VASHULAL ATUANTRAM WADHAWA, ULHASNAGAR V. DCIT CIR 2 KALYAN, MUMBAI

ITA 7197/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100944 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 27-11-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 04-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SIDDARAMAPPA KAPPATTANAVAR
• Assessee Lawyers: SURESH N OTWANI
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI , . . , BEFORE MS. SUSHMA CHOWLA , JM AND SHRI N.K. BILLAIYA , AM ./ ITA NO. 71 97 /MUM/2012 ( / ASSESSMENT YEAR : 2008 - 09 ) SHRI VASHULAL ATUANTRAM WADHWA SHOP NO. 396, NEAR BUS STOP MAIN ROAD, ULHASNAGAR 421005 / VS. DCIT, CIRCLE - 2 KALYAN ./ PAN : AABPW7868F ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI SURESH N. OTWANI / RESPONDENT BY : SHRI SIDDARAMAPPA KAPPATTANAVAR / DATE OF HEARING : 22.07. 2015 / DATE OF PRONOUNCEMENT : 31 .07 .2015 / ORDER PER SUSHMA CHOWLA, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 13.09.2012 PASSED BY CIT(A) - II, THANE AND IT PERTAINS TO ASSESSMENT YEAR 2008 - 09. THERE WAS A DELAY OF ONE DAY IN FILING THE APPEAL AND BECAUSE OF THE SMALLNESS OF DELAY WE CONDONED THE SAME AND PROCEED TO DECIDE THE APPEAL. 2. THE ONLY ISSUE RAISED IN THE PRESENT APPEALS IS AGAINST THE ADDITION OF ` 2,16,000/ - . 3. BRIEFLY, IN THE FACTS OF THE PRESENT CASE SURVEY OPERATIONS WERE CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE UNDER SECTION 133A OF THE ACT ON 23.01.2008. THE ASSESSEE WAS PROPRIETOR OF M/S. SONAM GARMENTS AND WAS ENGAGED IN THE BUSINESS OF TRADING IN HOSIERY ITEMS. DURING THE COURSE OF SURVEY PROCEEDINGS CASH OF ` 2,16,580/ - WAS FOUND FROM THE PREMISES OF THE ASSESSEE AGAINST WHICH THE ASSESSEE COULD EXPLAIN CASH TO THE EXTENT OF ITA NO. 7197 /MUM/201 2 SHRI VASHULAL ATUANTRAM WADHAWA 2 ` 1,59,917/ - AND THE BALANCE SUM OF ` 56,633/ - WAS OFFERED TO TAX AS ADD ITIONAL INCOME. FURTHER, THE STOCK INVENTORY WAS PREPARED ON THE DATE OF SURVEY WHICH TOTALLED TO ` 37,57,823/ - . THE TOTAL VALUE OF STOCK AS ON THE DATE OF SURVEY WAS WORKED OUT AT ` 31,74,234/ - AFTER REDUCING GP OF 15.53%. AS PER THE TENTATIVE TRADING ACCOU NT DRAWN UP DURING THE COURSE OF SURVEY THE STOCK AS PER THE BOOKS OF ACCOUNT WORKED OUT AT ` 17,64,593/ - . THE DIFFERENCE OF ` 14,09,641/ - WAS ACCEPTED BY THE ASSESSEE AND THE SAME WAS OFFERED AS ADDITIONAL INCOME FOR THE YEAR UNDER CONSIDERATION. IN THE RET URN OF INCOME FILED FOR ASSESSMENT YEAR 2008 - 09 ASSESSEE HAD DECLARED THE ADDITIONAL INCOME OF ` 11,93,641/ - AS AGAINST THE INCOME OFFERED OF ` 14,66,304/ - . THE ASSESSEE WAS SHOW CAUSED TO EXPLAIN THE DISCREPANCY IN