M/s. Bharti Auto Products, JAMNAGAR V. The Income Tax Officer, Ward-1(3), JAMNAGAR

ITA 484/RJT/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1112 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 25-05-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 05-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Assessee Lawyers: DM RINDANI
• Keywords: Sale consideration of property below Jantri Value

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE SHRI SHAILEND RA K UMAR YADAV, JUDICIAL MEMBER, AND SHRI N. S. SAINI , ACCOUNTANT MEMBER . ITA. NO. 484 / RJT /20 1 3 (ASSESSMENT YEAR: 200 6 - 07 ) M/S. BHARTI AUTO PRODUCTS, 408/1, GID C STU, JAMNAGAR APPELLANT VS. THE INCOME TAX OFFICER , WARD - 1(3), ROOM NO.104, 1 ST FLOOR, TARANJALI BUILDING, P. N. MARG, JAMNAGAR RESPONDENT PAN: AA C FB1550C / BY APPELLANT : SHRI D. M. RINDANI , C.A. / BY RESPONDENT : SHRI AVINASH KUMAR , D.R. / DATE OF HEARING : 2 5 . 0 5 .2015 / DATE OF PRONOUNCEMENT : 28 . 0 5 .201 5 ORDER PER SHAILENDRA KUMAR YADAV, J.M: TH I S APPEAL HAS BEEN FILED BY ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) , JAMNAGAR , DATED 20 . 0 9 . 20 1 3 ON THE FOLLOWING GROUND : I T A NO. 484 / RJT / 1 3 , A.Y. 20 0 6 - 07 [ M/S. BHARTI AUTO PRODUCTS VS. IT O ] PAGE 2 1 . THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), JAMNAGAR ERRED IN CONFIRMING ACT ION OF A SSESSING O FFICER IN LEVYING OF PENALTY OF RS.5,68,753/ - U/S.271(1)(C) OF THE INCOME - TAX ACT, 1961. 2. ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF MANUFACTURING OF BRASS PARTS AND TRADING OF SCRAP. DURING COURSE OF SURVEY, STOCK OF 8039.900 KGS OF FINISHED GOODS VALUED AT RS.16,95,615/ - WAS FOUND AND IT WAS ADDED TO THE TOTAL INCOME OF ASSESSEE U/S.69B OF THE ACT. THE EXCESS STOCK OF 696.500 KG OF BRASS SCRAP VALUED AT RS.83,204/ - WAS ALSO FOUND AND IT WAS ADDED U/S.69B OF THE ACE. PENALTY PROCEEDING U/S.271(1)(C) WERE ALSO INITIATED. CIT(A) CONFIRMED THE ADDITION IN QUANTUM. ASSESSING OFFICER OBSERVED IN PENALTY PROCEEDING THAT ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND CONCEALED PARTICULARS OF INCOME TO THE EXTE NT OF ADDITION MADE BY ASSESSING OFFICER AND CONFIRMED BY CIT(A). ACCORDINGLY, PENALTY OF RS.5,68,753/ - WAS LEVIED, WHICH WAS CONFIRMED BY CIT(A). 2.1 BEFORE US, LEARNED AUTHORIZED REPRESENTATIVE POINTED OUT THAT EXCESS STOCK IS BASIS OF PENALTY CONFIRME D BY CIT(A) . IN THIS REGARD, LEARNED AUTHORIZED REPRESENTATIVE DREW OUR ATTENTIONS TO THE PAGE 20 OF PAPER BOOKS INTER ALIA POINTED OUT THAT ASSESSEE FURNISHED INFORMATION/DETAILS AS AND WHEN CALLED FOR AND PRODUCED COPY OF OTHER RELEVANT MATERIALS . SAME WERE EXAMINED BY ASSESSING OFFICER AND COMPARED WITH INFORMATION FURNISHED. DURING COURSE OF SURVEY, EXCESS STOCK WAS ALLEGED I T A NO. 484 / RJT / 1 3 , A.Y. 20 0 6 - 07 [ M/S. BHARTI AUTO PRODUCTS VS. IT O ] PAGE 3 TO BE FOUND . SUMMARY OF STOCK IS AS PER ATTACHED SCHEDULE G OF AUDITED REPORT AS DETAILED ON PAGE 20 OF PAPER BOOK . W HILE CO MPLETING ASSESSMENT U/S.143(3) OF THE ACT, ASSESSING OFFICER MADE ADDITION TO THE TOTAL INCOME RETURNED BY ASSESSEE WITHOUT APPRECIATING THE FACTS OF CASE IN PROPER PERSPECTIVE AND BEING AGGRIEVED THEREBY ASSESSEE TOOK THE MATTER BEFORE US. LEARNED AUTHOR IZED REPRESENTATIVE SUBMITTED THAT HE OFFERED FOR TAXATION OF VALUE OF EXCESS STOCK AT RS.83,206/ - BY CREDITING IT TO PROFIT AND LOSS ACCOUNT AND AFTER RECONCILIATING THE SAME AS PER SCHEDULE G OF AUDIT REPORT, ENCLOSED WITH RETURN OF INCOME. AS PER SAID SCHEDULE G, THE WEIGHT OF PACKING MATERIALS OF CARTOONS IN NUMBER 5753 AND IN KGS 8039.909 WAS DEDUCTED FROM THE EXCESS STOCK FOUND. BUT ASSESSING OFFICER DISALLOWED THE CLAIM OF WEIGHT OF PACKING MATERIALS OF CARTOONS IN KGS 8039 SAYING THAT NO WHERE DIS CUSSED IN STATEMENT OF SURESHBHAI PATEL. THE COLUMN NOS. III, IV AND V OF THE INVENTORY REFERS AS NO. OF CARTOONS(S) , GROSS WEIGHT PER CARTOON AND TOTAL GROSS WEIGHT (INCLUDING PACKING MATERIALS) RESPECTIVELY. SINCE AS PER INVENTORY, WEIGHT IS INCLUSI VE OF PACKING MATERIALS, WEIGHT OF CARTOONS MUST BE DEDUCTED FROM TOTAL WEIGHT IRRESPECTIVE OF FACTS THAT IT IS NOT MENTIONED IN STATEMENT RECORDED. THIS IS AS PER RECORDS AND NOT MANIPULATED OR AFTER THOUGHT. IN THIS BACKGROUND, LEARNED AUTHORIZED REPRE SENTATIVE REQUESTED TO S ET ASIDE THE MATTER TO CIT(A). ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE ORDER OF AUTHORITIES BELOW. I T A NO. 484 / RJT / 1 3 , A.Y. 20 0 6 - 07 [ M/S. BHARTI AUTO PRODUCTS VS. IT O ] PAGE 4 2.2 AGREEING TO THE CONTENTION OF ASSESSEE, WE RESTORE THE MATTER TO CIT(A) WITH DIRECTION TO DECIDE THE SAME AS PER FACT AND LAW AS DISCUSSED ABOVE AFTER PROVIDING DUE OPPORTUNITY OF HEARING TO BOTH PARTIES. SINCE, WE ARE RESTORING THE MATTER TO CIT(A) ON PRELIMINARY ISSUE, WE ARE REFRAINING TO COMMENT ON MERIT OF THE SAME. WE ARE ALSO AWARE OF THE FACT THAT THIS FINDING IS WITHOUT PREJUDICE TO THE MERIT OF QUANTUM ADDITION BECAUSE QUANTUM ADDITION AND PENALTY PROCEEDINGS ARE INDEPENDENT IN ITS OWN SPHERES . 3 . IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE AS INDICAT ED . PRONOUNCED IN THE OPEN COURT ON THIS THE 28 TH DAY OF MA Y , 201 5 . SD/ - SD/ - (N. S. SAINI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT : DATED 28 /0 5 /2015 TRUE COPY S K SINHA COPY OF T HE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, RAJKOT . 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, RAJKOT