Dr. Ashok Kumar HUF., Agra V. D.C.I.T., Circle- 4 (1), Agra

ITA 33/AGR/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94126 (ITAT-AGRA)
• Duration Of Justice: 3 year(s) 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-07-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 30-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BELU SINHA
• Assessee Lawyers: APPLICATION REJECTED
• Section: 143(3); 133A; 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SH RI G.C. GUPTA, VICE PRES ID ENT AND SHRI INTURI RAMA RAO , ACCOUNTANT MEMBER ITA NO. 33 / AG RA / 201 2 ASSESSMENT YEAR : 20 0 6 - 07 DR. ASHOK KUMAR HUF, VS. ASSTT. COMMISSIONER INCOME TAX , PROP. M/S. KOHINOOR GLASS HOUSE, CIR 4(1), AGRA. KASHMIRI BAZAR, AGRA. (PAN A ABHA 1771 R ) . (APPELLANT) (RESPONDENT) A PPELLANT BY : APPLICATION REJECTED RE SPONDENT BY : S MT. BELU SINHA, SR. D.R. DATE OF HEARING : 2 1 .07. 201 5 DATE OF PRONOUNCEMENT : 12.08 .2015 ORDER PER INTURI RAMA RAO , ACCOUNTANT MEMBER: T HIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - I I, AGRA DATED 29.09.2011 FOR THE A.Y. 200 6 - 07, RAISING THE FOLLOWING G ROUNDS OF APPEAL: - 1. BECAUSE ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSES BY LEARNED A.O. & LEARNED C. I T. APPEAL IS BAD, BOTH IN THE EYES OF LAW AND ON FACTS. 2. BECAUSE THE LEARNED A.O. HAS ERRED IN INVOKING THE PROVISIONS OF SEC 145 IGNORING THE FACTS ON RECORD AND REJECTING THE EXPLANATIONS OF THE ASSESSEE IN THE SUMMARY MANNER. THUS THE ADDITION OF RS.27,14,132.00 MADE BY THE LEARNED A.O. IS LIABLE TO BE DELETED. ITA NO.33/AGRA/2012 A.Y. 2006 - 07 2 3. BECAUSE THE LEARNED A.O. HAS ERRED IN INVOKING THE PROVISIONS OF SEC 145 BY WRONGLY INTERPRET ING THE JOTTINGS/ NOTING IN THE DIARIES. THUS THE ADDITION OF RS.27,14,132.00 MADE BY THE LEARNED A.O. IS LIABLE TO BE DELETED. 4. BECAUSE THE ESTIMATIONS OF SALES AT RS.6,00,000.00 AS AGAINST THE SALES OF ASSESSEE AS PER BOOKS OF ACCOUNTS OF ASSESSEE AT RS.5,02,57,666.00 IS EXCESSIVE, WRONG, BASELESS AND CONTRARY TO THE FACTS AND RECORD. THUS THE LEARNED A.O. HAS ERRED. 5. BECAUSE THE ESTIMATIONS OF G.P. @ 10 % IS WRONG, EXCESSIVE, BASELESS AND BASED ON SURMISES & CONJECTURES AND CONTRARY TO THE FACTS ON RECORD. THUS THE LEARNED A.O. HAS ERRED. 6. BECAUSE THE LEARNED C. I. T. APPEAL HAS ERRED IN OBSERVING THAT MERELY THE INCOMPLETE POSTINGS IN THE LEDGER WHEN THE PRIMARY BOOKS WAS FOUND COMPLETE TENDS TO INCOMPLETE LEDGER. THU S HE HAS ERRED IN CONFIRMING THE INVOKING THE PROVISIONS OF SEC 145. 7. BECAUSE THE LEARNED C. I. T. APPEALS HAS ERRED BY WRONGLY INTERPRETING THE EXPLANATIONS OF APPELLANT AS REGARDS TO DIFF IN STOCK TAKEN DURING PROCEEDINGS U/S 133A AND AS ESTIMATED IN PRO VISIONAL TRADING ACCOUNT. IT IS THEREFORE PRAYED TO KINDLY DELETE THE ADDITIONS MADE BY THE LEARNED A.O. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE APPELLANT IS A HUF ENGAGED IN THE BUSINESS OF TRADING OF S H E ET GLASS. THE RETURN OF INCOME F OR TH E A.Y. 2006 - 07 WAS FILED ON 29 TH OCTOBER, 2006 DECLARING INCOME OF RS.6,50,701/ - . SUBSEQUENTLY , THE CASE WAS TAKEN UP FOR SCRUTINY ASSESSMENT AND ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE INCOME TAX ACT , 1961 ( THE ACT HEREINAFTER ) VIDE ORDER DATED 22.12.2008 BY REJECTING THE BOOK RESULTS AND ESTIMATING THE SALES AT RS.6 CRORES AND G . P . THEREON AT 10% AND THEREBY MAKING ADDITION OF RS.27,14,132/ - AT A TOTAL INCOME ITA NO.33/AGRA/2012 A.Y. 2006 - 07 3 OF RS.33,64,833/ - AGAINST THE SAID RETURN OF INCOME , APPEAL WAS FILED BEFORE THE LD. CIT (A) - II , AGRA WHO VIDE ORDER DATED 29 TH SEPTEMBER , 2011 DISMISSED THE APPEAL VIDE PARA NO.3 .1 OF HIS ORDER WHICH READS AS UNDER : - FROM THE ABOVE IT IS CLEAR THAT EVERYTHING WAS NOT HUNKY DORY AS REGARDS THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSES SEE. ALSO, THE ARGUMENT OF THE LD. AR THAT THE APPELLANT IS ALMOST AN ILLITERATE PERSON AND WAS MADE TO SIGN CERTAIN PAPERS CANNOT CUT ANY ICE ON TWO COUNTS FIRSTLY WHEN THE ASSESSEE CAN TRANSACT BUSINESS OF CRORES YEARLY THEN A PLEA CANNOT BE TAKEN THA T HE DID NOT UNDERSTAND AS TO WHAT HE WAS SIGNING, SECONDLY NOTHING HAS BEEN BROUGHT ON RECORD THAT ANY UNDUE PRESSURE OR COERCION WAS EXERTED BY THE SURVEY TEAM. IF T HAT WAS SO THEN THE MA T TER SHOULD HAVE BEEN REPORTED TO THE HIGHER AUTHORITIES FOR REDRE SSAL. IT HAS ALSO NOT BEEN EXPLAINED AS TO WHY SURRENDER OF RS.25 LACS WAS MADE DURING THE SURVEY. I AGREE WITH THE LD. AR THAT STATEMENT MADE DURING THE SURVEY IS NOT BINDING. BUT, IF THE SURRENDER WAS NOT VOLUNTARY THEN THE SAME SHOULD HAVE BEEN RETRA CTED AT THE FIRST AVAILABLE OPPORTUNITY . NOTHING TO THE EFFECT THAT THIS WAS AGITATED BEFORE ANY OF THE AUTHORITIES HAS B E EN BROUGHT ON RECORD IN THESE CIRCUMSTANCE IT WAS REASONABLE ON THE PART OF THE AO TO ESTIMATE THE TURNOVER . THEREFORE, I AM OF THE OPINIO N THAT THE BOOKS OF ACCOUNTS HA VE BEEN RIGHTLY REJECTED BY THE A O BY INVOKING THE PROVISIONS OF SEC. 145. A S REGARDS THE ESTIMATION OF SALES AS T HE ASSESSEE COULD NOT RECONCILE THE STOCK FOUND AT THE TIME OF SURVEY TO VIS - - VIS THE BOOKS OF ACCOUNTS AND ENTRIES AS ENTERED IN THE DIARIES FOUND DURING THE SURVEY. THE OBSERVATION OF THE A O THAT THE STOCK AT THE TIME OF SURVEY WAS RS.7737148/ - AND AS PER PROVISIONAL TRADING ACCOUNT IT WAS RS.45510565/ - AND DURING THE ASSESSMENT PROCEEDINGS IT WAS RECOMP UTED AT RS. 8695185/ - HAS NOT BEEN REBUTTED BY THE APPELLANT AS TO WHAT SPECIFICALLY WENT WRONG AT THE TIME OF STOCK TAKING DURING SURVEY BY POINTING OUT THE DISCREPANCIES IN SPECIFIC ENTRIES AS RECORDED BY THE SURVEY TEAM. THEREFORE , IN THESE CIRCUMSTANCE S THE AO WAS RIGHT IN ESTIMATING THE TURNOVER OF THE APPELLANT AND HAVING REGARD TO FACTS AND CIRCUMSTANCES OF THE CASE THE ESTIMATION DONE BY HIM