DCIT,CIR-4, KOLKATA, Kolkata V. M/s AGR Automobiles Pvt. Ltd., Kolkata

ITA 479/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1559 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 23-05-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 20-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GOULEN HANGSHING
• Assessee Lawyers: N O N E

Judgement Text

1 ITA NO.479/KOL/2014 AGR AUTOMOBILES PVT. LTD., AY 2010-11 , C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE .., /AND . , ) [BEFORE SHRI A. T. VARKEY, JM & SHRI M. BALAGANESH , AM] I.T.A. NO. 479/KOL/2014 ASSESSMENT YEAR: 2010-11 DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE-4, KOLKATA. VS. M/S. AGR AUTOMOBILES PVT. LTD. (PAN: AABCB0537F) APPELLANT RESPONDENT DATE OF HEARING 23.05.2017 DATE OF PRONOUNCEMENT 12.07.2017 FOR THE APPELLANT SHRI GOULEN HANGSHING, CIT, DR FOR THE RESPONDENT N O N E ORDER PER SHRI A.T.VARKEY, JM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-IV, KOLKATA DATED 18.11.2013 FOR AY 2010-11. 2. THE ONLY GROUND RAISED BY THE REVENUE IS AGAINST THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS.12,82,98,524/- WHICH WA S ADDED BY THE AO TAKING NOTE OF THE DIFFERENCE IN THE STOCK SHOWN BY THE ASSESSEE IN IT S BOOKS VIS--VIS THAT SHOWN TO THE BANK. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY IS A DEALER OF MARUTI SUZUKI INDIA LTD. FOR SELLING MARUTI MADE CARS FROM ITS VA RIOUS SHOWROOMS LOCATED AT VARANASI. THE ASSESSEE ALSO DEALS IN SECOND HAND CARS WHICH I T BUYS FROM PRIVATE PERSONS AND SELLS TO PRIVATE PERSONS. THE ASSESSEE COMPANY DECLARED TOT AL INCOME OF RS.38,46,964/- IN ITS RETURN OF INCOME. LATER, THE CASE WAS TAKEN UP FOR SCRUTIN Y AND THE AO ISSUED NOTICES TO THE STATE BANK OF INDIA, SPECIALIZED COMMERCIAL BRANCH, VARAN ASI AND TAKING NOTE OF THE DIFFERENCE 2 ITA NO.479/KOL/2014 AGR AUTOMOBILES PVT. LTD., AY 2010-11 IN QUANTITY AND VALUE OF VEHICLES PURCHASED AND SOL D TO THE TUNE OF RS.12,82,98,524/- WAS PLEASED TO MAKE THE ADDITION. AGGRIEVED, THE ASSES SEE PREFERRED APPEAL BEFORE THE LD. CIT(A), WHO WAS PLEASED TO ACCEPT THE EXPLANATION G IVEN BY THE ASSESSEE AND WAS PLEASED TO DELETE THE SAME. AGGRIEVED, THE REVENUE IS BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE ADDITION HAS BEEN MADE BY T HE AO TAKING NOTE OF THE DISCREPANCY IN VALUE OF STOCK DECLARED TO THE BANK FOR OBTAINING H IGHER LOAN ON HYPOTHECATION OF STOCK. IT WAS ARGUED BEFORE THE LD. CIT(A) THAT THE STATEMENT FURNISHED BY THE ASSESSEE BEFORE THE BANK WAS TO AVAIL THE HIGHER OVERDRAFT FACILITY SHO WING HIGHER CLOSING INVENTORY BASED ON WHICH BANK DETERMINES THE DRAWING POWER OF THE BORR OWER AND DOES NOT REFLECT ANY TRANSACTIONS OF SALE AND PURCHASE WITH THIRD PARTIE S. WE NOTE THAT THE ASSESSEE WAS MAINTAINING REGULAR BOOKS OF ACCOUNT AND THE BOOKS WERE DULY ACCEPTED BY THE AO AND OTHER STATUTORY AUTHORITIES LIKE SALES TAX AND EXCI SE DEPARTMENT AND NO ADDITION HAS BEEN MADE BY THE AO AFTER REJECTING THE BOOKS AND THAT N EITHER PURCHASES NOR SALES SHOWN IN THE REGULAR BOOKS WERE DOUBTED. THE AO HAS NOT BROUGHT ON RECORD ANY MATERIAL OR EVIDENCE THAT THE ASSESSEE HAS DEALT IN GOODS FROM OUTSIDE T HE BOOKS OF ACCOUNT. WE NOTE THAT THE AO HAS MADE THE ENTIRE ADDITION TAKING NOTE OF THE DIF FERENCE BETWEEN STOCK SHOWN IN THE ASSESSEES BALANCE SHEET AND STOCK SHOWN IN THE BAN K FROM WHICH ASSESSEE WAS ENJOYING CREDIT FACILITIES AGAINST HYPOTHECATION OF STOCK. THE AO TOOK STOCK AS SHOWN TO BANK TO BE TRUE STOCK WITH THE ASSESSEE AND ADDED THE DIFFEREN CE IN STOCK VALUATION AS THE INCOME OF ASSESSEE. THE ASSESSEES EXPLANATION WAS THAT STOCK SHOWN TO THE BANK WAS INFLATED TO GET MAXIMUM CREDIT FACILITIES. THE AO APART FROM RELYI NG ON THE STOCK STATEMENT GIVEN TO BANK HAD BROUGHT NO OTHER EVIDENCE ON RECORD TO SHOW THA T ASSESSEE IN FACT POSSESSED A LARGER QUANTITY OF STOCK, THEREFORE, WITHOUT BRINGING ANY SPECIFIC INSTANCE OF TRANSACTION RELATING TO SALE AND PURCHASE OF CARS OUTSIDE THE BOOKS MAINTAI NED BY THE ASSESSEE OR BRINGING ANY MATERIAL TO SHOW THAT ASSESSEE ACTUALLY HAVE MORE S TOCK THAN WHAT HAS BEEN REFLECTED IN ITS BALANCE SHEET PRODUCED BEFORE THE AO NO ADDITION WA S WARRANTED. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT THE LD. CIT(A) RIGHTLY APPRECIATED THE ISSUE BASED ON THE PRECEDENTS LAID DOWN BY THE HONBLE HIGH COURTS AND 3 ITA NO.479/KOL/2014 AGR AUTOMOBILES PVT. LTD., AY 2010-11 COORDINATE BENCHES OF THE TRIBUNAL. THEREFORE, WE ARE INCLINED TO UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(A) AND DISMISS THE APPEAL OF T HE REVENUE. 5. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 12.07.2017 SD/- SD/- (M. BALAGANESH) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 12TH JULY, 2017 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT DCIT, CIRCLE-4, KOLKATA. 2 RESPONDENT M/S. AGR AUTOMOBILES PVT. LTD., 3A, GA RSTIN PLACE, 1 ST FLOOR, KOLKATA-700 001. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR. PVT. SECRETARY