113 DATED 05/05/09 AG AIN REQUESTING TO FILE THE REPORT WITHIN 10 DAYS BUT TH ERE WAS NO COMPLIANCE AGAIN ON PART OF THE LD.AO. THE AO C OULD NOT SEND REPORT EVEN AFTER 10 MONTHS OF SENDING THE LETTER ALONGWITH THE REMINDER. THERE IS NO POINT FOR WAIT ING ANY FURTHER FOR THE SAID REPORT IN AS MUCH AS THE APPEA L WAS FILED WAY BACK IN 28/01/09. I TREAT THE SILENCE OF THE AO AS HIS ACCEPTANCE OF THE CLAIM OF THE APPELLANT AND DE CIDE TO ADJUDICATE THE CASE ON THE BASIS OF MATERIAL AVAILA BLE ON RECORD AND SILENCE OBSERVED BY THE LD.AO. 4. THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDS TH AT THE SAID MISTAKE IN POSTING THE VALUE OF STOCK OF FINISHED G OODS AND RAW MATERIAL DOES NOT HAVE ANY IMPACT ON THE INCOME OF THE ASSESSEE. CIT(A) AFTER ADMITTING THE ADDITIONAL EVIDENCE DELE TED THE ADDITIONS MADE ON ACCOUNT OF DIFFERENCE IN CLOSING STOCK AND ENHANCED COST OF PRODUCTION OF `38,21,194/- AND `63,17,730/-. BESID ES OBSERVING THAT ITA-3025/DEL/2010 3 THE ASSESSING OFFICER IS NOT OPPOSING THE GROUND RA ISED BY THE ASSESSEE, HIS OBSERVATIONS IN PARAGRAPH 2.4 ARE AS UNDER:- 2.4 WHETHER THE CLAIM OF THE APPELLANT IS CORRECT OR NOT IS ESSENTIALLY A QUESTION OF FACT. TO DETERMINE THE F ACTUAL DETAILS A REMAND REPORT WAS SOUGHT FROM THE AO FORWARDING APPLICATION MADE BY THE APPELLANT U/R 46 A. THE LD.AR ON 19/02/10 HAS CATEGORICALLY STATED TILL THA T DATE THE APPELLANT WAS NEVER CALLED UPON BY THE AO IN CONNEC TION WITH REMAND PROCEEDINGS FOR WHICH APPLICATION U/R 4 6A HAS BEEN FILED BY THE APPELLANT COMPANY. THE APPELLANT IS REQUIRED TO MAINTAIN THE ACCOUNT AS PER THE PROVISI ONS OF THE LAW AND AS PER THE ACCOUNTING STANDARD AS PRESC RIBED IN IAS. BUT WHEN AO IS NOT OBJECTING THE GROUND OF THE APPELLANT AT THE REMAND STAGE AND WHEN THE SAME IS TO BE DONE AS PER THE FACTUAL EVIDENCE AS SUBMITTED U/R 4 6A, THE AO'S SILENCE IS CONSTRUED AS HIS AGREEMENT SPECIALL Y IN THE PRESENT CIRCUMSTANCES OF THE CASE. THE ADDITIONS M ADE ON A/C OF DIFFERENCE IN CLOSING STOCK AND ENHANCED COS T OF PRODUCTION OF RS.38,21,194/- AND RS.63,17,730/- RESPECTIVELY ARE HEREBY DIRECTED TO BE DELETED. 5. THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDS TH AT THE COPIES OF REVISED STATEMENT INCORPORATING THE CORRECT STOCK F IGURES I.E. FINISHED GOODS AT `38,21,194/-, THE PROFIT FIGURE REMAINS TH E SAME. BESIDES, IN THE NEXT ASSESSMENT YEAR, THE FIGURES OF STOCK REMA INS THE SAME I.E. :- 38,21,194 (FINISHED GOODS) + 1,01,38,924 (RAW MATER IAL) = 1,39,60,118/-. THIS FIGURE IS REFLECTED AS OB IN T HE BALANCE SHEET AS ON 31.3.2007. THE MISTAKE BEING ONLY IN PREPARING THE STATEMENTS AND CIT(A) HAVING DECIDED THE ISSUE AFTER CALLING FOR T HE DUE REMAND REPORT, THE ADDITION HAS BEEN RIGHTLY DELETED. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. FROM THE COPY OF THE BALANCE S HEET AS ON 31.3.2007, THE COST OF INVENTORIES COMES TO `1,39,6 0,118/- WHICH IS SUM TOTAL OF CLOSING STOCK OF FINISHED GOODS AND RA W MATERIAL. THE ADDITIONS WERE MADE BY THE ASSESSING OFFICER NOT ON ACCOUNT OF MISTAKEN ENTRIES BY THE ASSESSEE WITHOUT CALLING IT S EXPLANATION. THE ITA-3025/DEL/2010 4 SAME WAS DULY EXPLAINED BEFORE THE CIT(A) WHO ADMIT TED THE WORKING UNDER RULE 46A AND CALLED FOR THE ASSESSING OFFICER S REMAND REPORT. THE ASSESSING OFFICER DID NOT REPLY OR OPPOSE THE A SSESSEES WORKING. IN VIEW OF THE EXPLANATION AND CONTENTIONS OF THE L EARNED COUNSEL FOR THE ASSESSEE, FACTS AND CIRCUMSTANCES ON RECORD, WE SEE NO INFIRMITY IN THE ORDER OF THE CIT(A) DELETING THESE ADDITIONS. THE SAME IS UPHELD. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 2 ND DECEMBER, 2011. SD/- SD/- ( (( (K.G.BANSAL K.G.BANSAL K.G.BANSAL K.G.BANSAL) )) ) (R.P.TOLANI (R.P.TOLANI (R.P.TOLANI (R.P.TOLANI) )) ) ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER DATED : 02.12.2011 VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR