The ITO, Ward-7(2), Ahmedabad V. M/s. Seven Earth, Ahmedabad

ITA 3951/AHD/2008

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1839 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 15-03-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 04-12-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: U S RAINA SRDR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE SHRI D.K. TYAGI, HONBLE JUDICIAL MEMBER AND SHRI A.N.PHAUJA, HONBLE ACCOUNTANT MEMBER ITA NO.3951/AHD/2008 ASSESSMENT YEAR:2005-06 DATE OF HEARING:15.3.11 DRAFTED:16.3.11 INCOME TAX OFFICER, WARD-7(2), AHMEDABAD V/S. M/S. SEVEN EARTH, SHOP NO.1-2, 1-3, EARTH COMPLEX, OPP. KANAK KALA, ANANDNAGAR ROAD, SATELLITE, AHMEDABAD PAN NO.AAUFS8365C (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI U.S. RAINA SR-DR RESPONDENT BY:- NONE O R D E R PER D.K. TYAGI, JUDICIAL MEMBER:- THIS IS REVENUES APPEAL AGAINST THE ORDER OF COMM ISSIONER OF INCOME- TAX(APPEALS)-XI, AHMEDABAD IN APPEAL NO. CIT(A)-XI/ 532/JAN-08/07-08 DATED 10-10-2008 FOR THE ASSESSMENT YEAR 2005-06. 2. THE REVENUE HAS TAKEN THE FOLLOWING GROUND:- 1. THE LD. COMMISSIONER OF INCOME TAX (A)-XI, AHME DABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 12,03,462/- MADE ON ACCOUNT OF EXCESS STOCK FOUND DURING THE COURSE OF SURVEY TAXED U/S.69B OF THE I.T. ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. COMMISSIONER OF INCOME TAX (A)-XI, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. ITA NO. 3951/AHD/2008 A.Y. 2005-06 ITO WD-7(2) ABD V. M/S. SEVEN EARTH PAGE 2 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF RETAIL TRADING IN READYMADE GARMENTS AND STITCHI NG OF GARMENTS. THERE WAS A SURVEY OPERATION IN ASSESSEES CASE AND IT WAS NO TICED BY THE SURVEY PARTY THAT THE ASSESSEE HAD UNACCOUNTED STOCK OF RS.12,03 ,462/-. THE ASSESSEE DISCLOSED THE SAME TOWARDS ADDITIONAL INCOME AND OF FERED THE SAME FOR TAX PURPOSE. THE ASSESSEE ALSO PAID TAX ON THE ADDITION AL INCOME. THE ASSESSING OFFICER, HOWEVER, WAS NOT SATISFIED WITH THE ENTRIE S PASSED IN THE BOOKS OF ACCOUNTS AND HE WAS OF THE VIEW THAT THE DISCLOSED STOCK WAS DEBITED AND ALSO CREDITED TO THE TRADING ACCOUNT AND THEREBY TH E ASSESSEE HAS SQUARED UP THE STOCK DISCLOSED AT THE TIME OF SURVEY. THEREFOR E, ASSESSING OFFICER MADE FURTHER ADDITION OF RS.12,03,462/-. AGGRIEVED BY TH IS ORDER OF ASSESSING OFFICER ASSESSEE WENT IN APPEAL BEFORE LD. CIT(APPEALS) AND FILED DETAILED SUBMISSION TO SHOW THAT ASSESSEE HAD DISCLOSED THE EXCESS STOCK FOUND DURING THE SURVEY OPERATION AND ASSESSEE HAS TRULY AND CORRECTLY DISCLOSED THE SAME IN THE BOOKS OF ACCOUNT OF THE ASSESSEE-FI RM AND A COPY OF TRADING ACCOUNT WAS ALSO PRODUCED BEFORE LD. CIT(A), WHICH READS AS UNDER:- 3. THE A.R ALSO PRODUCED THE TRADING ACCOUNT WHICH IS REPRODUCED AS UNDER:- TRADING ACCOUNT TO OPENING STOCK 25,51,682 BY SALES NET 1,54,43, 655 TO PURCHASES 1,33,93,231 BY CLOSING STOCK (AS PER BOOKS) 37,05,518 TO STOCK DISCLOSED 12,03,462 BY STOCK DISCLOSED 12,03,462 TO GROSS PROFIT 44,07,752 BY ADDITIONAL INCREASE 12,03,462 2,15,56,127 2,15,56,127 TAKING INTO CONSIDERATION THE SUBMISSION OF ASSESSE E AND AFTER GOING THROUGH THE TRADING ACCOUNT, THE LD CIT(A) DELETED THE ADDI TION. AGGRIEVED BY THIS ORDER, NOW REVENUE IS IN APPEAL BEFORE US. 4. AT THE TIME OF HEARING LD. SR-DR RELIED ON THE O RDER OF ASSESSING OFFICER. NONE APPEARED ON BEHALF OF ASSESSEE DESPIT E THE FACT THAT NOTICE WAS DULY SERVED ON THE ASSESSEE. HOWEVER, WE HAVE PROCE EDED TO DECIDE THE ITA NO. 3951/AHD/2008 A.Y. 2005-06 ITO WD-7(2) ABD V. M/S. SEVEN EARTH PAGE 3 ISSUE AFTER GOING THROUGH THE RECORDS AND HEARING L D. SR-DR AND WE FIND THAT LD. CIT(A) HAS GIVEN RELIEF TO ASSESSEE BY OBSERVIN G AS UNDER:- 4. FROM THE WRITTEN SUBMISSION AS REPRODUCED ABOVE , IT IS SEEN THAT THE DISCLOSED INCOME MADE BY THE APPELLANT TOWARDS ADDI TIONAL INCOME IS VERY MUCH AVAILABLE IN THE TRADING ACCOUNT. EVEN AF TER THE APPELLANT HAD DEBITED CLOSING STOCK AND ALSO CREDITED TRADING ACC OUNT WITH THE CLOSING STOCK OF RS.12,03,462/-. THEREFORE, BY MAKING DEBIT ENTRIES AND CREDIT ENTRIES TOWARDS STOCK AT RS.12,03,462/- HAS NOT MAD E ANY DIFFERENCE. THE APPELLANTS DISCLOSED INCOME WHICH WAS MADE DUR ING SURVEY OPERATION IS NOT NULLIFIED SINCE THE ADDITIONAL INC OME OFFERED TOWARDS EXCESSIVE STOCK AT RS.12,03,462/- IS VERY MUCH AVAI LABLE IN THE TRADING ACCOUNT. THEREFORE, AFTER VERIFYING THE FACTS AND C IRCUMSTANCES OF THE CASE I AM INCLINED TO DELETE THE ADDITION MADE BY T HE A.O AT RS.12,03,462/-. THEREFORE, THIS GROUND OF APPEAL IS ALLOWED. SINCE THE ABOVE FINDING OF LD. CIT(A) IS BASED UPON THE ENTRIES PASSED BY ASSESSEE IN ITS BOOKS OF ACCOUNT CLEARLY SHOWING TH AT ADDITIONAL INCOME OFFERED TOWARDS EXCESSIVE STOCK AT RS.12,03,462/-HA S BEEN TRULY AND CORRECTLY DISCLOSED BY ASSESSEE, WE FIND NO INFIRMITY IN THE ORDER PASSED BY LD. CIT(A) AND SAME IS THEREFORE UPHELD. 5. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 15/03/2011 SD/- SD/- (A.N.PHAUJA) (D.K. TYAGI) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, DATED : 15/03/2011 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-XI, AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD