SEEMA GARG, V. ACIT, Jaipur

ITA 723/JPR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5586 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 27-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT DHK

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA-@ ITA NO. 723/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 SMT. SEEMA GARG PROP. M/S. SEEMA SALES CORPORATION, OLD KABARKHANA, JUMERATI, BHOPAL 462 001 CUKE VS. THE ACIT CIRCLE- 7 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ACXPG 2841 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI PRAVEEN SARASWAT, CA JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJ MEHRA, JCIT LQUOKBZ DH RKJH[K@ DATE OF HEARING : 27/11/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 13/01/2016 VKNS'K@ ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A)-III, JAIPUR DATED 26-08-2014 FOR THE ASSESSM ENT YEAR 2010-11 RAISING FOLLOWING GROUND:- 1. THAT LD. CIT(A) HAS ERRED IN CONFIRMING THE AD DITION OF RS. 2,54,616/- ON ACCOUNT OF ESTIMATION OF CLOSI NG STOCK BY VALUING @ RS. 28/- PER KG BY AO INSTEAD OF RS. 2 0/- PER KG (COST PRICE) OF ROTTEN (WASTE) TENDU PATTA TAKEN BY ASSESSEE . THE LD. CIT(A) HAS FAILED TO UNDERSTAND THE FACTS OF THE CASE THAT RS. 28/- PER KG WAS THE RATE ON WH ICH ASSESSEE HAS SOLD GOODS, SUBSEQUENTLY ON 14-12-2011 (A.Y. 2011-12), PROFIT ON IT HAS BEEN TAXED. SO THE VALUE TAKEN BY AO FOR ESTIMATING CLOSING STOCK AS ON 31-03-2010 WA S ITA NO.723/JP/2014 SMT. SEEMA GARG VS. ACIT, CIRCLE- 7, JAIPUR . 2 WRONG. ACCORDINGLY, ITS CONFIRMATION BY LD. CIT(A) IS ALSO WRONG AS IT WOULD BE DOUBLE TAXATION. HENCE ADDITIO N MADE IS NOT JUSTIFIED. 2.1 DURING THE COURSE OF HEARING, THE LD. AR CONTEN DS THAT BOOKS OF ACCOUNT ARE DULY AUDITED. NO DEFECTS THEREIN HAVE B EEN FOUND BY LD. AO. THE ADDITION IN QUESTION PERTAINS ONLY TO VALUATION OF TENDU PATTA STOCK WHICH IS A NATURAL PRODUCT AND SUBJECT TO DECAY, DA MAGE AND INFERIORITY OF QUALITY. THE ASSESSEE OFFERED A REASONABLE EXPLANAT ION WHICH HAS BEEN ARBITRARILY REJECTED BY THE AO WHO MADE THE ADDITIO N, IN FIRST APPEAL SAME WAS CONFIRMED BY LD. CIT(A). IT IS FURTHER CONTENDE D THAT THE ADDITION IN QUESTION ON STOCK VALUATION IS REVENUE NEUTRAL AS C LOSING STOCK OF THIS YEAR WILL BE ALLOWED TO THE ASSESSEE AS OPENING SOCK THU S REDUCING THE PROFITS OF SUBSEQUENT YEAR. THE HON'BLE SUPREME COURT IN TH E CASE OF CIT VS. EXCEL INDUSTRIES LTD. (2013) 358 295 HELD THAT SUCH NEUTRAL ADDITIONS SHOULD NOT BE AGITATED BY THE DEPARTMENT. 2.2 THE LD. DR IS HEARD. 2.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND MERIT IN THE CONTENTIO NS OF THE LD. AR THAT VALUATION OF A FRAGILE COMMODITY LIKE A TENDU PATTA IS A SUBJECT MATTER OF ESTIMATION. NO DEFECT HAS BEEN FOUND IN THE BOOKS O F ACCOUNT OF THE ASSESSEE. THE VALUE OF STOCK IS DULY CERTIFIED BY A UDITORS. BESIDES, THE ADDITION BECOMES REVENUE NEUTRAL AS MENTIONED ABOVE RELYING ON THE ITA NO.723/JP/2014 SMT. SEEMA GARG VS. ACIT, CIRCLE- 7, JAIPUR . 3 JUDGEMENT OF HON'BLE SUPREME COURT IN THE CASE OF C IT VS. EXCEL INDUSTRIES (SUPRA). THUS IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, THE ADDITION CONFIRMED BY THE LD. CIT(A) IS DELETED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13/01/20 16. SD/- SD/- VH-VKJ-EHUK VKJ-IH-RKSYKUH (T.R. MEENA) (R.P.TOLANI) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 13 /01/2016 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. SEEMA GARG, BHOPAL 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT, CIRCLE- 7, JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.723/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR