Zacfa Chemicals, Bhavnagar V. The ITO, Ward No.- 1(5), Bhavnagar

ITA 625/AHD/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1055 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 10-05-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 11-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B R POPAT
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH BEFORE: S H RI PRAMOD KUMAR , ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER ZACFA CHEMICALS, 212/A, GIDC, CHITRA, BHAVNAGAR - 364004, PAN: AAAFZ0923B (APPELLANT) VS THE ITO, WARD - 1(5), BHAVNAGAR (RESPONDENT) REVENUE BY : S H RI SANJAY KUMAR , SR. D . R. ASSESSEE BY: S H RI B.R. POPAT , A.R. DATE OF HEARING : 15 - 07 - 2 016 DATE OF PRONOUNCEMENT : 26 - 07 - 2 016 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2009 - 10 , AR IS ES FROM ORDER OF THE CIT(A) - 6, AHMEDABAD DATED 16 - 12 - 2015 IN APPEAL NO. CIT(A) - 6/331/14 - 15 , CONFIRMING ASSESSING OFFICER S ACTION ADDING A SUM OF RS. 3,13 ,551/ - AS SUPPRESSED SALES IN THE NATURE OF UNDISCLOSED I T A NO . 625 / A HD/20 16 A S SESSMENT YEAR 200 9 - 10 I.T.A NO. 625 /AHD/20 16 A.Y. 2009 - 10 PAGE NO ZACFA CHEMICALS VS. ITO 2 INCOME, IN PROCEEDINGS UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE FIRM MANUFACTURES AND TRADES INORGANIC CHEMICALS. IT FILED RETURN ON 26 - 09 - 2008 STATING INCOME OF RS. 74,875/ - . THE DEPARTMENT CONDUCTED A SURVEY ON ASSESSEE S BUSINESS PREMISES ON 10 - 03 - 2011. IT IMPOUNDED A PURPLE NOTE BOOK MAHIMA NOTE PAD ANNEXURE - 21 ALLEGEDLY REVEALING ACTUAL SALES OF THE LAST 12 MONTHS TO BE RS. 1,55,21,463/ - . THE A SSESSEE S SALES/GROSS RECEIPTS DECLARED WERE OF RS. 1,48,54,440/ - . THIS PRIMA FACIE INDICA TED SUPPRESSED SALES OF RS. 6,67,023/ - . THE ASSESSING OFFICER SOUGHT TO ADD THE SAME. THE ASSESSEE INTER ALIA CONTESTED THIS SUPPRESSION OF SALES, CLAIMED TO HAVE RATHER DECLARED EXCESS SALES TO THE TUNE OF RS. 2,07,020/ - , PLEADED THAT THE ROUGH DIARY S EIZED DURING SURVEY WAS NOT A CONCLUSIVE EVIDENCE IN VIEW OF ITS DULY AUDITED BOOK RESULTS DRAWN AS PER PURCHASE INVOICES, SALES, BANK RECORDS ETC. IT FURTHER PLACED RELIANCE ON VAT DECLARATION OF EVERY MONTH. THE ASSESSING OFFICER IN ASSESSMENT ORDER R EJECTED ALL THESE PLEAS. HE WENT BY THE SCRUTINY SHOW CAUSE NOTICE QUOTING SEIZED DIARY DOCUMENT AS INCLUSIVE EVIDENCE. HE DENIED ASSESSEE S VAT ARGUMENT IN ABSENCE OF RETURN. HE FURTHER HELD THAT THE ALLEGED EXCESS SALE HEREINABOVE HAD BEEN DEDUCTED OU T OF FUNDS RETURN AMOUNT TO RS. 5,20,571/ - . ALL THIS RESULTED IN THE IMPUGNED ADDITION OF RS. 3,13,551/ - COMPUTED ON NET DIFFERENCE ON THE SALES IN QUESTION. I.T.A NO. 625 /AHD/20 16 A.Y. 2009 - 10 PAGE NO ZACFA CHEMICALS VS. ITO 3 3. THE CIT(A) CONFIRMS ASSESSING OFFICER S ACTION VIDE ORDER UNDER CHALLENGE. 4. WE HAVE H EARD BOTH THE PARTIES. CASE FILE PERUSED. LEARNED COUNSEL POINT S OUT IN THE COURSE OF HEARING THAT IT IS PRIMARILY A RE - CONCILIATION ISSUE BETWEEN ASSESS EE S SALES RECORDED IN BOOKS/VAT RETURN AND THOSE MENTIONED IN THE IMPOUNDED DOCUMENTS IN THE COURSE OF SURVEY. HE TAKES US TO PAGE 20 OF THE PAPER BOOK CONTAINING COPY OF THE SEIZE D DOCUMENTS DEMONSTRATING ASSES SEE S SALES FROM ASSESSMENT YEARS 2007 - 08 TO 2010 - 11 INCLUDING THE IMPUGNED ASSESSMENT YEAR. SH R I POPAT THEREAFTER INVITES OUR ATTENTION TO ASS ESSING OFFICER S REGULAR ASSESSMENT ORDER DATED 27 - 02 - 2015 ACCEPTING ASSESSEE S RECONCILIATION BETWEEN THE IMPOUNDED DOCUMENTS AND ACTUAL FIGURES ON THE BASIS OF ITS VAT RETURN FOLLOWING EXCLUSIVE METHOD ON REGULAR BASIS. LEARNED DEPARTMENTAL REPRESENTATI VE FAILS TO REBUT THIS FACTUAL POSITION . WE OBSERVE IN THESE PECULIAR FACTS THAT THE ASSESSING OFFICER HAS ADOPTED DIFFERENT APPROACHES FOR ADDING THE IMPUGNED SALES FIGURE RECORDED IN THE IMPOUNDED DIARY DOCUMENT. THE FACT ALSO REMAINS THAT ASSESS EE S V AT RETURN IN QUESTION WAS NOT FILED IN THE COURSE OF ASSESSMENT PROCEEDINGS. WE ADOPT CONSISTENCY AND DIRECT THE ASSESSING OFFICER TO FOLLOW THE SAME COURSE OF ACTION IN THE IMPUGNED ASSESSMENT YEAR AS IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR IN ORDER TO VERIFY AND RECONCILE THE ASSESSEE S SALE FIGURES AS PER ITS VAT RETURN . THE ISSUE IS ACCORDINGLY SET ASIDE TO THE FILE OF ASSESSING OFFICER FOR FURTHER ACTION AS PER LAW. I.T.A NO. 625 /AHD/20 16 A.Y. 2009 - 10 PAGE NO ZACFA CHEMICALS VS. ITO 4 5. THIS ASSESSEE S APPEAL SUCCEEDS FOR STATISTICAL PURPOSES. O RDER PR ONOUNCED IN THE OPEN C OURT ON 26 - 07 - 201 6 SD/ - SD/ - ( PRAMOD KUMAR ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 26 /07 /2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,