M/s. Shree Mahalakshmi Rice Mills, V. Joint Commissioner of Income tax, Ferozepur

ITA 497/ASR/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5719 (ITAT-AMRITSAR)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 27-12-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S K KATARIA
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.L. KARWA, VICE PRESIDENT AND SH. MEHAR SINGH, ACCOUNTANT MEMBER I.T.A. NO.497(ASR)/2010 ASSESSMENT YEAR:2007-08 PAN :AAIFS5587J M/S. SHREE MAHALAKSHMI RICE MILLS VS. JT.COMMR. OF INCOME-TAX, KORKAPURA. RANGE-III,FEROZEPUR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. S.K. KATARIA, ADV. RESPONDENT BY: SH. TARSEM LAL, DR ORDER PER MEHAR SINGH, AM, THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE CIT(A), BATHINDA, DATED 15.09.2010, PASSED UNDER SECTION 250(6) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO IN SH ORT THE ACT) FOR THE ASSESSMENT YEARS 2007-08, WHERE THE ASSESSEE HAS RA ISED FOLLOWING GROUNDS: 1. THAT AS PER PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A), HAS ERRED IN CONFIRMING THE ASSESSMENT ORDE R OF LD. JCIT PASSED U/S 143930 AMONGST OTHERS ON THE FOLLOW ING POINTS. 2. LD. CIT(A) HAS ERRED IN RESTRICTING THE ADDITION MADE BY LD. JCTI UNDER HEAD KHUDI PHAK TO 50% WHEREAS AS NO I NDUSTRY NORMS ARE FIXED FOR YIELD OF KHUDI PHAK AT 3.2% . IN FACT, THIS YIELD OF 3.2% IS FIXED FOR RICE BRAN, WHICH ASSESSEE/APPELLANT FIRM HAD CORRECTLY SHOWN. NO NOR MS ARE 2 FIXED FOR YIELD OF KHUDI PHAK. THE ADDITION ON YIEL D OF RS.29669/- DESERVES TO BE DELETED. 3. THAT LD. CIT(A) HAS ERRED IN CONFIRMING THE ORDE R OF LD. JCIT, WHEREIN ADDITION OF RS.80,000/- HAS BEEN CONFIRMED ON ACCOUNT OF CESSATION OF LIABILITY AS THE PURCHASER HAD DIED . REASONABLE OPPORTUNITY WAS GIVEN TO ASSESSEE FIRM IN ASSESSMEN T PROCEEDING TO FILE THE CONFIRMATION FROM BROKER REG ARDING REPAYMENT OF THE ADVANCE RECEIVED FOR BIKRI RICE AC COUNT. IN APPEAL, ADDITIONAL EVIDENCE WAS FILED IN THE CONFI RMATION FROM BROKE REGARDING REPAYMENT OF ADVANCE. LD. CIT( A) HAS ERRED IN NOT ACCEPTING THE ADDITIONAL EVIDENCE FILE D IN APPEAL. 4. THAT THE APPELLANT BEGS TO CRAVES ANY OTHER ADD ITIONAL GROUNDS OF APPEAL, BEFORE OR AT THE TIME OF THE HEARING OF THE APPEAL, WITH PERMISSION OF CHAIR. 2. GROUND NOS. 1 & 4 ARE GENERAL IN NATURE, HENCE, WE DO NOT CONSIDER IT ESSENTIAL TO ADJUDICATE THE SAME. 3. IN THE SECOND GROUND OF APPEAL, THE ASSESSEE CON TENDED THAT THE LD. CIT(A), ERRED IN RESTRICTING THE ADDITION UNDER TH E HEAD KHUDI PHAK TO 50%, WHEREAS NO INDUSTRY NORMS ARE FIXED FOR YIELD OF KH UDI PHAK AT 3.2%. AND THE ADDITION OF RS. 29669/- DESERVES TO BE DELETED. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A PARTNERSHIP FIRM IS ENGAGE D IN THE BUSINESS OF PADDY HUSKING AND OWNS PLANT/MACHINERY. RETURN DECLARING AN INCOME OF RS.46,690/- WAS ELECTRONICALLY FILED ON 18.10.2007. THE ACCOUNTS WERE AUDITED BY THE CHARTERED ACCOUNTANT. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE IN ITS YIELD CHART HAS SH OWN THE YIELD OF KHUDI PHAK OF ONLY 2.8%. THE AO OBSERVED THAT AS PER INDU STRY NORMS AND AS PER OTHER MILLS, THIS YIELD SHOULD BE MINIMUM 3.2%. HE NCE, HE OBSERVED THAT THE ASSESSEE HAS SHOWN THE KHUDI PHAK SHORT BY 235. 47 QTLS. BY APPLYING THE RATE OF RS.252/- PER QTL. , THE AO MADE THE ADDITIO N OF RS.59,339/- INTO THE TRADING ACCOUNT OF THE ASSESSEE. ON APPEAL, THE LD. CIT(A), SUSTAINED THE 3 ADDITION OF RS.29,669/-. NOW AGGRIEVED WITH THE ORD ER OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THIS BENCH. 3.1. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THA T THE ASSESSEE-FIRM HAS CORRECTLY GIVEN THE YIELD OF RICE BRAN @ 3.35% ON P ADDY MILLING AND KHUDI PHAK OBTAINED HAS BEEN CORRECTLY SHOWN @ 2.80% OF P ADDY MILLING. HE SUBMITTED THAT THE A.O. HAS MADE THE ADDITION ON T HE POINT THAT INDUSTRY NORMS ARE PRESCRIBED @ 3.2% FOR SUPERIOR PHAK, WHER EAS IN FACT THE INDUSTRY NORMS ARE FIXED FOR RICE BRAN @ 3.35% ON PADDY MILL ING. HE FURTHER SUBMITTED THAT THE ASSESSEE FIRM HAS BEEN CONSISTEN TLY SHOWING THE YIELD OF KHUDI PHAK @ 2.8% AND REQUESTED THAT THE ADDITION S O MADE AND CONFIRMED MAY BE DELETED. 3.2. THE LD. DR, ON THE OTHER HAND, RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. WE ARE OF THE OPINION THAT THE LD. CIT(A), HAS PASSED A DETAILED AND WELL REASONED ORDER WITH REASONING AND LOGIC, REQUIRES NO INTERFERENCE AND DESERVES TO BE UPHELD. HOWEVER, THE FINDINGS GIVEN BY THE CIT(A), IN HIS I MPUGNED APPELLATE ORDER, ARE REPRODUCED HEREUNDER, FOR THE PURPOSE OF APPREC IATION OF THE FACTS OF THE CASE: THE ASSESSEES REPRESENTATIVE HAS FILED A YEAR WISE CHART FOR YIELD ON KHUDI PHAK WHICH SHOWS A CONSISTENT PERCENTAGE OF 2 .8% WHEREAS THE SAME SHOULD HAVE BEEN AT 3.2% AS PER A.O. NO INDUST RY NORMS ARE AVAILABLE. THE CONTENTION OF THE ASSESSEEE THAT IN EARLIER YEARS ALSO THE DEPARTMENT HAS ACCEPTED SUCH YIELD AND IN SUPPORT T HE ASSESSMENT ORDER PASSED IN THE CASE OF THE ASSESSEE FOR A.Y. 2 001-02 IS ALSO FILED. ON GOING THROUGH THE CASE, IT IS SEEN THAT NO SUCH ISSUE WAS EVEN TOUCHED BY THE AO. NO OTHER ASSESSMENT ORDER HAS BE EN BROUGHT TO THE NOTICE MEANING THEREBY THE CONTENTION OF ASSESSEE I S NOT ENTIRELY 4 CORRECT, THAT DEPARTMENT, AFTER EXAMINATION HAS ACC EPTED SUCH YIELD. MOREOVER, THE ASSESSEE HAS SHOWN A YIELD OF 2.8% WI THOUT ANY CHANGE WHATSOEVER OVER THE YEAS WHICH SUGGESTS THAT SUCH Y IELD IS SHOWN MECHANICALLY AND NOT BY WEIGHMENT OR OTHER SCIENTIF IC MEASURE. IT IS JUST AN ESTIMATE CARRIED OVER AND OVER. NORMS FOR R ICE BRAWN IS FIXED AT 3.5% BY FOOD AND CIVIL SUPPLIES DEPARTMENT SINCE NO NORMS ARE FIXED AND IN THE PRESENT CASE THE AO HAS TAKEN SUCH YIELD AT 3.2% QUOTING INDUSTRY NORMS (NOT SPECIFIED IN THE ORDER) AND OTHER MILLS, WHEREAS THE YIELD OF 2.8% AS SHOWN BY THE ASSESSEE ALSO APPEARS TO BE AN ESTIMATE PUT MECHANICALLY, IT WOULD MEET THE END S OF JUSTICE IF SUCH YIELD IS TAKEN AT 3.0% FOR THE YEAR UNDER CONSIDERA TION LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE. THIS IS TO BE TAKEN FOR THE A.Y. 2007-08. IN VIEW OF THIS ONLY AN ADDITION OF RS.29,669/- IS SUSTAINED AND BALANCE RS.29,669/- IS DELETED. 4.1. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY INFIR MITY IN THE FINDINGS OF THE LD. CIT(A) AND THE SAME ARE UPHELD. ACCORDINGLY , THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 5. AS REGARDS GROUND NO.3, RELATING TO CONFIRMATION OF ADDITION OF RS.80,000/- ON ACCOUNT OF CESSATION OF LIABILITY, T HE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT CONFIRMATION OF ADDITION IS LEGALLY NOT TENABLE, AS THE ASSESSEE HAD RECEIVED DRAFT OF RS.80,000/- FROM BRO KER. HOWEVER, AS PER INFORMATION AVAILABLE TO US, THE PARTICULAR DEALER HAS EXPIRED WHILE ON WAY TO DELHI FROM HARIDWAR WHILE BRINGING KAWAT. THERE FORE, IN VIEW OF THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, CONFI RMATION FROM THE SAID PARTY CANNOT BE OBTAINED. THE LD. COUNSEL FOR THE A SSESSEE, CONTENDED THAT PHOTOCOPY OF THE DEMAND DRAFT PURCHASED BY THE SAI D PARTY FROM DELHI WAS OBTAINED AND FILED, IN CONFIRMATION OF THE SAID PO INT. HE FURTHER STATED THAT THE LD. CIT(A) CONFIRMED THE ADDITION IGNORING CRED IBLE EXPLANATION FILED BY THE ASSESSEE IN THE FORM OF DOCUMENTARY EVIDENCE I. E. IN THE SHAPE OF DEMAND DRAFT FILED. IT WAS NOT POSSIBLE FOR THE AS SESSEE TO PRODUCE 5 CONFIRMATION FROM THE PERSON WHO EXPIRED, WHILE BRI NGING KAWAT FROM HARIDWAR. THEREFORE, WE ARE OF THE CONSIDERED OPIN ION THAT DEMAND DRAFT IS A CORROBORATIVE AND CREDIBLE EVIDENCE ESTABLISHING POINT OF THE ASSESSEE. CONSEQUENTLY, THE ADDITION SUSTAINED BY THE LD. CIT (A), IS DELETED AND THIS GROUND OF APPEAL IS ALLOWED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 21S T JUNE, 2011. SD/- SD/- (H.L. KARWA) (MEHAR SINGH) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 21ST JUNE, 2011 /SKR/ COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE:M/S. SHREE MAHALAKSHMI RICE MILLS, KOT KAPURA. 2. THE JCIT, R-III, JALANDHAR. 3. THE CIT(A), JALANDHAR. 4. THE CIT, JALANDHAR. 5. THE SR DR, ASR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH : AMRITSAR.