SMT. LEELA DEVI GOYAL, Neemuch V. THE ITO, Neemuch

ITA 662/IND/2014

• Counselvise Citation: 66222714 RSA 2014
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 29-10-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: SANJEEV GOYAL
• Keywords: Search and seizure; Opportunity of being heard

Judgement Text

SMT. LEELADEVI GOYAL ITA NOS. 661,663 & 664/IND/2014 1 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NOS. 661, 663 & 664/IND/2014 A.YS.2004-05, 2006-07 & 2007-08 SMT. LEELA DEVI GOYAL NEEMUCH ::: APPELLANT VS INCOME TAX OFFICER NEEMUCH ::: RESPONDENT APPELLANT BY SHRI SANJEEV GOYAL RESPONDENT BY SHRI R.A. VERMA DATE OF HEARING 15.12.2015 DATE OF PRONOUNCEMENT 3 0 .12.2015 O R D E R THESE APPEALS ARE DIRECTED AGAINST DIFFERENT ORDERS OF THE LEARNED CIT(A), UJJAIN, DATED 1.8.2014. 2. AT THE TIME OF HEARING, GROUND RELATING TO VEHICL E EXPENSES IN ITA NOS. 663 AND 664/IND/2014 WAS NOT SMT. LEELADEVI GOYAL ITA NOS. 661,663 & 664/IND/2014 2 PRESSED BY THE LEARNED COUNSEL FOR THE ASSESSEE. THE SAME IS, THEREFORE, DISMISSED AS NOT PRESSED. 3. IN THE ASSESSMENT YEAR 2004-05 THE BRIEF FACTS ARE T HAT THE ASSESSEE DERIVES INCOME FROM TRADING IN SOYABEAN. THE ASSESSEE IS ALSO ENGAGED IN THE BUSINESS OF GRAINS, OIL SEEDS, FERTILIZERS AND KIRANA GOODS. THE ASSESSEE IS C ARRYING ON THE BUSINESS UNDER THE NAME AND STYLE OF M/S BANWARILAL RAMSWAROOP GOYAL. DURING TGE TEAR YC TGE ASSESSEE FILED RETURN OF INCOME DECLARING INCOME AT RS.4,80,494/-. THE ASSESSING OFFICER MADE ADDITION OF RS.4,21,940/- ON ACCOUNT OF INFLATED PURCHASES. AGAINST THIS ADDITION, THE ASSESSEE WENT IN APPEAL BUT THE LEAR NED CIT(A) DISMISSED THE SAME. NOW THE ASSESSEE IS IN FUR THER APPEAL. 4. HAVING HEARD BOTH THE SIDES, I AM OF THE VIEW TH AT IT IS AN ADMITTED FACT THAT THE ASSESSING OFFICER MADE THE ADDITION ON ACCOUNT OF INFLATED PURCHASES. THE ASSESSEE IS SMT. LEELADEVI GOYAL ITA NOS. 661,663 & 664/IND/2014 3 PURCHASING AND SELLING SOYABEAN. FOR PURCHASE AND SALE THE ASSESSEE MAINTAINS TWO ACCOUNTS I.E. SOYABEAN ACCOUNT AND MANDI PAID SOYABEAN ACCOUNT. IN THE MANDI PAID SOYABEAN ACCOUNT THE ASSESSEE IS SHOWING SOYABEAN PURCHASED FROM REGISTERED DEALERS WHEREAS IN SOYABEAN ACCOUNT THE ASSESSEE IS SHOWING PURCHASES FROM AGRICULTURISTS IN MANDI. IN SOYABEAN MANDI ACCOUNT THE ASSESSEE HAS SHOWN GP OF RS.3,24,657/- WHICH COMES TO 1.95% OF THE SALES. IN THE MANDI PAID SOYABEAN ACCOUNT THE ASSESSEE HAS SHOWN LOSS OF 0.87%. THE ASSESSING OFFICER EXAMINED THE PURCHASE AND SALES AND FOUND THAT IN SOYABEAN ACCOUNT THE ASSESSEE HAS CONTINUOUSLY BEEN PURCHASING MATERIAL ON HIGH PRICES AND SELLING AT LOW PRICES, THUS SUFFERING LOSSES WHEREAS THE ASSESSEE IS A COMMISSION AGENT AND NOT SUPPOSED TO SUFFER LOSES. H E, THEREFORE, CONCLUDED THAT THE ASSESSEE HAS INFLATED THE PURCHASE OF MANDI PAID SOYABEAN. SMT. LEELADEVI GOYAL ITA NOS. 661,663 & 664/IND/2014 4 5. BEFORE ME, THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE AS TO HOW THE LOSS HAS OCCURRED. HOWEVER, CONSIDERING THE TOTAL PURCHASES OF RS. 8,43,87,885/- , I ESTIMATE THE PROFIT @ 1.9% AND ORDER ACCORDINGLY. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 7. IN THE ASSESSMENT YEARS 2006-07 AND 2007-08 THE COMMON GROUND IS REGARDING DISALLOWANCE MADE IN CLOSING STOCK OF RS. 2,69,492/- IN THE ASSESSMENT YEAR 2006-0 7 AND OF RS. 1,46,470/- IN THE ASSESSMENT YEAR 2007-08. 8. IN THE AUDIT REPORT THE ASSESSEE MENTIONED THAT THE CLOSING STOCK IS VALUED AT MARKET VALUE. THE ASSESSING OFFICER HAS ADOPTED MARKET VALUE WHILE ARRIVING AT THE CORRECT CLOSING STOCK OF THE ASSESSEE. THE ASSESSEE HAS LIBERTY TO ADOPT THE METHOD AS PER LAW. ONCE THE MET HOD HAS BEEN ADOPTED BY THE ASSESSEE, HE HAS TO FOLLOW IT. THE SMT. LEELADEVI GOYAL ITA NOS. 661,663 & 664/IND/2014 5 ASSESSEE HAS CHANGED THE METHOD OF CLOSING STOCK AAS PE R HIS WISH. THE ASSESSING OFFICER HAS ADOPTED THE MARKET VALUE WHILE CALCULATING THE CLOSING STOCK. THE ASSESS ING OFFICER WAS OF THE VIEW THAT THE ASSESSEE WAS NOT ABLE T O CALCULATE AS TO HOW THE VALUE HAS BEEN ARRIVED AT. THE ASSESSING OFFICER HELD THAT METHI WAS SOLD AT RS. 1550 /- TO 1870/- HENCE THE RATE WAS TAKEN AT RS. 1700/-. SIMILAR LY HE HAS ESTIMATED THE RATE FOR URAD AT RS. 3,000/- AND FOR RAIDA MANDI PAID AT RS. 1500/- AND CONSIDERING THESE HE HAS MADE VALUATION OF CLOSING STOCK AND MADE THE ADDITIO N ACCORDINGLY AGAINST WHICH THE ASSESSEE CARRIED THE MATTER IN APPEAL BUT COULD NOT SUCCEED. NOW, THEREFORE, THE ASSESSEE IS IN APPEAL. 9. DURING THE COURSE OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OR V.K.B. BUILDERS & CONTRACTORS (P) LTD. VS. CIT; (2009) 318 ITR 204 (SC ) 228 SMT. LEELADEVI GOYAL ITA NOS. 661,663 & 664/IND/2014 6 WHEREIN THE HON'BLE SUPREME COURT HAS HELD THAT THE CLOSING STOCK OF EARLIER YEAR HAS TO BE TAKEN AS STOCK OF NEXT YEAR. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IF ANY VALUATION IS MADE IN THE CLOSING STOCK THEN THE EFF ECT OF THE SAME HAS TO BE GIVEN IN THE OPENING STOCK OF THE NEXT YEAR. AS PER THE LEARNED COUNSEL FOR THE ASSESSEE, NO ADDITION IS, THEREFORE, CALLED FOR. 10. THE LEARNED DR HAS NO OBJECTION IF THE MATTER IS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER F OR DECIDING THE SAME AFRESH. 11. HAVING HEARD BOTH THE SIDES, I FIND IT APPROPRIATE TO RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFI CER FOR DECIDING THE ISSUE AFRESH IN THE LIGHT OF THE DECISI ON OF THE HON'BLE SUPREME COURT IN THE CASE OF V.K.J. BUILDERS & CONTRACTORS P. LTD. (SUPRA) AFTER PROVIDING THE ASSESSE E AN OPPORTUNITY OF BEING HEARD. SMT. LEELADEVI GOYAL ITA NOS. 661,663 & 664/IND/2014 7 12. IN THE RESULT, ALL THE APPEALS ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN OPEN COURT ON 30 DECEMBER, 2015 SD/- (D.T. GARASIA) JUDICIAL MEMBER 30 DECEMBER, 2015 DN/-