Shanti Udyog, Jalgaon V. Income-tax Officer, Nashik

ITA 769/PUN/2010

• Counselvise Citation: 76924514 RSA 2010
• Duration Of Justice: 4 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 04-11-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 24-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K MODI
• Assessee Lawyers: SUNIL PATHAK
• Section: 143(3); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.769/PN/2010 (ASSESSMENT YEAR : 2008-09) SHANTI UDYOG, E-68, MIDC AREA, JALGAON 425 003. PAN : AAGFS1501E . APPELLANT VS. INCOME TAX OFFICER, CENTRAL-2, NASHIK. . RESPONDENT ASSESSEE BY : MR. SUNIL PATHAK DEPARTMENT BY : MR. A. K. MODI DATE OF HEARING : 13-11-2014 DATE OF PRONOUNCEMENT : 26-11-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AG AINST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, NASHIK DATED 24.03.2010 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 24.12.2009 PASSED BY THE ASSESSING OFFICER U/S 153B(B) R.W.S. 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2008-09. 2. IN THIS APPEAL, THE ONLY ISSUE RAISED BY THE ASS ESSEE IS WITH REGARD TO THE ACTION OF THE CIT(A) IN CONFIRMING AN ADDITION OF RS.29,96,900/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF EXCESS STOCK OF UDAD DAL. 3. IN BRIEF, THE RELEVANT FACTS ARE THAT ASSESSEE I S A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF MANUFACTURE AND DALS. T HE ASSESSEE IS A MEMBER OF SAHYOG GROUP OF CASES WHEREIN A SEARCH AC TION U/S 132 OF THE ACT WAS CARRIED OUT ON 22.11.2007. IN THE COURSE OF SE ARCH, PHYSICAL STOCK INVENTORY WAS PREPARED AND ON COMPARISON WITH THE S TOCK POSITION AS PER THE BOOKS OF ACCOUNT, EXCESS STOCK OF UDAD DAL OF 1303 QUINTALS WAS NOTED. ITA NO.769/PN/2010 FURTHER, THE PARTNER OF THE FIRM IN A STATEMENT REC ORDED U/S 132(4) OF THE ACT MADE A DECLARATION OF ADDITIONAL INCOME OF RS.26,00 ,000/- ON ACCOUNT OF STOCK DISCREPANCIES. THE EXCESS STOCK OF UDAD DAL OF 130 3 QUINTALS WAS VALUED AT RS.26,96,900/-. THE ASSESSING OFFICER FOUND THAT T HE AFORESAID AMOUNT WAS NOT DECLARED IN THE RETURN OF INCOME AND ON BEING S HOW-CAUSED ASSESSEE EXPLAINED THAT THE EXCESS STOCK OF UDAD DAL WAS ON ACCOUNT OF INCORRECT COUNTING OF STOCK ON ESTIMATE BASIS BY THE SEARCH P ARTY. THE ASSESSEE ALSO SUBMITTED THAT ALL ITS PURCHASES AND SALES WERE DUL Y SUPPORTED BY THE VOUCHERS AND THE BOOKS OF ACCOUNT WERE AUDITED. TH EREFORE, THERE WAS NO JUSTIFICATION FOR MAKING AN ADDITION ON ACCOUNT OF EXCESS STOCK IN THE ABSENCE OF ANY EVIDENCE. THE CONTENTIONS OF THE ASSESSEE H AVE BEEN REJECTED BY THE ASSESSING OFFICER AS WELL AS BY THE CIT(A) PRIMARIL Y ON THE GROUND THAT THE INVENTORY OF STOCK AT THE TIME OF SEARCH WAS PREPAR ED WITH THE HELP OF THE STAFF OF THE ASSESSEE AND THEREFORE IT WAS WRONG ON THE P ART OF THE ASSESSEE TO SAY THAT THERE WAS INCORRECT COUNTING OF STOCK BY THE S EARCH PARTY. AGAINST THE AFORESAID, ASSESSEE IS FURTHER APPEAL BEFORE US. 4. BEFORE US, THE LD. REPRESENTATIVE FOR THE ASSESS EE HAS REITERATED THE PLEA RAISED BEFORE THE LOWER AUTHORITIES, WHICH IS TO THE EFFECT THAT THE EXCESS STOCK IS ON ACCOUNT OF INCORRECT ACCOUNTING OF STOC K ON ESTIMATE BASIS BY THE SEARCH PARTY AND THEREFORE THE ADDITION WAS NOT MAI NTAINABLE. 5. ON THE OTHER HAND, THE LD. CIT-DR HAS RELIED UPO N THE ORDERS OF THE AUTHORITIES BELOW IN SUPPORT OF THE CASE OF THE REV ENUE. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. IN OUR CONSIDERED OPINION, THE INCOME-TAX AUTHORITIES MADE NO ERROR I N REJECTING THE PLEA OF THE ASSESSEE THAT THE IMPUGNED STOCK DISCREPANCY IS MER ELY ON ACCOUNT OF INCORRECT COUNTING OF STOCK BY THE SEARCH PARTY. I N-FACT, APART FROM THE BALD ASSERTIONS OF INCORRECT COUNTING OF STOCK BY THE SE ARCH PARTY, ASSESSEE HAS NOT ITA NO.769/PN/2010 POINTED OUT ANY SPECIFIC DEFECT IN THE MANNER IN WH ICH THE STOCK INVENTORY WAS PREPARED BY THE SEARCH PARTY. EVIDENTLY, THERE IS NO DENIAL TO THE ASSERTIONS OF THE LOWER AUTHORITIES THAT THE INVENTORY WAS PREPAR ED WITH THE HELP OF THE STAFF OF THE ASSESSEE, WHO ARE WELL CONVERSANT WITH THE S TOCK OF MATERIAL AND WEIGHT THEREOF. IN THESE CIRCUMSTANCES, WE FIND THE LOWER AUTHORITIES WERE JUSTIFIED IN DISREGARDING THE PLEA OF THE ASSESSEE. APART THERE FROM, IT IS ALSO AN ADMITTED POSITION THAT WITH RESPECT TO THE STOCK DISCREPANCI ES FOUND IN THE SEARCH, PARTNER OF THE ASSESSEE FIRM HAD DECLARED AN ADDITI ONAL INCOME OF RS.26,00,000/- IN STATEMENT RECORDED U/S 132(4) OF THE ACT. CONSIDERING THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES OF THE CASE , IN OUR VIEW, THE IMPUGNED ADDITION OF RS.29,96,900/- HAS BEEN RIGHTLY SUSTAIN ED BY THE CIT(A) ON ACCOUNT OF UNEXPLAINED EXCESS STOCK OF UDAD DAL. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH NOVEMBER, 2014. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 26 TH NOVEMBER, 2014. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-I, NASHIK; 4) THE CIT-I, NASHIK; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE