Satinder Kumar, Dhuri V. ITO, Malerkotla

ITA 436/CHANDI/2012

• Counselvise Citation: 43621514 RSA 2012
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 29-08-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 17-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AKHILESH GUPTA
• Assessee Lawyers: SUDHIR SEHGAL
• Section: 145; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO.436/CHD/2012 (ASSESSMENT YEAR : 2008-09) SH.SATINDER KUMAR, VS. THE INCOME TAX OFFICER, PROP. M/S GURU KIRPA RICE MILLS, WARD IV(4), DHURI. MALERKOTLA. PAN: ACIPK7273R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI AKHILESH GUPTA, DR DATE OF HEARING : 29.08.2012 DATE OF PRONOUNCEMENT : 30.08.2012 O R D E R PER SUSHMA CHOWLA, J.M, : THE APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-II, LUDHIANA DA TED 27.3.2012 RELATING TO ASSESSMENT YEAR 2008-09 AGAINST THE ORD ER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE GROUND NO.1 RAISED BY THE ASSESSEE IS AGAINS T THE REJECTION OF BOOKS OF ACCOUNT UNDER SECTION 145 OF THE ACT IS NO T PRESSED AND HENCE THE SAME IS DISMISSED AS NOT PRESSED. 3. THE ISSUE IN GROUND NOS.2 AND 3 RAISED BY THE AS SESSEE IS AGAINST THE ADDITION OF RS.5,12,183/- ON ACCOUNT OF SALE OF RICE HUSK BY ESTIMATING THE SALE PRICE OF RICE HUSK. THE ASSESS EE DURING THE YEAR UNDER CONSIDERATION HAD SOLD 6928 QTLS OF RICE HUSK AT AN AVERAGE RATE OF RS.106/- PER QTL AND HAD DECLARED THE SALE VALUE OF RS.7,34,857/-. THE ASSESSING OFFICER, HOWEVER, COMPARED THE SALE VALUE OF RICE HUSK WITH 2 THE CORRESPONDING RATE OF RICE HUSK REFLECTED BY TH E TWO CONCERNS I.E. M/S GARG TRADING CO. AND M/S AMARNATH & SONS. THE ASSESSING OFFICER IN VIEW OF THE COMPARABLE CASES ADOPTED THE SALE RA TE OF RICE HUSK @ 250/- PER QTL. RESULTING IN ADDITION OF RS.5,12,183 /-. THE SAID ADDITION WAS CONFIRMED BY THE CIT (APPEALS). 4. THE LEARNED A.R. FOR THE ASSESSEE POINTED OUT TH AT THE ISSUE STANDS COVERED VIDE ORDERS OF THE CHANDIGARH BENCH OF TRIB UNAL IN VARIOUS CASES OF RICE MILLERS. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE RAISED VIDE PRESENT GROUND OF APPEAL IS AGAIN ST THE ADOPTION OF SALE RATE OF RICE HUSK AT RS.250/- PER QTL AS AGAINST RS .106/- DECLARED BY THE ASSESSEE. WE FIND THAT SIMILAR ISSUE OF ESTIMATION OF VALUE OF HUSK SOLD BY THE ADOPTING THE RATE AT WHICH THE PURCHASES WER E MADE BY OTHER CONCERNS AROSE BEFORE THE TRIBUNAL IN THE CASE OF S HRI MANPREET SINGH DHILLON VS. ITO, WARD NABHA (ITA NO.69/CHD/2009) RE LATING TO ASSESSMENT YEAR 2006-07. THE TRIBUNAL VIDE ORDER D ATED 29.4.2010 HELD AS UNDER: 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS. THE ASSESSEE DURING THE YEAR UNDER CONSI DERATION HAS SHOWN SALE OF HUSK. TOTAL QUANTITY OF HUSK SOLD DURING THE YEAR WAS 13,280 QUINTALS, OUT OF WHICH 3969 QUI NTALS WERE SOLD TO M/S A.P. ORGANICS. THE AVERAGE RATE OF SALE TO M/S A.P. ORGANICS WAS RS. 99/-. THE SALE OF HUSK TO M/S A.P. ORGANICS HAD BEEN ACCEPTED BY THE ASSESSING OF FICER. FURTHER, THE ASSESSEE HAD SOLD HUSK WEIGHING 9310.4 0 QUINTALS IN CASH, ON DIFFERENT DATES AT DIFFERENT R ATES AVERAGING BETWEEN RS. 89/- TO RS. 100/- PER QUINTAL S. THE TOTAL SALE PRICE OF THE HUSK WAS SHOWN BY THE ASSES SEE WAS AT RS. 8,73,497/-. THE AVERAGE SALE PRICE WORKS TO RS. 93.81 PER QUINTAL. THE SAID SALES WERE MADE IN CASH AND ARE REFLECTED IN THE BOOKS OF ACCOUNT WHICH IN TURN ARE AUDITED BY THE AUDITORS. THE ASSESSING OFFICER COMPARED THE RATE OF SALES AT WHICH THE ASSESSEE HAD SOLD THE RICE HUSK WITH THE RATE OF PURCHASE BY THREE DIFFERENT CONCERNS I.E. I NDIAN ACRYLICS LTD, M/S MILKFED AND M/S UNITED BREWERIES LTD. FROM THE PERUSAL OF THE DATA INCORPORATED IN PARA 2 .4 OF THE ASSESSMENT ORDER WITH REGARD TO THE PURCHASE OF RIC E HUSK REFLECTED BY THE SAID PARTIES, WE FIND THAT THE SAM E IS AT 3 VARIANCE, AND AVERAGE RATE WAS APPLIED BY ASSESSING OFFICER. THE PLEA OF THE ASSESSEE WITH REGARD TO O VERHEAD EXPENDITURE OF TRANSPORTATION, LOADING / UNLOADING AND MIDDLEMAN COMMISSION WAS ACCEDED TO BY THE ASSESSIN G OFFICER AND DEDUCTION OF RS. 50/- PER QUINTAL WAS A LLOWED FROM THE NET RATE APPLIED MONTH-WISE. 7. THE ENTRIES IN BOOKS OF ACCOUNT DEPICT A TRUE ST ATE OF AFFAIRS UNLESS SOME EVIDENCE IS FOUND TO BE CONTRAR Y. IN THE ABSENCE OF ANY SUCH EVIDENCE, BEING FOUND AND BROUG HT ON RECORD, AGAINST THE ASSESSEE, THERE IS NO MERIT I N REJECTING THE BOOK RESULTS AND MAKINGS ADDITIONS ON ESTIMATE BASIS. THE BOOK RESULTS SHOWN BY AN ASSESSEE CAN BE COMPAR ED WITH ANOTHER CONCERN IN CASE THERE ARE IDENTICAL CIRCUMSTANCES. MERELY BECAUSE TWO CONCERN /S ARE EN GAGED IN SAME BUSINESS CANNOT BE THE BASIS FOR ADOPTING T HE RATES OF PURCHASE / SALE SHOWN BY ONE CONCERN AS THE RATE S OF SALE / PURCHASE OF THE OTHER CONCERN. THE RESULTS SHOWN BACKED BY BOOKS OF ACCOUNTS CANNOT BE REJECTED ON THE SURM ISES THAT THE RATES OF PURCHASES / SALES SHOWN BY THE AS SESSEE IN ITS BOOKS OF ACCOUNT IS AT VARIANCE WITH THOSE BY O THER CONCERN, UNLESS IT IS PROVED WITH EVIDENCE THAT THE TRANSACTIONS UNDERTAKEN BY TWO WERE UNDER IDENTICAL CIRCUMSTANCES AND TWO CONCERNS WERE DEALING WITH ID ENTICAL COMMODITIES. THE ASSESSEE BEFORE US IS DEALING IN T HE SALE OF RICE HUSK, WHICH IS AN AGRICULTURAL COMMODITY AN D MERELY BECAUSE THE SALE RATE REFLECTED IN THE BOOKS OF ACC OUNT OF ASSESSEE IS AT VARIANCE WITH THE PURCHASE RATE SHOW N BY THREE CONCERNS, CANNOT BE THE BASIS FOR MAKING ADDI TION IN THE HANDS OF THE ASSESSEE, IN THE ABSENCE OF ANY EV IDENCE BROUGHT ON RECORD TO PROVE THE QUALITY OF PRODUCT D EALT IN BY THE TWO CONCERNS AND THE QUANTITY PURCHASED / SO LD. FURTHER, IF WE COMPARE THE PURCHASE RATES OF THE TH REE CONCERNS INTER SE, THERE IS VARIANCE OF RS. 150/- TO RS. 196/- PER QUINTAL FOR THE RICE HUSK PURCHASED BY TH ESE CONCERNS. IN THE FACTS AND CIRCUMSTANCES, WHERE NO DEFECT HAS BEEN FOUND IN THE BOOK ENTRIES OF THE ASSESSEE, MERELY BECAUSE THE RATES OF SALE OF RICE HUSK SHOWN BY THE ASSESSEE DO NOT TALLY WITH PURCHASE RATES SHOWN BY ANOTHER C ONCERN, CANNOT BE THE BASIS FOR REJECTION OF BOOK RESULTS A ND ADOPTION OF AVERAGE RATE FOR COMPUTING THE VALUE OF HUSK SOLD BY THE ASSESSEE, DURING THE YEAR, IN THE ABSEN CE OF ANY EVIDENCE FOUND TO THE CONTRARY, IS NOT JUSTIFIED. H ENCE THE SAME IS REJECTED. 8 WE FIND NO MERIT IN THE WORKING OF THE VALUE OF S ALE CONSIDERATION BY ASSESSING OFFICER OF 9310.40 QUINT AL OF RICE HUSK SOLD BY THE ASSESSEE. THE ASSESSEE HAD PR ODUCED THE LEDGER ACCOUNT TO JUSTIFY THE SALE OF RICE HUSK . THE COMPARISON MADE BY THE ASSESSING OFFICER WITH PURCH ASES MADE BY THREE DIFFERENT PARTIES DOES NOT STAND THE TEST AS THE RELEVANT DETAILS IN RESPECT OF THE PURCHASES MA DE BY THEM ARE NEITHER AVAILABLE ON RECORD NOR WERE THEY MADE AVAILABLE TO THE ASSESSEE. THIS BEING AN AGRICULTUR E PRODUCT, NO SET STANDARD CAN BE LAID TO DETERMINE T HE VALUE OF A PARTICULAR PRODUCT SOLD OR PURCHASED BY A PERS ON VIS-- VIS THE SAME PRODUCT DEALT IN BY THE OTHER PERSON. THE 4 ASSESSING OFFICER HAS FAILED TO BRING ON RECORD ANY EVIDENCE TO JUSTIFY THE APPLICABILITY OF HIGHER VAL UE AS COMPARED TO THE RATES REFLECTED IN THE BOOKS OF ACC OUNT OF THE ASSESSEE. IN THE ENTIRETY OF FACTS AND CIRCUMST ANCES WHERE THE SALE OF RICE HUSK SHOWN AT THE RATE OF 96 .60 PAISA PER QUINTAL, SHOWN BY THE ASSESSEE IN THE PRECEDING YEAR, HAS BEEN ACCEPTED BY THE ASSESSING OFFICER VIDE ORD ER PASSED U/S 143(3) OF THE ACT, THE RESULTS SHOWN FOR THE YEAR MERITS TO BE ACCEPTED. ACCORDINGLY, WE SET ASIDE T HE ORDER OF CIT(A) AND DELETE THE ADDITION OF RS. 1,04,819/ - MADE ON ACCOUNT OF UNDER VALUATION OF HUSK SOLD BY THE ASSE SSEE. THE GROUND NOS. 2 & 3 RAISED BY THE ASSESSEE ARE TH US ALLOWED. 6. THE FACTS OF THE PRESENT CASES BEING IDENTICAL T O THE FACTS BEFORE THE TRIBUNAL, IN SHRI MANPREET SINGH DHILLON VS ITO , WARD, NABHA (SUPRA) AND FOLLOWING THE RATIO LAID DOWN WE SET A SIDE THE ORDER OF CIT(A) AND DELETE THE ADDITION. GROUND NO. 2 RAISED BY THE ASSESSEE IS THUS ALLOWED AND THE ALTERNATE PLEA RAISED VIDE GRO UND NO.3 IS DISMISSED. 7. THE ISSUE IN GROUND NOS. 4 TO 6 IS AGAINST THE A DDITION OF RS.1,91,500/- ON ACCOUNT OF LOW HOUSEHOLD EXPENSES. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD SHOWN TO HA VE SPENT RS.48,000/- ON HOUSEHOLD EXPENSES. THE PLEA OF THE ASSESSEE WA S THAT HIS WIFE WHO WAS AN INDEPENDENT TAX ASSESSEE HAD CONTRIBUTED A S UM OF RS.80,000/-. THE ASSESSING OFFICER HOWEVER, ESTIMATED THE EXPEND ITURE @ RS.5000/- PER MONTH FOR EACH FAMILY MEMBER OF THE ASSESSEE CO NSISTING OF FOUR MEMBERS AND MADE AN ADDITION OF RS.1,91,500/- WITHO UT GIVING CREDIT TO THE CONTRIBUTION MADE BY THE WIFE OF THE ASSESSEE O F RS.80,000/- TOWARDS HOUSEHOLD EXPENSES. 8. THE CIT (APPEALS) UPHELD THE ORDER OF THE ASSESS ING OFFICER. 9. THE PLEA OF THE ASSESSEE BEFORE US WAS THAT HIS FAMILY CONSISTED SELF, WIFE AND ONE MINOR SCHOOL GOING SON AND HE WA S STAYING IN HIS ANCESTRAL HOUSE AND ALL THE BILLS WERE PAID BY HIS UNCLE AND FATHER. THE 5 PERUSAL OF THE ASSESSMENT ORDER REFLECTS THAT THE W IFE OF THE ASSESSEE HAD FILED RETURN OF INCOME SHOWING INCOME OF RS.1,05,00 0/- OUT OF WHICH SHE HAD DEPOSITED RS.95,000/- IN CASH IN HER BANK ACCOU NT ON 17.5.2007. ON THE SAME DATE SAME AMOUNT WAS GIVEN AS LOAN. IN VI EW THEREOF, WHERE THE ASSESSEE HAS FAILED TO JUSTIFY THE EXPENDITURE INCURRED FOR MEETING HIS HOUSEHOLD EXPENSES, AND IN VIEW OF NON-AVAILABI LITY OF THE FUNDS IN THE HANDS OF THE WIFE OF THE ASSESSEE, WE FIND NO M ERIT IN THE STAND OF THE ASSESSEE. WE ARE OF THE VIEW THAT THE ENDS OF JUSTICE WOULD BE MET IF THE ADDITION IS RESTRICTED TO RS.90,000/-, TO WHICH PROPOSITION THE LEARNED A.R. FOR THE ASSESSEE FAIRLY AGREED. IN VIEW THERE OF, WE RESTRICT THE ADDITION TO RS.90,000/- AS AGAINST RS.1,91,500/- MA DE BY THE ASSESSING OFFICER AND UPHELD BY THE CIT (APPEALS). THE GROUN D NOS.4 TO 6 RAISED BY THE ASSESSEE ARE THUS PARTLY ALLOWED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DAY OF AUGUST, 2012. SD/- SD/- (MEHAR SINGH) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30 TH AUGUST, 2012 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 6