M/s Banarsi Mishthan Bhandar Pvt. Ltd., Kanpur V. The Asstt. Commissioner of Income Tax (C.C-VI), Kanpur

ITA 524/LKW/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0567 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 27-04-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 12-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K C MEENA
• Keywords: Business income

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.524/LKW/2014 ASSESSMENT YEAR:2007 - 08 A.C.I.T., C.C. - VI (NOW ACIT, C.C. - 2) KANPUR. VS M/S BANARSI MISHTHAN BHANDAR PVT. LTD., 26/72, BIRHANA ROAD, KANPUR. PAN:AAACB5675R (RESPONDENT) (APPELLANT) SHRI P . K. KAPOOR , F.C.A. APPELLANT BY SHRI K. C. MEENA, D. R. RESPONDENT BY 01/05/2015 DATE OF HEARING 12 /06/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - I, KANPUR DATED 31/03/2014 FOR THE ASSESSMENT YEAR 2007 - 08. 2. IT WAS AGREED BY BOTH THE SIDES THAT GROUND NO. 1(A) AND 2 ARE INTER CONNECTED, WHICH ARE AS UNDER: 1. BECAUSE THE AUTHORITIES BELOW HAVE ERRED IN LAW AND ON FACTS IN MAKING/SUSTAINING ADDITIONS FOR SUMS AGGREGATING RS.58,26,868/ - MADE UP AS UNDER: ( A ) CASH ALLEGED TO FOUND IN EXCESS ON RS.32,300/ - THE DATE OF SEARCH ON 17/10/2006 2. BECAUSE ADDITION OF RS.32,300/ - ON ACCOUNT OF CASH ALLEGED TO HAVE BEEN FOUND IN EXCESS AT THE TIME OF SEARCH ON 17.10.2006, AS SUSTAINED BY THE CIT(A) ON THE FOLLOWING GROUNDS AND REASON: - 2 'IN THE STATEMENTS RECORDED DURING THE COURSE OF SEARCH, NONE OF THE PARTNERS DISCLOSED 'BARDANA SALES'. IF THERE WERE ACTUAL BARDANA SALES THESE WOULD HAVE BEEN DISCLOSED STRAIGHT AWAY IN THESE STATEMENTS. ASSESSEE HAS FURNISHED NO EVIDENCE OF THESE ALLEGED 'BARDANA SALES' EXCEPT STATEMENT OF SHRI JEEVAN AGARWAL. THUS THIS ENTIRE EXERCISE OF CREATING A CASH ENTRY THROUGH ALLEGED 'BARDANA SALES' APPEARS TO BE AN AFTERTHOUGHT TO ACCOUNT FOR THE EXCESS CASH. THIS HAS BEEN THOUGHT OUT BY THE 'LEGAL BRAINS' OF THE ASSESSEE. IN THE ABSEN CE OF ANY CONCLUSIVE EVIDENCE THIS ALLEGED 'BARDANA SALES' CANNOT BE ACCEPTED.' IS WHOLLY ILLEGAL AS BEING INCONSISTENT WITH THE FACTS OF THE CASE AND MATERIAL AND INFORMATION AVAILABLE ON RECORD. 3. L EARNED A. R. OF THE ASSESSEE SUBMITTED THAT ON PAGE NO. 47 OF THE PAPER BOOK IS THE DETAIL OF BUSINESS INCOME, WHICH INCLUDES CASH RECEIPT OF RS.32,300/ - AGAINST SALE OF BARDANA. HE SUBMITTED THAT THIS AMOUNT OF BARDANA SALE WAS NOT INCLUDED IN THE CASH BOOK ON THE DATE OF SEARCH BUT SINCE IT WAS RECORDE D AFTERWARDS AS INCOME, NO SEPARATE ADDITION IS REQUIRED TO BE MADE IN RESPECT OF EXCESS CASH FOUND TO THIS EXTENT. LEARNED D. R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE ASSESSING OFFICER MADE ADDITION OF RS.32,300/ - ON ACCOUNT OF EXCESS CASH FOUND AT THE TIME OF SEARCH. SINCE EXCESS CASH FOUND IS ALREADY ACCOUNTED FOR IN THE BOOKS AS INCOME, NO SEPARATE ADDITION IS CALLED FOR IN RESPECT OF SUCH EXCESS CASH FOUND OF RS.32 ,300/ - . THEREFORE, THIS ADDITION IS DELETED. ACCORDINGLY, THESE GROUNDS ARE ALLOWED. 