The Income Tax Officer, Ferozepur V. M/s M.S. Foods Pvt. Ltd, Ferozepur

ITA 75/ASR/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5368 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-08-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 03-02-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M P SINGH
• Keywords: Set aside
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. B. R. BASKARAN, ACCOUNTANT MEMBER AND SH. N. K. CHOUDHRY, JUDICIAL MEMBER I.T.A. NO. 75/ASR/2017 AS SESSMENT YEAR: 2012-13 INCOME TAX OFFICER, WARD-3(1), FEROZEPUR VS. M/S M. S. FOODS PVT. LTD., VILL. BAHADURWALA, FEROZEPUR [PAN: AACCM 9834B] (RESPONDENT) APPELLANT BY : SH. M. P. SINGH CIT-DR RESPONDENT BY: NONE DATE OF HEARING: 22.08.2019 DATE OF PRONOUNCEMENT: 22.08.2019 ORDER PER B. R. BASKARAN, ACCOUNTANT MEMBER: THE REVENUE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 24-10-2016 PASSED BY LD CIT(A), BATHINDA AND IT RELATES TO THE ASSESSMENT YEAR 2012-13. THE REVENUE IS AGGRIEVED BY THE DECISION OF LD CIT(A) I N DELETING THE ADDITION RELATING TO STOCK DIFFERENCE OF RS.374.92 LAKHS BETWEEN BOOK STOCK AND THE STATEMENT OF STOCK GIVEN TO BANK. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. T HE LD CIT-DR SUBMITTED THAT THE BENCH HAD DIRECTED THE REVENUE TO SERVE THE NOTICE AND THE SAME HAS BEEN SERVED BY AFFIXURE. HENCE WE PROCEED TO DISPOSE OF THE APPEA L EX-PARTE, WITHOUT THE PRESENCE OF THE ASSESSEE. ITA NO. 75/ASR/2017 (AY 2012-13) ITO V. M. S. FOODS PVT. LTD. 2 3. WE HEARD LD D.R AND PERUSED THE RECORD. TH E AO NOTICED THAT THE ASSESSEE HAS SHOWN BOOK STOCK AT RS.947.92 LAKHS AS ON 31.3. 2012, WHILE THE STOCK VALUE SHOWN IN THE STATEMENT FURNISHED TO THE BANK WAS RS .1322.84 LAKHS. WHEN QUESTIONED, THE ASSESSEE SUBMITTED THAT IT HAD ADOP TED FUTURE REALIZABLE VALUE OF GOODS FOR VALUING THE STOCK FOR BANK PURPOSES. NOT CONVINCED WITH THE EXPLANATIONS OF THE ASSESSEE, THE AO ADDED THE DIFF ERENCE AMOUNT OF RS.374.92 LAKHS TO THE INCOME OF THE ASSESSEE U/S 69 OF THE A CT. IN THIS REGARD, THE AO TOOK SUPPORT OF THE DECISION RENDERED BY HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SMT. SHAKUNTLA THUKRAL VS. CIT (366 ITR 644 ). 4. THE LD CIT(A), HOWEVER, DELETED THE ADDITION BY FOLLOWING HOST OF CASE LAWS STATED IN HIS ORDER. WITH REGARD TO THE DECISION R ENDERED BY HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SMT. SHAKUNTLA TH UKRAL (SUPRA), WHICH WAS RELIED UPON BY AO, THE LD CIT(A) HELD THAT THE FACT S IN THE ABOVE SAID CASE IS DIFFERENT AND HENCE THE AO CANNOT TAKE SUPPORT OF T HE SAME. IN EFFECT, THE LD CIT(A) ACCEPTED THE CONTENTIONS OF THE ASSESSEE THA T THE ASSESSEE HAS PUT HIGHER VALUE TO THE STOCK QUANTITY. FURTHER, THE LD CIT(A ) OBSERVED THAT THEAO HAS NOT POINTED OUT ANY DISCREPANCY IN THE BOOKS WITH REFER ENCE TO PURCHASE, SALE OR CLOSING STOCK. ACCORDINGLY HE DELETED THE ADDITION . 5. THE LD CIT-DR SUBMITTED THAT THE LD CIT(A) H AS OVERLOOKED THE DECISION RENDERED BY HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF M/S B.T STEELS LTD VS. CIT (ITA NO.186 OF 2004). HE FURTHER SUBMI TTED THAT THE LD CIT(A) HAS NOT PROPERLY APPRECIATED THE DECISION RENDERED BY H ONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SHAKUNTLA THUKRAL (SUPRA). TH E LD CIT-DR FURTHER SUBMITTED THAT THE ADDITION OF THE DIFFERENCE BETWEEN BOOK ST OCK AND THE BANK STOCK WAS ITA NO. 75/ASR/2017 (AY 2012-13) ITO V. M. S. FOODS PVT. LTD. 3 UPHELD BY HONBLE CALCUTTA HIGH COURT IN THE CASE O F BINOD KUMAR AGARWALA VS. CIT (ITAT NO.22 OF 2015 DATED 21-06-2018). 6. WE HEARD LD D.R AND PERUSED THE RECORD. FRO M THE ASSESSMENT ORDER, WE NOTICE THAT THERE IS NO DIFFERENCE IN THE QUANTITY OF PADDY-PERMAL, RICE-PERMAL SHOWN IN THE BOOK AND IN THE BANK STATEMENT. IN RE SPECT OF PADDY-1121, THE BOOK STOCK WAS SHOWN AT 26,517 QUINTALS AND IN BANK STAT EMENT, IT WAS SHOWN AT 27,090 QUINTALS, I.E., 523 QUINTALS ARE SHOWN IN EXCESS IN THE STATEMENT FURNISHED TO THE BANK. ON THE CONTRARY, IN RESPECT OF RICE -1121, T HE BOOK STOCK WAS SHOWN AT 1539 QUINTALS, WHILE IT WAS SHOWN AT 1185 QUINTALS IN BA NK STATEMENT, I.E., THERE IS DEFICIT OF 354 QUINTALS. THE ABOVE SAID DIFFERENCES ALMOST OFFSET WITH EACH OTHER. HOWEVER THE VALUE OF BARDANA WAS SHOWN AT RS.29.95 LAKHS IN BOOK, WHILE THE SAME IS SHOWN AT RS.143.49 LAKHS IN BANK STATEMENT. AS OBSERVED BY LD CIT(A), THE ASSESSEE HAS INFLATED THE RATES OF EACH OF THE ITEM FOR BANK PURPOSES. 7. HENCE, WHAT IS REQUIRED TO BE SEEN IS TO VER IFY AS TO WHETHER THE RATES ADOPTED FOR VALUING VARIOUS ITEMS OF STOCK FOR BOOK PURPOSE S IS CORRECT OR NOT. IF THE VALUE ADOPTED FOR BOOK PURPOSES IS FOUND TO BE CORRECT, T HEN THE VALUE TAKEN FOR BANK PURPOSES SHOULD BE IGNORED. THE VALUE FOR BOOK PURP OSES CAN BE ASCERTAINED FROM THE PURCHASE VALUE OF VARIOUS ITEMS. WE NOTICE THA T BOTH THE TAX AUTHORITIES HAVE NOT CARRIED OUT THE SAID EXERCISE, WHICH WOULD HAVE BROUGHT THE TRUTH ABOUT THE VALUE ADOPTED FOR BANK PURPOSES. WE NOTICE THAT TH E AO HAS ADDED THE DIFFERENCE WITHOUT EXAMINING THE SAME CRITICALLY AND THE LD CI T(A) HAS GRANTED RELIEF WITHOUT GIVING A FINDING THAT THE VALUE ADOPTED FOR BANK PU RPOSES IS INFLATED. UNDER THESE CIRCUMSTANCES, IN OUR VIEW, THIS ISSUE REQUIRES FRE SH EXAMINATION AT THE END OF AO. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY LD CI T(A) ON THIS ISSUE AND RESTORE ITA NO. 75/ASR/2017 (AY 2012-13) ITO V. M. S. FOODS PVT. LTD. 4 THE SAME TO THE FILE OF THE AO FOR EXAMINING IT AFR ESH IN THE LIGHT OF DISCUSSIONS MADE SUPRA. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN CO URT ON AUGUST 22, 2019 SD/- SD/- (N. K. CHOUDHRY) (B. R. BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 22.08.2019 /GP/SR. PS. COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: (2) THE RESPONDENT: (3) THE CIT(APPEALS) (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T TRUE COPY BY ORDER