UPAJ INVESTMENT & FINANCE P. LTD, MUMBAI V. ITO 8(3)(4), MUMBAI

ITA 4535/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9310 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 29-11-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 06-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL

Judgement Text

. , IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI , BEFORE SHRI R.K.GUPTA , J M ITA NO. 4535 / MUM/ 20 1 1 ( ASSESSMENT YE AR : 200 7 - 20 0 8 ) M/S UPAJ INVESTMENT & FINANCE PVT. LIMITED, GALA NO. 7, J.K.INDL. ESTATE, OFF. MAHAKALI CAVES ROAD, ANDHERI (EAST) , MUMBAI - 95 VS. ITO WARD 8( 3)(4), MUMBAI PAN/GIR NO. : AAAC U 1942 N ( APPELLANT ) .. ( RESPONDENT ) /A SSESSEE BY : MR. ANIL SATHE /RE VENUE BY : MR. MOHIT JAIN DATE OF HEARING : 6 TH DEC ., 2012 DATE OF PRONOUNCEMENT : 12 TH DEC. ,2012 O R D E R THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 17 - 2 - 2011 OF LEANED CIT(A) - 18 , MUMBAI RELATING TO THE ASSESSMENT YEAR 2007 - 08. 2 . THE ONLY ISSUE IN APPEAL OF THE ASSESSEE IS AGAINST CONFIRMING THE ACTION OF THE ASSESSIN G OFFICER ASSUMING SALES OUTSIDE THE BOOKS OF RS. 4,95, 371/ - AND ADDING THE SAME TO THE INCOME OF THE ASSESSEE . 3 . DURING THE ASSESSMENT PROCEEDING, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS SHOWN CLOSING STOCK NIL, WHEREAS THERE WAS AN OPENING STOCK AND THERE WAS NO SALE DURING THE YEAR. THE ASSESSEE ITA NO. 4535 /20 1 1 2 WAS REQUIRED TO EXPLAIN THE REASON FOR NOT SHOWING THE STOCK IN ITS BALANCE SHEET. IT WAS EXPLAINED THAT THE STOCK WAS OF THE OBSOLETE ITEMS, WHICH WAS WRITTEN OFF AND, THEREFORE , THE SAME HAS NOT BEEN SHOWN. 4 . THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE CONTENTION OF THE ASSESSEE, THEREFORE, HE ADDED THE STOCK ON THE BASIS OF OPENING STOCK SHOWN BY THE ASSESSEE. 5 . B EFORE THE CIT(A) , I T WAS SUBMITTED THAT THE SE ARE PETTY ITEMS OF SYRINGE WHICH WERE LAKHS IN NUMBER AND THERE WAS NO REALIZABLE VALUE OF THESE, THEREFORE, NILL VALUE WAS SHOWN. IT WAS FURTHER STATED THAT THESE ITEMS WERE SOLD IN TWO SUBSEQUENT YEARS FOR RS. 75,559/ - . COPY OF THE SAME WERE ALSO PRODUCED BEFORE THE LEARNED CIT(A) . LEARNED CIT(A) SOUGHT REMAND REPORT FROM THE ASSESSING OFFICER , WHO OBJECTED IN ACCEPTING THE ADDITION EVIDENCE AS THE ASSESSEE HAS NOT FILED ANY DETAIL BEFORE HIM DURING THE ASSESSMENT PROCEEDING. THEREAFTER THE LEARNED C IT(A) AFTER CONSIDERING THE SUBMI SSION AND TAKING INTO CONSIDERATION OF THE SALE BILLS PRODUCED, FOUND THAT THESE ARE NOT SUCH EVIDENCE WHICH ARE ACCEPTABLE AS THE ENTIRE STORY OF SALE OF ST OCK DURING THE SUBSEQUENT YEARS , SEEMS TO BE BOGUS. THE REASONING HAS BEEN RECORDED IN PARA 5 OF TH E ORDER OF THE CIT(A) . ACCORDINGLY, HE REJECTED THE CLAIM OF THE ASSESSEE. THE ALTERNATE CLAIM OF THE ASSESSEE THAT THE REALIZABLE VALUE OF THE STOCK CANNOT BE ADDED AS ONLY PROFIT CAN BE ADDED. THIS EXPLANATION ALSO NOT ACCEPTED AS NO EVIDENCE ITA NO. 4535 /20 1 1 3 WHATSOEVER WAS FILED BEFORE HIM. ACCORDINGLY, HE REJECTED THIS CLAIM OF THE ASSESSEE ALSO AND CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 6 . AFTER CONSIDERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD , I FOUND THAT THE ASSESSEE DESERVES TO SUCCEED IN ITS APPEAL IN PART . I NOTED THAT THE THERE WAS AN OPENING STOCK OF 25 LAKHS OR ODD SYRINGE VALUING AT RS. 4,95,371/ - , THE SAME WAS NOT SHOWN IN THE STOCK IN HAND FOR THE REASON THAT THE STOCK WHICH WAS OBSOLETE IN NATURE WAS TREATED AS OF ZERO VALUE AND THERE FORE, THE SAME WAS WRITTEN OFF. IN SUBSEQUENT YEAR, PART OF OBSOLETE STOCK WAS SOLD IN OPEN MARKET FOR CONSIDERATION OF RS. 75,559/ - AND THE SAME WAS OFFERED FOR TAXATION DURING THAT YEAR. THERE WAS NO PURCHASE IN THAT YEAR WHEN THE OBSOLETE STOCK WAS SOLD, IT MEANS THAT THE OLD STOCK WAS SOLD BY THE ASSESSEE AND THE SAME HAS BEEN OFFERED FOR TAXATION. THE SALE BILL WAS ALSO PRODUCED BEFORE THE CIT(A) , WHICH WAS SENT FOR REMAND REPORT. IF THE AO WAS NOT SATISFIED THEN HE COULD HAVE ENQUIRED BY SUMMONING THE PARTIES THROUGH THE ASSESSEE. THEREFORE, IN MY CONSIDERED VIEW, THE BENEFIT OF THE AMOUNT WHICH HAS BEEN OFFERED FOR TAXATION IN SUBSEQUENT YEAR SHOULD BE GIVEN TO THE ASSESSEE. I FURTHER NOTED THAT NOW 5 - 6 YEARS MORE HAS BEEN LAPSED AND STOCK MAY BE SOME REALIZABLE VALUE OR NOT. THE COUNSEL OF THE ASSESSEE HAS ALSO SUBMITTED THAT SOME REASONABLE VALUE CAN BE ADOPTED. KEEPING IN MIND ALL THESE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE OPINION THAT IF AN ADDITION OF RS. 2,00,000/ - IS SUSTAINED OUT OF T OTAL ADDITION, THEN IT WILL MEET THE END OF JUS TICE. ACCORDINGLY I SUSTAIN THE ADDITION OF ITA NO. 4535 /20 1 1 4 RS. 2,00,000/ - AND THE REMAINING ADDITION IS DELETED. I ORDER ACCORDINGLY. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF DEC. 2012. 2012 SD/ - ( ) ( R.K.GUPTA ) / JUDICIAL MEMBER MUMBAI ; DATED : 12 /12 / 2012 . /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / TH E CIT(A) - X, MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( DY./ASSTT. REGISTRAR) / ITAT, MUMBAI