ITO, BHARATPUR V. SH. RAJENDRA PRASAD KHANDELWAL, BHARATPUR

ITA 785/JPR/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7837 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 04-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL: JAIPUR BENCH JAIPUR BEFORE SHRI SHAILEND RA K UMAR YADAV, JUDICIAL MEMBER, AND SHRI B. C. MEENA , ACCOUNTANT MEMBER . ITA.NO. 7 85 /JP /20 1 2 (ASSESSMENT YEAR: 200 9 - 1 0 ) ITO, WARD - 1, BHARATPUR APPELLA NT VS. SH. RAJENDRA PRASAD KHANDELWAL PROP. M/S MOHAN TRADING CO., NEW MANDI, BHARATPUR RESPONDENT PAN: A CMPP6054F / BY APPELLANT : SHRI RAJESH OJHA , D.R. / BY RESPONDENT : SHRI MANISH AGARWAL , A.R. / DATE OF HEARING : 2 8 .1 1 .2014 / DATE OF PRONOUNCEMENT :5 .1 2 .2014 I.T .A. NO. 7 85 / JP /2 0 1 2 A.Y. 200 9 - 1 0 ( ITO VS. SH. RAJENDRA PD. KHANDELWAL ) PAGE 2 ORDER PER SHAILENDRA KUMAR YADAV, J . M: THIS APPEAL HAS BEEN FILED BY THE REVENU E AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) , ALWA R , DATED 06. 0 7 .201 2 FOR A.Y. 200 9 - 1 0 ON THE FOLLOWING GROUND: 1 . THAT T HE L D. C OMMISSIONER OF I NCOME T AX (A) , ALWAR HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS. 2 4 , 72 , 3 79 / - MADE BY THE AO BY INVOKING THE PROVISIONS OF SECTION 145(3) OF THE ACT. 2. THAT THE L D. C OMMISSIONER OF I NCOME T AX (A) , ALWAR H AS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN RESTRIC TING THE ADDITION OF RS. 2 5 , 477 / - TO RS.12,740/ - WHICH WAS MADE ON ACCOUNT OF DISALLOWANCE OUT OF VARIOUS EXPENSES FOR PERSONAL USE. 3. THAT THE L D. C OMMISSIONER OF I NCOME T AX (A) , ALWAR HAS ERRED IN LAW AS WELL AS ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELETING THE ADDITION OF RS. 41 , 312 / - MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OUT OF CLAIM OF WASTAGE OF SARSON MTP VAT. 2. FIRST ISSUE IN REVENUE S APPEAL IS REGARDING ADDITION OF RS.24,72,379/ - MADE BY ASSESSING OFFICER , WHICH WAS DELETED BY CIT(A). 2.1 SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF REVENUE, INTER ALIA, STATING THAT IN THE FACTS AND CIRCUMSTANCES CIT(A) WAS NOT JUSTIFIED IN DELETING ADDITION OF RS.24,7 2,379/ - MADE BY ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SECTION I.T .A. NO. 7 85 / JP /2 0 1 2 A.Y. 200 9 - 1 0 ( ITO VS. SH. RAJENDRA PD. KHANDELWAL ) PAGE 3 145(3) OF THE ACT. ON OTHER HAND, LD. AUTHORIZED REPRESENTATIVE SUPPORTED THE ORDER OF CIT(A) ON THIS ISSUE. 2.2 A CCORDING TO LD. AUTHORIZED REPRESENTATIVE, ASSESSEE IS MAINTAINING P ROPER BOOKS OF ACCOUNTS, BILLS, VOUCHERS OF PURCHASE AND SALES, STOCK REGISTER AND QUANTITATIVE DETAILS, WHICH WERE EVIDEN T FROM AUDIT REPORT IN FORM NO. 3CD AND FROM REMAND REPORT OF ASSESSING OFFICER, WHICH WAS PREPARED AFTER EXAMINING BOOKS OF ACCOUNTS, BILLS AND VOUCHERS AND STOCK REGISTER. CIT(A) FROM THE REMAND REPORT DATED 28.05.2012 OBSERVED THAT ASSESSING OFFICER HAS POINTED OUT FOUR INSTANCES OF DISCREPANCIES IN ENTRY MADE IN STOCK REGISTER TO SUPPORT THE FINDING GIVEN IN ASSESSMENT ORDER REGARDI NG INVOKING PROVISION OF SECTION 145(3) OF THE ACT. CIT(A) OBSERVED THAT ASSESSING OFFICER HAS SENT THE REMAND REPORT WITHOUT CONFRONTING THESE INSTANCES TO ASSESSEE ALTHOUGH IT WAS MENTIONED IN THE REMAND LETTER DATED 23.04.2012 THAT PROPER OPPORTUNITY S HOULD BE PROVIDED TO ASSESSEE. HOWEVER, LD. AUTHORIZED REPRESENTATIVE EXPLAINED ALL FOUR INSTANCES /ISSUES REPORTED BY ASSESSING OFFICER IN REPLY SUBMITTED ON 22.06.2012, WHICH WAS EXAMINED BY CIT(A) WITH REFERENCE TO SUPPORTING EVIDENCE SUBMITTED WITH TH E REPLY AND NO ADVERSE INFERENCE WAS DRAWN BY OBSERVING AS UNDER: ( I ) THE DIFFERENCE IN TOTAL WEIGHT OF PURCHASE AS PER BILL DATED 23.03.0 OF RONAK TRADING COMPANY (I.E. 125 QTL.) AND AS PER ENTRY IN STOCK REGISTER (123.11 QTL.) IS ON ACCOUNT OF SHORTAGE O N ACCOUNT OF DRIAGE/LEAKAGE. THE SAID CONSIGNMENT HAS BEEN SOLD TO M/S M.J. OIL I.T .A. NO. 7 85 / JP /2 0 1 2 A.Y. 200 9 - 1 0 ( ITO VS. SH. RAJENDRA PD. KHANDELWAL ) PAGE 4 INDUSTRIES ON 24.03.09 IN WHICH THE WEIGHT IS RECORDED AS 123.11 QTL. (II) THE DIFFERENCE IN CLOSING STOCK OF SA RSON MTP ACCOUNT BY 21.88 QTL. H AS ARISEN AS THE SHORTAGE IN TH AT ACCOUNT HAS BEEN SHOWN AS CLOSING STOCK DUE TO INADVERTENT MISTAKE BY THE ACCOUNTANT AND THE LD. CIT(A) RESULTING IN DECLARATION OF HIGHER INCOME BY RS.45532/ - . (III) THE PURCHASE OF SARSON OF 183.6 QTL. VALUED AT RS.375462/ - IS REFLECTED IN THE ACCOUNT OF SUMANGAL TRADERS AND IN THE STOCK REGISTER OF APPELLANT MAINTAINED FOR COMMISSION BUSINESS. (IV) THE DIFFERENCE IN THE BALANCE OF SUNDRY CREDITORS OF RS.5089.50 (71054.50 - 65965) RELATING TO M/S RADHEYSHYAM OIL AND FLOUR MILL AND OF RS.87402/ - (657752 - 5 70350) IS A MATTER OF RECONCILIATION WHICH HAS BEEN DULY EXPLAINED WITH THE SUBMISSION. IN THIS BACKGROUND, CIT(A) OBSERVED THAT ASSESSEE WAS MAINTAINING PROPER BOOKS OF ACCOUNTS, BILLS AND VOUCHERS, DAY TO DAY STOCK REGISTER AND QUANTITATIVE DETAILS DURI NG THE YEAR UNDER CONSIDERATION . ASSESSING OFFICER HAS NOT POINTED OUT ANY DEFICIENCY IN THE SAME SO AS TO INVOKING PROVISIONS OF SECTION 145(3) OF THE ACT. ASSESSING OFFICER MADE ADDITION OF RS.24,72,379/ - BY ESTIMATING GP OF SARSON OF MTP ACCOUNT AT RS .46,76,069/ - BY VALUING TOTAL QUANTITY SOLD @46.33, WHICH WAS DIFFERENCE AMOUNT OF AVERAGE RATE OF SALES AND PURCHASE. CIT(A) RIGHTLY FOUND THAT ESTIMATING GP IN ABOVE MANNER WAS WITHOUT JUSTIFICATION PARTICULARLY WHEN ASSESSING OFFICER HAS NOT BEEN ABLE TO FIND ANY DEFECT IN BOOKS OF ACCOUNTS, PURCHASE AND SALE BILLS MAINTAINED BY ASSESSEE. ASSESSEE HAS CONSISTENTLY FOLLOWED THE METHOD OF VALUING ITS CLOSING STOCK AT LOWER OF COST OR MARKET PRICE AND ASSESSING OFFICER HAS NOT BEEN ABLE TO POINT OUT THAT VALUATION OF STOCK WAS INCORRECT I.T .A. NO. 7 85 / JP /2 0 1 2 A.Y. 200 9 - 1 0 ( ITO VS. SH. RAJENDRA PD. KHANDELWAL ) PAGE 5 EITHER IN ASSESSMENT PROCEEDING OR IN REMAND PROCEEDING. THEREFORE, ADDITION OF RS.24,72,379/ - WAS FOUND TO BE WITHOUT ANY MERIT AND SAME WAS RIGHTLY DELETED BY CIT(A). WE UPHOLD THE SAME. 3. NEXT ISSUE IS WITH REGARDS T O DISALLOWANCE OF RS. 25,477/ - OUT OF TELEPHONE EXPENSES AND DEPRECIATION OF CAR ETC., WHICH WAS RESTRICTED TO RS.12,740/ - . UNDER FACTS AND CIRCUMSTANCES, WE ARE NOT INCLINED TO INTERFERE IN THE FINDING OF CIT(A) WHO HAS RESTRICTED THE ADDITION OF RS.25,4 77/ - TO RS. 12,740/ - AS DISCUSSED IN PARA 5 OF ITS ORDER. SAME IS UPHELD. 4. NEXT ISSUE IS WITH REGARDS TO DISALLOWANCE OF CLAIM OF WASTAGE. ASSESSING OFFICER DISALLOWED THE CLAIM OF WASTAGE OF SARSON AT RS.41,312/ - . ASSESSING OFFICER FOUND THAT ASSESS EE HAS NOT FURNISHED ANY DOCUMENTARY EVIDENCE IN SUPPORT OF CLAIM OF WASTAGE OF 15.48 QTL. OF SARSON MTP VAT ACCOUNTS AND OBSERVED THAT THERE ARE OTHER ASSESSEES WHO ARE IN THE SAME LINE OF BUSINESS AND NO SUCH CLAIM IS BEING MADE BY THEM. THEREFORE, WAST AGE CLAIM OF RS.41,312/ - WAS DISALLOWED, WHICH WAS DELETED BY CIT(A) BY OBSERVING THAT SHORTAGE CLAIMED AT 0.015% IS NOMINAL AND IS A NATURAL OCCURRENCE ON ACCOUNT OF DRIAGE AND DUST. ACCORDING TO US, SHORTAGE IS A MATTER OF FACT PERCENTAGE MAY VARY FROM ASSESSEE TO ASSESSEE. TAKING ALL FACTS AND CIRCUMSTANCES INTO CONSIDERATION, WE ARE NOT INCLINED TO INTERFERE IN THE FINDING OF CIT(A), WHO HAS DELETED THE ADDITION OF RS.41,312/ - MADE BY ASSESSING OFFICER ON ACCOUNT I.T .A. NO. 7 85 / JP /2 0 1 2 A.Y. 200 9 - 1 0 ( ITO VS. SH. RAJENDRA PD. KHANDELWAL ) PAGE 6 OF DISALLOWANCE OF CLAIM OF WASTAGE OF SARSON MTP VAT. SAME IS UPHELD. 5 . AS A RESULT, APPEAL FILED BY THE REVENU E IS DISMISSE D . PRONOUNCED IN THE OPEN COURT ON THIS THE DAY OF DECEMBER , 2014. SD/ - SD/ - ( B. C. MEENA ) (SHAILENDRA KUMAR YADAV ) ACCOU NTANT MEMBER JUDICIAL MEMBER TRUE COPY S.K.SINHA COPY FORWARDED TO: 1. THE APPELLANT - ITO, WARD - 1, BHARATPUR 2. THE RESPONDENT - SH. RAJENDRA PD. KHANDELWAL 3. THE CIT 4. CIT(APPEALS) 5. THE DR 6. GUARD FILE (ITA NO. 7 85 /JP/ 201 2 ) BY ORDER A.R., JAIPUR. I.T .A. NO. 7 85 / JP /2 0 1 2 A.Y. 200 9 - 1 0 ( ITO VS. SH. RAJENDRA PD. KHANDELWAL ) PAGE 7 STRENGTHEN PREPARATION & DELIVERY OF ORDERS IN THE ITAT 1) DATE OF TAKING DICTATION 01 . 1 2 .201 4 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE XXX 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 02.12.2014 4) DATE OF CORRECTION 05.12.2014 5) DATE OF FURTHER CORRECTION XXX 6) DATE OF INITIAL SIGN BY MEMBERS 05.12.2014 7) ORDER UPLOADED ON 08.12.2014 8) ORIGINAL DICTATION PAD HAS BEEN ENCLOSED IN THIS FILE YES 9) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON 05.12.2014