SATISH KUMAR, Alwar V. ITO, Alwar

ITA 780/JPR/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70140 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 18-10-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S L CHANDEL

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH SMC JAIPUR BEFORE SHRI B.R. JAIN, ACCOUNTANT MEMBER ITA NO. 780/JP/2013 ASSESSMENT YEAR: 2008-09 PAN NO. ACOPK2635D SHRI SATISH KUMAR, VS. INCOME TAX OFFICER PROP. M/S MARUTI TRADING CO., WARD 1(2), ALWAR. 66, NEW MANDI YARD, KHERLI. (APPELLANT) (RESPONDENT) APPELLANT BY : (NONE) WRITTEN SUBMISSION RESPONDENT BY : SHRI S.L. CHANDEL. DATE OF HEARING : 21.11.2013 DATE OF PRONOUNCEMENT : 21.11.2013 ORAL ORDER PER B.R. JAIN, A.M. THIS APPEAL BY ASSESSEE AGAINST THE ORDER DATED 01 ST AUGUST, 2013 OF LD. CIT (APPEALS), ALWAR, RAISES THE SOLITARY GROUND AS UNDER:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(APPEALS) WAS WRONG AND UNJUSTIFIED IN SUSTAININ G THE TRADING ADDITION OF RS. 50,000/- AS AGAINST RS. 1,00,000/- MADE BY THE LD. I.T.O. 2. BRIEFLY THE FACTS ARE THAT THE ASSESSEE HAS RETU RNED INCOME OF RS. 3,49,920/- FROM TRADING IN PULSES, OIL SEED AND COMMISSION ETC . BOOKS OF ACCOUNT PRODUCED WERE TEST CHECKED. THE ASSESSING OFFICER WAS NOT SA TISFIED WITH THE CORRECTNESS AND COMPLETENESS OF ACCOUNTS AS THE SAME SUFFERED F ROM DEFECTS SUCH AS CLAIM OF 2 EXCESSIVE SHORTAGE OF STOCK AND VALUATION OF STOCK HAVING BEEN MADE ON ESTIMATE BASIS COUPLED WITH DECLINE IN GROSS PROFIT RATE. HE , THEREFORE, REJECTED THE ACCOUNT BY APPLICATION OF PROVISIONS OF SECTION 145(3) OF T HE I.T. ACT AND ESTIMATED INCOME BY MAKING THE TRADING ADDITION OF RS. 1,00,0 00/-. 3. THE LD. CIT(APPEALS) UPHELD THE DECISION TO REJE CT ACCOUNTS AND CONSIDERING THE DEFECTS PROCEEDED TO RESTRICT THE T RADING ADDITION OF RS. 50,000/- BEING FAIR ON THE FACTS AND CIRCUMSTANCES OF THE CA SE. 4. NONE ATTENDS ON THE BEHALF OF THE ASSESSEE. IN T HE WRITTEN SUBMISSIONS FILED AND LAID ON RECORD BY THE ASSESSEES COUNSEL, IT HA S BEEN CONTENDED THAT THE CLOSING STOCK HAS CONSISTENTLY BEEN VALUED ON ESTIMATE BASI S AND THERE IS NO EXCESSIVE CLAIM OF THE SHORTAGE OF STOCK AT 0.95% AS AGAINST ACCEPTED SHORTAGE OF 1 TO 1.5% IN SIMILAR CASES. IN THE EVENT, THE STOCK IS VALUED AT A FIGURE MORE THAN THAT DISCLOSED BY THE ASSESSEE, THE SAME WILL NOT EFFECT TAX LIABILITY AS THE ASSESSEE IS ASSESSED TO SAME TAX RATE IN THE SUBSEQUENT YEAR. T HE CLOSING STOCK OF THE YEAR UNDER CONSIDERATION SHALL BECOME OPENING STOCK OF S UBSEQUENT YEAR. IT HAS, THEREFORE, BEEN SUBMITTED THAT THE ADDITION SUSTAIN ED AT RS. 50,000/- BEING UNJUSTIFIED AND UNCALLED, NEEDS TO BE DELETED. 5. ON THE OTHER HAND, THE LD. D.R. CONTENDS THAT TH E ASSESSEE HAS NOT LAID ANY BASIS ON RECORD TO SHOW THAT THE DEPARTMENT HAS ACC EPTED WASTAGE IN SIMILAR CASES FROM 1 TO 1.5%. THE ASSESSEE HAS ALSO NOT ASSAILED THE ACTION TO REJECT THE ACCOUNTS. THE DECISION TO REJECT ACCOUNTS IS BONAFIDE AND EST IMATE SUSTAINED IS ON RATIONAL BASIS. RELIANCE HAS BEEN PLACED ON THE JUDGMENT BY HON'BLE SUPREME COURT IN THE 3 CASED OF CST VS. H.M. ESUFALI (1973) 90 ITR 271 (SC ) 277. THE ESTIMATED ADDITION SUSTAINED AT RS. 50,000/- DOES NOT CALL FO R ANY INTERFERENCE. 6. HEARD LD. D.R. EX PARTE QUA THE ASSESSEE WITH RE FERENCE TO WRITTEN SUBMISSIONS AS THE ASSESSEE SEEKS TO DECIDE THE ISS UE ON THE BASIS OF WRITTEN SUBMISSIONS LAID ON RECORD. THE ACCOUNTS OF THE ASS ESSEE SUFFERED FROM DEFECTS, WHICH WERE SERIOUS IN NATURE. THE VALUATION OF STOC K MADE BY THE ASSESSEE WAS NOT MADE ON THE BASIS OF ACTUAL COST OR MARKET PRICE BU T WAS MADE MERELY ON ESTIMATE BASIS. THE ABNORMAL WASTAGE HAS ALSO BEEN CLAIMED. THE CORRECTNESS OF STOCK ACCOUNT WAS NOT VERIFIABLE. THE ASSESSING OFFICER F OR BONAFIDE REASONS REJECTED THE ACCOUNTS BY APPLICATION OF PROVISIONS OF SECTIO N 145(3) OF THE ACT AND MADE ESTIMATED ADDITION OF RS. 1,00,000/- IN TRADING RES ULTS. THE APPELLANT HAS NOT ASSAILED THE ACTION TO REJECT THE ACCOUNTS BEFORE T HIS TRIBUNAL NOR HE HAS SHOWN THAT THE AUTHORITIES BELOW HAVE BEEN VINDICTIVE OR CAPRI CIOUS IN MAKING THE ESTIMATE. THE APPELLANT, THEREFORE, CAN BE SAID TO HAVE ACCEP TED THE FACT THAT HIS ACCOUNTS ARE NOT CORRECT AND COMPLETE AND TRUE PROFITS THEREFROM CANNOT BE DEDUCED. THE LD. CIT(A) AFTER CONSIDERING THE ENTIRE GAMUT OF THE IS SUE AND FACTS AND CIRCUMSTANCES OF THE CASE, CAME TO THE CONCLUSION THAT THE ACCOUN TS HAVE RIGHTLY BEEN REJECTED. AS THE BASIS ADOPTED BY THE ASSESSING OFFICER FOR ESTI MATING THE INCOME REQUIRED CORRECTION, HE ACTED WITHIN THE SCOPE OF HIS POWERS AND REDUCED THE ESTIMATED ADDITION TO RS. 50,000/- ONLY. ON THE PECULIAR FACT S, NO INTERFERENCE IS CONSIDERED NECESSARY IN THE DECISION TAKEN BY THE LD. CIT(A). ACCORDINGLY, GROUND RAISED IN APPEAL BEING DEVOID OF ANY MERIT, STANDS REJECTED. 4 7. IN THE RESULT, THE APPEAL BY THE ASSESSEE STANDS DISMISSED AS ANNOUNCED IN THE OPEN COURT IMMEDIATELY AFTER CLOSE OF THE HEARI NG ON 21 ST NOVEMBER, 2013. SD/- (B.R. JAIN) ACCOUNTANT MEMBER JAIPUR, DATED : 21/11/2013 * RANJAN COPY FORWARDED TO :- 1. SHRI SATISH KUMAR, KHERLI. 2. THE ITO, WARD 1(2), ALWAR. 3. THE CIT (A) 4. THE CIT 5. THE D/R GUARD FILE (ITA NO. 780/JP/2013) BY ORDER, AR ITAT JAIPUR.