ITO 11(3)(4), MUMBAI V. DR. YASMEEN S.KHATIB, MUMBAI

ITA 4006/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83690 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2006-2007
• Appeal Filed On: 20-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL G B ENCH, MUMBAI ! , ' #$ % % % % , &' . % . () . % . #$ * BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ./I .T.A. NO.4006/MUM/2013 ( + + + + / ASSESSMENT YEAR :2006-07 THE ITO-11(3)(4), AAYAKAR BHAVAN, MUMBAI-400 020 / VS. DR. YASMEEN S.KHATIB, SHOA PLOT NO. 25, GREATER BOMBAY C.H.S. GULMOHAR C RD NO. 5, JVPD SCHEME, MUMBAI-400 059 $, ' ./ - ./ PAN/GIR NO. : AABPK 6774 ( ,. / APPELLANT ) .. ( /0,. / RESPONDENT ) ,. 1 / APPELLANT BY: SHRI S.P. WALIMBE /0,. 2 1 / RESPONDENT BY: SHRI PRAKASH JOTWANI 2 3)' / DATE OF HEARING :28.08.2014 45+ 2 3)' / DATE OF PRONOUNCEMENT :03.09.2014 #6 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-7, MUMBAI DT.21.12.2012 PERTAINING TO A.Y. 2 006-07. 2. THE SOLE GRIEVANCE OF THE REVENUE IS THAT THE LD . CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY THE AO ON ACCOUNT OF UNDISCLOSED CLOSING STOCK OF RS. 27,700/- KG. AMOUNTING TO RS. 13,85,000/-. ITA NO.4006/M/2013 2 3. THE ASSESSEE IS A DOCTOR EMPLOYED WITH COOPER HO SPITAL AND IS ALSO ENGAGED IN THE BUSINESS OF TRADING IN FISH. FO R THE YEAR, THE RETURN WAS FILED ON 30.10.2006 DECLARING TOTAL INCOME AT R S. 8,28,769/-. THE RETURN WAS SELECTED FOR SCRUTINY ASSESSMENT AND ACC ORDINGLY STATUTORY NOTICES WERE ISSUED AND SERVED UPON THE ASSESSEE. 3.1. DURING THE COURSE OF THE SCRUTINY ASSESSMENT P ROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS SHO WN NIL OPENING STOCK AS WELL AS NIL CLOSING STOCK. THE AO OBSERVED THAT THE QUANTITY PURCHASED IS 4,85,466 KGS. THE AO FURTHER NOTED TH AT THE ASSESSEE HAS SOLD 4,57,766 KGS. ACCORDING TO THE AO, THERE WAS A DIFFERENCE OF 27,700 KGS IN THE PURCHASED QUANTITY AND THE SALES QUANTITY. SINCE THE CLOSING STOCK WAS NIL, THE AO TOOK THE DIFFERENCE A S THE UNDISCLOSED CLOSING STOCK AND VALUED IT AT RS. 50/- PER KG AND ADDED RS. 13,85,000/- AS UNDISCLOSED CLOSING STOCK. 4. BEFORE THE LD. CIT(A), IT WAS STRONGLY CONTENDED THAT FISH PRODUCTS ARE HIGHLY PERISHABLE AND CANNOT BE STORED WITHOUT COLD STORAGE. SINCE THE ASSESSEE WAS NOT HAVING ANY COLD STORAGE FACILITY, HE HAS TO SELL ALL THE GOODS EVERYBODY. THEREFORE, THERE IS NO ST OCK AT THE END OF THE DAY NOR AT THE END OF THE MONTH AND ALSO NOT AT THE END OF THE YEAR. THE QUANTITIES PURCHASED DURING THE YEAR WERE SOLD. IT WAS FURTHER POINTED OUT TO THE LD. CIT(A) THAT IT IS NOT KNOWN HOW THE AO H AS ARRIVED AT THE SALES QUANTITY WITHOUT GIVING ANY BASIS. 4.1. AFTER CONSIDERING THE FACTS AND THE SUBMISSION S, THE LD. CIT(A) AT PARA-3.3 OF HIS ORDER OBSERVED THAT THE ASSESSEES BOOKS OF ACCOUNTS ARE AUDITED BY STATUTORY AUDITORS WHEREIN THE AUDITORS HAVE GIVEN COMPLETE DETAILS OF QUANTITATIVE CHART. THE LD. CIT(A) FURT HER OBSERVED THAT THE AO HAS NOT GIVEN ANY JUSTIFICATION OR BASIS FOR WOR KING OUT THE DIFFERENCE ITA NO.4006/M/2013 3 OF STOCK THEREFORE IN ABSENCE OF ANY WORKING OR JUS TIFICATION, THE LD. CIT(A) DELETED THE ADDITIONS MADE BY THE AO. 5. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. 6. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY REL IED UPON THE FINDINGS OF THE AO. 7. THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN SUBMITTED BEFORE THE LOWER AUTHORITIES. 8. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTH ORITIES BELOW AND THE RELEVANT MATERIAL BROUGHT ON RECORD BEFORE US. IT IS AN UNDISPUTED FACT THAT THE BOOKS OF ACCOUNTS WERE AUDITED AND THE TRA DING ACCOUNTS WERE QUANTIFIED. IT IS ALSO AN ADMITTED FACT THAT THE Q UANTITY PURCHASED DURING THE YEAR HAVE BEEN SOLD DURING THE YEAR ITSELF THER EBY LEAVING NIL CLOSING STOCK. WE FIND FORCE IN THE CONTENTION OF THE LD. COUNSEL THAT THE AO HAS NOT GIVEN ANY JUSTIFICATION OR BASIS FOR ARRIVING A T THE SALES QUANTITY ADOPTED BY HIM. WE FURTHER FIND THAT THE AO HAS NOT POINTED OUT ANY DEFECT IN THE QUANTITATIVE DETAILS MENTIONED IN THE AUDIT REPORT. CONSIDERING ALL THESE FACTS IN TOTALITY, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD SEPTEMBER, 2014 SD/- SD/- (S.T.M. PAVALAN ) (N.K. BILLAIYA) #$ / JUDICIAL MEMBER ' #$ / ACCOUNTANT MEMBER MUMBAI; 7# DATED : 3 RD SEPTEMBER, 2014 . . ./ RJ , SR. PS ITA NO.4006/M/2013 4 #6 #6 #6 #6 2 22 2 /3 /3 /3 /3 8+3 8+3 8+3 8+3 / COPY OF THE ORDER FORWARDED TO : 1. ,. / THE APPELLANT 2. /0,. / THE RESPONDENT. 3. 9 ( ) / THE CIT(A)- 4. 9 / CIT 5. :; /3 , , / DR, ITAT, MUMBAI 6. ;& < / GUARD FILE. #6 #6 #6 #6 / BY ORDER, 03 /3 //TRUE COPY// = == = / > > > > (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI