ACIt, Kollam V. Southern Cashew Exporters, Kollam

ITA 566/COCH/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2510 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 26-06-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 10-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: IYPE MATHEW

Judgement Text

1 ITA NO.566/COCH/2011 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 566/COCH/2011 (ASSESSMENT YEAR 2008-09) THE A.C.I.T., CIR.1(1) VS M/S SOUTHERN CASHEW KOLLAM EXPORTERS, CHANDANATHOPE KOLLAM PAN : AAEFM2115M (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. S VIJAYAPRABHA RESPONDENT BY : SHRI IYPE MATHEW DATE OF HEARING : 26-06-2013 DATE OF PRONOUNCEMENT : 28-06-2013 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A), TRIVANDRUM DATED 25-07-2011 AND PERTAINS TO ASSESSMENT YEAR 2008-09. 2. SMT. S VIJAYAPABHA, THE LD.DR SUBMITTED THAT OFF ICIALS FROM ANDHRA BANK INSPECTED THE PHYSICAL STOCK AVAILABLE WITH TH E ASSESSEE AND FOUND THAT THERE WAS A DEFICIENCY IN STOCK TO THE EXTENT OF RS.975.35 LAKHS. THE DIFFERENCE IN OPENING STOCK DECLARED TO THE INCOME- TAX DEPARTMENT AND TO 2 ITA NO.566/COCH/2011 THE BANK WAS ADMITTED TO BE - THE STOCK WAS VALUED AT MARKET PRICE FOR THE BANK AND AT COST FOR THE INCOME-TAX DEPARTMENT. AC CORDING TO THE LD.DR, THERE WAS A CLEAR UNDER-STATEMENT OF TURNOVER TO TH E DEPARTMENT WHICH SHOWS THAT THERE WAS AN UNACCOUNTED SALES TO THE EX TENT OF RS.9,75,35,000. ON A QUERY FROM THE BENCH, WHETHER WAS THERE ANY DIFFERENCE IN THE QUANTITY OF THE STOCK, THE LD.DR CLARIFIED THAT THERE WAS NO DIFFERENCE IN THE QUANTITY OF STOCK AND THAT THE DI FFERENCE WAS ONLY WITH RESPECT TO THE VALUE. 3. ON THE CONTRARY, SHRI IYPE MATHEW, THE LD.REPRES ENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE DIFFERENCE IS ONLY BECA USE OF THE DIFFERENT METHODS OF VALUATION OF STOCK. ACCORDING TO THE LD .REPRESENTATIVE, DUE TO PASSAGE OF TIME, SOME OF THE STOCKS WERE FOUND ROTT EN AND SOME WERE BROKEN. THEREFORE, DURING THE INSPECTION BY THE BA NK OFFICIALS IT WAS VALUED AT A LESSER PRICE. ACCORDING TO THE LD.REPRESENTAT IVE, WHEN THE QUANTITY IS FOUND AS DECLARED TO THE INCOME-TAX DEPARTMENT, THE RE IS NO QUESTION OF ANY SUPPRESSION OF SALES. IT IS ONLY A CASE OF DIF FERENT VALUATION BY TWO DIFFERENT AUTHORITIES. WHEN THERE WAS A DIFFERENCE DUE TO DIFFERENT METHOD OF VALUATION OF THE STOCK, ACCORDING TO THE LD.REPR ESENTATIVE, THERE CANNOT BE ANY ADDITION. 3 ITA NO.566/COCH/2011 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. AS CLARI FIED BY THE LD.DR, EVEN DURING THE INSPECTION BY THE BANK OFFICIALS, NO DIF FERENCE IN THE QUANTITY AS DECLARED TO THE DEPARTMENT WAS FOUND. THE DIFFEREN CE WAS ONLY WITH RESPECT TO THE VALUATION OF STOCK. WHEN THE STOCK WAS FOUND AS DECLARED TO THE INCOME-TAX DEPARTMENT, MERELY BECAUSE THERE WAS SOME VARIATION IN THE ESTIMATION OF THE VALUE, NO ONE COULD SAY THAT THERE WAS SUPPRESSION OF SALES. IF THERE WAS ANY ACTUAL DEFICIENCY IN THE P HYSICAL STOCK, THEN WE MAY SAY THAT THERE WAS SALES OUTSIDE THE BOOKS OF A CCOUNT. WHEN THE DEPARTMENTAL REPRESENTATIVE CLARIFIED THAT THERE WA S NO DIFFERENCE IN THE QUANTITY OF THE STOCK, THIS TRIBUNAL IS OF THE CONS IDERED OPINION THAT MERELY BECAUSE THERE WAS SOME DIFFERENCE IN THE ESTIMATION OF THE VALUE BY THE ASSESSEE AND THE BANK OFFICIALS, IT DOES NOT MEAN T HAT THERE WAS ANY SUPPRESSION OF SALE. DUE TO VARIOUS REASONS AS ALS O BECAUSE OF PASSAGE OF TIME, THE STOCK OF CASHEW NUTS MIGHT HAVE BEEN D AMAGED OR ROTTEN. THEREFORE, THE BANK AUTHORITIES MIGHT HAVE VALUED T HE STOCK AT A LESSER PRICE. THIS WOULD NOT AUTOMATICALLY LEAD TO AN INF ERENCE THAT THERE WAS A SUPPRESSION OF SALES. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY, THE ORDER OF CIT(A) IS CONFIRMED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. 4 ITA NO.566/COCH/2011 ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH JUNE, 2013. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 28 TH JUNE, 2013 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH