Sri Jagdamba Agro Industries, Kalahandi V. ITO, Bolangir

ITA 50/CTK/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7834 (ITAT-CUTTACK)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 22-06-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 24-01-2012
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: S WRITTEN SUBMISSIONS

Judgement Text

IN THE INC O ME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM , AND SHRI K.S.S.PRASAD RAO, JM ITA NO S . 50 /CTK/2012 (ASSESSMENT YEAR S 2008 - 09) SRI JAGDAMBA AGRO INDUSTRIES,AT/P.O.SAINTALA, DIST.BOLANGIR (ODISHA) PAN: AAEFJ 54 69 L VERSUS INCOME - TAX OFFICER, BOLANGIR WARD, BOLANGIR. (APPELLANT) (RESPONDENT) ITA NO S . 294/CTK/2012 (ASSESSMENT YEAR S 2008 - 09) M/S.PAYAL CLOTH STORE, PRP.HANUMAN PRASAD AGRAWAL, AT/P.O.KESINGA, DIST.KALAHANDI (ODISHA) PAN:AAUPA 3441 R VERSUS INC OME - TAX OFFICER, BHAWANIPATNA WARD, BHAWANIPATNA. (APPELLANT) (RESPONDENT) FOR THE ASSESSEES: WRITTEN SUBMISSIONS FOR THE DEPARTMENT : SHRI S.C.MOHANTY, DR DATE OF HEARING : 22.06.2012 DATE OF PRONOUNCEMENT : 29 .06.2012 ORDER SHRI K.K.GU PTA, AM : THESE TWO APPEALS ARE BY THE ASSESSEES AGITATING THE CONTENTION OF THE LEARNED CIT(A) CONFIRMING THE AMOUNTS BROUGHT TO TAX BY THE ASSESSING OFFICER ON THE BASIS OF SURVEY CONDUCTED U/S.133A LEADING TO FINDING OF DISCREPANCY IN THE STOCK PHYSICAL LY VERIFIED VIS - - VIS INCOMPLETE RECORDS MAINTAINED BY THE ASSESSEE AT THE TIME OF SURVEY. 2. BOTH THE APPEALS ARE FOR THE ASSESSMENT YEAR 2008 - 09 AND THE COMMON COUNSEL FOR THE ASSESSEE HAS PREFERRED TO FILE WRITTEN SUBMISSIONS WHICH HE HAS PROPOSED TO B E TAKEN UP ON RECORD PREFERRING OVER P ERSONAL APPEARANCE. WE PROCEED TO DISPOSE OF THESE APPEALS AFTER HEARING THE LEARNED DR ON THE BASIS OF MATERIAL BROUGHT ON RECORD BY THE LEARNED COUNSEL FOR THE ASSESSEE AS ANNEXED TO THE WRITTEN SUBMISSIONS. ITA NOS.50 AND 294/CTK/2012 2 3. WE HA VE CONSIDERED THE ORDERS OF THE AUTHORITIES BELOW FOR BOTH THE ASSESSEES AND ALSO PERUSED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE IN THE WRITTEN SUBMISSIONS AND THE LEARNED DR WHO HAS SUPPORTED THE ORDER OF THE LEARNED CIT(A) WHICH THROW M ORE LIGHT ON THE CASE OF THE ASSESSEE BRINGING TO TAX A PORTION OF THE INCOME EMBODIED IN THE STOCK FOUND IN THE SURVEY WHICH HAS NOT BEEN RENDERED TO TAX BY THE ASSESSEE WHICH CASE WAS SCRUTINIZED ON ITS FILING OF RETURNS FOR THE ASSESSMENT YEAR 2008 - 09 U /S. 143(3). 4. WE DO NOT FIND MERIT IN THE CONTENTION OF THE LEARNED CIT(A) IN UPHOLDING THE ADDITION. IT WAS THE CASE OF THE ASSESSEE TO EXPLAIN THE DISCREPANCY OF STOCK IN THE MIDDLE OF THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATIO N WHEN THE ASSESSEES COULD NOT BE SAID TO HAVE MADE PROFITS FROM THE STOCK MISSING IN THE LIGHT OF THE FACT FINDING THAT THE ASSESSEE DOES NOT MAINTAIN BOOKS OF ACCOUNT BUT HAS RENDERED INCOME FROM TRADING THEREOF AT THE END OF THE YEAR WHETHER HAS BEEN C ONSIDERED BY THE ASSESSING OFFICER ACCEPTABLE AS SALES OR THE COST OF SALES SHOWN AS CLOSING STOCK. THE INCOME IS TO BE TAXED FOR THE YEAR AND NOT FOR A PARTICULAR DATE WHICH BUSINESS TRANSACTIONS ARE TO BE RECORDED IN THE BOOKS OF ACCOUNT IN ACCORDANCE WI TH THE BUSINESS CONDUCTED AND NOT BECAUSE THE I.T.AUTHORITIES FEEL THAT ON A PARTICULAR DATE T HIS AMOUNT OF EXCESS STOCK OR LESS STOCK SHOULD HAVE BEEN TAXED WHEN THE ASSESSEE HAD OPTION TO RECTIFY IT TILL THE CLOSE OF THE FY. THIS CLEARLY INDICATES THAT P URPORTED UNDISCLOSED INCOME HAS BEEN TAXED IN THE MIDDLE OF THE YEAR WHICH INCOME WAS TO BE COMPUTED AT THE END OF THE YEAR WITH SUPPORTING DOCUMENTS WHICH WAS TO BE CONSIDERED FOR ASSESSMENT BY THE ASSESSING OFFICER U/S.143(3). IN OTHER WORDS, WE ARE OF T HE CONSIDERED VIEW THAT IT WAS NOT THE CASE OF THE ASSESSEE TO HAVE UNDISCLOSED INCOME TO BE TAXED UNDER THE PROVISIONS OF SECTION ITA NOS.50 AND 294/CTK/2012 3 132(4) AND NEITHER W A S IT A CASE OF THE ASSESSING OFFICER TO BRING TO TAX UNDISCLOSED INCOME IN AN ORDER U/S.143(3). 5. WE AR E CONSTRAINT TO MAKE THE OBSERVATION IN THE FOREGOING PARAGRAPH IN VIEW OF THE PROPER FACTS NOT HAVING BEEN BROUGHT ON RECORD EITHER BY THE ASSESSING OFFICER AND THE LEARNED CIT(A) AND NOT EXPLAINED BY THE LEARNED COUNSEL FOR THE ASSESSEE AS OF NOW. THE LE ARNED COUNSEL FOR THE ASSESSEE HAS DEFINITELY RAISED THE GROUND COMMON FOR BOTH THE ASSESSEES THAT THE FIGURES ARE PURELY HYPOTHETICAL FIGURES AND HAVE RESULTED ON THE BASIS OF ESTIMATION WHICH ESTIMATION CANNOT BE SUPPORTED BY ANY METHOD ON THE BASIS OF D OCUMENTS AND BILLS AND VOUCHERS HELD BY THE ASSESSEE. IN OTHER WORDS WITH THE ANNEXURE TO THE WRITTEN SUBMISSIONS, THE LEARNED COUNSEL FOR THE ASSESSEE HAS TRIED TO JUSTIFY THAT THE FATE OF THE MISSING STOCK OR EXCESS STOCK HAS BEEN DEALT WITH BY THE ASSES SEE IN RENDERING THE INCOME WHICH WAS THE SUBJECT MATTER FOR SCRUTINY U/S. 1 43(3) THEREFORE WAS LEADING TO A FINDING THAT THIS INCOME HAS BEEN DEALT WITH BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT OR ON THE BASIS OF SPECIFIC FINDINGS OF THE ASSESSING OFFICER O R THE LEARNED CIT(A) WOULD LEAD TO DOUBLE TAXATION ONLY . HAVING SAID SO AND ON THE BASIS OF FACTS BROUGHT ON RECORD ABOVE , THE TRIBUNAL BEING THE FINAL FACT FINDING BODY , WE ARE INCLINED TO SET ASIDE THE IMPUGNED ORDERS OF THE LEARNED CIT(A) AND RESTORE TH E ISSUE TO THE FILE OF THE ASSESSING OFFICER TO CONSIDER AFRESH WITH A SPECIFIC DIRECTION TO RELATE THE FINDING OF SURVEY OF BOTH THE ASSESSEES TO THE MATERIAL FACT FINDING THE MOVEMENT OF STOCK, THE ALLOWANCE OF PURCHASES, THE SALES DULY ACCEPTED BY HIM A ND WHETHER THE CLOSING STOCK WAS MORE THAN THE STOCK COMPUTED BY THE ASSESSEE AS AVAILABLE AS ON THE DATE OF SURVEY WHETHER COULD NOT BE FORMING PART OF THE INCOME HAS TO BE ESTABLISHED BY THE ASSESSING OFFICER. NEEDLESS TO SAY THAT AN OPPORTUNITY OF BEI NG HEARD TO ITA NOS.50 AND 294/CTK/2012 4 THE RESPECTIVE ASSESSEES BE GRANTED AND PASS THE ASSESSMENT ORDER AFRESH IN THE LIGHT OF THE OBSERVATIONS MADE ABOVE. 6. IN THE RESULT, THE APPEALS OF BOTH THE ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSES. S D/ - S D/ - (K.S.S.PRASAD RAO) JUDICIAL MEMBER (K.K.GUPTA) ACCOUNTANT MEMBER DATE: 29 .06.2012 H.K.PADHEE, SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT S : 1. SRI JAGDAMBA AGRO INDUSTRIES,AT/P.O.SAINTALA, DIST.BOLANGIR (O DISHA) 2. M/S.PAYAL CL OTH STORE, PRP.HANUMAN PRASAD AG RAWAL, AT/P.O.KESINGA, DIST.KALAHANDI (ODISHA) 2. THE RESPONDENT: 1. INCOME - TAX OFFICER, BOLANGIR WARD, BOLANGIR. 2. INCOME - TAX OFFICER, BHAWANIPATNA WARD, BHAWANIPATNA. 3. THE CIT, 4. THE CIT(A ), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY. APPENDIX XVII SEAL TO BE AFFIXED ON THE ORDER SHEET BY THE SR. P.S./P.S. AFTER DICTATION IS GIVEN 1. DATE OF DICTATION 2 5 .06.2012.. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 2 6 .06.2012OTHER MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.... 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S . 29.6.2012 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER ................ 9. DATE OF DESPATCH OF THE ORDER . .