ACIT, Gwalior V. Sh. Rajendra Kumar Goyal, Shivpuri

ITA 80/AGR/2009

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 2530 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-01-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 05-03-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M K SRIVASTAVA
• Keywords: Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO.80/AGR/2009 A.Y. 2004-05 ASSTT. COMMISSIONER OF INCOME-TAX, VS. SHRI RAJEN DRA KUMAR GOYAL, CIRCLE-3, GWALIOR. PROP. M/S BALAJI STONE POLI SHING, SHIVPURI (M.P.) (PAN : ACQPG 2565 C). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.K. SRIVASTAVA, SR. D.R. RESPONDENT BY : NONE (APPLICATION REJECTED) ORDER PER P.K. BANSAL, A.M.: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A) DATED 20.11.2008 BY TAKING THE FOLLOWING EFFECTIVE GROUND S OF APPEAL :- (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. COMMISSIONER OF INCOME TAX (A) IS NOT JUSTIFIED IN DELETING THE ADD ITION OF ` 29,77,463/- AND ` 3,63,126/- MADE BY THE A.O. ON ACCOUNT OF SUPPRESSI ON OF CLOSING STOCK OF STONE AND PACKING MATERIAL RESPECTIVELY. (2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN DELETING THE DISALLOWAN CE OF ` 3,76,000/- AND ` 3,74,000/- OUT OF CLEARING & FORWARDING EXPENSES AN D FREIGHT EXPENSES RESPECTIVELY WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAD HIMSELF SUBMITTED IN WRITING ON 15.12.2006 THAT SOME VOUCHERS OF FREI GHT AND CLEARING AND FORWARDING EXPENSES WERE MISPLACED. 2 2. THE CASE WAS FIXED FOR HEARING BUT NONE APPEARED ON BEHALF OF THE ASSESSEE ALTHOUGH APPLICATION FOR ADJOURNMENT WAS RECEIVED THOROUGH P OST. THE CASE WAS ADJOURNED EARLIER ALSO FROM TIME TO TIME AT THE REQUEST OF THE LD. A.R. T HE REASONS MENTIONED FOR THE ADJOURNMENT WAS THAT DUE TO BAD WEATHER AND FOGGY CONDITION IT IS D IFFICULT TO REACH AGRA IN TIME. THE FACT IS THAT SINCE YESTERDAY THERE IS NO FOG AND THE SUN IS RISI NG AT ITS FULL SWING. IT APPEARS THAT THE ASSESSEE IS NOT INTERESTED THAT THE MATTER BE HEARD. SINCE THERE IS NO PLAUSIBLE REASON FOR SEEKING ADJOURNMENT, THE APPLICATION FOR ADJOURNMENT STANDS REJECTED. WE, THEREFORE, DECIDED TO HEAR THE CASE AFTER HEARING THE LD. D.R. 3. THE LD. D.R., IN RESPECT OF GROUND NO.1, CONTEND ED THAT THE ASSESSING OFFICER ON VERIFICATION OF BOOKS OF ACCOUNTS OF THE ASSESSEE N OTED THAT THE LAST SALE WAS MADE BY THE ASSESSEE ON 03.03.2004 EXCEPT PETTY SALE OF ` 9,800/- ON 31.03.2004. WHEREAS, THE ASSESSEE HAS M ADE VARIOUS PURCHASES AFTER 03.03.2004 TO THE TUNE OF ` 29,77,463/-. SIMILARLY, THE ASSESSEE HAS ALSO BOUGHT PACKING MATERIAL AFTER 03.03.2004 FOR ` 3,63,126/-. THE ASSESSEE HAS SHOWN CLOSING STOCK AT NIL WHILE THERE MUST HAVE BEEN STOCK FOR THE PUR CHASE MADE AFTER 03.03.2004. ACCORDINGLY, THE ASSESSING OFFICER MADE ADDITION OF ` 29,77,463/- FOR THE STONE AND ` 3,63,126/- FOR THE PACKING MATERIAL BEING THE CLOSING STOCK. REFERRING TO THE PAPER BOOK OF THE ASSESSEE AT PAGE NO.75, IT WAS POINTED OUT THAT THE CONTENTION OF THE ASSESSEE THAT ALL THE PURCHASES ARE ENTERED AT THE END OF EACH MONTH IS NOT CORRECT AS COPY OF PURCHASE REGIS TER APPEARING AT PAGE NO.75 CLEARLY DEPICTS THAT THE PURCHASE HAS BEEN SHOWN BY THE ASSESSEE ON 10 TH MARCH, 12 TH MARCH, 18 TH MARCH AND 31 ST MARCH. OUR ATTENTION WAS ALSO DRAWN TOWARDS COPY O F THE BILLS WHICH ARE AVAILABLE FROM PAGE NOS. 80 TO 120 AND IT WAS POINTED OUT THAT ALL THE PURCHASE BILLS ARE DATED AFTER 03.03.2004 WHEN 3 LAST SALE WAS MADE BY THE ASSESSEE. THUS, IT WAS C ONTENDED THAT THE CIT(A), WITHOUT LOOKING INTO THE FACTS OF THE CASE, JUST AGREED WITH THE CONTENT ION OF THE LD. A.R. AND IN ONE LINE HE DELETED THE ADDITION BY OBSERVING ON THE BASIS OF FOREGOING, I DELETE THE ADDITIONS OF RS.29,77,463/- IN STONE AND RS.3,63,126/- IN PACKING MATERIAL MADE IN THE C LOSING STOCK 4. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE MATERIAL ON RECORD. WE HAVE ALSO GONE THROUGH THE ORDERS OF THE TAX AUT HORITIES BELOW ALONG WITH PAPER BOOK OF THE ASSESSEE AS REFERRED TO BY THE LD. D.R. WE NOTED T HAT IN THIS CASE THERE HAD BEEN LAST SALE ON 03.03.2004 EXCEPT PETTY SALE OF ` 4,806/- ON 31.03.2004 VIDE INVOICE NO.391. THE ASS ESSEE HAS MADE THE PURCHASES AFTER 3 RD MARCH WHICH IS APPARENT FROM THE COPY OF THE PURCH ASE REGISTER AS APPEARING AT PAGE NOS. 75 TO 77 OF THE PAPER BOOK. EVEN FROM THE PURCHASE BILLS, COPIES OF WHICH ARE AVAILABLE FROM PAGE NOS. 80 TO120, IT IS APPARENT THAT THE ASSESSEE HAS MADE PURCHASES AFTER 3 RD MARCH. THERE IS NO EVIDENCE AVAILABLE ON RECORD W HEN DID THE ASSESSEE MAKE THE SALE OF THESE PURCHASES. THE CIT(A) DID NOT PASS ANY SPEAK ING ORDER. HE MERELY REPRODUCED THE CONTENTION OF THE ASSESSEE AND DELETED THE ADDITION OF ` 29,77,463/- IN STONE AND RS.3,63,126/- IN PACKING MATERIAL MADE IN CLOSING STOCK. WE NOTED T HAT BEFORE THE CIT(A) THE ASSESSEE HAS FILED COPY OF VARIOUS DOCUMENTS, DETAILED COPY OF EACH SA LE BILL AND EACH PURCHASE BILL, COPY OF THE STOCK REGISTER FOR THE EARLIER YEARS, DETAILED COPY OF VOUCHERS AND BILLS, BUT THE CIT(A) DID NOT GIVE ANY INDEPENDENT FINDING. ON EXAMINATION OF TH ESE DOCUMENTS, EVEN HE HAS NOT CALLED FOR ANY REPORT FROM THE ASSESSING OFFICER, BUT DELETED THE ADDITION. IN OUR OPINION, THE MATTER REQUIRES DETAILED EXAMINATION AND PASSING OF A SPEA KING ORDER. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) ON THIS ISSUE AND RESTORE THE ISSUE T O THE FILE OF THE ASSESSING OFFICER WITH THE 4 DIRECTION THAT THE ASSESSING OFFICER SHALL EXAMINE IN DETAIL THE CONTENTION OF THE ASSESSEE TAKEN BEFORE THE CIT(A) AFTER VERIFYING THE RECORD AND TH E EVIDENCE AS MAY BE PRODUCED BY THE ASSESSEE. THUS, GROUND NO.1 STANDS ALLOWED FOR STA TISTICAL PURPOSES. 5. THE SECOND ISSUE RELATES TO THE DELETION OF THE DISALLOWANCE OF ` 3,76,000/- AND ` 3,74,000/-OUT OF CLEARING & FORWARDING EXPENSES AND FREIGHT EXPENSES RESPECTIVELY. THE FACTS RELATING TO THIS ISSUE ARE THAT THE ASSESSING OFFIC ER DISALLOWED 20% OF THE CLEARING AND FORWARDING AS WELL AS FREIGHT EXPENSES BY OBSERVING THAT ON EXAMINATION IT WAS FOUND THAT THE BILLS ARE MISSING AND VOUCHERS ARE NOT PROPERLY MAI NTAINED. EVEN THOUGH SHRI GAJENDRA JAIN, CHARTERED ACCOUNTANT OF THE ASSESSEE WAS CONFRONTED VIDE ORDER SHEET DATED 08.12.2006 BUT HE COULD NOT ANSWER SATISFACTORILY REGARDING THESE FAC TS. WHEN THE MATER WENT BEFORE THE CIT(A), BEFORE THE CIT(A) THE LD. A.R. FILED ALL THE DETAIL S ALONG WITH COPIES OF EACH AND EVERY VOUCHERS AND CONTENDED THAT EXPENSES RELATING TO CLEARING AN D FORWARDING AND FREIGHT ARE SUPPORTED BY DOCUMENTARY EVIDENCES. THE ASSESSING OFFICER HAS N OT POINTED OUT ANY SPECIFIC EXPENDITURE WHICH IS TO BE DISALLOWED. THE CIT(A) DELETED THE DISALLOWANCE. 6. THE LD. D.R. RELIED ON THE ORDER OF THE ASSESSIN G OFFICER AND POINTED OUT THE SPECIFIC FINDING THAT THE ASSESSEE HAS NOT PRODUCED ALL THE BILLS AND VOUCHERS BEFORE THE ASSESSING OFFICER. THE ONUS IS ON THE ASSESSEE TO PROVE THE GENUINENES S OF THE EXPENDITURE. IN THE ABSENCE OF ONUS BEING DISCHARGED BY THE ASSESSEE, THE ASSESSING OFF ICER WAS CORRECT IN LAW IN DISALLOWING THE EXPENDITURE. 5 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS ALONG WITH THE ORDERS OF THE TAX AUTHORITIES BELOW. WE NOTED THAT THE ASSESSING OFF ICER HAS CLEARLY OBSERVED THAT THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS AND PRODUCE ALL TH E BILLS AND VOUCHERS FOR CLEARING AND FORWARDING EXPENSES AS WELL AS FREIGHT EXPENSES. B UT THE ASSESSEE DID NOT PRODUCE ALL THE BILLS AND VOUCHERS. CERTAIN BILLS AND VOUCHERS WERE MISS ING AND NOT MAINTAINED PROPERLY. THE ASSESSING OFFICER HAS GIVEN OPPORTUNITY TO THE ASSE SSEE IN THIS REGARD. THEREFORE, HE HAD DISALLOWED THE EXPENDITURE. BEFORE THE CIT(A), THE LD. A.R. FILED THE DETAILS ALONG WITH COPIES OF EACH AND EVERY VOUCHERS BUT THE REASON WHY THESE WE RE NOT FILED BEFORE THE ASSESSING OFFICER IS NOT COMING OUT OF THE ORDER OF THE CIT(A). THE CIT (A) DID NOT ASK FOR THE COMMENTS OF THE ASSESSING OFFICER ON THE VOUCHERS AND THE DETAILS P RODUCED BY THE LD. A.R. OF THE ASSESSEE BUT RATHER ACCEPTED THE EVIDENCES AT THE BACK OF THE AS SESSING OFFICER WHICH, IN OUR OPINION, THE CIT(A) COULD HAVE NOT DONE. IN OUR OPINION, THE CI T(A) SHOULD GIVE PROPER AND REASONABLE OPPORTUNITY TO THE ASSESSING OFFICER TO EXAMINE THE DETAILS AND THE VOUCHERS PRODUCED BY THE ASSESSEE. THIS IS THE SETTLED LAW THAT IF THE ASSE SSEE IS CLAIMING THE DEDUCTION OF AN EXPENDITURE, ONUS IS ON THE ASSESSEE TO PROVE THAT HE HAS GENUIN ELY INCURRED THE EXPENSES. IF HE FAILS TO PROVE THE GENUINENESS OF THE EXPENDITURE SO INCURRED, THE EXPENSES CANNOT BE ALLOWED. THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY TO BOTH THE P ARTIES, WE SET ASIDE THE ORDER OF THE CIT(A) ON THIS ISSUE AND RESTORE THIS ISSUE ALSO TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION THAT TH E ASSESSEE SHALL FILE ALL THE DETAILS AND COPIES OF E ACH AND EVERY VOUCHERS OF CLEARING AND FORWARDING EXPENSES AND FREIGHT EXPENSES BEFORE THE ASSESSING OFFICER TO PROVE THE GENUINENESS OF THE EXPENDITURE INCURRED BY HIM. THE ASSESSING OFFICER SHALL EXAMINE ALL THE DETAILS OF THE VOUCHERS. THE ASSESSING OFFICER IS DIRECTED TO DIS ALLOW THE EXPENDITURE TO THE EXTENT THAT THE 6 ASSESSEE FAILS TO PRODUCE THE EVIDENCES BEFORE THE ASSESSING OFFICER. THUS, THIS GROUND OF APPEAL ALSO STANDS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 14.01.2011 ). SD/- SD/- (H.S. SIDHU) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: AGRA DATE: 14 TH JANUARY, 2011 PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR, ITAT, AGRA BENCH, AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY