M/s A.K. Medicines, Agra V. I.T.O.-4(1), Agra

ITA 357/AGR/2011

• Counselvise Citation: 35720314 RSA 2011
• Duration Of Justice: 1 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 10-10-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 19-09-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Keywords: Reasonable cause
• Section: 133A; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 357/AGRA/2011 ASSTT. YEAR : 2006-07 M/S. A.K. MEDICINES, VS. INCOME-TAX OFFICER, 19/43, KUCHA SADHU RAM, 4(1), AGRA. AGRA.(PAN : AAEFA 3547 L) (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 10.10.2012 DATE OF PRONOUNCEMENT OF ORDER : 19.10.2012 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A)-II, AGRA DATED 01.06.2011 FOR THE ASSESSMENT YEAR 2006- 07 ON THE FOLLOWING GROUNDS : 1. BECAUSE THE ASSESSMENT COMPLETED UNDER SECTION 144 IS BAD IN LAW AS THERE WAS REASONABLE CAUSE FOR NON-COMPLI ANCE ON THE DATE FIXED AND THUS NO PROPER OPPORTUNITY WAS PROVIDED B EFORE MAKING OF THE ADDITION. 2. BECAUSE THE INVENTORY OF THE STOCK FOUND IN THE SHOP WAS NOT PREPARED AFTER PHYSICAL COUNTING OF EACH ITEM OF ME DICINES. 3. BECAUSE THE AUTHORITIES BELOW FAILED TO APPRECI ATE THAT INVENTORY OF STOCK WAS PREPARED ONLY IN RESPECT OF MEDICINES FOUND IN SHOP AND NO INVENTORY WAS PREPARED OF THE STOCK IN GODOWN AND THERE WAS NO INSTANCE OF OUT OF BOOKS SALES FOUND DURING THE COURSE OF SURVEY. ITA NO. 357/AGRA/2011 2 4. BECAUSE, ON THE FACTS OF THE CASE, ADDITION OF RS.4,33,700/- FOR EXTRA PROFIT AND CONFIRMATION OF THE SAME BY TH E LD. CIT(A) IS UNJUSTIFIED AND HIGHLY EXCESSIVE. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT SURVEY U/ S. 133A OF THE IT ACT WAS CARRIED OUT BY THE DEPARTMENT ON 15.02.2006 AS NOTE D IN THE ASSESSMENT ORDER. THE STOCK TO THE EXTENT OF RS.31,88,973/- WAS FOUND SHO RT BY THE SURVEY PARTY. SINCE SHORTAGE OF STOCK WAS NOT EXPLAINED, THEREFORE, THE AO FOUND THAT IT WAS OBVIOUS CONCLUSION THAT THE SAME WAS SOLD BY THE ASSESSEE O UTSIDE THE BOOKS OF ACCOUNT. THEREFORE, THE SAME WAS TREATED AS SUPPRESSED SALE AND THE AO REJECTED THE BOOKS OF ACCOUNT AND BY APPLYING G.P. RATE SHOWN BY THE A SSESSEE, ESTIMATED THE EXTRA PROFIT ON SUCH SUPPRESSED SALE AT RS.4,33,700/- AND THE SAME WAS ADDED TO THE INCOME OF THE ASSESSEE. THE ASSESSEES MAIN PLANK O F ARGUMENTS BEFORE THE LD. CIT(A) WAS THAT STOCK OF MEDICINES KEPT IN GODOWN W AS NOT TAKEN INTO ACCOUNT, THEREFORE, STOCK WAS FOUND SHORT. THE LD. CIT(A), H OWEVER, FOUND THAT THE DETAILS AVAILABLE ON RECORD THAT NO SUCH PLEA WAS MADE DURI NG THE SURVEY OPERATION AS WELL AS AT THE ASSESSMENT STAGE. THE ASSESSEE DID NOT PR ODUCE ANY EVIDENCE BEFORE THE AO AT THE ASSESSMENT STAGE. THEREFORE, EXPARTE ASSE SSMENT WAS PASSED. EVEN BEFORE THE LD. CIT(A), NO SUCH EVIDENCE WAS FOUND T O SUPPORT THE CONTENTION RAISED AT THE APPELLATE SAGE. THEREFORE, THE PLEA OF THE A SSESSEE WAS TOTALLY UNFOUNDED AND WAS REJECTED. THE ADDITION WAS ACCORDINGLY CONFIRME D. THE LD. CIT(A) ALSO ITA NO. 357/AGRA/2011 3 JUSTIFIED THE ACTION OF THE AO IN PASSING THE EXPAR TE ASSESSMENT. THEREFORE, THE APPEAL WAS DISMISSED. 3. THE APPEAL WAS TAKEN UP FOR HEARING TIME TO TIME AND REGISTERED NOTICES WERE SENT TO THE ASSESSEE, BUT THE ASSESSEE DID NOT FILE ANY PAPER BOOK ON ANY DATE OF HEARING. WHEN THE APPEAL WAS LASTLY FIXED ON 10.10. 2012, NOTICE SENT TO THE ASSESSEE THROUGH REGISTERED POST WAS SERVED. AD CAR D DULY SERVED UPON THE ASSESSEE IS AVAILABLE ON RECORD. HOWEVER, NONE APPE ARED ON BEHALF OF THE ASSESSEE DESPITE SERVICE OF NOTICE. THE LD. DR RELIED UPON T HE ORDERS OF THE AUTHORITIES BELOW. 4. ON CONSIDERATION OF THE FACTS OF THE CASE IN THE LIGHT OF FINDINGS OF AUTHORITIES BELOW, WE DO NOT FIND ANY JUSTIFICATION TO INTERFER E WITH THE ORDERS OF THE AUTHORITIES BELOW. IT IS NOT IN DISPUTE THAT DURING THE COURSE OF SURVEY, STOCK WAS FOUND SHORT BY THE SURVEY PARTY. THE ASSESSEE DID NOT EXPLAIN S HORTAGE OF STOCK AT THE TIME OF SURVEY PROCEEDINGS OR ASSESSMENT PROCEEDINGS. WHATE VER PLEA WAS TAKEN BEFORE THE LD. CIT(A) WAS NOT SUPPORTED BY ANY EVIDENCE ON REC ORD. THUS, IT IS ESTABLISHED ON RECORD THAT THERE WAS SHORTAGE IN THE STOCK FOUND A T THE TIME OF SURVEY. THEREFORE, THE AO WAS JUSTIFIED IN CONCLUDING THAT THE SAME ST OCK WAS SUPPRESSED BY THE ASSESSEE AS SOLD OUT OF BOOKS. WHATEVER G.P. RATE W AS SHOWN BY THE ASSESSEE WAS ITA NO. 357/AGRA/2011 4 APPLIED ON SUCH SUPPRESSED SALES AND INCOME WAS COM PUTED ACCORDINGLY. HONBLE GUJRAT HIGH COURT IN THE CASE OF CIT VS. PRESIDENT INDUSTRIES, 258 ITR 654 HELD THAT ADDITION CANNOT BE MADE OF ENTIRE SALE PROCEED S AND ONLY PROFIT EMBEDDED IN SALE PROCEEDS COULD BE TAXED. FURTHER, THE ASSESSEE DID NOT AVAIL OF ANY OF THE STATUTORY NOTICES BEFORE THE AO. THEREFORE, THE AO WAS JUSTIFIED IN PASSING THE EXPARTE ORDER, WHICH IS ALSO CONFIRMED BY THE LD. C IT(A). CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY MERI T IN THE APPEAL OF THE ASSESSEE. THE SAME IS ACCORDINGLY DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY