ITO, CHITTORGARH V. M/s. Riddhi Siddhi Tiles P. Ltd., CHITTORGARH

ITA 387/JODH/2013

• Counselvise Citation: 38723314 RSA 2013
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 12-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Assessee Lawyers: U C JAIN
• Keywords: Rejection of books of accounts
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER ITA NO.387/JODH/2013 ASSESSMENT YEAR: 2008-09 THE INCOME TAX OFFICER, VS. M/S RIDDHI SIDDHI TIL ES P. LTD. WARD-3, KILA ROAD, A-184, RICCO INDUSTRIAL AREA, CHITTORGARH. CHITTORGARH. (PAN: AACCR 5641 M). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.A. JOSHI, D.R. RESPONDENT BY : SHRI U.C. JAIN & SHRI RAJENDRA JAI N DATE OF HEARING : 20.11.2013 DATE OF PRONOUNCEMENT : 22.11.2013 ORDER PER HARI OM MARATHA, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2008 -09 IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), UDAIPUR DATED 28.03.2013. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE COMPANY IS ENGAGED IN THE MANUFACTURING OF MARBLE SLABS AND TILES. FO R A.Y. 2008-09 IT FILED RETURN ON 26.09.2008 DECLARING LOSS OF RS.33,367/-. HOWEVER, THE ASSESSMENT WAS MADE UNDER SECTION 145(3) OF THE INCOME TAX ACT, 1961, THE ACT FOR SHORT, AT A TOTAL 2 ITA NO.387/JODH/2013 A.Y. 2008-09 INCOME OF RS.22,95,626/- AS AGAINST THE LOSS SHOWN BY THE ASSESSEE. IN ARRIVING AT THE ABOVE INCOME, A SURVEY UNDER SECTION 133A OF TH E ACT WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE ON 10.03.2008. D URING THE SURVEY, THE ASSESSEE AGREED TO SURRENDER THE VALUE OF EXCESS STOCK AND C ASH FOUND AND DETERMINED ON PHYSICAL VERIFICATION. A STATEMENT OF THE ASSESSEE WAS RECORDED UNDER SECTION 133A OF THE ACT AND THE COMPANY AGREED TO DECLARE V ALUE OF EXCESS CASH AND STOCK WHICH COMES TO RS.15,04,928/- AS ESTIMATED AT THE T IME OF SURVEY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. NOTICED SOME DISCREPANCIES REGARDING FREIGHT CHARGES TO RAW MATERIALS PURCHASES, POWER C ONSUMPTION PER UNIT OF PRODUCTION AND CONSUMPTION OF BLADE/SEGMENT OF SLAB PRODUCTION. ON THE BASIS OF THESE DISCREPANCIES, THE A.O. FOUND THE BOOKS OF AC COUNT OF THE ASSESSEE AS UNRELIABLE AND HAS REJECTED THE SAME UNDER THE PROV ISIONS OF SECTION 145(3) OF THE ACT AS HE WAS NOT SATISFIED ABOUT THE CORRECTNESS O R COMPLETENESS OF THE BOOKS. AFTER REJECTING THE BOOKS HE HAS MADE THE IMPUGNED ADDITION AND IN FIRST APPEAL, HOWEVER, THE LD. CIT(A) HAS FOUND THAT THE G.P. RAT E DECLARED BY THE ASSESSEE IS ON THE BASIS OF BOOKS OF ACCOUNTS AND OTHER ACCOUNTING RECORDS REGULARLY MAINTAINED BY IT AND THERE IS NO OTHER ADVERSE EVIDENCE AGAINS T THE ASSESSEE. HE HAS FOUND THAT IN CASE THE SURRENDERED AMOUNT IS ADDED, THE G.P. O F THE YEAR WORKS OUT TO 18.76% AS ESTIMATED AT 16.65% BY THE A.O. THEREFORE, HE H AS DELETED THE IMPUGNED ADDITION. 3 ITA NO.387/JODH/2013 A.Y. 2008-09 3. NOW THE REVENUE IS AGGRIEVED AND HAS FILED THIS APPEAL. THE MAIN CRUX OF THE REVENUE AS ADVOCATED BY THE LD. DEPARTMENTAL RE PRESENTATIVE IS THAT THE LD. CIT(A) HAS WRONGLY DELETED THE ADDITION OF RS.15,04 ,928/- MADE BY THE A.O. BY APPLYING PROVISIONS OF SECTION 145(3), EVEN AFTER U PHOLDING THE REJECTION OF APPLICATION OF THIS SECTION. 4. AFTER HEARING BOTH THE SIDES, WE FIND FOR A FACT THAT THE ASSESSEE HAS NOT CHALLENGED THE REJECTION OF BOOKS OF ACCOUNT BEFORE US AND, THEREFORE, THE REJECTION OF BOOKS OF ACCOUNTS REMAINS UNCHALLENGED. HOWEVER , WHEN THE SURRENDERED AMOUNT IS INCLUDED IN THE INCOME DECLARED BY THE AS SESSEE, THE G.P. RATE OF THE ASSESSEE COMES TO 18.76% WHICH IS BETTER THAN LAST YEARS G.P. IT IS A SETTLED POSITION OF LAW THAT EVEN AFTER REJECTION OF BOOKS OF ACCOUNTS, NO ADDITION CAN BE MADE WITHOUT ANY BASIS. ANY STATEMENT RECORDED UND ER SECTION 133A HAS GOT NO EVIDENTIARY VALUE QUA THE ASSESSEE AS IT HAS BEEN H ELD BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. S. KHADER KHAN SON REP ORTED IN (2012) 25 TAXMAN.COM 413 (SUPREME COURT) THE SURRENDER OF INC OME ON ACCOUNT OF EXCESS STOCK IS DEFINITELY TOWARDS ASSESSEES BUSINESS INC OME AND CANNOT BE SEPARATELY ADDED AS HAS BEEN DONE BY THE A.O. ACCORDINGLY, WE UPHOLD THE IMPUGNED FINDING OF THE LD. CIT(A) AND DISMISS THE APPEAL OF THE REV ENUE. 4 ITA NO.387/JODH/2013 A.Y. 2008-09 5. IN THE RESULT, APPEAL OF THE REVENUE STANDS DISM ISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 22.11.2013) SD/- SD/- (N.K. SAINI) (HARI OM MARATHA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 22 ND NOVEMBER, 2013 PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, JODHPUR BENCH, JODHPUR 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE T RIBUNAL, JODHPUR