The ACIT,Vapi Circle, Vapi V. Shri Dhirubhai N.Kachhadia(HUF), Vapi

ITA 3176/AHD/2011

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8829 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 06-03-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 15-12-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 133A; 201; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT CAMP BEFORE: S H RI RAJPAL YADAV , JUDICIAL MEMBER AND SHR I AMARJIT SINGH , ACCOUNTANT MEMBER THE ACIT, VAPI CIRCLE, VAPI (APPELLANT) VS DHIRUBHAI NANJIBHAI KACHHADIA (HUF), GUJARAT STEEL SUPPLIERS, AD A RSH SHOPPING CENTER, GIDC, VAPI PAN: AAFHD1710B (RESPONDENT) REVENUE BY : S H RI ALOK KUMAR , SR. D . R. ASSESSEE BY: S H RI RAJ ESH UPADH Y AY , A.R. DATE OF HEARING : 06 - 03 - 2 01 7 DATE OF PRONOUNCEMENT : 31 - 03 - 2 017 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS REVENUE S APPEAL FOR A.Y. 2008 - 09 , AR IS ES FROM ORDER OF THE C IT(A), VALSAD DATED 15 - 09 - 2011 IN APPEAL NO. CIT(A)/VLS /342/10 - 11 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 3176 / A HD/20 11 A SSESS MENT YEAR 200 8 - 09 I.T.A NO. 3176/AHD/2011 A.Y. 2008 - 09 PAGE NO ACIT VS. DHIRUBHAI NANJIBHAI KACHHADIA (HUF) 2 2. THE REVENUE HAS RAISED FOLLOWI NG GROUND OF APPEAL: - ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE ADDITION OF RS. 70,40,450/ - ON ACCOUNT OF DISCLOSED STO CK. 3. BRIEF FACTS OF CASE ARE THAT R ETURN OF INCOME DECLARING TOTAL INCOME OF RS. 85,08,090/ - WAS FILED ON 30 TH SEPTEMBER, 2008. THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) WAS ISSUED ON 29 TH SEPTEMBER, 2009. IN THIS CASE, DURING THE COURSE OF SURVEY, THE ASSESSEE HAD MADE DISCLOSURE OF INCOME TO THE E XTENT OF RS. 80,35 , 000/ - (EXCESS S TOCK OF RS. 70,40,450/ - + EXCESS CASH OF RS. 9,94,550/ - ). THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAD NOT DISCLO SED THE AMOUNT DECLARED AT THE T IME OF SURVEY. T HE ASSESSING OFFICER HAS OBSERVED THAT AMOU NT OF PURCHASES SHOWN IN THE TRA DING AND PROFIT AND L OSS A/C AT RS. 6,23,48, 155/ - WHEREAS THE ASSESSING OFFICER NOTICED THAT AS PER THE INFORMATION IN THE AUDIT REPORT THE VALUE OF TOTAL PURCHASE QUANTITY OF 1999020 @ RS. 29.25 COMES TO RS. 5,84,71,3 35/ - . ON MAKIN G COMPARISON THE ASSESSING OFFICER COME TO THE CON CLUSION THAT VALUE OF PURCHASE S WAS SHOWN EXCESS BY RS. 37,76,820/ - IN THE P&L A/C IN VIEW OF THESE OBSERVATION S, THE ASSESSING OFFICER HAD REJECTED THE BOOKS OF ACCOUN T S OF THE ASSESSEE AN D MADE ADDITION OF R S. 70,40,450/ - TO THE TOTAL INCOME OF THE ASSESSEE BY STATING THAT DECLARATION OF STOCK MADE DURING SURVEY WAS NOT REFLECTED IN THE GROSS PROFIT PERCENTAGE. AGGRIEVED AGAINST THE IMPUGNED ORDER OF THE ASSESSING OFFICER, THE ASSESSEE P REFERRED APPEAL BEFORE THE LD. I.T.A NO. 3176/AHD/2011 A.Y. 2008 - 09 PAGE NO ACIT VS. DHIRUBHAI NANJIBHAI KACHHADIA (HUF) 3 CIT(A). LD. CIT(A) HAS DELETED THE ADDITION MADE BY THE ASSESSIN G OFFICER BY OBSERVING AS UNDER: - 6.1 OBSERVATION OF THE A.O. : - THE A.O. HAS GIVEN HIS FINDING IN PARA 2 - 4 OF THE ASSESSMENT ORDER. FOR THE SAKE OF AVOIDING REPETITION THE FINDINGS ARE SUMMARIZED THAT THE A.O. DISAGREED WITH THE COMPUTATION OF TOTAL INCOME INCLUDING THE AMOUNT DISCLOSED AT THE TIME OF SURVEY. AS EVIDENT, DURING THE SURVEY THE APPELLANT MADE DISCLOSURE OF INCOME TO THE EXTENT OF RS. 80,35,000/ - (EXCESS STOCK RS. 70,40,450/ - + EXCESS CASH RS. 9,94,550/ - ) AND THE APPELLANT DULY DISCLOSED IN THE R/I FILED. THE A.O. WAS OF THE OPINION THAT THE APPELLANT HAD NOT DISCLOSED THE AMOUNT DECLARED AT THE TIME OF SURVEY BECAUSE THE APPELLANT CANNOT SHOW THE UNDISCLOSED INCOME AS CLOSING STOCK. I HAVE PERUSED THE COMPUTATION OF TOTAL INCOME FILED WITH THE R/I. THE APPELLANT HAD RIGHTLY DISCLOSED THE AMOUNT OF DE CLARED AT THE T I M E OF SURVEY. WHAT THE A.O. MISSED OUT WAS IF T HE INCOME IS GENERATED IT HAS TO HAVE CORRESPONDING ASSETS. IN THIS CASE THE UNDISCLOSED INCOME IS REFLECTED IN THE FORM OF CLOSING STOCK WHICH IS PERFECT AND IN ORDER. THEREFORE, THERE IS NO UNDER - STATEMENT OF INCOME. AT THE SAME TIME IF THE ADD ITION IS SUSTAINED, THAT WILL AMOUNT TO DOUBLE TAXATION OF THE SAME AMOUNT. IN VIEW OF THE ABOVE, THE A.O. IS DIRECTED TO DELETE THE ADDITION. THE APPELLANT SUCCEEDS IN THIS GROUND OF APPEAL . 4. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US , LD. DR CONTENDED THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER AND HE SUPPORTED THE ORDER OF THE LD.CIT(A) . ON THE OTHER HAND, LD. C OUNSEL SUPPORTED THE ORDER OF LD. CIT(A) AND ALSO SUBMITTED PAPER BOOK CONTAININ G INFORMATION RELATING TO COPY OF ITR , COMPUTATION OF INC OME FOR ASSESSMENT YEAR 2008 - 09 , WRITTEN SUBMISSION MADE BEFORE CIT(A) AND ASSESSING OFFICER , S TATEMENT OF STOCK, STATEMENT RECORDED U/S. 133A ETC. 5. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. ON PERUSAL OF THE RECORD, WE NOTICED THAT THE ASSESSEE HAD I.T.A NO. 3176/AHD/2011 A.Y. 2008 - 09 PAGE NO ACIT VS. DHIRUBHAI NANJIBHAI KACHHADIA (HUF) 4 MADE DISCLOSURE OF INCOME DURING THE COURSE OF SURVEY TO THE EXTENT OF RS. 80,35,000/ - (EXCESS STOCK OF RS. 70,40,450/ - + EXCESS CASH OF RS. 9,94,550/ - ) . WE HAVE ALSO NOTI CED THAT IN THE COMPUTATION OF TOTAL INCOME THE ASSESSEE HAD SHOWN NET PROFIT AS PER PROFIT AND LOSS A/C AT R S. 4,93,328/ - AND ADDED RS. 80,35,000/ - DECLARED AT THE TIME OF SURVEY, THEREFORE, TOTAL INCOME WAS SHOWN AT RS. 85 , 08 , 09 1 / - . THE ASSESSING OFFICER H AS VERIFIED THE PURCHASES SHOWN IN THE TRADING AND PROFIT AND LOSS A/C AT RS. 6,23,48,155/ - WITH THE PURCHASE S QUANTITY 1999020 AND THE RATE OF VALUING THE STOCK @ RS. 29.25 SHOWN IN THE AUDIT REPORT. T HE ASSESSING OFFICER COME TO THE CONCLUSION THAT VALUE OF PURCHASES WAS SHOWN EXCESS BY RS. 37,76,820/ - IN THE P&L A/C . BECAUSE OF THESE COMPARISON THE ASSESSING OFFICER COMES TO THE CONCLUSION THAT PURCHASES FINALLY REFLECTED IN THE BOOKS OF ACCOUNTS ARE SHOWN MORE BY RS. 37,36,820/ - . WE HAVE CONSI DERED THE ABOVE MENTIONED FACTS AND FINDINGS AND FIND THAT THE ASSESSING OFFICER OBSERVED DISCREPANCY IN THE VALUE OF PURCHASES RECORDED IN THE P&L A/C AS COMPARED TO THE VALUE OF PURCHASES DETERMINED ON THE BASIS OF INFORMATION FOUND IN THE AUDIT REP ORT. IN THIS CONNECTION, WE FIND THAT THE ASSESSING OFFICE R HAS NOT SUPPORTED HIS FINDING OF ADDING RS. 70,40,450/ - UNDER THE HEAD ADDITION OF DISCLOSED STOCK OF SURVEY. IN THIS CONNECTION WE HAVE EXAMINED THE PAPER BOOK AND FIND THAT IN THE COMPUTATION OF TOTAL INCOME THE ASSESS EE HAD ADDED RS.80,35,000/ UNDER THE HEAD DECLARATION MADE AT THE TIME OF SURVEY TO THE INCOME OF RS.4,93,328 TAKEN FROM THE P&L A/C AS A RESULT TOTAL INCOME OF RS.85,08,091 WAS SHOWN IN THE RETURN OF INCOME FILED BY THE ASSESSE E. THESE FACTS AND FINDINGS POINT OUT THAT ASSESSING OFFICER HAD MADE ADDITION OF RS. I.T.A NO. 3176/AHD/2011 A.Y. 2008 - 09 PAGE NO ACIT VS. DHIRUBHAI NANJIBHAI KACHHADIA (HUF) 5 70,40,450/ - WITHOUT ANY JUSTIFICATION WHILE POINTING OUT THE DISCREPANCY RS. 37,76,820 ONLY IN THE PURCHASES AS PER ANALYSIS MADE BY HIM. IN VIEW OF THE ABOVE FIN DINGS IN OUR CONSIDERED OPINION DISCREPANCY NOTICED IN THE VALUE OF PURCHASES TO THE EXTENT OF RS. 37,76,820 ONLY REQUIRED PROPER VERIFICATION WITH RELEVANT SUPPORTING DOCUMENTS TO FIND OUT THE BASIS OF VALUATION OF PURCHASES SHOW N IN THE AUDIT REPORT AN D IN THE P&L A/C. T HEREFORE, IN THE INTEREST OF JUSTICE WE RESTORE THE ISSUE TO THE ABOVE EXTENT TO THE ASSESSING OFFICER TO DECIDE A FRESH AFTER PROVIDING OPPORTUNITY TO THE ASSESSEE AND AFTER CONSIDERING ANY RELEVANT SUPPORTING MATERIAL PROVIDED BY THE A SSESSEE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PR ONOUNCED IN THE OPEN C OURT ON 31 - 03 - 201 7 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTAN T MEMBER AHMEDABAD : DATED 31 /03/2017 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,