Shri Rajendra Kumar, JODHPUR V. ITO, BALOTRA

ITA 452/JODH/2009

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1584 (ITAT-JODHPUR)
• Duration Of Justice: 3 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-01-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 24-07-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G R KOKANI
• Assessee Lawyers: RAJENDER JAIN
• Section: 133A; 234B

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. 452/JU/2009 ASSESSMENT YEAR : 2005-06 SHRI RAJENDRA KUMAR, VS. THE ITO, S/O SHRI GANPATLAL JI, BALTORA. PROP. M/S RIDHI SIDHI DYE CHEM, BALTORA PAN NO. AAJPC8154A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJENDER JAIN RESPONDENT BY : SHRI G.R. KOKANI DATE OF HEARING : 15.01.2013 DATE OF PRONOUNCEMENT : 07.02.2013 ORDER PER HARI OM MARATHA, J.M. THIS APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YE AR 2005-06 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) DATED 7.3.2009. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE CARRIES THE BUSINESS OF DYE, DYE STUFF, CAUSTIC, CHEM ETC. A S URVEY U/S 133A OF THE ACT WAS CONDUCTED AT THE BUSINESS PREMISES OF THE A SSESSEE ON 9.11.2004. 2 THE LEDGER POSTINGS OF THE DAY WAS NOT COMPLETE AT THE TIME OF SURVEY BUT WERE COMPLETED DURING THE COURSE OF SURVEY ALL THE BOOKS OF ACCOUNT WERE AVAILABLE. WHILE PREPARING TRADING ACCOUNT FOR ASC ERTAINING CLOSING STOCK AS ON THE DATE OF SURVEY, ONE BILL QUA PURCHASE OF RS . 2,16,900/- WAS NOT AVAILABLE ON SPOT BUT THE GOODS AS PER THAT BILL WE RE STATED TO RECEIVED AND UNLOADED IN THE GODOWN. ACCORDING TO ASSESSEE THIS STOCK WAS INCLUDED IN THE INVENTORY PREPARED BY THE SURVEY TEAM. THE CONT ROVERSY IS REGARDING THE EXCESS STOCK FOUND DURING THE COURSE OF SURVEY. A S TATEMENT OF THE ASSESSEE WAS RECORDED ON 9.11.2004. WHILE EXPLAINING THE ST OCK FOUND ON PHYSICAL VERIFICATION IN EXCESS OF WHAT WAS RECORDED IN THE BOOKS OF ACCOUNT, THE ASSESSEE HAD AGREED TO SURRENDER THE VALUE OF THAT STOCK AT RS. 4,73,155/-. THE ASSESSEE HAD ALSO PAID ADVANCE TAX, AMOUNTING T O RS. 1.5 LAKHS THEREON THROUGH CHEQUE. BUT IN THE RETURN OF INCOME THE AS SESSEE DID NOT HONOUR THE SURRENDER MADE ON ACCOUNT OF EXCESS STOCK, AND DID NOT OFFER IT FOR TAXATION. INSTEAD OF SURRENDERED AMOUNT OF RS. 4,73,155/-, TH E ASSESSEE DECLARED ONLY A SUM OF RS. 1,37,935/- ON ACCOUNT OF EXCESS STOCK FOUND DURING SURVEY. IT WAS EXPLAINED BEFORE THE ASSESSING OFFICER THAT GOO DS WORTH RS. 2,16,900/- HAS BEEN RECEIVED PHYSICALLY BUT THE BILL HAD NOT B EEN RECEIVED BY THAT TIME AND THAT IS WHY THE VALUE OF STOCK COULD NOT BE ACC OUNTED FOR IN THE BOOKS OF ACCOUNT. BUT THE ASSESSING OFFICER REJECTED THI S EXPLANATION OF THE ASSESSEE AND ADDED THE ENTIRE REMAINING AMOUNT OF R S. 2,16,900/- TO THE TOTAL INCOME OF THE YEAR. 3. BEFORE THE LEARNED CIT(A) SIMILAR ARGUMENTS WERE RAISED. IN SUPPORT OF THE CONTENTION THAT GOODS WERE DISPATCHED ON 7.1 1.2004, THE ASSESSEE 3 FURNISHED A COPY OF INVOICE NO. 4098 DATED 8.11.200 4 OF M/S GULJAG INDUSTRIES LTD. AND A COPY OF MTR NO. 2015 OF M/S V IKRAM TRANSPORT COMPANY. BUT THE INVOICE NUMBER DID NOT TALLY AS F ROM THE COPY OF MTR NO.2015 OF M/S VIKRAM TRANSPORT COMPANY, IT WAS SEE N THAT THE INVOICE MENTIONED THEREON IS 233225/CSF/3724 AND NOT 4098. THE COMMISSIONER ALSO TOOK INTO CONSIDERATION THE STATEMENT OF THE A SSESSEE THAT DURING SURVEY, THE INVENTORY WAS PREPARED IN HIS PRESENCE AND IN HIS STATEMENT, THE PORP. SHRI RAJENDRA KR. CHOPRA HAD CERTIFIED THE CO RRECTNESS OF THE PHYSICAL STOCK TAKEN. IN THAT STATEMENT, SHRI CHOPRA HAD AL SO REFERRED TO SOME DEFECTS IN THE STOCK TAKING AND IN ITS VALUATION BU T BEFORE THE ASSESSING OFFICER HE COULD NOT PIN POINT ANY SUCH DEFECT DESP ITE OPPORTUNITY GIVEN TO HIM. ACCORDINGLY, THE LEARNED CIT(A) HAS ALSO UPHE LD THE ADDITION OF RS. 2,16,900/-. NOW, THE ASSESSEE HAS COME IN APPEAL B EFORE US. 4. ALMOST ALL SORTS OF ARGUMENTS WHICH WERE TAKEN B EFORE THE LOWER AUTHORITIES HAVE ALSO BEEN TAKEN BEFORE US DURING H EARING. THE LEARNED LD. AR HAS FILED A PAPER BOOK CONTAINING INVENTORY TAK EN DURING SURVEY AND COPY OF THE WRITTEN SUBMISSION FILED BEFORE THE CIT (A). HE HAS ALSO FILED COPIES OF ORDERS INCLUDING THAT OF HON'BLE JODHPUR BENCH IN SUPPORT OF ASSESSEES CONTENTION. IT WAS PARAMOUNTLY ARGUED T HAT ANY STATEMENT TAKEN DURING SURVEY PROCEEDINGS CONDUCTED U/S 133A OF THE ACT HAS GOT NO EVIDENTIALLY VALUE AND IN THIS REGARD APART FROM RE LYING ON OTHER DECISIONS OF OTHER COURTS / TRIBUNAL, RELIANCE HAS BEEN PLACE D ON THE DECISION OF THE HON'BLE SUPREME COURT RENDERED IN THE CASE OF CIT V S. VIJAY NAGINDAS MEHTA REPORTED IN (2011) 335 ITR (ST) 5 VIDE WHICH THE DECISION OF 4 HON'BLE MUMBAI HIGH COURT HAS BEEN CONFIRMED WHO HA D APPROVED THE FINDINGS OF THE TRIBUNAL THAT MERE STATEMENT TAKEN DURING THE COURSE OF SURVEY CANNOT BE MADE THE SOLE BASIS FOR MAKING ADD ITION WHEN THE DISCREPANCIES ARE PROPERLY EXPLAINED BY THE ASSESSE E. ON THE OTHER HAND, LEARNED LD. DR HAS SUPPORTED THE FINDINGS OF THE AU THORITIES BELOW. HE HAS REPEATED ALL THE REASONS WHICH HAVE BEEN TAKEN BY T HE ASSESSING OFFICER TO MAKE THE IMPUGNED ADDITION. 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE HAVE FOUND THAT WHATEVER IS STATED IN A STATEMENT RECORDED DURING THE SURVEY PROCEEDINGS CANNOT BE MADE A BASIS OF AN ADDITION. THIS IS THE DICTUM OF VARIOUS COURTS INCLUDING THAT OF THE HON'BLE APEX COURT. THE DECISIONS RELI ED UPON BY THE LD. AR ARE DIRECTLY ON THE ISSUE. IT IS TRITE THAT IN CASE THE ASSESSEE DISAPPROVES SURRENDER WITH THE HELP OF EVIDENCE AND EXPLAINS TH E DISCREPANCY FOUND IN THE VALUATION OF STOCK TAKEN DURING SURVEY PROCEEDI NGS THE STATEMENT CANNOT BE GIVEN ANY EVIDENTIARY VALUE. THE ASSESSEE HAS CO MPUTED THE TOTAL EXCESS STOCK AS PER RECORD WHICH HAS NOT BEEN DISPUTED BY THE REVENUE. IN OUR CONSIDERED OPINION, THE ASSESSEE HAS CLEARLY CALCUL ATED THE EXCESS STOCK AND HAS PAID TAXES THEREON AND HAS ALSO DISCLOSED TO TH AT EXTENT IN THE RETURN OF INCOME, THEREFORE, ANY FURTHER ADDITION SOLELY BASE D ON THE ADMISSION OF THE ASSESSEE IN SUCH CIRCUMSTANCES CANNOT BE SUSTAINED IN THE GIVEN CASE. ACCORDINGLY, WE ORDER TO DELETE THE IMPUGNED ADDITI ON AND ALLOW GROUND NO.1 OF THIS APPEAL. 5 6. THE SECOND GROUND PERTAINS TO CHARGING OF INTERE ST U/S 234B AND 234C OF THE ACT. SINCE THE CHARGING OF INTEREST IS MANDA TORY BUT IT IS ALSO CONSEQUENTIAL, THEREFORE, WE CANNOT HOLD THE CHARGI NG OF INTEREST UNDER THESE SECTIONS AS A GROSS ERROR. ACCORDINGLY, THIS GROUND CANNOT BE ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 07.02.2013 ) SD/- SD/- (N.K.SAINI) (HARI OM MARATHA) ACCOUNTANT MEMBER JUDICIAL MEMER DATED : 7 TH FEBRUARY, 2013 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR