M/s Jai Durga Milk Products, Kurukshetra V. JCIT, Kurukshetra

ITA 824/CHANDI/2011

• Counselvise Citation: 82421514 RSA 2011
• Duration Of Justice: 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 29-08-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Section: 2

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE, VICE PRESIDENT ITA NO. 824/CHD/2011 ASSESSMENT YEAR: 2007-08 M/S JAI DURGA MILK PRODUCTS, VS. THE JCIT, KURUKSHETRA KURUKSHETRA RANGE, KURUKSHETRA PAN NO. AABFL 2030 N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHWANI KUMAR RESPONDENT BY : SHRI N.K.SAINI DATE OF HEARING : 03.10.2011 DATE OF PRONOUNCEMENT : 03.10.2011 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT, KARNAL DATED 30.5.2011 RELATING TO ASSESSMENT YEAR 2007-08. 2. IN THIS APPEAL THE ASSESSEE HAS TAKEN THE FOLLOW ING GROUNDS:- 1. THAT ORDER PASSED U/S 250(6) BY THE LD. CIT, KARNA L IS AGAINST LAW AND FACTS ON THE FILE IN AS MUCH HE WAS NOT JUSTIFIED IN ARBITRARILY UPHOLDING THE ACTION OF TH E LD. ASSESSING OFFICER IN REJECTING THE BOOKS OF ACCOUNT BY RESORT TO PROVISIONS OF SECTION 145(3) 2 2. THAT LD. CIT(A) FURTHER GRAVELY ERRED IN UPHOLDI NG THE ACTION OF THE LD. ASSESSING OFFICER IN ESTIMATING T HE TOTAL INCOME ASSESSMENT RS. 4,81,000/- AS AGAINST RETURN AT RS. 80,822/-. 3. THE RELEVANT FACTS NOTED BY THE ASSESSING OFFICE R IN THE ASSESSMENT ORDER READS AS UNDER:- THE ASSESSEE IS CARRYING ON DAIRY BUSINESS OF MIL K CHILLING AND MANUFACTURING OF GHEE ETC. THE QUANTITATIVE DETAILS IN RESPECT OF MILK & GHEE, AS PER THE AUDIT REPORT WERE NOT CORRECT AND THE SAME COUL D NOT BE RECONCILED DURING THE COURSE OF ASSESSMENT BY SHRI VIKAG GARG, CA. SINCE, THERE IS NO CLARIFY IN QUANTITATIVE DETAILS AS PER AUDIT REPORT AND QUANTITATIVE DETAILS AS EXPLAINED BY SHRI VIKAS GAR G, CA DURING THE COURSE OF ASSESSMENT, THE BOOKS OF ACCOUNT ARE REJECTED U/S 145(3) OF THE I.T. ACT. RELIANCE IS PLACED ON SUPREME COURT DECISION 38 ITR 579 (SC) IN THE CASE OF S.N. NARMASIVYAM CHETTIAR V CIT, WHEREIN IT WAS HELD KEEPING OF STOCK REGISTER WAS OF A GREAT IMPORTANCE BECAUSE THAT WAS A MEANS OF VERIFYING THE ASSESSEES QUANTITATIVE TALLY. SINC E, THE ASSESSEE HAS FAILED TO GET THE QUANTITATIVE DETAILS OF RAW MATERIAL AND FINISHED GOODS VERIFIED THE BOOKS OF ACCOUNT ARE REJECTED U/S 145(3) OF THE INCOME TAX A CT, 1961, AND NET INCOME IS ESTIMATED AT RS. 4,81,000/- . 4. ON APPEAL, THE CIT HELD THAT THE ASSESSING OFFIC ER WAS JUSTIFIED IN REJECTING THE BOOKS OF ACCOUNT U/S 145(3) OF THE IN COME TAX ACT, 1961 (IN SHORT THE ACT). HE FURTHER HELD THAT THE ADDITIO N OF RS. 4 LACS MADE BY THE ASSESSING OFFICER WAS REASONABLE IN VIEW OF THE FACT OF STEEP DECLINE IN GP. 3 IN VIEW OF THE ABOVE, THE CIT DISMISSED THE APPEAL OF THE ASSESSEE AND HENCE THE ASSESSEE IS IN APPEAL BEFORE THE TRIB UNAL. 5. I HAVE HEARD THE RIVAL SUBMISSIONS. SHRI ASHWANI KUMAR, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSE E HAS MAINTAINED ALL THE CASH BOOK, LEDGER, PURCHASE REGISTER, SALES REGISTE R INCLUDING THE QUANTITATIVE DETAILS OF EACH ITEM ON THE COMPUTER. THE ASSESSEE HAS ALSO MAINTAINED THE COMPLETE DETAILS OF EACH ITEM IN DIF FERENT PACKING WISE. LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT DU RING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS SUBMITTED THE COMPLETE STOCK REGISTER AFTER TAKING THE PRINT OUT FROM THE COMPUT ER. ON THE OTHER HAND SHRI N.K.SAINI LD. DR HEAVILY RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. IN THIS CASE, THE CIT(A) HAS CATEGORI CALLY STATED THAT THE STOCK REGISTER PRODUCED BEFORE THE ASSESSING OFFICE R IS THE PRINT OUT TAKEN FROM THE COMPUTER AND NOT MUCH WEIGHTAGE CAN BE GIVEN TO IT BEING THE SAME CAN BE MAINTAINED AS PER CONVENIENCE OF TH E ASSESSEE. IT IS ALSO SEEN THAT THERE WAS NO CLARITY IN QUANTITATIVE DETA ILS FURNISHED BY THE ASSESSEE. IN THE ABSENCE OF STOCK REGISTER, THE AS SESSING OFFICER COULD NOT VERIFY THE ASSESSEES QUANTITATIVE TALLY. IN MY OP INION, LD. CIT HAS CORRECTLY HELD THAT BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE WERE NOT RELIABLE AND THEREFORE, THE CIT WAS JUSTIFIED IN UP HOLDING THE ACTION OF THE ASSESSING OFFICER. AS REGARDS THE ADHOC ADDITION, I AM OF THE VIEW THAT THERE WAS NO BASIS FOR THE ASSESSING OFFICER FOR MA KING THE ADDITION OF RS. 4,81,000/-. THE ASSESSING OFFICER HAS NOT CITED ANY COMPARABLE CASE WHILE MAKING THE ADHOC ADDITION. THEREFORE, I AM O F THE OPINION THAT THE ADHOC ADDITION OF RS. 4,81,000/- MADE BY THE ASSES SING OFFICER AND CONFIRMED BY THE CIT(A) IS ON HIGHER SIDE. CONSIDE RING THE FACTS AND 4 CIRCUMSTANCES OF THE CASE, IT WOULD BE FAIR AND REA SONABLE TO REDUCE THE ADDITION TO RS. 1 LAC. THUS, THE ASSESSEE GETS A R ELIEF OF RS. 3 LACS. 6. IN THE RESULT, APPEAL IS ALLOWED PARTLY. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 3RD DAY OF OCTOBER, 2011. SD/- (H.L.KARWA) VICE PRESIDENT DATED : 3 RD OCTOBER, 2011 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH