M/s. Wine King, Rourkela V. ITO, Ward-5, Rourkela

ITA 472/CTK/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1532 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 28-06-2021
• Assessment Year: 2010-2011
• Appeal Filed On: 31-12-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: DAMODAR PATI
• Keywords: Rule of consistency; Set aside
• Section: 201; 13

Judgement Text

, . . , , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH , CUTTACK , BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER ./ ITA NO. 472 / CTK /20 19 ( / ASSE SSMENT YEAR : 20 1 0 - 20 1 1 ) M/S WINE KING, FERTILISER TOWNSHIP, TANGARPALI, ROURKELA - 769007 VS. ITO, WARD - 5, ROURKELA / PAN NO. : A AAFW 2996 F ( / APPELLANT ) .. ( / RESPONDENT ) /AS SESSEE BY : SHRI DAMOD AR PATI , AR /REVENUE BY : SHRI S.C.MOHANTY, DR / DATE OF HEARING : 2 8 / 06 /20 2 1 / DATE OF PRONOUNCEMENT 30 / 06 /20 2 1 / O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER D ATED 24.09.2019 , PASSED BY THE CIT(A), SAMBALPUR FOR THE ASSESSMENT YEAR 201 0 - 201 1 . 2 . BESIDE S THE GROUNDS RAISED IN FORM NO.36, T HE ASSESSEE HAS ALSO FILED AN APPLICATION FOR ADDITIONAL GROUNDS AGITATING THEREIN THAT THE ORDERS PASSED BY BOTH THE FORUM BE LOW ARE LIABLE TO BE SET ASIDE AS THE ASSESSEE WAS MADE TREATING THE ASSESSEE AS FIRM AFTER DISSOLUTION OF THE PARTNERSHIP FIRM ON 30.12.2008. 3 . ON CAREFUL PERUSAL OF THE RELEVANT MATERIAL AVAILABLE ON RECORD AS WELL AS THE ORDERS OF THE AUTHORITIES BEL OW, IT IS FOUND FROM THE ADDITIONAL GROUND RAISED BY THE ASSESSEE THAT THE PARTNERSHIP FIRM HAS BEEN DISSOLVED ON 31.12.2008, HOWEVER, THE DOCUMENTARY EVIDENCE PRODUCED ITA NO. 472 /CTK/20 19 2 BEFORE US IN THE FORM OF PAPER BOOK AT PAGES 42 TO 45 CONTAINING THE BEER & LIQUOR STO CK AS ON 31.03.2010, HAVE BEEN SIGNED BY THE PARTNER. IT IS NOT UNDERSTOOD THAT IF THE PARTNERSHIP FIRM IS DISSOLVED ON 31.12.2008, HOW THE STATEMENT OF BEER AND LIQUOR STOCK AS ON 31.03.2010 HAS BEEN SIGNED BY THE PARTNER. THERE IS NO SUCH CLAIM MADE BY T HE ASSESSEE EITHER BEFORE THE AO OR BEFORE THE CIT(A) WITH REGARD TO THE DISSOLUTION OF THE PARTNERSHIP FIRM OF THE ASSESSEE. EVEN BEFORE THE TRIBUNAL ALSO, THERE IS NO SUCH DOCUMENTARY EVIDENCE BORNE BY THE ASSESSEE TO SUBSTANTIATE SUCH CLAIM. IN VIEW OF THE ABOVE, I HAVE NO HESITATION BUT TO REJECT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE. ACCORDINGLY, THE APPLICATION FOR ADMISSION OF ADDITIONAL GROUND OF THE ASSESSEE IS DISMISSED. 4 . NOW, THE GROUNDS TAKEN BY THE ASSESSEE IN FORM NO.36 ARE TO BE CONS IDERED IN THE FOLLOWING PARAGRAPHS. 5. IN THIS APPEAL, THE ASSESSEE HAS RAISED AS MANY AS 13 GROUNDS BUT AS AGREED BY THE LEARNED REPRESENTATIVE OF BOTH THE SIDES, THE SOLE ISSUE INVOLVED FOR ADJUDICATION IS AS TO WHETHER THE AO WAS RIGHT IN MAKING ADDITI ON OF RS.8,27,386/ - ON ACCOUNT OF UNDER VALUATION OF CLOSING STOCK? 6. LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS FOLLOWING FIFO METHOD FOR VALUATION OF ITS STOCK AND IT WAS NOT PRACTICALLY POSSIBLE TO MAINTAIN DETAILS OF VARIOUS PARTICUL ARS OF WINE KING AND BEER TO VALUE THE CLOSING STOCK. LD. COUNSEL ALSO SUBMITTED THAT THE AO HAS MADE CLOSING STOCK VALUATION OF LIQUOR AND BEER AND WITHOUT ANY BASIS ON THE BASIS OF HIS OWN WHIMS AND FANCIES WHICH IS NOT SUSTAINABLE, THEREFORE, THE ADDITI ON MAY KINDLY BE DELETED. LD. COUNSEL ALSO SUBMITTED ITA NO. 472 /CTK/20 19 3 THAT AS PER PARA 4.3 OF ASSESSMENT ORDER, THE ASSESSEE FURNISHED MONTH - WISE OPENING STOCK, PURCHASES, SALES OF LIQUOR AND BEER SEPARATELY BUT COULD NOT FURNISH THE BASIS OF VALUATION, THROUGH IN LIQUORS DIFFERENT ITEMS AND DIFFERENT ARE AVAILABLE. LD. COUNSEL ALSO SUBMITTED THAT DURING EARLIER AND SUBSEQUENT YEARS, THE VALUATION MADE BY THE ASSESSEE WAS ACCEPTED BY THE DEPARTMENT AND THERE IS NO LEGAL BASIS FOR ALLEGING THE ALLEGATION OF UNDER - VALUATION OF CLOSING STOCK AND MAKING ADDITION, THEREFORE, THE ADDITION MAY KINDLY BE DELETED. 7 . REPLYING TO THE ABOVE, LD. DR STRONGLY SUPPORTED THE ASSESSMENT AS WELL AS FIRST APPELLATE ORDER AND SUBMITTED THAT WHEN THE ASSESSEE IS NOT SUBMITTED/FURNISHED THE BAS IS OF VALUATION OF LIQUOR AND BEER THEN THE AO HAS NO ALTERNATIVE BUT TO VALUE THE CLOSING STOCK OF LIQUOR AND BEER ON THE BASIS OF MONTH - WISE STATEMENTS FURNISHED BY THE ASSESSEE SHOWING THE DETAILS OF OPENING STOCKS, PURCHASES, SALES OF LIQUOR AND BEER , WHICH CANNOT BE DISBELIEVED OR DISCARDED IN ABSENCE OF ANY OTHER SUBSTANTIAL AND ACCEPTABLE EVIDENCE BY THE ASSESSEE. LD. DR ALSO SUBMITTED THAT RULE OF CONSISTENCY IS HONOURED IN THE TAXATION MATTER BUT THE AO IS NOT PREVENTED TO EXAMINE OR VERIFY THE DET AILS AND VALUATION OF STOCK SUBMITTED BY THE ASSESSEE ONLY BECAUSE IT WAS ACCEPTED BY HIS PREDECESSOR DURING EARLIER OR SUBSEQUENT ASSESSMENT YEARS. LD. DR DREW OUR ATTENTION TOWARDS PARA 4.4 OF THE ASSESSMENT ORDER AND OPERATIVE LAST PARA OF PAGE 5 OF THE FIRST APPELLATE ORDER AND SUBMITTED THAT ADDITION WAS RIGHTLY MADE AND CONFIRMED, THEREFORE, NO INTERFERENCE IS WARRANTED IN THE ITA NO. 472 /CTK/20 19 4 FINDINGS RECORDED BY THE AUTHORITIES BELOW AND THUS THE APPEAL OF THE ASSESSEE MAY KINDLY BE DISMISSED. 8 . ON CAREFUL CONSIDER ATION OF THE ABOVE RIVAL SUBMISSIONS AND ON PERUSAL OF THE PAPER BOOK FILED BY THE ASSESSEE SPREADING 344 PAGES AND OTHER RELEVANT MATERIALS, I AM OF THE VIEW THAT THE SOLE GRIEVANCE OF THE ASSESSEE IS REGARDING ADDITION MADE BY THE AO ON THE ALLEGATION OF UNDER - VALUATION OF CLOSING STOCK DURING THE ASSESSMENT PROCEEDINGS. I ALSO NOTICED THAT THE ASSESSEE HIMSELF FILED MOTH - WISE DETAILS OF CLOSING AND OPENING STOCK ALONGWITH PURCHASE AND SALES, WHEREIN THE AO NOTICED THAT THE ITEM - WISE VALUE OF CLOSING STOC K HAS NOT BEEN TAKEN BY THE ASSESSEE IN THE STATEMENTS SUBMITTED BEFORE HIM , THEREFORE, THE AO WAS RIGHT IN PROCEEDING TO MAKING VALUATION ON THE BASIS OF THE STATEMENTS GIVEN BY THE ASSESSEE AND APPLYING THE PRICE IN THE MONTH OF MARCH, 2007 AND IN COMPUT ING THE CLOSING STOCK ACCORDINGLY. THE AO FOUND DISCREPANCY OF RS.7,32,705.57 AND AFTER IMPUGNED AMOUNT PERTAINING TO FREIGHT & TAXES PROPORTIONATELY , HE ESTIMATED THE AMOUNT UNDER VALUATION CLOSING STOCK AT RS.8,27,386/ - , WHICH IS QUITE CORRECT, REASONABL E AND, HENCE, SUSTAINABLE. DURING THE ARGUMENTS BEFORE THE LD. FIRST APPELLATE AUTHORITY AS WELL AS BEFORE THIS BENCH, LD. COUNSEL OF THE ASSESSEE COULD NOT SUBSTANTIATE ANY GROUND OR ANY REASON AS TO WHY THE VALUATION MADE BY THE AO IS INCORRECT OR NOT SU STAINABLE, AND, THEREFORE, THE ADDITION IS JUST , PROPER AND SUSTAINABLE. THUS, I AM OF THE CONSIDERED OPINION THAT NO INTERFERENCE IS WARRANTED IN THE FINDINGS ARRIVED AT BY THE AO AS WELL AS ITA NO. 472 /CTK/20 19 5 LD. CIT(A) CONFIRMING THE ADDITION. ACCORDINGLY, THE GROUNDS OF ASSESSEE BEING DEVOID OF MERITS, ARE DISMISSED. 9 . IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED . O RDER PRONOUNCED IN THE OPEN COURT ON 30 / 06 / 20 2 1 . SD / - ( CHANDRA MOHAN GARG ) / JUDICIAL MEMBER CUTTACK ; DATED 30 / 06 /20 2 1 . . / PKM , S R.P.S. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - . M/S WINE KING, FERTILISER TOWNSHIP, TANGARPALI, ROURKELA - 769007 2. / THE RESPONDENT - ITO, WARD - 5, ROURKELA 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//