THE DECLARATION OF ADDITIONAL INCOME. IN R EPLY THE ASSESSEE SUBMITTED THAT AFTER THE SURVEY IT REALISED THAT SOME OF THE INVENTORY WAS ERRONEOUSLY RECORDED DURING THE SURVEY . THE ASSESSEE FURTHER POINTED OUT THAT AFTER RECEIPT OF THE STOCK LIST, THE SAID DISCREPANCY WAS POINTED OUT TO THE DCIT WHO IN TURN ASSURED THAT THE SAME WOULD BE EXAMINED DURING THE COURSE OF SCRUTINY PROCEEDINGS. THE ASSESSEE SUBMITTED THAT THE DIFFERENCE OF ` 2,16,000/ - IS NOT TO BE ADDED IN HIS HANDS. ANOTHER ITEM WAS T - SHIRTS OF 1002 PIECES. THE AO REJECTED THE SUBMISSION OF THE ASSESSEE IN VIEW OF HAVING SIGNED THE STOCK INVENTORY DURING THE COURSE OF SURVEY AND ALSO BECAUSE OF HIS CONSENT GIVEN DURING THE COURSE OF SURVEY PROCEEDINGS TO OFFER ADDITIONAL INCOME OF ` 14,66,304/ - . THE BALANCE OF ` 2,72,633/ - WAS ADDED IN THE H ANDS OF THE ASSESSEE. 4. BEFORE THE CIT(A) THE ASSESSEE EXPLAINED THAT IT WAS DEALING IN SEVERAL ITEMS OF BABA SUITS AND THE STOCK INVENTORY REFLECTED THAT THE ASSESSEE WAS DEALING IN LOWER PRICE ITEMS WHEREAS ENTRY NO. 381 ON PAGE 11 OF THE INVENTORY HAD DES CRIPTION OF BABA SUITS, TOTAL PIECES - 450 AND SELLING PRICE - ` 480/ - PER PIECE INSTEAD OF ` 48/ - PER PIECE. THE ASSESSEE THUS CLAIMED THAT THE DIFFERENCE OF ` 2,16,000/ - SINCE EXPLAINED, NEED NOT BE ADDED IN HIS HANDS. ANOTHER EXPLANATION WAS GIVEN IN RESPECT OF T - SHIRTS OF 1002 PIECES. HOWEVER, THE CIT(A) REJECTED THE CLAIM OF THE ASSESSEE IN VIEW OF THE VALUE OF SOME OF THE ITEMS BEING HIGHER AND IN THE ABSENC E OF THE ASSESSEE HAVING FURNISHED ANY EVIDENCE TO ESTABLISH HIS CASE. THE ASSESSEE IS IN APPEAL ITA NO. 7197 /MUM/201 2 SHRI VASHULAL ATUANTRAM WADHAWA 3 AGAINST THE ADDITION OF ` 2,16,000/ - , I.E. THE VALUE OF BABA SUITS UNDER DECLARED. 5. THE LEARNED A.R. FOR THE ASSESSEE REFERRED TO THE STOCK INVENTORY PLACED IN T HE PAPER BOOK ON PAGES 8 TO 21 AND POINTED OUT THAT A PERUSAL OF THE SAID STOCK INVENTORY WOULD REFLECT THAT THE ASSESSEE WAS DEALING IN BABA SUITS AND THE VALUE OF THE SAID SUITS VARIED BETWEEN ` 100 / - TO ` 150 / - . ONLY ONE ENTRY, I.E. ITEM NO. 381 ON PAGE 1 8 OF THE INVENTORY , THE COST WAS ADOPTED AT ` 480 FOR 450 PIECES. THE ASSESSEE FURTHER POINTED OUT THAT IMMEDIATELY ON RECEIPT OF THIS STOCK INVENTORY AFTER THE SURVEY OPERATIONS , A LE TTER WAS FILED BY THE ASSESSEE ON 30.01.2008 BEFORE THE DCIT EXPLAINING T HE SAID ERROR , WHICH HAD CREPT IN THE VALUATION OF THE STOCK. A COPY OF THE LETTER IS PLACED ON PAGE 39 OF THE PAPER BOOK. THE ASSESSEE FURTHER POINTED OUT THAT THE D CI T, VIDE LETTER DATED 04.02.2008 POINTED OUT THAT THE SAID ISSUE WOULD BE CONSIDERED DURI NG THE COURSE OF SCRUTINY. THE PLEA OF THE LEARNED A.R. FOR THE ASSESSEE BEFORE US WAS THAT THE SAID ISSUE WAS REJECTED BY THE AO WHILE COMPLETING THE ASSESSMENT AND EVEN THE LEARNED CIT(A) HAD REJECTED THE EXPLANATION OF THE ASSESSEE. 6. THE LEARNED D .R. FOR THE REVENUE PLACED RELIANCE UPON THE ORDER PASSED BY THE CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE RECORD. THE ONLY ISSUE ARISING IN THE PRESENT APPEAL IS AGAINST THE ADDITION OF ` 2,16,000/ - . DURING THE COURSE OF SURVEY THE ASS ESSEE HAD DECLARED CERTAIN STOCK ON ACCOUNT OF THE SAME BEING FOUND IN EXCESS. THE STOCK FOUND DURING THE COURSE OF SURVEY WAS ` 31,74,234/ - AS AGAINST THE STOCK AS PER THE BOOKS OF ` 17,16,543/ - . THE EXCESS STOCK OF ` 14,09,641/ - WAS DECLARED BY THE ASSESSEE AS ADDITIONAL INCOME FOR THE YEAR ALONG WITH OFFER OF CASH OF ` 56,663/ - . THE EXPLANATION OF THE ASSESSEE BEFORE THE AUTHORITIES BELOW FOR THE VARIATION IN THE INCOME OFFERED AND DECLARED IN THE RETURN OF INCOME WAS THAT ONE ITEM AT SR. NO. 381 OF PAGE 11 OF THE STOCK INVENTORY WAS VALUED @ ` 480/ - WHEREAS THE VALUE OF THE SAID ITEM WAS ONLY ` 48/ - . THE SAID MISTAKE WAS POINTED OUT BY THE ASSESSEE VIDE LETTER DATED 30.01.2008 WHICH IS PLACED ON PAGE 39 OF THE PAPER BOOK. EVEN THE DCIT HAS CONSIDERED THE SAID ITA NO. 7197 /MUM/201 2 SHRI VASHULAL ATUANTRAM WADHAWA 4 EXPLANATION OF THE ASSESSEE BUT IT WAS STATED BY HIM IN HIS COMMUNICATION THAT THE SAME WOULD BE VIEWED AT THE TIME OF ASSESSMENT. HOWEVER, WHILE COMPLETING THE ASSESSMENT NO COGNIZANCE OF THE SAID LETTER WAS TAKEN. BOTH THE AUTHORITIES BELOW HAVE REJECTE D THE CLAIM OF THE ASSESSEE IN VIEW OF THE FACT THAT THE ASSESSEE HAD OFFERED ADDITIONAL INCOME DURING THE COURSE OF SURVEY. WE FIND NO MERIT IN THE ORDERS OF THE AUTHORITIES BELOW IN THIS REGARD. THE ASSESSEE HAS FILED AN EXPLANATION IN RESPECT OF ONE ITE M AND HAS ALSO POINTED OUT THAT THE ITEMS DEALT WITH HIM ARE OF LOWER MARKET VALUE AND HE HAS NO ITEM IN HIS INVENTORY WHICH IS VALUED AT ` 480/ - . IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMST ANCES WE FIND MERIT IN THE PLEA OF THE ASSESSEE AND ACCORD INGLY WE DELETE THE ADDITION OF ` 2,16,000/ - . 8. IN THE RESULT, THE APP EAL FILED BY THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JULY, 2015. 31.07.2015 SD/ - SD/ - ( N.K. BILLAIYA ) ( SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED 31 ST JULY, 201 5 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - II, THANE 4. / CIT - III, THANE 5. , , / DR, F BENCH, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER //TRUE COPY// /ASSTT. REGISTRAR) , /ITAT, MUMBAI N.P.