THE DY. CIT-1(2), RAIPUR V. M/S. RAJNANDGAON OIL PVT. LTD., BHANDARA

ITA 46/BIL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1413 (ITAT-RAIPUR)
• Duration Of Justice: 2 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 12-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHEETAL VERMA
• Keywords: Unexplained investment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI SHAMIM YAHYA , HONBLE ACCOUNTANT MEMBER & SHRI PARTHA SARATHI CHAUDHURY , HONBLE JUDICIAL MEMBER ITA NO. 46 / R PR /201 3 (ASST. YEAR : 200 7 - 0 8 ) DCIT - 1(2), RAIPUR. VS. M/S. RAJNANDGAON OIL PVT. LTD., 1, BALDEOBAGH, RAJNANDGAON, MOHGAONDEVI , TAHSIL MOHADI, BHANDARA. PAN NO. AABCR 3122 N (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE . DEPARTMENT BY : SMT. SHEETAL VERMA - DR . DATE OF HEARING : 21 / 04/2016 . DATE OF PRONOUNCEMENT : 22 / 04 /201 6 . O R D E R PER SHAMIM YAHYA , ACCOUNTANT MEMBER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), RAIPUR , DATED 22 /0 4 /201 3 AND PERTAINS TO ASSESSMENT YEAR 200 7 - 0 8 . 2. REVENUE HAS RAISED THE FOLLOWING GROUND OF APPEAL: - WHETHER IN LAW AND ON FACTS & CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 55,02,872/ - MADE BY THE ASSESSING OFFICER UNDER SEC. 69B OF THE IT ACT, 1961 ON ACCOUNT OF UNEXPLAINED INVESTMENT. 2 ITA NO. 46 / RPR /201 3 3 . IN THIS CASE , UNDISCLOSED INCOME BY WAY OF UNDISCLOSED STOCK WAS ADDED BY THE ASSESSING OFFICER ON THE GROUND OF DIFFERENCE IN STOCK STATEMENT SUBMITTED TO THE BANK AUTHORITIES AND THAT SUBMITTED IN THE AUDITED FINANCIAL STATEMENTS. 4 . UPON HEARING THE ASSESSEES APPE AL, THE LD. CIT(A) DELETED THE ADDITION HOLDING AS UNDER: - 7. I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER, AND SUBMISSIONS OF THE APPELLANT. IT IS AN UNDISPUTED FACT THAT THE APPELLANT DID MAINTAIN QUANTITATIVE DETAILS AND THE BOOKS OF ACCOUNTS ARE AUDITED. ADMITTEDLY, THE AUDITOR HAS NOT POINTED OUT ANY INFIRMITY IN THE CLOSING STOCK VALUED BY THE APPELLANT IN AUDITED FINANCIAL STATEMENTS. IT IS SEEN THAT THE ADDITION HAS BEEN MADE BY THE A.O BASED ON THE DETAILS OF STOCK POSITION GIVEN BY THE APPE LLANT TO THE BANK. I HAVE PERUSED THE COPY OF STOCK STATEMENT SUBMITTED TO THE BANK BY THE APPELLANT WHEREIN CLOSING STOCK HAS BEEN SHOWN AT RS. 14,85,499/ - ., I FIND THAT THE SAID STOCK STATEMENT IS DULY VERIFIED AND ALSO ACKNOWLEDGED BY THE BANK OFFICIAL WITH SEAL AND INITIAL. IT IS ALSO GATHERED FROM THE RECORDS THAT THE THEN A.O HAD DULY APPLIED HER MIND ON THE ISSUE OF DIFFERENCE IN THE VALUE OF INVENTORY AS THE APPELLANT HAD SUBMITTED ITS REPLY DATED 22.12.2009 DURING THE COURSE OF ASSESSMENT PROCEEDIN GS ITSELF AND EXPLAINED THE OBJECTIVE BEHIND SHOWING INFLATED FIGURES OF INVENTORY TO THE BANK. I AM OF THE CONSIDERED OPINION THAT THE A.O HAD BEFORE HIM BOTH THE COPIES OF STOCK STATEMENT SUBMITTED BY THE APPELLANT TO THE BANK, THE THEN A.O ACCEPTED THE SUBMISSION OF THE APPELLANT, HOWEVER, LATER IN THE FRESH ASSESSMENT PROCEEDINGS CONSEQUENT UPON ORDER OF THE LD. CIT U/S 263, THE A.O HAS MADE THE ADDITION RELYING UPON THE STOCK STATEMENT SUBMITTED BY THE APPELLANT TO THE BANK FOR COVERING UP THE CASH CRE DIT FACILITY AND DRAWING POWER. IT IS SEEN THAT THE ADDITION HAS BEEN MADE BY THE A.O MERELY ON THE BASIS OF STOCK STATEMENT SUBMITTED BY THE APPELLANT TO THE BANK, THE CONCLUSION DRAWN BY THE A.O IS NOT BASED ON ANY INDEPENDENT ENQUIRY CONDUCTED BY THE A. O WITH THE BANK OFFICIALS. THERE IS NO POSITIVE EVIDENCE AGAINST THE APPELLANT INASMUCH THERE IS NO AFFIRMATION FROM THE BANK OFFICIALS TO THE EFFECT THAT THE APPELLANT DID HAVE INVENTORY WORTH RS. 64.16 LACS. THE PRESENT CASE IS DIFFERENT FROM THE CASES R ELIED UPON BY THE A.O INASMUCH AS IN THE PRESENT CASE, THERE ARE TWO SETS OF STOCK STATEMENT AND A.O CHOSE TO RELY ON ONE OF THE THEM WITH HIGHER INVENTORY VALUE TO SUPPORT 3 ITA NO. 46 / RPR /201 3 THE ADDITION TO THE TOTAL INCOME. I AM OF THE CONSIDERED OPINION THAT THE SUBMISSIO N OF THE APPELLANT THAT THE INFLATED FIGURES WERE GIVEN TO THE BANK FOR ENSURING CONTINUED CREDIT FACILITY CANNOT BE SIMPLY BRUSHED ASIDE AS IT IS NOT AGAINST THE HUMAN PROBABILITIES TO SHOW HIGHER FIGURE IN THE STOCK STATEMENT. I AM OF THE CONSIDERED OPIN ION THAT THE DIFFERENCE IN THE VALUE OF STOCK MAY GIVE RISE TO SUSPICION, HOWEVER, THE SAME ALONE CANNOT BE ACCEPTED AS EVIDENCE TO HOLD ADVERSITY AGAINST THE APPELLANT WHEN THERE IS OTHER SET OF STOCK STATEMENT WHICH WAS DULY FURNISHED DURING THE COURSE O F ORIGINAL ASSESSMENT PROCEED INGS AND NOT IN THE COURSE OF FRESH ASSESSMENT PROCEEDINGS, THUS, THE ACTION OF THE APPELLANT CANNOT BE SAID TO BE AN AFTERTHOUGHT TO AVOID ADVERSITY AFTER THE ISSUE CAME TO THE SURFACE. 8. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ADDITION MADE BY THE A.O CANNOT BE SUSTAINED. HENCE, THE ADDITION IS DELETED. 5. AGAINST THE ABOVE ORDER, THE REVENUE IS IN APPEAL . 6 . WE HAVE HEARD LD. DR. NONE APPEARED ON BEHALF OF THE ASSESSEE, H OWEVER, UNDATED ADJOURNMENT APPLICATION IS THERE FROM THE ASSESSEES COUNSEL . HOWEVER, FINDING THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ITAT, NAGPUR BENCH ON SIMILAR ISSUE , WE HAVE REJECTED THE ADJOURNMENT APPLICATION AND PROCEEDED TO ADJUDICATE THE ISSUE RAISED BY THE REVENUE. 7 . UPON HEARING LD. LD. DR AND PERUSING THE RECORD, WE FIND THAT THE ADDITION IN THIS CASE HAS BEEN SOLELY MADE ON THE BASIS OF STOCK STATEMENT SUBMITTED TO THE BAN K. IT IS NOT AT ALL THE CASE THAT THE ASSESSING OFFICER HAS FOUND ANY DEFECT IN THE BOOKS OF ACCOUNT OR THE STOCK DETAILS OF THE ASSESSEE. IT IS ALSO NOT THE CASE THAT THERE IS ANY EVIDENCE ON RECORD THAT THE SAID STOCK STATEMENT WAS PHYSICALLY VERIFIED BY THE BANK OFFICIALS AS ON 4 ITA NO. 46 / RPR /201 3 THE DATE OF THE STOCK STATEMENT . H ENCE, IN OUR CONSIDERED OPINION, THIS STOCK STATEMENT SUBMITTED TO THE BANK CANNOT BE A CONCLUSIVE EVIDENCE IN MAKING THE ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT IN STOCK . WE NOTE THAT THERE ARE CERTAIN CONFLICT ING DECISION S OF HIGH COURT S QUA THE CREDIBILITY OF STOCK STATEMENT SUBMITTED TO THE BANK. HOWEVER, NO DECISION OF THE JURISDICTIONAL HIGH COURT HAS BEEN BROUGHT TO OUR NOTICE IN THIS REGARD BY THE LD. DR. 8 . WE ALSO FIND THAT HON'BLE APEX COURT IN THE CASE OF CIT V VEERDIP ROLLERS P. LTD. I N CC NO. 13575/2008 , VIDE ORDER DATED 13/10/2008 HAS DISMISSED DEPARTMENTAL APPEAL , AGAINST HON'BLE GUJARAT HIGH COURT DECISION ON SIMILAR ISSUE , WHICH WAS IN FAVOUR OF ASSESSEE . IN THESE CIRCUMSTA N CES, WE FOLLOW THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF M/S. VEGETABLE S PRODUCTS ( 88 ITR 192 ) FOR THE PROPOSI TI ON THAT IF TWO VIEW S ARE POSSIBLE, ONE IN FAVOUR OF THE ASSESSEE SHOULD BE FOLLOWED. ACCORDINGLY, WE ARE OF THE CONSIDERED OPINION, THERE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). ACCORDINGLY , WE UPHOLD THE SAME. 9 . IN THE RESULT, THIS APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 /04/2016 . S D / - S D / - ( PARTHA SARATHI CHAUDHURY ) ( SHAMIM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 22 ND APRIL , 201 6 . 5 ITA NO. 46 / RPR /201 3 VR/ - COPY TO: 1 . THE ASSESS E E. 2 . THE REVENUE. 3 . THE CIT 4 . THE CIT(A) 5 . THE D.R . 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., RAIPUR.