M/s Khandelwal Oil Mill, Durgapur V. ITO,Ward-1(3), Durgapur, Durgapur

ITA 722/KOL/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8108 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2012
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 07-05-2012
• Court: TRIBUNAL
• Department Lawyers: D K RAKSHIT J
• Assessee Lawyers: U DASGUPTA
• Section: 143(3)

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND , . . !' ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI C. D. RAO, AM ] # # # # / I.T.A NO. 722/KOL/2012 $% &' $% &' $% &' $% &'/ // / ASSESSMENT YEAR: 2008-09 KHANDELWAL OIL MILL VS. INCOME-TAX OFFICER, WD -1(3), DURGAPUR (PAN: AADFK5417E) ()* /APPELLANT ) (+,)*/ RESPONDENT ) DATE OF HEARING: 08.10.2012 DATE OF PRONOUNCEMENT: 08.10.2012 FOR THE APPELLANT: SHRI U. DASGUPTA, ADVOCATE FOR THE RESPONDENT: SHRI D. K. RAKSHIT, JCIT(DR) !- / ORDER PER MAHAVIR SINGH, JM ( , , , , ) THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A), DURGAPUR IN APPEAL NO. 114/CIT(A)/DGP/2010-11 DATED 09.02.2012. ASSESSMENT WAS FRAMED BY ITO, WD-1(3), DURGAPUR U/S. 143(3) OF THE INCOME-TAX ACT, 1961 (H EREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2008-09 VIDE HIS ORDER DATED 30.12. 2010. 2. THE FIRST ISSUE IN THIS APPEAL OF ASSESSEE IS AG AINST THE ORDER OF CIT(A) SUSTAINING THE ADDITION OF RS.1,53,877/- MADE BY AO ON ACCOUNT OF PROFIT ON UNDISCLOSED SALES. FOR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NO.2: 2. FOR THAT ON THE FACTS OF THE CASE THE LD. CIT(A ) WAS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS.1,53,877/-, MADE BY THE AO, ON A/C O F PROFITS ON ALLEGED UNDISCLOSED SALES, AND THE SAME MAY PLEASE BE DELETED. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESSEE IS IN THE BUSINESS OF MAN UFACTURE OF MUSTARD OIL, RESALE OF MUSTARD SEEDS AND ALSO ENGAGED IN THE BUSINESS OF RUNNING O F TRUCK ON HIRE UNDER THE NAME AND STYLE OF M/S. KHANDELWAL OIL MILLS. FOR THE RELEVANT ASSESS MENT YEAR 2008-09, THE ASSESSEE FILED RETURN OF INCOME ON 09.09.2008 DECLARING A TOTAL INCOME OF RS.2,86,800/-. ASSESSEES PREMISES WAS SURVEYED BY I. T. DEPARTMENT ON 15.02.2008 WHEREIN THERE WAS A DIFFERENCE OF STOCK I.E. SHORT STOCK OF RS.6,15,506/-. AT THE BUSINESS PREMISES O F THE ASSESSEE PHYSICAL STOCK WAS FOUND AT 2 ITA 722/K/2012 KHANDELWAL OIL MILL A.Y. 08-09 RS.11,84,293/- AS AGAINST THE STOCK AS PER STOCK RE GISTER AT RS.17,99,799/-. SINCE THERE WAS A DIFFERENCE IN STOCK OF RS.6,15,506/- THE AO TREATED THE DIFFERENCE AS UNDISCLOSED SALE OF STOCK AND APPLIED GP @ 25% AND MADE ADDITION OF RS.1,53,8 77/-. THE ASSESSEES GP IS AT 3.25% AS ADMITTED BY ASSESSEES COUNSEL. THE CIT(A) ALSO CO NFIRMED THE ADDITION. BEFORE US, LD. COUNSEL FOR THE ASSESSEE REQUIESTED FOR FAIR ESTIMA TION OF GP AT 3.25% ON UNDISCLOSED SALES. ON THE OTHER HAND, THE LD. SR. DR OBJECTED TO THE SAME AND SUBMITTED FOR UPHOLDING THE GP APPLIED BY AO AT 25%. WE FIND THAT THE AO HAS NOT GIVEN AN Y BASIS FOR APPLICATION OF GP ON UNDISCLOSED SALE @ 25%. HENCE, WE ARE OF THE VIEW THAT A REASONABLE GP SHOULD HAVE BEEN ADOPTED. THE ASSESSEE HAS DISCLOSED GP RATE AT 3.2 5% IN THIS YEAR AND HAS ADMITTED BY ASSESSEES COUNSEL THAT ASSESSEES GP OF EARLIER YE ARS AND IN FUTURE YEARS IS AROUND 3 TO 5%. TAKING A LIBERAL VIEW AND GOING BY THE NATURE THAT THESE ARE UNDISCLOSED SALE WHICH IS NOT BORNE ANY SALES TAX, VAT OR OTHER TAXES THE PROFIT IS LIKELY TO BE LITTLE HIGHER. HENCE, WE DIRECT THE AO TO RECOMPUTE THE GP BY APPLYING 10% OF THE GP RATE. HOWEVER, THIS CANNOT BE TAKEN AS A PRECEDENT BY THE REVENUE IN FUTURE YEARS WHILE FRAMING ASSESSMENT IN THE CASE OF THE ASSESSEE. IN THE PRESENT CASE, THERE ARE PECULIAR CIRCUMSTANCES FOR APPLYING THE GP AT 10%. THIS CANNOT BE UNIVERSAL. HENCE, WE DIRECT THE AO ACCORDINGLY. THIS ISSUE OF ASSESSEES APPEAL IS PARTLY ALLOWED. 4. THE NEXT ISSUE IN THE APPEAL OF ASSESSEE IS AGAI NST THE ORDER OF CIT(A) IN SUSTAINING THE ADDITION OF UNDISCLOSED SALES PERTAINING TO THIRD P ARTIES AT RS.1,07,583/-. FOR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NO.3: 3. FOR THAT ON THE FACTS OF THE CASE THE CIT(A) WA S NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS.1,07,583/-, MADE BY THE AO ON A/C OF ALLEGED UNDISCLOSED SALES, ON THE BASIS OF PAPERS BELONGING TO THIRD PARTIES, AND THE SAME MAY PLEASE BE DELETED. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. THE ASSESSEE BEFORE LOWER AUTHORITIES AND EVEN NOW BEFORE US CONTENDED THAT THE ADDITION MADE ON THE BASIS OF PINK SLIPS AMOUNTING TO RS.1,07,583 /- TREATED AS UNACCOUNTED SALES ACTUALLY BELONGS TO M/S. KHANDELWAL DAL MILL WHICH IS SISTER CONCERN OF THE ASSESSEE FIRM AND NOT THE ASSESSEE. WHEN THIS WAS PUT TO LD. SR. DR AND THE COMPIES OF THOSE SALE BILLS WERE SHOWN FROM THE PAPER BOOK OF THE ASSESSEE, HE FAIRLY CONC EDED THAT THIS ADDITION CAN BE DELETED BUT HE REQUESTED THAT A DIRECTION BE GIVEN TO MAKE THIS AD DITION IN THE CASE OF KHANDELWAL DAL MILL. WE FIND THAT THIS ADDITION ON THE BASIS OF UNACCOUN TED SALE OF KHANDELWAL DAL MILL CANNOT BE MADE IN THE HANDS OF PRESENT ASSESSEE I.E. KHANDELW AL OIL MILL. HOWEVER, THE AO IF FEELS SO 3 ITA 722/K/2012 KHANDELWAL OIL MILL A.Y. 08-09 CAN TAKE ACTION IN THE CASE OF KHANDELWAL DAL MILL AND THAT ALSO AS PER LAW. ACCORDINGLY, THIS ADDITION IS DELETED. APPEAL OF ASSESSEE IS PARTLY A LLOWED. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. 7. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- . . !' , (C. D. RAO) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( ' ' ' ') )) ) DATED : 8TH OCTOBER, 2012 ./ $01 2 JD.(SR.P.S.) 4 ITA 722/K/2012 KHANDELWAL OIL MILL A.Y. 08-09 !- 3 +4 5!4&6- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT KHANDELWAL OIL MILL, SANJIB SARANI, DU RGAPUR- 713201. 2 +,)* / RESPONDENT ITO, WARD-1(3), DURGAPUR 3 . -$ ( )/ THE CIT(A), DURGAPUR 4. 5. -$ / CIT DURGAPUR 4<= +$ / DR, KOLKATA BENCHES, KOLKATA ,4 +/ TRUE COPY, !-$>/ BY ORDER, 1 /ASSTT. REGISTRAR .