Pawan Kumar Rekhan, New Delhi V. ITO, New Delhi

ITA 5428/DEL/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4153 (ITAT-DELHI)
• Duration Of Justice: 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 01-12-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 19-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMJANEYULU
• Assessee Lawyers: B L GUPTA ITP
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SM C - I , NEW DELHI BEFORE SH. N. K. SAINI, A CCOUNTANT M EMBER ITA NO. 5428/DEL/2016 : ASSTT. YEAR : 201 2 - 1 3 PAWAN KUMAR REKHAN, PROP. DELHI AGRO (INDIA), 2658, N AYA BAZAR, DELHI - 110006 VS INCOME TAX OFFICER, WARD - 47(1), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. A A DPR3788H ASSESSEE BY : SH. B. L. GUPTA, ITP REVENUE BY : SH. RAMJANEYULU , SR. DR DATE OF HEARING : 01.12 .201 6 DATE OF PRONOU NCEMENT : 06 . 12 .201 6 ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 27.09.2016 OF LD. CIT(A) - 16 , NEW DELHI . 2. THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO THE SUSTENANCE OF ADDITION OF RS.14,56,730 / - MADE BY THE AO ON ACCOUNT OF UNDERVALUATION OF THE CLOSING STOCK BY PASSING THE ORDER EX - PARTE U/S 144 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 3 . FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 3 0.03.2013 DECLARING AN INCOME OF RS.2,74,568/ - WHICH WAS PROCESSED U/S 143(1) OF THE ACT. LATER ON, THE CASE WAS SELECTED FOR SCRUTINY. THE AO PASSED THE EX - PARTE ORDER BY MAKING AN ADDITION OF RS.14,56,730/ - ON ACCOUNT OF VALUATION OF THE CLOSING STOCK BY OBSERVING THAT THE ASSESSEE WAS FOLLOWING THE METHOD OF VALUATION OF CLOSING STOCK ITA NO. 5428 /DEL /201 6 PAWAN KUMAR REKHAN 2 AS COST OR MARKET PRICE WHICHEVER WAS LESS AND THAT THE AVERAGE COST PRICE OF THE ASSESSEE WAS AT RS.34.17 PER UNIT WHEREAS THE CLOSING STOCK OF 1,91,340 KGS HAS BEEN VALU ED AT RS.26.55 PER UNIT. 4 . BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND FURNISHED THE WRITTEN SUBMISSION WHICH HAS BEEN INCORPORATED AT PAGE NOS. 2 & 3 OF THE IMPUGNED ORDER. THE LD. CIT(A) DID NOT FIND MERIT IN THE SUBMISSIONS O F THE ASSESSEE BY OBSERVING THAT PASSING OF THE ORDER U/S 144 OF THE ACT DID NOT MEAN AUTOMATICALLY THAT WHATEVER THE ASSESSEE HAD STATED IN HIS INCOME TAX RETURN WAS ACCEPTED BY THE DEPARTMENT . HE FURTHER OBSERVED THAT NO PLAUSIBLE REASON HAD BEEN GIVEN F OR NON - COMPLIANCE BEFORE THE AO AND EVEN AT THE APPELLATE STAGE, THE ASSESSEE HAD NOT FURNISHED THE EVIDENCE TO REBUT THE OPINION OF THE AO. 5 . NOW THE ASSESSEE IS IN APPEAL. 6 . I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERI AL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT APPEARS THAT THE LD. CIT(A) DID NOT APPRECIATE THE SUBMISSION OF THE ASSESSEE IN THE RIGHT PERSPECTIVE , PARTICULARLY THIS SUBMISSION THAT THE TOTAL CLOSING STOCK OF 1,91,340 KGS INCLUDED WHEAT QUANTITY OF 85840 KG PURCHASE D @ RS.11.71 PER KG AND THE SAID DETAIL WAS FURNISHED TO THE AO AND THAT THE WHEAT AND RICE WERE VALUED AT THE PRICE OF THE PURCHASES. IN THE PRESENT CASE, THE AO ALSO PASSED THE ASSESSMENT ORDER EX - PARTE WITHOUT CONSIDERING THE AFORESAID DETAIL S FURNISHED BY THE ASSESSEE. I, THEREFORE, ITA NO. 5428 /DEL /201 6 PAWAN KUMAR REKHAN 3 CONSIDERING THE TOTALITY OF THE FACTS DEEM IT APPROPRIATE TO SET ASIDE THIS CASE BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION , IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF B EING HEARD TO THE ASSESSEE. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . (ORDER PRON OUNCED IN THE CO URT ON 06 /12 /2016) SD/ - (N. K. SAINI ) ACCOUNTANT MEMBER DAT ED: 06 /12 /2016 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR