M/s Harish Hosiery, Faizabad V. Dy. Commissioner of Income Tax, Faizabad

ITA 691/LKW/2015

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 7260 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 16-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income

Judgement Text

I.T.A. NO.691/LKW/2015 ASSESSMENT YEAR:2011-12 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI T. S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO.691/LKW/2015 ASSESSMENT YEAR:2011-12 M/S HARISH HOSIERY, LG CHAMBER, JAMUNIYA BAGH, FAIZABAD. PAN:AACFH 8988 C VS. DY.C.I.T., CIRCLE-FAIZABAD. (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LEARNED CIT(A), FAIZABAD DATED 15/09/2015 RELATING TO ASSES SMENT YEAR 2011-12. THE ONLY EFFECTIVE GROUND IN THIS APPEAL IS THE ACT ION OF LEARNED CIT(A) BY WHICH HE HAD CONFIRMED AN ADDITION OF RS.2,44,640/- OUT OF TOTAL ADDITION OF RS.22,21,945/- WHICH THE ASSESSING OFFICER HAD MADE ON ACCOUNT OF SUPPRESSION IN SALES MADE BY THE ASSESSEE. 2. AT THE OUTSET, LEARNED A. R. SUBMITTED THAT ASSE SSEE HAD DECLARED TOTAL SALES OF RS.3,40,88,426/- ON ACCOUNT OF SALES EXEMPTED AND SALES INVOICE AND IN THE TRADING ACCOUNT OUT OF WHICH THE ASSESSEE HAD RECORDED EXEMPTED SALES TO THE TUNE OF RS.1,08,54,717/- WHER EAS THE TOTAL SALES AS PER LEDGER ACCOUNT OF EXEMPTED SALES FURNISHED TO T HE ASSESSING OFFICER WAS APPELLANT BY SHRI ABHINAV MEHROTRA, ADVOCATE RESPONDENT BY SHRI AJAY KUMAR, D.R. DATE OF HEARING 27/09/2018 DATE OF PRONOUNCEMENT 28 / 0 9 /201 8 I.T.A. NO.691/LKW/2015 ASSESSMENT YEAR:2011-12 2 RS.1,30,76,662/- THEREFORE, THE ASSESSING OFFICER H ELD THAT THERE WAS A SUPPRESSION OF SALES TO THE EXTENT OF RS.22,21,945/ - AND THEREFORE, THE ASSESSING OFFICER HAD MADE THE ADDITION OF ENTIRE A MOUNT WHEREAS THE LEARNED CIT(A) HAD DELETED SUBSTANTIAL PART BY REST RICTING THE ADDITION TO NET PROFIT RATE AS DECLARED BY THE ASSESSEE. LEARNED A . R. SUBMITTED THAT THIS MISTAKE WAS INADVERTENT AND THERE WAS NO MIS-STATEM ENT IN THE LEDGER ACCOUNT OR IN THE TRADING ACCOUNT AND IN FACT THE T OTAL TURNOVER FOR EXEMPTED SALES AS WELL AS INVOICE REMAINED SAME TO THE EXTEN T OF RS.3,40,88,246/- AND ASSESSING OFFICER WAS APPRAISED OF THE FACTS DU RING THE ASSESSMENT PROCEEDINGS ITSELF AND A COPY OF VAT RETURN WAS ALS O FILED BEFORE THE ASSESSING OFFICER. IT WAS SUBMITTED THAT LEARNED C IT(A) HAS WRONGLY HELD THAT IN SUPPORT OF THE CLAIM VAT RETURN WAS NOT FIL ED AS ASSESSING OFFICER HIMSELF HAS NOTED THAT ANNUAL RETURN IN FORM XXVI A S SUBMITTED TO THE COMMERCIAL TAX DEPARTMENT WAS FILED. LEARNED A. R. SUBMITTED THAT THERE BEING A CLERICAL MISTAKE IN CLASSIFYING THE TURNOVE R IN ONE HEAD INSTEAD OF ANOTHER HEAD, THE DEPARTMENT IS NOT JUSTIFIED IN MA KING ANY ADDITION. 3. LEARNED D. R., ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT ASSESSING OFFICER, IN HIS ORDER VIDE PARA B HAS HIMSELF NOTED THE TURNOVER OF EXEMPTED SALES AS PER TRADING ACCOUNT TO THE TUNE OF RS.1,08,54,717/- WHEREAS AS PER LEDGER ACCOUNT HE HAS OBSERVED THE TURNOVER TO THE TUNE OF RS.1,30,76,662 /-. THE DIFFERENCE OF RS.22,21,945/- HAS BEEN ADDED BY HIM AS SUPPRESSED SALES WHEREAS HE HAS IGNORED THE FACT THAT EQUIVALENT AMOUNT WAS SHOWN O N THE LOWER SIDE IN TRADING ACCOUNT IN RESPECT OF SALES INVOICE. THERE FORE, IT SEEMS THAT THERE WAS A MISTAKE IN CLASSIFICATION OF SALES IN ONE HEA D INSTEAD OF ANOTHER HEAD. THE ASSESSEE HAS FILED DETAILED SUBMISSIONS BEFORE ASSESSING OFFICER I.T.A. NO.691/LKW/2015 ASSESSMENT YEAR:2011-12 3 REGARDING THIS EXPLANATION AND HAD ALSO FILED ANNUA L RETURN FILED WITH COMMERCIAL TAX DEPARTMENT TO SUBSTANTIATE ITS CLAIM . THE SUBMISSIONS OF THE ASSESSEE, AS REPRODUCED BY ASSESSING OFFICER IN HIS ORDER, ARE REPRODUCED BELOW: 'WHILE FILLING THE LEDGER COPY DUE TO OVERSIGHT OF ACCOUNTANT, LEDGER COPY OF EXEMPTED SALES WERE SUBMITTED CARRYI NG TOTAL OF RS.1,30,76,662.00 AND LEDGER COPY OF TAXABLE SALES (SALE INVOICE) CARRYING TOTAL OF RS. 2,10,11,764.00 WERE SUBMITTED. THE INADVERTENT MISTAKE OCCURRED WHILE FILING DOCUM ENTS ON THE BASIS OF BONAFIDE REASONS ALREADY STATED ABOVE. FUR THER YOUR GOODSELF WILL APPRECIATE THAT AGGREGATE SALES OF BO TH THESE ACCOUNTS STANDS FOR RS. 3,40,88,426/- THE DIFFERENC E IS ONLY OF CLERICAL NATURE WHILE RECORDING THE TAXABLE SALES I N EXEMPTED SALES. THESE FACTS ARE VERIFIABLE FROM ANNUAL RETUR N FORM XXVI SUBMITTED WITH COMMERCIAL TAX DEPARTMENT, HENCE NO ADVERSE INFERENCE MAY BE DRAWN ON SAME ONLY BECAUSE OF INTR A HEAD DIFFERENCE OF SALES WHICH DO NOT HAVE ANY REVENUE E FFECT (ANNEXURE-3). THAT IN REFERENCE TO EXEMPTED GOODS S ALE LEDGER IN WHICH CONSOLIDATED SALES ARE ENTERED ON FEW OCCA SIONS, IN THIS REGARD IT IS SUBMITTED THAT DUE TO BONAFIDE RE ASONS ALREADY STATED ABOVE THESE LEDGERS WERE SUBMITTED BEFORE YO UR HONOUR PRIOR TO FINALISATION/RECONCILIATION OF ACCOUNTS AN D DUE TO OVERSIGHT OF ACCOUNTANT. 5. THE ABOVE SUBMISSION OF THE ASSESSEE HAVE BEEN W RONGLY IGNORED BY THE AUTHORITIES BELOW AND THERE BEING NO DIFFERENCE IN THE TOTAL TURNOVER OF THE ASSESSEE, THE ADDITION MADE BY THE ASSESSING OF FICER WAS NOT JUSTIFIED AND CONSEQUENT APPLICATION OF NET PROFIT RATES TO T HESE ALLEGED SALES IS ALSO NOT JUSTIFIED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 28/09/2018) SD/. SD/. (PARTHA SARATHI CHAUDHURY) ( T. S. KAPOOR ) JUDICIAL MEMBER A CCOUNTANT MEMBER DATED:28/09/2018 *SINGH I.T.A. NO.691/LKW/2015 ASSESSMENT YEAR:2011-12 4 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW