PUNJIBEN G. PATEL, MUMBAI V. CIT(A) XXIII, MUMBAI

ITA 5664/MUM/2008

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1571 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 17-11-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 08-09-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PARAS S SAVLA
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE S/SHRI R.K. GUPTA, J.M. AND PRAMOD KUMAR, A. M I.T.A. NO.5664/MUM./2008 (ASSESSMENT YEAR : 2005-06 ) DATE OF HEARING: 17.11.2009 MRS. PUNJIBEN G. PATEL, PRAKASH GLASS TRADERS, GROUND FLOOR, LBS MARG, BHANDUP (W), MUMBAI 78 PAN AAGPP1013Q VS ITO, WARD23(1)(3) MUMBAI APPELLANT RESPONDENT ASSESSEE BY : SHRI PARAS S. SAVLA REVENUE BY : SHRI SANJEEV JAIN O R D E R PER PRAMOD KUMAR, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 30.7.2008, PASSED BY THE LD. CIT(A)XXIII, MU MBAI, FOR A.Y. 2005-06. ALTHOUGH, THE ASSESSEE HAS RAISED FIVE ELABORATED G ROUNDS OF APPEAL, THE SHORT ISSUE REQUIRING OUR ADJUDICATION IS WHETHER O R NOT THE LD. CIT(A) WAS JUSTIFIED IN UPHOLDING THE ADDITION OF RS.4.50 LACS IN RESPECT OF DIFFERENCE IN STOCK AS DECLARED BY HIM DURING THE SURVEY PROCEEDI NGS U/S 133A OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ). 2. THE ASSESSEE IS A TRADER IN GLASS. DURING THE RELEV ANT PREVIOUS YEAR, A SURVEY U/S 133A OF THE ACT WAS CONDUCTED IN THE BUS INESS PREMISES OF THE ASSESSEE. DURING THE COURSE OF SURVEY, CERTAIN DISC REPANCIES WERE NOTED IN THE STOCK FOUND AT THE PREMISES. IN THE STATEMENT R ECORDED DURING THE COURSE OF SURVEY, THE ASSESSEE, INTER-ALIA, STATED THAT TO CONSIDER THE DISCREPANCIES NOTICED IN MY BOOKS OF ACCOUNT, I AM OFFERING A SUM OF RS.4.50 LACS FOR TAXATION AND TAX THEREON WILL BE PAID ON 2 8.3.2005 HOWEVER, WHEN THE INCOME TAX RETURNS WERE FILED BY THE ASSES SEE, NO SUCH SEPARATE INCOME OF RS.4.50 LACS WAS REFLECTED. IT WAS FOR TH IS REASON THAT THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO SHOW CAU SE AS TO WHY THE SUM OF RS.4.50 LACS NOT BE ADDED TO HIS RETURN OF INCOME. ELABORATE SUBMISSIONS WERE MADE BY THE ASSESSEE ON HOW THE INCOME ON ACCO UNT OF DISCREPANCIES MRS. PUNJIBEN G. PATEL I.T.A. NO.5664/MUM./2008 2 IN STOCK IS ALREADY TAKEN INTO ACCOUNT BY P&L A/C, BUT NONE OF THESE SUBMISSIONS IMPRESSED THE ASSESSING OFFICER. HE PRO CEEDED TO MAKE AN ADDITION OF RS.4.50 LACS ON ACCOUNT OF ADDITIONAL INCOME AS DISCLOSED AT THE TIME OF SURVEY . 3. AGGRIEVED BY THE STAND TAKEN BY THE ASSESSING OFFIC ER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. THE LD. CIT(A) DISMISSED THE SUBMISSIONS MADE BY TH E ASSESSEE AND OBSERVES AS FOLLOWS:- 4.4 THE APPELLANTS SUBMISSIONS HAVE BEEN CONSIDERE D. PURSUANT TO THE SURVEY, THE APPELLANT HAS DRAWN UP THE TRADING ACCOUNT FOR THE PERIOD UPON THE DATE OF SURVEY AND FROM 23.3.2005 T O 31.3.2005. THE DIFFERENCE IN STOCK NOTED AT THE TIME OF SURVEY HAS BEEN INCLUDED AND TAKEN AS OPENING STOCK AS ON 22.3.2005 AND ARRIVED ON CLOSING STOCK FIGURE OF RS.19,24,000/-. THE APPELLANTS ACTION IS NOT ACCEPTABLE. THE ARGUMENT THAT DIFFERENCE IN STOCK AT THE TIME OF SU RVEY WAS ONLY RS.3,49,054/- IS ALSO NOT MATERIAL AT THIS STAGE AS THE APPELLANT HAD VOLUNTARILY ACCEPTED AND QUANTIFIED THE DISCREPANCI ES FOUND AT THE TIME OF SURVEY AT RS.4,50,000/- AND PAID TAX DUE THEREON ON 28.3.2005. THE PRESENT CONTENTION IS CLEARLY AN AFTERTHOUGHT A ND CANNOT BE ACCEPTED. THE ADDITION MADE OF RS.4,50,000/- IS UPH ELD. THE ASSESSEE IS NOT SATISFIED AND IS IN SECOND APPE AL BEFORE US. 4. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING PERUS ED THE MATERIAL ON RECORD, WE FIND THAT THE SOLE AND PROXIMATE BASIS O F THE IMPUGNED ADDITION IS DECLARATION MADE BY THE ASSESSEE DURING THE COURSE OF SURVEY U/S 133A OF THE ACT. ON THE STRENGTH OF THIS STATEMENT, THE AUT HORITIES BELOW HAVE BRUSHED ASIDE THE EXPLANATION GIVEN BY THE ASSESSEE AND PROCEEDED TO MAKE AN ADDITION OF THE AMOUNT DISCLOSED IN THE STATEMEN T RECORDED DURING THE SURVEY. THE ACTION OF THE AUTHORITIES BELOW PROCEED ING ON THE FALLACIOUS ASSUMPTION THAT THE ADDITION CAN BE MADE IN THE HAN DS OF THE ASSESSEE ON THE BASIS OF STATEMENT RECORDED DURING THE COURSE O F SURVEY. AS HELD BY THE HONBLE KERALA HIGH COURT IN THE CASE OF PAUL MATHE WS & SONS VS CIT, 263 ITR 101, A STATEMENT RECORDED U/S 133(1) OF THE ACT HAS NO EVIDENTIARY VALUE. ACCORDINGLY, AN ADDITION CANNOT BE MADE IN T HE HANDS OF THE ASSESSEE BASED ON SUCH STATEMENT ALONE. SIMILAR WERE THE VIE W OF A COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF ACIT VS SATYANARAYA N AGRAWAL, 91 TTJ 481. IN VIEW OF THESE DISCUSSIONS AND HAVING REGARD TO THE FACT THAT THE IMPUGNED ADDITION IS MADE ON THE BASIS OF STATEMENT ALONE AN D DESPITE THE FACT THAT THE ASSESSEE HAS GIVEN REASONABLE EXPLANATION FOR T HE DISCREPANCIES IN STOCK MRS. PUNJIBEN G. PATEL I.T.A. NO.5664/MUM./2008 3 HAVING BEEN DULY REFLECTED IN THE P&L A/C, WE CONSI DER IT PROPER TO DELETE THE IMPUGNED ADDITION OF RS.4.50 LAKHS. THE ASSESSEE GE TS THE RELIEF ACCORDINGLY. 5. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25.11.2009. SD/- R.K. GUPTA JUDICIAL MEMBER SD/- PRAMOD KUMAR ACCOUNTANT MEMBER MUMBAI, DATED: 25.11.2009. COPY TO : (1) THE ASSESSEE (2) THE RESPONDENT (3) THE CIT(A), MUMBAI, CONCERNED (4) THE CIT, MUMBAI CITY CONCERNED (5) THE DR, C BENCH, ITAT, MUMBAI TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI PRADEEP PRADEEP PRADEEP PRADEEP MRS. PUNJIBEN G. PATEL I.T.A. NO.5664/MUM./2008 4 DATE INITIAL 1. DRAFT DICTATED ON 18.11.2009 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 19.11.2009 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 20.11.2009 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 20.11.2009 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 20.11.2009 SR.PS/PS 6. DATE OF PRONOUNCEMENT 25.11.2009 SR.PS 7. FILE SENT TO THE BENCH CLERK 25.11.2009 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER