Rajendra B. Malu, HUF, Kolhapur V. Deputy Commissioner of Income-tax,

ITA 817/PUN/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2926 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 11-01-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 23-04-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ KUMAR JAIN
• Keywords: Tangible material; Corroborative evidences
• Section: 143(3); 132

Judgement Text

] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , !, # $ BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA, AM ITA NO.817/PN/2014 ASSESSMENT YEAR : 2006-07 RAJENDRA B MALU (HUF), CHANDAN, 8 TH LANE, AZAD ROAD, A/P JAUSINGPUR, TAL. SHIROL, DIST. KOLHAPUR. PAN : AACHR7709H . APPELLANT VS. THE DY. COMMISSIONER INCOME TAX, CENTRAL CIRCLE, KOLHAPUR. . RESPONDENT / APPELLANT BY : NONE / RESPONDENT BY : SHRI DHEERAJ KUMAR JAIN / DATE OF HEARING : 11.01.2016 / DATE OF PRONOUNCEMENT: 27.01.2016 % / ORDER PER PRADIP KUMAR KEDIA, AM : THE PRESENT APPEAL PREFERRED BY THE ASSESSEE IS AGA INST THE ORDER OF CIT(A), KOLHAPUR DATED 05.02.2014 RELATING TO ASSES SMENT YEAR 2006-07 PASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS OF APPEAL :- 1.1 THE HON'BLE CIT(A) ERRED IN CONFIRMING ADDITIO N OF EXCESS STOCK FOUND DURING SURVEY PROCEEDINGS OF RS.249180/-. 1.2 THE LEARNED CIT(A) FAILED TO APPRECIATE THE FAC T THAT VALUATION RATES CONSIDERED DURING THE COURSE OF SURVEY PROCEEDINGS FOR VALUATION OF CLOSING STOCK WERE AD-HOC PURCHASE RATES AND IF ACT UAL RATES ARE TAKEN, THE DISCREPANCY WILL NO MORE BE RS 249180/-. 2 ITA NO.817/PN/2014 1.3 THE LEARNED CIT(A) FAILED TO APPRECIATE THE FAC T THAT, WHEN QUANTITATIVE DETAILS ARE FURNISHED AND NO DISCREPANCIES IN QUANT ITATIVE DETAILS ARE FINDED OUT, THERE IS NO SCOPE FOR ANY ADDITION ON A CCOUNT OF EXCESS STOCK 1.4 THE LEARNED AO MAY BE DIRECTED TO DELETE THE AD DITION MADE ON ACCOUNT OF EXCESS STOCK FOUND DURING THE SURVEY PROCEEDINGS . 2.1 THE ASSESSEE CRAVES RIGHT TO ADD, ALTER, DELETE , MODIFY ALL OR ANY OF THE GROUNDS OF APPEAL. 3. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE INSPITE OF SERVICE OF NOTICE. LD. DEPARTMENTAL REPRESENTAT IVE, SHRI DHEERAJ KUMAR JAIN APPEARED ON BEHALF OF THE RESPONDENT/REVENUE. IN THE ABSENCE OF ANY APPEARANCE BY THE ASSESSEE IN PERSON OR THROUGH AUT HORIZED REPRESENTATIVE INSPITE OF SERVICE OF NOTICE, WE PROCEED TO DISPOSE OF THE APPEAL EX-PARTE QUA THE ASSESSEE AFTER HEARING THE RESPONDENT/REVENUE O N MERITS IN TERMS OF RULE 24 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 19 63. 4. THE ONLY ISSUE IN THE APPEAL IS REGARDING THE AD DITION OF RS.2,49,180/- TOWARDS EXCESS STOCK FOUND DURING THE SURVEY. 5. BRIEFLY STATED, AS EMERGING FROM THE ORDERS OF T HE AUTHORITIES BELOW, THE ASSESSEE HUF IS PROPRIETOR OF MANISH TRADING COMPA NY ENGAGED IN TRADING OF VARIOUS TYPES OF TOBACCO. THERE WAS A SEARCH AN D SEIZURE ACTION UNDER SECTION 132 OF THE ACT ON MALU GROUP TO WHICH THE A SSESSEE BELONGS. A SURVEY UNDER SECTION 132A OF THE ACT WAS CONDUCTED IN THE BUSINESS PREMISES OF THE ASSESSEE DURING WHICH IT WAS FOUND THAT THE STOCK OF THE ASSESSEES BUSINESS WAS IN EXCESS OF THE BOOK STOCK. THE DIFF ERENCE IN THE STOCK WAS FOUND TO BE AT RS.2,49,180/-. SHRI RAJENDRA BABULA L MALU, KARTA OF THE ASSESSEE, IN HIS STATEMENT DATED 11.10.2005 DECLARE D ONLY RS.49,861/- BEING PRICING DIFFERENCES AS ADDITIONAL INCOME. THE ASSE SSING OFFICER FOUND THAT THE RATES ADOPTED BY THE ASSESSEE IN WORKING OUT THE DI FFERENCE WERE IN VARIANCE WITH THE RATES ADOPTED DURING THE PHYSICAL STOCK TA KEN AT THE TIME OF SURVEY. ON BEING SHOW-CAUSED, THE ASSESSEE REPLIED THAT THE STOCK VALUE GIVEN TO THE SURVEY PARTY WERE AD-HOC PURCHASE RATES AND IF FAIR VALUATION OF THE STOCK AS 3 ITA NO.817/PN/2014 PER BOOKS ARE TAKEN, THE ALLEGED DISCREPANCY IN STO CK VALUATION WILL REMAIN NO MORE. THE ASSESSING OFFICER, HOWEVER, OBSERVED THA T THE ASSESSEE DID NOT RECONCILE THE DIFFERENCE IN THE RATE AND IN THE ABS ENCE OF ANY DOCUMENTARY EVIDENCE FURNISHED, THE EXPLANATION OF THE ASSESSEE WAS REJECTED BY THE ASSESSING OFFICER AND AN ADDITION OF RS.2,49,180/- WAS MADE TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF EXCESS STOCK F OUND DURING THE COURSE OF SURVEY. 6. IN THE FIRST APPEAL, THE ASSESSEE EXPLAINED BEFO RE THE CIT(A) THAT QUANTITY OF STOCK FOUND DURING THE COURSE OF SURVEY IS NOT DISPUTED. THE ONLY REASON FOR DIFFERENCE IN VALUATION OF STOCK IS ON A CCOUNT OF WRONG RATES TAKEN FOR VALUATION OF STOCK AT THE TIME SURVEY. THE CIT (A) AFTER TAKING COGNIZANCE OF FACTS NOTED ABOVE ENDORSED THE ACTION OF THE ASS ESSING OFFICER AS PER FINDINGS NOTED HEREUNDER :- 5. I FIND THAT THE ASSESSING OFFICER HAS SPECIFICA LLY MENTIONED THAT ASSESSEE ALSO DID NOT FURNISH ANY DETAILS OF THE RATES OF TH E DIFFERENT COMMODITY ADOPTED BY THE ASSESSEE NOW DURING THE COURSE OF ASSESSMENT PR OCEEDINGS AND THE BASIS ON WHICH ASSESSEE HAS FURNISHED THE ABOVE TABLE. THE REFORE, NO BASIS HAS BEEN GIVEN BY THE APPELLANT FOR ADOPTED DIFFERENCE FIGURES. H IS VERSION CANNOT BE ACCEPTED IN THE ABSENCE OF SUPPORTING EVIDENCE. THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER IS SUSTAINED AND GROUNDS TAKEN BY THE ASSES SEE ARE REJECTED. 7. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE IS IN FURTHER APPEAL BEFORE US. 8. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE A UTHORITIES BELOW AND OTHER MATERIAL PLACED ON RECORD. THE ONLY ISSUE IN VOLVED FOR ADJUDICATION IS CORRECTNESS OF ADDITION OF RS.2,49,180/- ON ACCOUNT OF EXCESS STOCK FOUND DURING THE COURSE OF SURVEY. WE FIND THAT THE CIT( A) HAS REJECTED THE CLAIM OF THE ASSESSEE AFTER GIVING REFERENCE TO THE RELEVANT MATERIAL PLACED BEFORE HIM AND AFTER APPRECIATING THE DOCUMENTARY EVIDENCES PL ACED ON RECORD. WE FIND THAT THE ASSESSEE COULD NOT DISCHARGE THE ONUS PROP ERLY WHICH LAY UPON HIM. SINCE THE FINDINGS OF THE CIT(A) HAS REMAINED UN-CO NTROVERTED AND IN THE 4 ITA NO.817/PN/2014 ABSENCE OF ANY TANGIBLE MATERIAL TO ENABLE US TO DE VIATE FROM THE CONCLUSION OF CIT(A), WE ARE INCLINED TO ENDORSE THE AFORESAID FI NDINGS OF THE CIT(A). 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED ON THIS 27 TH DAY OF JANUARY, 2016. SD/- SD/- ( SUSHMA CHOWLA ) ( PRADIP KUMAR KEDIA ) / JUDICIAL MEMBER # / ACCOUNTANT MEMBER PUNE ; DATED : 27 TH JANUARY, 2016. % & '() *)' / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A), KOLHAPUR; 4) THE CIT-II, KOLHAPUR; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. %+ / BY ORDER , ' # //TRUE COPY// $ %& # '( / SR. PRIVATE SECRETARY ) '* , / ITAT, PUNE