Sarvoday hardware Pvt.Ltd., Anand V. The ACIT.,Anand Circle, Anand

ITA 639/AHD/2009

• Counselvise Citation: 63920514 RSA 2009
• Duration Of Justice: 2 year(s) 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 28-12-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 27-02-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANURAG SHARMA
• Assessee Lawyers: M G PATEL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, D BENCH, AHMEDABAD BEFORE SHRI G.C. GUPTA, HONBLE VICE PRESIDENT AND SHRI B. P. JAIN, ACCOUNTANT MEMBER I.T.A. NO. 639/ AHD/2009 (ASSESSMENT YEAR 2004-05) SARVODAY HARDWARE PVT. LTD., KASHI ESTATE, GAMDI VAD STATION ROAD, ANAND VS. ACIT, ANAND CIRCLE, ANAND PAN/GIR NO. : AAHCS6525Q (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI M G PATEL, AR RESPONDENT BY: SHRI ANURAG SHARMA, SR. DR DATE OF HEARING: 28.12.2011 DATE OF PRONOUNCEMENT: 30.12.2011 O R D E R PER SHRI B.P.JAIN, AM:- THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDE R OF LD . CIT(A) - IV, BARODA DATED 02.01.2009 FOR THE ASSESSMENT YEAR 2004-05. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL: THE LD. CIT(A) IV, BARODA HAS ERRED IN LAW AND ON FACTS OF THE CASE BY ADDITION OF RS.11,21,793/- IN RESPECT OF UN ACCOUNTED SALES. 2. THE FACTS OF THE CASE ARE THAT DURING SURVEY U/S .133A AT ASSESSEE'S PREMISES ON 18.12.2003, STOCK OF STEEL FOUND ON PHY SICAL VERIFICATION WAS RS.7,07,155/- WHEREAS THE STOCK OF STEEL ITEMS AS P ER BOOKS OF ACCOUNT I.T.A.NO.639 /AHD/2009 2 WAS WORKED AT 1480.237 TONS. SHRI NAVNITBHAI RAOJIB HAI PATEL, DIRECTOR OF THE ASSESSEE COMPANY, IN ANSWER TO QUESTION NO.1 5 ACCEPTED THAT THE PHYSICAL STOCK TAKEN DURING THE SURVEY WAS PERFECT, QUANTITY WISE AND VALUE WISE AND THERE WAS NO DISPUTE REGARDING STOCK TAKING BY THE SURVEY PARTY. HE ALSO ACCEPTED THE SHORTAGE WORKED OUT IN THE STOCK VIS-A-VIS THE BOOK STOCK TO BE CORRECT. IN THE RETURN OF INCOME F ILED SUBSEQUENTLY, THE DIFFERENCE IN STOCK FOUND DURING THE SURVEY WAS NOT REFLECTED. DURING ASSESSMENT PROCEEDINGS, ASSESSEE THROUGH LE TTER DATED 16.3.2006 CLAIMED THE VALUE OF STOCK OF STEEL AS PER BOOK ON THE DATE OF SURVEY TO BE 758.63 TONS AS AGAINST 1480.237 TONS. ON THE REQUES T OF ASSESSEE, THE ASSESSING OFFICER PROVIDED DETAILS OF DATA UTILIZED TO COMPUTE THE VALUE OF BOOK STOCK ON THE DATE OF SURVEY TO THE APPELLAN T. THE ASSESSING OFFICER ACCEPTED ASSESSEES CONTENTION REGARDING TH E BOOK STOCK TO BE 75S637 KGS. AS AGAINST 1480237 KGS. WORKED OUT AT T HE TIME OF SURVEY. THE SHORTAGE IN STOCK OF STEEL WAS ACCORDINGLY WORK ED OUT TO BE 51482 KGS. THE ASSESSEE THEREAFTER ALSO CONTENDED THAT QU ANTITY OF PHYSICAL STOCK WAS ON APPROXIMATE BASIS. THE ASSESSING OFFICER, HO WEVER DID NOT ACCEPT ASSESSEES CONTENTION MADE AFTER LONG LAPSE OF TIME . AS PER A.O., ASSESSEES CONTENTION WAS AN AFTERTHOUG HT. ACCORDINGLY, VALUE OF UNACCOUNTED SALES OF STEEL AT RS.11,21,793/- WAS TAXED BY MAKING ADDITION TO THE INCOME SINCE THE ASSESSEE HAD ALREA DY DEBITED ENTIRE PURCHASES CORRESPONDING TO THE UNACCOUNTED SALES. T HE LD. CIT(A) CONFIRMED THE ACTION OF THE A.O. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. IT WAS ARGUED BY THE LD. COUNSEL FOR THE ASS ESSEE THAT WEIGHMENT OF THE STOCK OF STEEL WAS NOT DONE PROPERLY AND IT WAS NOT POSSIBLE TO COMPLETE THE WEIGHMENT IN ONE DAY AS OBSERVED BY TH E A.O. THE LD. I.T.A.NO.639 /AHD/2009 3 D.R. ARGUED THAT THE ASSESSEE DID NOT CHALLENGE THE WEIGHMENT METHOD AND THE OUTCOME OF THE WEIGHMENT EITHER DURING THE SURVEY OR EVEN AFTERWARDS AT THE TIME OF FILING OF RETURN. EVEN I N THE STATEMENT OF MR. N R PATEL, ACKNOWLEDGED THE VALUE OF THE PHYSICAL STO CK TO BE PERFECT BOTH VALUE-WISE AND QUANTITY-WISE. THEREFORE THERE IS N O FORCE IN THE ASSESSEES CONTENTION REGARDING DEFICIENCY IN THE W EIGHMENT ON THE DATE OF SURVEY. 4. AFTER HEARING BOTH THE PARTIES, WE ARE OF THE VI EW THAT THERE APPEARS TO BE SOME FORCE IN THE ARGUMENT MADE BY THE LD. A. R. THAT THE QUANTITATIVE STOCK POINTED OUT BY THE LD. A.R. CANN OT BE WEIGHED IN A SINGLE DAY BUT AT THE SAME TIME, THIS HAS NOT BEEN CHALLENGED BY THE ASSESSEE AT ANY LEVEL BELOW. THEREFORE BOOKS OF AC COUNT OF THE ASSESSEE CANNOT BE SAID TO BE ACCURATE AND PROPER AND THE AS SESSEE HAS NOT DECLARED THE ACCURATE G.P. IN THE PRECEDING YEAR IT HAS BEE N STATED THAT THE ASSESSEE HAS DECLARED G.P. RATE OF 2.09%. IN VIEW OF THE ABOVE FACTS WE ARE OF THE VIEW THAT TO MEET BOTH THE ENDS OF JUSTI CE, WE DIRECT THE A.O. TO APPLY G.P. RATE OF 5% ON THE DECLARED TURNOVER. TH E ORDERS OF BOTH THE AUTHORITIES BELOW ARE ACCORDINGLY MODIFIED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS PAR TLY ALLOWED IN TERMS INDICATED HEREINABOVE. 6. ORDER PRONOUNCED IN THE OPEN COURT ON 30.12.2011 . SD./- SD./- (G. C. GUPTA) (B. P. JAIN) VICE PRESIDENT ACCOUNTANT MEMBER SP I.T.A.NO.639 /AHD/2009 4 COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD 6. THE GUARD FILE 1. DATE OF DICTATION 29/12 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER30/12 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S.30/12 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 30/12 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.30/12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 30/12/2011 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. ..