M/s. Andey Ranga Rao & Co., Mogalthur V. The ITO, Palakol

ITA 407/VIZ/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8885 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 30-09-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M K SETHI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM SMC BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO, HON'BLE JUDICIAL MEMBER ITA NO. 407/VIZ/2016 (ASST. YEAR : 2008-09) M/S. ANDEY RANGA RAO & CO., D.NO. 4-1, K.P. PALEM, MOGALTHUR MANDAL, WEST GODAVARI DISTRICT. VS. ITO, WARD-1, PALKOL. PAN NO. AAOFA 1724 H (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.N. HARI ADVOCATE. DEPARTMENT BY : SHRI M.K. SETHI - SR. DR DATE OF HEARING : 05/06/2017. DATE OF PRONOUNCEMENT : 05/06/2017. O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), RAJAHMUNDRY, DATED 26/07/2016 FOR THE ASSESSMENT YEAR 2008-09. 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN CIVIL CONTRACT WORKS, FILED ITS RETURN OF INCOME BY DECLARING TOTAL INCOME OF 21,550/-. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOTED THAT THE ASSESSEE HAS SHOWN AN AMOUNT OF 6,02,000/- IN THE BALANCE SHEET AS CLOSING STOCK, BUT THE SAME WAS NOT REFLECTED IN THE PROFIT & LOSS ACCOUNT. THE ASSESSING OFFICER HAS CALLED CLARIFICATION FROM THE ASSESSEE. IN RESPONSE, THE AUTHORIZED REPRESENTATIVE FOR THE 2 ITA NO. 407/VIZ/2016 (M/S. ANDEY RANGA RAO & CO.,) ASSESSEE AGREED FOR MAKING ADDITION OF 6,02,000/-. ACCORDINGLY, THE ADDITION WAS MADE. 3. ON APPEAL, IT WAS SUBMITTED BEFORE THE LD. CIT(A) THAT CLOSING STOCK WAS ADJUSTED AGAINST THE PURCHASES OF KANKARA OF 4,80,000/-, CEMENT OF 4,72,000/- AND IRON OF 4,28,000/- AND THUS ONLY CONSUMPTION OF MATERIAL WAS DEBITED TO PROFIT & LOSS ACCOUNT. AS A RESULT, CLOSING STOCK DID NOT APPEAR ON THE CREDIT SIDE OF THE PROFIT & LOSS ACCOUNT. THE LD. CIT(A) AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE, CONFIRMED THE ORDER OF THE ASSESSING OFFICER BY OBSERVING AS UNDER:- I HAVE CONSIDERED THE SUBMISSIONS AND DETAILS FILED. I HAVE ALSO PERUSED THE RECORD, FROM WHICH IT IS SEEN THAT THE AO HAD FIXED THE CASE FOR HEARING ON VARIOUS OCCASIONS AND ONLY ADJOURNMENTS WERE SOUGHT. THEREFORE THE AO HAD ISSUED SUMMONS ON 23.10.2010 IN RESPONSE TO WHICH THE ASSESSEE AND HIS AUTHORISED REPRESENTATIVE HAD APPEARED AND DURING WHICH THEY HAVE AGREED TO THE IMPUGNED ADDITION, THE RELEVANT EXTRACT OF THE ORDER SHEET IS AS UNDER: 'IN RESPONSE TO SUMMONS ISSUED TO THE ASSESSEE, THE ASSESSEE SHRI ANDE RANGE RAO, AND THE A. R. SHRI P. LAKSHMINARAYANA APPEARED AND FILED VAKALAT. ON EXAMINATION OF BOOKS OF ACCOUNT, IT IS NOTICED THAT THE ASSESSEE SHOWED AN AMOUNT OF RS. 6,02,000/- AS DOSING STOCK IN THE BALANCE SHEET. SIMILAR AMOUNT NOT SHOWN IN THE TRADING AND P & L ACCOUNT. WHEN THIS IS PUT TO THE ASSESSEE AND THE AR, THEY HAVE PLEADED-THAT THE ASSESSEE IS NOT PROPERLY EDUCATED AND THAT THE ACCOUNTANT HAD NOT PROPERLY MAINTAINED THE BOOKS AND DID NOT SHOW MUCH INTEREST. THE ASSESSEE AND THE AR HAVE AGREED FOR ADDITION OF RS.6,02,000/- TO THE TOTAL INCOME AND PRAYED THAT DUE TO LACK OF KNOWLEDGE, THAT THE ASSESSEE IS AGED 72 YEARS AND NOT IN PROPER HEALTH BECAUSE OF WHICH THE MISTAKE HAD CREPT IN. HOWEVER, THE ADDITION OF RS. 6,02,000/- & AGREED UPON BY THE AR AND THE ASSESSEE.' THE ORDER SHEET HAS BEEN SIGNED BY THE AUTHORISED REPRESENTATIVE AND THE ASSESSEE. THUS, IT IS VERY CLEAR THAT THE 3 ITA NO. 407/VIZ/2016 (M/S. ANDEY RANGA RAO & CO.,) ASSESSEE HAD AGREED FOR THE ADDITION CONSIDERING THAT PROPER BOOKS OF ACCOUNTS WERE NOT MAINTAINED. NO PEA WAS TAKEN BEFORE THE AO THAT ONLY THE CONSUMPTION OF MATERIALS WERE DEBITED TO THE P & L ACCOUNT, AND NO INFORMATION WAS SUBMITTED TO THE AO IN THIS REGARD. CONSIDERING THE TOTALITY OF THESE FACTS, I FIND THAT THE AO IS JUSTIFIED IN MAKING THE IMPUGNED ADDITION AND THE SAME IS UPHELD. 6. IN THE RESULT, THE APPEAL FOR THE ASSESSMENT YEAR 2008-09 IS DISMISSED. 4. ON BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. 5. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) IS NOT CORRECT. 6. ON THE OTHER HAND, THE LD. D.R. STRONGLY SUPPORTED THE ORDERS PASSED BY THE AUTHORITIES BELOW. 7. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. 8 . IN THIS CASE, THE ASSESSEE HAS SHOWN AN AMOUNT OF 6,02,000/- IN THE BALANCE SHEET AS CLOSING STOCK, BUT THE SAME WAS NOT REFLECTED IN THE PROFIT & LOSS ACCOUNT. WHEN ASSESSING OFFICER ASKED THE ASSESSEE, HE AGREED FOR ADDITION. ACCORDINGLY, ASSESSING OFFICER MADE THE ADDITION. ON APPEAL, LD. CIT(A) AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE, CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. BEFORE US, THE ASSESSEE HAS NOT FILED ANY MATERIAL OR ANY EXPLANATION AS TO WHY THE AMOUNT OF 6,02,000/- IS NOT REFLECTED IN THE PROFIT & LOSS ACCOUNT. THEREFORE, BY CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE 4 ITA NO. 407/VIZ/2016 (M/S. ANDEY RANGA RAO & CO.,) CASE, WE ARE OF THE OPINION THAT THE AUTHORITIES BELOW WERE PROPERLY EXAMINED THE ISSUE AND MADE THE ADDITION. THE ASSESSEE IS NOT ABLE TO POINT OUT ANY ERROR IN THE ORDER PASSED BY THE LD. CIT(A), HENCE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). 9 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 05 TH DAY OF JUNE, 2017. SD/- (V. DURGA RAO) JUDICIAL MEMBER DATED : 05 TH JUNE, 2017. VR/- COPY TO: 1. THE ASSESSEE - M/S. ANDEY RANGA RAO & CO., D.NO. 4-1, K.P. PALEM, MOGALTHUR MANDAL, WEST GODAVARI DISTRICT. 2. THE REVENUE - ITO, WARD-1, PALKOL. 3. THE CIT, RAJAHMUNDRY. 4. THE CIT(A), RAJAHMUNDRY. 5. THE D.R., VISAKHAPATNAM. 6. GUARD FILE. BY ORDER