Yogilon Twisto Fab, Surat V. The Income Tax Officer, Ward-9(4), Surat

ITA 518/AHD/2015

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 1911 (ITAT-SURAT)
• Duration Of Justice: 3 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 09-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPMA SING ALA
• Assessee Lawyers: MEHA L R SHAH
• Section: 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH ES, SURAT BEFORE: SHR I AMARJIT SINGH , ACCOUNTANT MEMBER AND MS. MADHUMITA ROY , JUDICIAL MEMBER YOGILON TWISTO FAB, C/O RASESH SHAH & ASSOCIATES, O - 1, 1 ST FLOOR, SLVER PALM BLDG, TIMALIYAWAD, SURAT - 395001 PAN: AAAFY2829D (APPELLANT) VS THE IT O , WARD - 9(4) , SURAT (RESPONDENT) REVENUE BY : MS. ANUPMA, S I NG A LA , SR. D . R. ASSESSEE BY: SHRI MEHA L R. SHAH, A.R. DATE OF HEARING : 19 - 11 - 2 018 DATE OF PRONOUNCEMENT : 20 - 12 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTAN T MEMBER : - THIS ASSESSEE S APPEAL FOR A. Y. 2009 - 10 , ARI SES FROM ORDER OF THE CIT(A) - V, SURAT DATED 16 - 09 - 2 013 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE SOLITARY GROUND OF APPEAL OF THE ASSESSEE IS AGA INST THE ORDER OF THE LD. CIT(A) DATED 16 - 09 - 2013 IN SUSTAINING THE ADDITION OF RS. 20 , 01 , 510/ - ON ACCOUNT OF EXCESS STOCK FUND DURING THE COURSE OF SURVEY. 3. THE FACT IN BRIEF DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S. 143(3) OF THE ACT T HE ASS ESSING OFFICER NOTICED THAT IN THE CASE OF THE ASSESSEE A SURVEY I T A NO . 518 / A HD/20 15 A SSESSMENT YEAR 200 9 - 10 I.T.A NO. 518 /AHD/20 15 A.Y. 2009 - 10 PAGE NO YOGILON TWISTO FAB VS. IT O 2 ACTION U/S. 133A OF THE ACT W AS CARRIED OUT O N 18 - 08 - 2008. DURING THE COURSE OF SURVEY EXCESS STOCK OF UNACCOUNTED Y AR N WAS FOUND. THE ASSESSEE HAS DISCLOSED AN AMOUNT OF RS. 20 , 01 , 510/ - ON ACCOUNT OF EXCESS YARN OF UNACCOUNTED STOCK. ON VERIFICATION OF THE DETAIL, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS NOT OFFERED THE VALUE OF EXCESS STOCK OF RS. 2001510/ - AS UNDISCLOSED INCOME IN THE RETURN OF INCOME. THE A SSESSEE EXPLAIN ED OUT OF EXCESS STOCK OF RS. 20,01,510/ TH ERE WAS A DIFFERENCE OF RS. 12 , 47 , 879/ - ATTRIBUTABLE TO HIGHER RATE OF VALUATION OF STOCK A D O P TE D BY THE SURVEY OFFICIAL DURING THE CO URSE OF SURVEY ACTION. HOWEVER , THE ASSESSING OFFICER HAS NOT ACCEPTED THE SU BMISSION OF THE ASSESSEE AND STATED THAT ON THE DATE OF SURVEY THE STOCK AS PER BOOKS OF ACCOUNT OF THE ASSESSEE FIRM WAS OF RS. 12,08 ,350/ - A S AGAINST PHYSICAL STOCK OF RS. 32 , 09 , 860/ - , THEREFORE, THE DIFFERENCE OF RS. 20 , 01 , 510/ - WAS ADDED TO T HE TOTAL INCOME OF THE ASSESSEE BEING T HE VALUE OF EXCESS STOCK FOUND DURING THE SURVEY. 4. AGGRIEVED ASSESSEE HAS PREFERRED ON APPEAL BEFORE THE LD. CIT(A) AGAINST THE IMPUGNED ADDITION MADE BY THE ASSESSING OFFICER. THE LD. CIT(A) HAS DISMISSED THE APPEAL OF TH E ASSESSEE. 5. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS CONTENDED THAT THE LD . CIT(A) HAS NOT CONSIDERED THE SUBMISSION MADE DURING THE COURSE OF APPELLATE PROCEEDINGS AND THE ASSESSING OFFICER HAS MADE INCORRECT ADDITION WITHOUT DISAPPROVING THE SUPPORTING MATERIAL AND EXPLANATION FURNISHED BY THE ASSESSEE. HE HAS ALSO FURNISHED PAPER BOOK CONTAINING DETAILS OF INFORMATION SUBMITTED BEFORE THE ASSESSING OFFICER AND CIT(A) DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND A PPELLATE PROCEEDINGS . O N THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE HAS PLACED RELIANCE ON THE ORDER OF THE LD. CIT(A) I.T.A NO. 518 /AHD/20 15 A.Y. 2009 - 10 PAGE NO YOGILON TWISTO FAB VS. IT O 3 6. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD CAREFULLY. IT IS NOTICED THAT DURING THE COURSE OF SURVEY ON 1 8/08/2008, PHYSICAL STOCK OF THE YARN W AS TAKE N AT 18 , 667/ - KGS AND THIS STOCK OF YARN WAS VALUED AT RS . 32 , 09 , 860/ - AS PER ANNEXURE SF DATED 18/08 /2008 PLACED A T PAGE NO. 42 IN THE PAPER BOOK FURNISHED BY THE ASSESEE DURING THE COURSE OF APPELLATE PROCEE DINGS BEFORE US. IT IS NOTICE D THAT THE ASSESSEE HAS NOT DISPUTED TH E DIFFERENCE IN QUANTITY OF 7 , 692 KGS ( THE QUANTITY OF 18677 KGS FOUND DURING THE COURSE OF SURVEY AND QUANTITY OF 10 , 985 RECORDED IN THE BOOKS OF ACCOUNT AS ON THE DATE OF SURVEY ) . TH E ASSESEE HAS DISPUTED THE VALUATIO N OF EXCESS STOCK OF 7 , 692 KG RA W MATERIAL STOCK INVENTORIED AS PRE ANNEXURE SF AT THE TIME OF S URVEY VALUED AT A PRICE RANGING FROM RS . 165 TO RS. 180 PER KGS STATING THAT THE SAME WAS EVEN HIGHER THAN THE SELLING PRI CE OF THE ASSESSEE I.E. RS. 140 PER KG. IN THIS CONNECTION, IT IS NOTICED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND APPELLATE PROCEEDINGS BEFORE THE ASSESSING OFFICER AND LD. CIT(A) , THE ASSESSEE HAS FILED DETAILS OF PURCHASES AND AVERAGE PURC HASE PRICE AT RS. 97 PER KG AS PER PAGE NO. 44 OF T HE PAPER BOOK. THE ASSESSEE ALSO SUBMITTED THAT HE HAS SHOWN THE EXCESS QUANTITY OF 7 , 692 KGS OF CLOSING STOCK FOUND DURING THE CO U RS E S U RVEY AT RS. NIL I N THE DEBIT SIDE OF T HE P & L ACCOUNT AND THE ACTU AL SALE REALIZATION OF THIS STOCK WAS FULLY SHOWN IN THE SALE ON THE C REDIT SIDE OF THE P & L ACCOUNT . THE LD. COUNSEL HA S A LSO CONTENDED THAT T HE GROSS PRO FIT SHOWN DURING T H E YEAR WAS @ 21.10 AS COMPARED TO EARLIER YEAR GROSS PROFIT SHOWN @ 14.57%. DUR ING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US THE LD. COUNSEL HAS ALSO PRESENTED THREE METHOD OF SHOWING THE DISCREPANCY IN EXCESS QUANTITY OF STOCK FOUND DURING THE COURSE OF SURVEY DEMONSTRATING THE SAME EFFECT OF REPORTING THE DISCREPANCY OF EXCES S STOCK DETECTED IN SURVEY ACTION . IT IS ALSO NOTICED THAT VIDE LETTER DATED 28/12/2011 PLACED AT PAGE NO. 6 OF THE PAPER BOOK, THE ASSESSEE HAS EXPLAINED TO THE ASSESSING OFFICER THAT THE RATE AT WHICH THE EXCESS STOCK VALUED WAS MUCH HIGHER THAN THE CO ST PRICE OF THE STOCK OF 7692 KG FOUND DURING THE COURSE OF SURVEY. AFTER CONSIDERING THE ABOVE FACTS, MATERIAL FURNISHED IN THE PAPER BOOK , IT I S APPARENT THAT THE ASSESSING OFFICER HAS NOT VALUED THE I.T.A NO. 518 /AHD/20 15 A.Y. 2009 - 10 PAGE NO YOGILON TWISTO FAB VS. IT O 4 EXCESS STOCK FOUND DURING T HE COURS E OF SURVEY ON TH E BASS OF COST OF RAW MATERIAL. THEREFORE, IN THE INTEREST OF JUSTICE , WE CONSIDER IT WOULD BE APPROPRIATE TO RESTORE THIS ISSUE OF VALUATION OF EXCESS STOCK OF 7 , 692 KG TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATING DE - NOVO AFTER VERIFICATION OF THE ACTUAL RATE OF GOODS AS PER THE PURCHASE BILLS TO BE PRODUCED BY THE ASSSESSEE DURING T HE COURSE OF SET ASIDE PROC EE DINGS. ACCORDINGLY , THE ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING AFRESH AS DIRECTED ABOVE AFTER AFFORDING A DEQUATE OPPORTUNITY TO THE ASSESSEE. THEREFORE, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE . ORDER PR ONOUNCED IN THE OPEN C OURT ON 20 - 12 - 201 8 SD/ - SD/ - ( MADHUMITA ROY ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 20 /12 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,