BAJRANG LAL GUPTA, Jaipur V. ITO, BEHROR

ITA 566/JPR/2014

• Counselvise Citation: 56623114 RSA 2014
• Duration Of Justice: 1 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 22-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT DHK
• Section: 2

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 566/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2005-06 SHRI BAJRANG LAL GUPTA, PROP. OF M/S. VIJAY AUTOMOBILES, N.H.-8, KOTPUTLI, DISTT. JAIPUR. CUKE VS. THE INCOME TAX OFFICER, BEHROR, DISTT. ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AENPG 0397 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJ MEHRA, JCIT LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16/10/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 16/10/2015 VKNS'K@ ORDER PER R.P. TOLANI, JM THE APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF THE LD. CIT (A), ALWAR DATED 06.06.2014 FOR THE ASSESSMENT YEAR 2005-06. T HE GROUND RAISED BY THE ASSESSEE IS AS UNDER :- THE LD. COMMISSIONER OF INCOME TAX (APPEALS), ALW AR HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE PENALTY OF RS . 1,06,500/- U/S 271(1)(C). 2 ITA NO. 566/JP/2014 A.Y. 2005-06 SHRI BAJRANG LAL GUPTA VS. ITO 2. THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT P ENALTY ORDER WAS PASSED BY LD. CIT (A) VIDE ORDER DATED 6.6.2014 WHEREAS IN QUANTU M APPEAL THE ADDITIONS WERE DELETED BY THE TRIBUNAL VIDE ITS ORDER DATED 21.11. 2014 BY OBSERVING AS UNDER :- 2.5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE MATERIALS AVAILABLE ON RECORD. IT APPEARS FROM THE RECORD THA T ASSESSEES EXPLANATION TOWARDS EXCESS STOCK HAS NOT BEEN CONSI DERED PROPERLY. BESIDES A SURVEY WAS CONDUCTED IN THE BUSINESS PREM ISES OF THE ASSESSEE AND NO INCRIMINATING MATERIAL WAS FOUND. IN SUCH SI TUATION, THE ADDITION OF EXCESS STOCK, GROSS PROFIT AND ESTIMATION OF SALES TURNOVER AMOUNTS TO MULTIPLE ADDITIONS WHICH IN OUR CONSIDERED VIEW IS NOT JUSTIFIABLE IN VIEW OF THE JUDGMENT OF COORDINATE BENCH IN THE CASE OF ITO VS. MOHAN LAL AGARWAL (SUPRA). SIMILARLY, THE ASSESSEE HAS GIVEN REASONABLE EXPLANATION ABOUT THE POLLUTION TESTING INCOME OF RS. 5,301/- A ND MISCELLANEOUS EXPENSES OF RS. 16,481/-. IN OUR CONSIDERED VIEW, A N ADDITION OF RS. 1.00 LAC IN RESPECT OF STOCK FOUND DURING THE COURSE OF SURVEY WILL MEET THE ENDS OF JUSTICE AND ALL OTHER ADDITIONS ARE DELETED . BESIDES, ITAT OBSERVED THAT THERE ARE MULTIPLE ADDI TIONS AND THE AMOUNT OF RS. 1,00,000/- WAS HELD TO BE IN RESPECT OF VALUATION O F EXCESS STOCK. THE VALUATION OF STOCK WHICH WAS AVAILABLE WITH THE ASSESSEE WAS TO BE CAR RIED OVER AS OPENING STOCK OF NEXT YEAR. THUS THE ADDITION RETAINED IS REVENUE NEUTRAL . RELIANCE IS PLACED ON THE HONBLE SUPREME COURT JUDGMENT IN THE CASE OF CIT VS. EXCEL INDUSTRIES LTD. (2013) 358 ITR 295 (SC). THE PENALTY BEING ATTRIBUTABLE TO VALUAT ION OF CLOSING STOCK WHICH IS BASED ON OPINION IS NOT LIABLE FOR IMPOSITION. 3 ITA NO. 566/JP/2014 A.Y. 2005-06 SHRI BAJRANG LAL GUPTA VS. ITO 3. THE LD. D/R CONTENDS THAT THE PENALTY MAY BE CON FIRMED QUA THE ADDITION OF RS. 1,06,500/-. 4. I HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. I FIND MERIT IN THE ARGUMENT OF THE LD. COUNSEL. THE REMAINING ADDITION OF RS. 1,00,000/- IS ATTRIBUTABLE TO VALUATION OF STOCK WHICH IS BAS ED ON OPINION OF THE AO AND ASSESSEE ABOUT VALUATION. BESIDES, THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. EXCEL INDUSTRIES LTD. (SUPRA) HAS HELD THAT SUCH TYPE OF ADDITION IS REVENUE NEUTRAL. IN VIEW OF THESE FACTS, IN MY CONSIDERED VIEW, THE PENALTY UND ER SECTION 271(1)(C) IS NOT LEVIABLE. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 16/10/2015 . SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 16/10/ 2015 DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI BAJRANG LAL GUPTA, KOTPUTLI. 2. IZR;FKHZ@ THE RESPONDENT- THE ITO WARD BEHROR, ALWAR. 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.566/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 4 ITA NO. 566/JP/2014 A.Y. 2005-06 SHRI BAJRANG LAL GUPTA VS. ITO