IS REASONABLE AND DOES NOT CALL FOR ANY DISTURBANCE. ANOTHER APPOINT OF AGITATION IS ADOPTION OF GP RATE OF 10% BY THE AO. HERE, I FIND HAT THE GP RATE HAS BEEN ADOPTED BY THE AO BY CITING A COMPARABLE CASE OF M/S KANPUR GLASS & PICTURE WHICH IS A GROUP CONCERN AND ALSO ASSESSEE S OWN CASE FOR A.Y. 2004 - 05. THEREFORE, THE ADOPTION OF GP RATE AT 10% CANNOT BE S AID TO BE EXCESSIVE ITA NO.33/AGRA/2012 A.Y. 2006 - 07 4 OR ARBITRARY AND THE ACTION OF THE A O IS UPHE LD. THUS, ALL THESE GROUNDS A RE DISMISSED. 3. BEING AGGRIEVED , THE ASSESSEE HA D COME UP WITH PRESENT APPEAL BEFORE US. ON THE DATE OF HEARING , NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE . AN ADJOURNMENT PETITION WAS FILED WHICH WAS REJECTED SINCE WE FIND THAT THERE ARE NO REASONABLE AND JUST CAUSE FOR GRANTING ADJ OURNMENT . THEREFORE , WE PROCEED TO D ISPOS E OF THIS APPEAL. 4. LD. SR . DEPARTMENTAL REPRESENTATIVE HAS PLACED RELIANCE ON ORD ERS OF LOWER AUTHORITIES A ND PRAYED THAT THE ORDER OF LOWER AUTHORITIES MAY BE UPHELD. 5. WE HAVE HEARD THE LD . SR. DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON REC ORD. WE FIND THAT IN THIS CASE THERE WAS A SURVEY OPERATION UNDER SECTION 133A OF THE ACT WHICH WAS CARRIED ON 08.11.2005 . DURING THE COURSE OF SURVEY OPERATIONS BY I NVESTIGATION WING , DIARIES AND LOOSE SHEETS CONTAINING INCRIMINATING INFORMATION WAS FOUND AND ON QUERY ON THIS TO THE ASSESSEE , THE ASSESSEE SURRENDERED A SUM OF RS.25 ,00,000/ - TOW A R D S THE STOCK. BEFORE THE LD. CIT (A) THE APPELLANT ARGUED THAT NO ADDITION CAN BE MADE MERELY BASED ON DISCLOSURE MADE DURING THE COURSE OF SURVEY OPERATIONS . THE SUBMISSIONS OF THE ASSESSEE WAS N OT FOUND ACCEPTABLE BY THE LD. CIT(A) AND TH E LD. CIT(A) CONFIRMED THE ORDER OF ASSESSMENT. HOWEVER , WE FIND THAT FOR ADOPTION OF RS.6 CRORES AS SALES THERE WAS NO BASIS OR MATERIAL AND HENCE WE DO NOT ACCEPT THE APPROACH ADOPTED BY THE A . O . FOR ESTIMATING SALES AT RS. 6 CRORS AND ALSO ITA NO.33/AGRA/2012 A.Y. 2006 - 07 5 G . P . MADE OF 10% . HOWEVER, KEEPING IN VIEW THE DEFICIENC IES FOUND BY THE A . O . DURING THE COURSE OF ASSESSMENT PROCEEDINGS , WE SUSTAIN THE ADDITION OF RS. 25 ,00,000/ - OFFERED BY THE APPELLANT HIMSELF . H ERE , WE MAY POINT OUT THAT WE ARE NOT SUSTAINING THE ADDITION MEREL Y BASED ON STATEMENT MADE BY THE ASSESSEE , B UT KEEPING IN VIEW SEVERAL DISCREPANCIES FOUND IN THE BOOKS OF ACCOUNT MAIN TA INED BY THE ASSESSEE, WE FEEL THA T THE AD DITION OF RS .25,00,000/ - IS JUST AND REASONABLE AND ACCORDINGLY APPEAL IS PARTLY ALLOWED . 6. IN THE RESULT, APP EAL FILED BY THE ASSESSEE IS PARTLY ALLOWED . (ORDER PRONOUNCED IN THE OPEN COURT ON 1 2.08. 2015 ) SD/ - SD/ - ( G.C. GUPTA ) ( INTURI RAMA RAO ) VICE PRESIDENT ACC OUNTANT MEMBER DATE: 12 TH AUGUST , 201 5 PB N/* COPY OF THE ORDER FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, AGRA B ENCH, AGRA