5. REGARDING GROUND NO. 1(B) I.E. REGARDING ADDITION OF RS.31,11,884/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF STOCK OF RAW MATERIAL AND 3 FINISHED GOODS ALLEGED TO H AVE BEEN FOUND IN EXCESS, IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT IN THE ASSESSMENT ORDER, THE A.O. HAS WORKED OUT THE BOOK STOCK BY ADDING UP THE EXPENSES AS PER BOOKS AND REDUCING SALES NET OF GROSS PROFIT @ 24.4% BUT THESE IS MISTAKE IN TH E SAME BECAUSE HE HAS NOT CONSIDERED THE EXPENSES INCURRED UP TO 17.10.2006 BUT ACCOUNTED FOR AFTERWARDS AS PER DETAIL ON PAGE 184 OF THE PAPER BOOK OF RS. 26,74,235.63 AND RS. 318,900/ - TOTAL RS. 29,93,135.63. HE ALSO SUBMITTED THAT THERE ARE CERTAIN OTHE R CASTING/TOTALING MISTAKES AND THEREFORE, THE ENTIRE ADDITION OF RS.31,11,884/ - IS UNJUSTIFIED. 6. LEARNED D. R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT AS PER PAGE NO. 1 84 OF THE PAPER BOOK , IT IS SUBMITTED THAT THERE WERE CERTAIN GOODS RECEIVED/EXPENSES INCURRED UP TO 17.10.2006 BUT THE SAME WERE ACCOUNTED FOR AFTERWARDS. THE SAME ARE KAJU RS. 219,880/ - . BADAM RS. 110,050, PISTA RS. 100,460/ - , MISC. PURCHASE RS. 155,391/ - ETC. TOTALING RS. 29,93,135.63. THERE IS NO FINDING OF THE AUTHORITIES BELOW THAT THIS CLAIM OF THE ASSESSEE IS NOT CORRECT. THIS IS VERY NORMAL THING THAT SOME EXPENSES ALWAYS REMAIN TO BE ACCOUNTED FOR BECAUSE OF PROCEDURAL REQUIREMENTS AND THERE IS NO THING ABNORMAL IN THIS CONTENTION AND THE SAME CANNOT BE BRUSHED ASIDE WITHOUT POINTING OUT CONCRETE MISTAKE THEREIN. ONCE WE CONSIDER THESE EXPENSES, BOOK STOCK GOES UP AND AS A CONSEQUENCE, THE STOCK FOUND STANDS EXPLAINED. UNDER THESE FACTS, THE ADDITION DOES NOT SURVIVE AND HENCE, WE DELETE THIS ADDITION MADE BY THE ASSESSING OFFICER. ACCORDINGLY, GROUND NO. 1(B) IS ALLOWED. 8. REGARDING GROUND NO. 1(C) AND GROUND NO. 3 & 4, WHICH ARE INTER - CONNECTED, IT WAS SUBMITTED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE 4 ASSESSEE BY THE TRIBUNAL DECISION IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008 - 09 AND 2009 - 10 IN I.T.A. NO.665 AND 666 DATED 28/04/2015. HE SUBMITTED COPY OF THE TRIBUNAL DECISION. 9. LEARNED D. R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN THOSE YEARS ALSO, THE ASSESSING OFFICER HAD ENHANCED THE GROSS PROFIT FROM 24% TO 3 6 % AS IN THE PRESENT YEAR. IN THOSE YEARS, SUCH ADDITION WAS DELETED BY CIT(A) AND THE ORDER OF CIT(A) IN THOSE YEARS WAS APPROVED BY THE TRIBUNAL. SINCE IN THE PRESENT YEAR ALSO, THE GROSS PROFIT RATE DECLARED BY THE ASSESSEE IS SAME I.E. AROUND 24%, WE DO NOT FIND ANY REASON TO TAKE A CONTRARY VIEW IN THIS YEAR. THEREFORE, FOLLOWING THE TRIBUN AL DECISION IN ASSESSEES OWN CASE, WE HOLD THAT IN THE PRESENT YEAR ALSO, THE ADDITION MADE BY THE ASSESSING OFFICER AND SUSTAINED BY CIT(A) IS NOT JUSTIFIED. WE, THEREFORE, DELETE THE SAME. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 12 /06/2015 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR