Chandumal Thawari, Betul V. JCIT Range-2, Bhopal

ITA 837/Ind/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4754 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 23-08-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: GIRISH AGRAWAL; NISHA LAHOTI A RS
• Keywords: Gross profit estimation; Business income; Depreciation
• Section: 69C; 142(1); 234B; 73; 13; 22; 145

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HONBLE MANISH BORAD, ACCOUNTANT MEMBER AND HONBLE MADHUMITA ROY, JUDICIAL MEMBER ITA NO.837/IND/2019 ASSESSMENT YEAR: 2010-11 SHRI CHANDUMA L THAWA N I PROP. M/S. CHANDUMAL SANMUKHDAS BETUL GANJ, BETUL / VS. JC IT RANGE-2 BHOPAL (APPELLANT) (REVENUE) P.A. NO. AAMPT3620R APPELLANT BY SHRI GIRISH AGRAWAL & MISS. NISHA LAHOTI, ARS RE VENUE BY SHRI HARSHIT BARI , SR. DR DATE OF HEARING: 07.04.2021 DATE OF PRONOUNCEMENT: 30.04.2021 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORD ER OF THE COMMISSIONER OF INCOME TAX APPEALS [CIT(A)]-1, BHOP AL DATED 30.04.2019 PERTAINING TO THE ASSESSMENT YEAR 2010-1 1. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: CHANDUMAL THARWANI ITA. NO.837/IND/2019 2 1. THAT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, AND HAVING REGARD TO THE EXPLANATION FURNISHED, IT BE K INDLY HELD THAT THE FINDINGS OF THE LEARNED LOWER AUTHORITIES THAT THER E IS AN UNDER VALUATION OF CLOSING STOCK BY RS. 140643 ARE WHOLLY WRONG AND UNJUSTIFIED AND, THEREFORE, SUCH FINDINGS BE QUASHED AND THE ADDITIO N OF RS. 140643 BE KINDLY DELETED. (2) THAT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, AND HAVING REGARD TO THE EXPLANATION FURNISHED, IT BE KINDLY HELD THAT THE FINDINGS OF THE LEARNED LOWER AUTHORITIES THAT THE ASSESSEE HAD SOLD SARKY KHALI OF RS. 75894 WITHOUT HAVING ANY STOCK O N THAT DAY ARE WHOLLY WRONG AND UNJUSTIFIED AND, THEREFORE, SUCH F INDINGS BE QUASHED AND THE ADDITION OF RS. 75894 BE KINDLY DELETED. (3) THAT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, AND HAVING REGARD TO THE EXPLANATION FURNISHED, IT BE KINDLY HELD THAT THE ASSESSEE HAD GENUINELY I NCURRED TRANSIT BUSINESS LOSS IN SOYABEEN ACCOUNT AT RS. 102825. THE FINDINGS OF THE LEARNED LOWER AUTHORITIES FOR NOT ACCEPTING SUCH GENUINE LOSS ARE WHOLLY WRONG, UNLAWFUL AND UNJUSTIFIED AND, THEREFORE, SUCH FINDINGS BE QUASHE D AND THE LOSS CLAIMED AT RS.102825 BE KINDLY ACCEPTED. (4) THAT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, AND HAVING REGARD TO THE EXPLANATION FURNISHED BEFORE T HE LEARNED LOWER AUTHORITIES, THE LEARNED CIT(A) IS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS. 644750 FOR THE ALLEGED LOWER GROSS PROFIT. THE ASSESSEE SUBMITS THAT THE SAID UNJUSTIFIED ADDITION BE KINDLY DELETED (5) THAT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN JAW, THE FINDINGS OF THE LEARNED CIT(A) IN PARA 2 AT PAG E 22 OF THE ORDER THAT 'ONCE THE ASSESSEE HAS RAISED AN ALTERNATIVE GROUND /SUBMISSION IT MEANS THAT THE ASSESSEE HAS ACCEPTED THE ADDITION O F GROSS PROFIT OF RS. 644750', ARE WHOLLY WRONG, UNLAWFUL AND UNJUSTIFIED . SUCH FINDINGS BE KINDLY QUASHED. (6) THAT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THAT TILE ALTERNATE CONTENTION RAISED IN THE APPEAL DID NOT M EAN THAT THE ASSESSEE IS NOT OBJECTING THE MERITS OF THE FOLLOWI NG ADDITIONS. THE FINDINGS & THE DECISION OF THE LEARNED CIT(A) IN PARA 2 OF THE ORDER ARE, THEREFORE, WHOLLY WRONG, UNLAWFUL AND INJUDICIOUS A ND BE KINDLY QUASHED. (7) THAT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN LAW AND NOT JUSTIFIED IN NO T ADJUDICATING INDEPENDENTLY THE ADDITIONS MADE IN ASSESSMENT OF (I) RS. 140643 FOR THE ALLEGED UNDER VALUATION OF CLOSING STOCK, (II) RS. 75894 FOR SALE OF SARKY KHALI WITHOUT HAVING STOCK AND (III) RS. 102825 FOR THE TRANSIT LOSS IN SOYABEEN ACCOUNT. THE ASSESSEE SUBMITS THAT ALL SUC H ADDITIONS BE KINDLY ADJUDICATED INDEPENDENTLY HAVING REGARD TO THE EXPL ANATION FURNISHED, DULY SUPPORTED BY DOCUMENTARY EVIDENCES, AND IT BE HELD THAT THE CHANDUMAL THARWANI ITA. NO.837/IND/2019 3 AFORESAID ADDITIONS ARE WHOLLY UNJUSTIFIED AND UNLA WFUL. 8) THAT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED LOWER AUTHORITIES ERRED IN LAW IN ESTIMATING THE HO USEHOLD EXPENDITURE OF THE ASSESSEE AT RS. 619000 PURELY ON ASSUMPTIONS AND PRESUMPTIONS AND WITHOUT ANY POSI TI VE MATERIAL OR EVIDENCE ON RECORD AND WITHOUT SATISFYING THE JUDICIAL REQUIREMENTS OF SECTION 69C . SUCH ARBITRARY ESTIMATES OF THE LEARNED LOWER AUTHORITIE S BE HELD AS UNLAWFUL AND UNJUSTIFIED AND, THEREFORE, THE SAME BE KINDLY QUASHED. (9) THAT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEVY' OF INTEREST U/S. 234A, 234B & 234C ARE UNLAWFUL AND HENCE BE CANCELLED. 2. THE FACTS GIVING RISE TO THE PRESENT APPEAL ARE THAT THE CASE OF THE ASSESSEE WHO IS AN INDIVIDUAL TRADING IN SOYABE AN OIL WAS PICKED UP FOR SCRUTINY ASSESSMENT. NOTICE U/S 143(2 ) OF THE INCOME TAX ACT 1961(HEREIN AFTER REFERRED AS THE ACT) WAS ISSUED ON 23.09.2011. IN RESPONSE TO THE NOTICE, AUTHORIZED R EPRESENTATIVE OF THE ASSESSEE FILED WRITTEN SUBMISSIONS AND DOCUMENT S. THE ASSESSING OFFICER WHILE FRAMING THE ASSESSMENT NOTI CED THAT THE ASSESSEE HAD CLAIMED CLOSING STOCK OF SOYABEAN OIL AT RS.70,40,299/- FOR QUANTITY OF 1577.73 QUINTAL AT A N AVERAGE RATE OF RS.4462.29 PER QUINTAL. THE ASSESSEE FURNISHED T HE RELEVANT DETAILS THEREOF. ON VERIFICATION OF DETAILS, ASSESS ING OFFICER OBSERVED THAT THE ASSESSEE DEALS IN SOYABEAN OIL THAT INCLUD ES LOOSE SOYABEAN OIL AND PACKED SOYABEAN OIL WITH BRAND NAM E KRITI FROM KRITI INDUSTRIES INDIA LTD. DEVAS. HOWEVER, NO SUCH SEPARATE CHANDUMAL THARWANI ITA. NO.837/IND/2019 4 DETAILS OF SOYABEAN OIL WERE MENTIONED IN THE SALES BILLS. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAD UNDERSTATED THE CLOSING STOCK OF SOYABEAN OIL BY RS.1,40,643/-, THEREFORE, HE MADE ADDITION. IN THIS REGARD, FURTHER, ASSESSING O FFICER OBSERVED THAT THE ASSESSEE MADE SALES OF SARKI KHALLI WITH OUT HAVING STOCK IN HAND. HENCE, HE MADE AN ADDITION OF RS.75,894/-. FURTHER, THE ASSESSING OFFICER MADE ADDITION OF RS.1,20,825/- BY OBSERVING THAT IN THE QUANTITATIVE DETAILS OF SOYABEAN OIL ACCOUNT , THE ASSESSEE HAS CLAIMED LOSS OF RS.26.85 QUINTALS. HE WAS ASKED TO JUSTIFY THE LOSS, HOWEVER NO SUBMISSION FOR EXPLANATION WAS OFF ERED, HENCE, THE ASSESSING OFFICER MADE ADDITION OF RS.75,894/-. THE ASSESSING OFFICER OBSERVED THAT IN THE CONSOLIDATED TRADING A CCOUNT, THE ASSESSEE HAD CLAIMED GROSS PROFIT OF RS.61,71,500/- AGAINST TOTAL SALES OF RS.33,17,16,268/- WHICH COMES TO NOMINAL 1 .86%. THE ASSESSING OFFICER WAS OF THE VIEW THAT THERE WERE V ARIOUS DISCREPANCIES IN THE BOOKS OF ACCOUNTS MAINTAINED B Y THE ASSESSEE. THE VALUATION OF CLOSING STOCK HAS NOT BEEN MADE PR OPERLY. QUANTITY LOSSES WERE CLAIMED WITHOUT ANY SPECIFIC D ETAILS SUPPORTED BY DOCUMENTARY EVIDENCES. GOODS WERE SOLD WITHOUT CORRESPONDING STOCK OF MATERIAL IN HAND. IT WAS FUR THER SEEN THAT CHANDUMAL THARWANI ITA. NO.837/IND/2019 5 THE ASSESSEE HAS MAINTAINED GENERAL QUANTITY RECORD OF VARIOUS ITEMS DEALT BY HIM. HOWEVER, NO QUALITY WISE DETAIL S THEREOF WERE MAINTAINED. FOR EXAMPLE, THE COMMODITY SUGAR IS A VAILABLE IN THREE VARIETIES VIZ BEST, MEDIUM AND LOWER QUALITY, HAVING DIFFERENT PURCHASE/SALE PRICE. HOWEVER, QUANTITATIVE RECORD O F ONLY SUGAR HAS BEEN MAINTAINED AND BIFURCATION THEREOF IN DIFF ERENT VARIETY WAS NOT AVAILABLE. HENCE, THE ASSESSING OFFICER INV OKED THE PROVISION OF SECTION 145 AND REJECTED THE BOOK RESU LTS AND PROCEEDED TO ESTIMATE PROFIT. THE ASSESSING OFFICER ADOPTED THE AVERAGE OF GROSS PROFIT OF EARLIER TWO FINANCIAL YE ARS AND MADE ADDITION OF RS.6,44,750/-. FURTHER, THE ASSESSING O FFICER MADE ADDITION ON ACCOUNT OF LOW WITHDRAWAL FOR HOUSEHOLD EXPENSES AMOUNTING TO RS.6,19,000/- BUT DID NOT MADE SEPARAT E ADDITIONS AS ADDITION WAS ALREADY MADE FOR ESTIMATED GROSS PR OFIT. THE ASSESSING OFFICER FURTHER MADE AD HOC DISALLOWANCE IN RESPECT OF SHOP EXPENSES OF RS.6,707/-, PETROL EXPENSES OF RS. 5,889/-, OUT OF TELEPHONE EXPENSES OF RS.4,868/-, OUT OF TRAVELLING EXPENSES OF RS.991/-, VEHICLE EXPENSES OF RS.468/- AND DISALLOW ANCE OUT OF DEPRECIATION ON CAR OF RS.4,619/-. HENCE, ASSESSED THE TOTAL CHANDUMAL THARWANI ITA. NO.837/IND/2019 6 INCOME AT RS.29,16,264/- AGAINST RETURNED INCOME OF RS.19,10,610/-. 3. AGGRIEVED AGAINST THIS THE ASSESSEE PREFERRED A N APPEAL BEFORE THE LD. CIT(A) WHO AFTER CONSIDERING THE SUBMISSION S PARTLY ALLOWED THE APPEAL. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L RAISING VARIOUS GROUNDS OF APPEAL. 5. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. A.O WAS NOT JUSTIFIED IN REJECTING THE BOOK RESULTS AS THE DISCREPANCY NOTICED BY THE LD. A.O WAS NOT CORRECT AS THE ASSES SEE HAD GIVEN NECESSARY EXPLANATION AND EVIDENCE TO PROVE THAT NO SUCH DISCREPANCY EXISTED. BOOKS OF ACCOUNTS WERE ALSO NO T REQUIRED TO BE REJECTED. AS REGARDS THE HOUSEHOLD EXPENSES IT WAS CONTENDED THAT SUFFICIENT DRAWINGS WERE SHOWN BY THE ASSESSEE AND HIS FAMILY MEMBERS. THE SUBMISSIONS MADE BY THE ASSESSEE READ S AS FOLLOWS:- 1. DEALER OF EDIBLE OILS AND GRAIN MERCHANT. 2. GROUND NO.1- UNDERVALUATION OF CLOSING STOCK OF SOY A BEAN OIL RS. 1,40 ,643/- CHANDUMAL THARWANI ITA. NO.837/IND/2019 7 A. AO PAGE 2 PARA 4.2 - NO DIFFERENCE IN QUANTITY AS P ER AO AND AS PER ASSESSEE, TAX AUDIT REPORT PB 23 B. RATE PER QUINTAL (ASSESSEE) - AVERAGE RATE PB 70 C. BASIS ON WHICH RATE PER QUINTAL HAS BEEN ARRIVED AT BY LD. AO IS BEST KNOWN TO HIM D. UNIFORM RATE APPLIED FOR ENTIRE PURCHASES 3. NOTICE ISSUED U/S 142(1) DATED 12.03.2013 AND FIXED FOR HEARING ON 31.03.2013. ANOTHER NOTICE WAS ALSO ISSUED ON THE SAME DATE FIX ING THE DATE OF HEARING ON 21.03.2013. [PB 73] 4. ASSESSMENT ORDER PASSED ON 26.03.2013 I.E. BEFORE T HE DATE OF HEARING. THE ORDER WAS PASSED WITHOUT CONSIDERING THE SUBMIS SION OF ASSESSEE WHICH WAS FILED IN DAK ON 31.03.2013. 5. G ROUND NO.2 - SALE OF SARKI KHALLI WITHOUT HAVING AN Y STOCK A. POSTING ERROR IN THE TALLY SOFTWARE B. INCORRECT POSTING ENTRY OF STOCK AND INVOICE ON 27. 02.2010 PB 40 C. STOCK DELIVERED BEFORE THE DATE OF INVOICE D. COPY OF BILTY DATED 17.02.2010 PB 42 E. COPY OF INVOICE DATED 27.02.2010 PB 41 F. STOCK DETAILS WITH CORRECT POSTING PB 39 6. GROUND NO. 3 - QUANTITY LOSS OF SOYA BEAN OIL A. LOSS OF STOCK OF SOYA BEAN OIL REPORTED IN THE T AX AUDIT REPORT PB 23 B. LD. AO PAGE 4 PARA 6.1 WHY THE SAID LOSS SHOULD NOT BE TREATED AS UNEXPLAINED SALES ..... CHANDUMAL THARWANI ITA. NO.837/IND/2019 8 C. LOSS DULY SUPPORTED WITH DOCUMENTS FIRS [PB 44-44A] D. LOSS TREATED AS INCOME - DEEMED E. QUANTITATIVE DETAILS AS PER TABLE OF AO ON PAGE 2 PARA 4.2 - AFTER CONSIDERING THE LOSS F. NO DOCUMENT ON RECORD FROM LD. AO TO ESTABLISH THAT ASSESSEE HAS SOLD THIS STOCK 7. DOCUMENTS SUBMITTED UNDER RULE 46A ADMITTED BY L D. CIT(A). 8. REMAND REPORT CALLED- A. IN THE REMAND REPORT, LD. AO HAS NOT GIVEN ANY FINDING ON THE DOCUMENTS SUBMITTED BUT HAS MERELY STATED ABOUT APP LICABILITY OF RULE 46A. [PB 66-67] B. INCORRECT FACT - HEARING FIXED ON 21.03.2013 - CORR ECT FACT - HEARING FIXED ON 31.03.2013 [PB 73] 9. REJOINDER SUBMITTED - ASSESSEE COVERED BY RULE 46A. A. PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING EVIDEN CE WHICH HE WAS CALLED TO PRODUCE BY THE LD. AO [RULE 46A(1)(B)] B. LD.AO HAS MADE THE ORDER APPEALED AGAINST WITHOUT G IVING SUFFICIENT OPPORTUNITY TO THE APPELLANT TO ADDUCE E VIDENCE RELEVANT TO ANY GROUND OF APPEAL [RULE 46A(1)(D)] 10.GROUND NO. 4 AND 5- GROSS PROFIT OF RS. 6,44,750 SUSTAINED A. NO SPECIFIC/CATEGORICAL FINDING THAT THE BOOKS OF A CCOUNTS ARE REJECTED. IT IS MERELY AN OBSERVATION BY LD.AO - AO PAGE 5 PARA 7.2 B. HIGHER THE TURNOVER, LESSER IS THE PROFIT MARGIN AO PAGE 5 PARA 7.3 CHANDUMAL THARWANI ITA. NO.837/IND/2019 9 PARTICULARS AY 2008 - 09 AY 2009 - 10 AY 2010 - 11 TURNOVER 29,50,75,793 28,57,20,667 33,17,16,268 C. QUALITY WISE DETAILS NOT MAINTAINED - NO REQUIREMEN T UNDER LAW - AD PAGE 4 PARA 7.1 D. GROUND 5 - ASSESSEE HAS NEVER ACCEPTED THAT ADDITIO N BY APPLYING THE PROVISIONS OF SECTION 145 BE SUSTAINED - INCORRECT FACT IN CIT(A) ORDER PAGE 22 .PARA 2(I) E. BOOKS OF ACCOUNTS ARE AUDITED AND NO ADVERSE COM MENT BY THE AUDITOR L1.GROUND NO. 6 -INTER LINKED WITH 1 TO 3 - ASSESSI NG IS OBJECTING THE MERITS OF ADDITIONS MADE ON ACCOUNT OF UNDER VALUAT ION OF CLOSING STOCK OF SOYA BEAN OIL, SALE WITHOUT STOCK IN HAND AND QU ANTITY LOSS OF SOYA BEAN OIL. 12.GROUND NO. 7 - CIT(A) AFTER CONSIDERING THE DOCU MENTS UNDER RULE 46A SUSTAINED 13.GROUND NO. 8 - HOUSEHOLD EXPENSES A. ASSESSEE IS AGED ABOUT 73 YEARS, BETUL IS A SMALL P LACE B. COMMON MESS AND KITCHEN, JOINT FAMILY SETUP C. MARRIED SONS - INCOME TAX ASSESSEE, ITR ON RECORD D. EXPENSES OF GRANDCHILDREN INCURRED BY THEIR RESPECT IVE PARENTS E. EXPENSES RELATED ONLY TO ASSESSEE AND HIS WIFE SHOU LD BE CONSIDERED, ITR OF WIFE ALSO PLACED ON RECORD F. BURDEN OF EXPENSES OF ENTIRE FAMILY CANNOT BE SHIFT ED TO ONE PERSON. FAMILY MEMBERS HAVE THEIR INCOME DULY RETUR NED AND MEET THEIR RESPONSIBILITIES. CHANDUMAL THARWANI ITA. NO.837/IND/2019 10 6. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEM ENTLY ARGUED SUPPORTING THE ORDER OF BOTH THE LOWER AUTHO RITIES. 7. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. EFFECTIVELY THE ASSESSEE HAD RAI SED 8 GROUNDS OF APPEALS. GROUND NO.1, 2 & 3 ARE WITH REGARD TO THE ADDITION MADE FOR THE DISCREPANCIES FOUND IN THE BOOKS OF ACCOUN TS NOTICED BY THE LD. A.O. GROUND NO.4,5,6 & 7 ARE WITH REGARD T O REJECTION OF BOOK RESULTS AND ESTIMATION OF GROSS PROFIT BY THE LD. A.O. GROUND NO.8 RELATES TO THE ADDITION FOR HOUSEHOLD EXPENDIT URE BUT THE SAME WAS NOT SEPARATELY ADDED SINCE THE TELESCOPING BENEFIT WAS GIVEN AGAINST THE ADDITION FOR GROSS PROFIT. 8. WE ALSO FIND THAT LD. CIT(A) WHILE DEALING WITH THE GROUNDS RAISED BY THE ASSESSEE CONCLUDED THAT SINCE THE ADD ITION FOR GROSS PROFIT HAS ALREADY BEEN MADE BY THE LD. A.O BY REJE CTING THE BOOK RESULTS AND MAKING ADDITION OF RS.6,44,750/- LD. A. O WAS NOT JUSTIFIED TO HAVE MADE SEPARATE ADDITIONS FOR THE D ISCREPANCIES NOTICED IN THE BOOKS OF ACCOUNTS. 9. WE WILL FIRST TAKE UP GROUND NO. 1,2 & 3. 10. AS REGARDS GROUND NO.1 WITH REGARD TO UNDER VAL UATION OF CLOSING STOCK OF SOYABEAN OIL AT RS,1,40,643/- WE F AIL TO FIND ANY CHANDUMAL THARWANI ITA. NO.837/IND/2019 11 MERIT IN THE FINDING OF LD. A.O SINCE THERE WAS NO DIFFERENCE IN THE QUANTITY AS NOTED BY THE LD. A.O AND AS MENTIONED I N THE AUDIT REPORT. THE ONLY DIFFERENCE IS ABOUT THE RATE OF S OYABEAN OIL CHARGED BY THE LD. A.O. WE FIND THAT IN THE CLOSI NG STOCK ASSESSEE HAS VALUED TOTAL STOCK ON AVERAGE RATE OF 4462 ON T HE CLOSING STOCK AT 1577.73 QUINTAL WHEREAS THE LD. A.O HAS APPLIED THE PURCHASE RATE OF RS.5205 ON THE PACKED SOYABEAN OIL AND RS.4 391/- ON THE LOOSE SOYABEAN OIL. BUT THERE IS NO BASIS MENTIONE D IN THE ASSESSMENT ORDER ABOUT THE RATES SO ADOPTED. THE A SSESSEE IS CONSISTENTLY VALUING ITS CLOSING STOCK AT COST OR M ARKET VALUE WHICHEVER IS LOW AND HAS APPLIED THE SAME. IN THES E GIVEN FACTS THE ADDITION IN UNDERVALUATION OF CLOSING STOCK OF SOYABEAN OIL AT RS.1,46,143/- WAS UNCALLED FOR. 11. AS REGARDS GROUND NO.2 FOR ADDITION FOR SALE OF SARKI KHALLI ALLEGING THAT THE ASSESSEE HAS NOT HAVING ANY SUCH STOCK, WE ON PERUSAL OF THE RECORDS FIND THAT ASSESSEE PURCHASED SARKI KHALLI FROM VISHNU OIL INDUSTRIES VIDE BILL NO.26 DATED 27 .2.2010. HOWEVER THE GOODS WERE RECEIVED 10 DAYS PRIOR FROM 17.2.2010 BY POONAM ROAD LINES. SO THE ASSESSEE HAD STOCK OF SA RKI KHALLI AS ON 17.2.2010 BUT SINCE THE BILL WAS ENTERED ON 27.2 .2010 THERE CHANDUMAL THARWANI ITA. NO.837/IND/2019 12 WAS A NEGATIVE STOCK APPEARING IN THE QUANTITATIVE DETAILS. THE NEGATIVE STOCK APPEARED SINCE THE ACCOUNTANT ENTERE D THE STOCK ON 28.2.2010. HAS IT BEEN MADE ON 27.2.2010 THERE WO ULD HAVE BEEN NO NEGATIVE STOCK. THIS FACT IS DISCERNABLE FROM THE PAPER BOOK PAGE 39. THUS IN OUR CONSIDERED VIEW THIS IS NOT A DISCREPANCY AND NO ADDITION WAS CALLED FOR AT RS.75,894/- ON ACCOUN T OF SALES WITHOUT STOCK IN HAND. 12. AS REGARDS GROUND NO.3 RELATING TO THE ADDITION OF RS.1,20,825/- ON ACCOUNT OF QUANTITY LOSS OF SOYABE AN OIL (INADVERTENTLY MENTIONED AS 1,02,825/- IN GROUNDS O F APPEAL), WE FIND THAT IN THE QUANTITATIVE DETAILS THE ASSESSEE HAS CLAIMED LOSS OF 26.85 QUINTAL. LD. A.O MADE ADDITION FOR RS.1,2 0,825/- FOR THE ALLEGED LOSS OF 26.85 QUINTAL FOR THE REASON THAT T HE ASSESSEE HAD NOT GIVEN NECESSARY REPLY. HOWEVER ON PERUSAL OF T HE AUDIT REPORT WE FIND THAT THIS LOSS WAS VERY WELL REPORTED IN TH E TAX AUDIT REPORT WHICH IS PLACED AT PAGE-23 OF THE PAPER BOOK AT ANNEXURE- III TO THE AUDIT REPORT. THE DETAILS SHOWS THAT TH E ASSESSEE HAD OPENING STOCK OF SOYABEAN OIL AT 796.8 QUINTAL AND PURCHASE DURING THE YEAR IS 49946.96 QUINTAL AND SALE DURING THE YEAR IS 49139.25 QUINTAL. THE LOSS OF SOYABEAN OIL IS MERE LY 0.05% OF THE CHANDUMAL THARWANI ITA. NO.837/IND/2019 13 TOTAL SOYABEAN OIL SOLD DURING THE YEAR WHICH IS IN CONSONANCE WITH THE BUSINESS ACTIVITY CONSISTENTLY CARRIED OUT BY T HE ASSESSEE. IN THESE GIVEN FACTS NO ADDITION WAS CALLED FOR THE QU ANTITY LOSS IN SOYABEAN OIL AT RS.1,02,725/-. THUS GROUND NO.1,2 & 3 OF THE ASSESSEES APPEAL ARE ALLOWED. 13. NOW WE TAKE UP GROUND NO.4,5,6&7 THROUGH WHICH THE ASSESSEE HAS CHALLENGED THE ADDITION FOR ESTIMATED GROSS PROFIT AT RS.6,44,750/- MADE BY LD. A.O BY REJECTING THE BOOK RESULTS. IN OUR CONSIDERED VIEW SINCE THE ADDITIONS MADE BY THE LD. A.O FOR THE ALLEGED DISCREPANCIES NOTICED IN THE BOOKS OF A CCOUNTS HAVE ALREADY BEEN DELETED BY US THERE REMAINS NO BASIS F OR THE LD. A.O OF REJECTING THE BOOK RESULTS SINCE THERE IS NO PLA USIBLE REASON LEFT TO REJECT THE BOOK RESULTS. WHATEVER DISCREPANCIES WERE NOTICED HAVE ALREADY BEEN DEALT BY US AND THE ADDITION SO MADE HAVE BEEN DELETED AND IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE WHERE THE ASSESSEE HAS MAINTAINED REGULAR BOOKS OF ACCOUN TS WITH QUANTITATIVE DETAILS, THE ACTION OF REJECTING THE B OOK RESULTS U/S 145(2) OF THE ACT IS HELD TO BE INCORRECT AND THUS NO ADDITION FOR ESTIMATED GROSS PROFIT AT RS.6,44,750/- IS CALLED F OR. THUS GROUND NO.4,5,6&7OF THE ASSESSEES APPEAL ARE ALLOWED. CHANDUMAL THARWANI ITA. NO.837/IND/2019 14 14. NOW WE TAKE UP GROUND NO.8 FOR THE ADDITION FO R HOUSEHOLD EXPENSES AT RS.6,19,000/-. THOUGH THE LD. A.O HAS NOT MADE SEPARATE ADDITION FOR THE HOUSEHOLD EXPENSES AS THE Y WERE CONSIDERED TO BE PART OF THE GROSS PROFIT ADDITION OF RS.6,44,750/- MADE BY THE LD. A.O BUT SINCE WE HAVE DELETED THE A DDITION FOR GROSS PROFIT, THE ISSUE OF HOUSEHOLD EXPENSES BECOM ES LIVE. WE OBSERVE THAT THE LD.A.O HAS ESTIMATED THE HOUSEHOLD EXPENDITURE AT RS.70,000/- PER MONTH TOTALING TO RS.8,40,000/- FOR THE FAMILY OF THE ASSESSEE CONSISTING OF 9 MAJOR MEMBERS AND 3 GRAND CHILDREN. HOUSEHOLD EXPENSES OF RS.2,21,000/- HAS BEEN SHOWN BY THE ASSESSEE IN HIS NAME AS WELL AS IN THE NAME OF OTHER FAMILY MEMBERS IN THE INCOME TAX RETURN, THUS THE ADDITIO N OF RS.6,19,000/- WAS MADE. THOUGH IT WAS CLAIMED BY TH E LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSEES FAMILY LIVING IN A SMALL PLACE NAMELY BETUL AND BEING THE JOINT FAMILY THE E XPENDITURE IS LOW AND BURDEN OF ENTIRE FAMILY CANNOT BE SHIFTED. 15. WE HOWEVER LOOKING TO THE FACTS AND CIRCUMSTANC ES OF THE CASE AND BEING FAIR TO BOTH THE PARTIES AND IN ABSE NCE OF COMPLETE HOUSEHOLD EXPENDITURE DETAILS WHICH HAVE NOT BEEN F ILED BY THE ASSESSEE, ARE OF THE CONSIDERED VIEW THAT THE HOUSE HOLD CHANDUMAL THARWANI ITA. NO.837/IND/2019 15 EXPENDITURE OF RS.40,000/- PER MONTH TOTALING TO RS .4,80,000/- WOULD BE SUFFICIENT TO COVER UP THE HOUSEHOLD EXPEN SES INCURRED BY THE ASSESSEE. AS THE ASSESSEE HAS SHOWN HOUSEHOLD EXPENSES OF RS.2,21,000/- (WHICH INCLUDES RS.72,000/- WITHDRAWA L SHOWN BY THE ASSESSEE AND THE REMAINING BY OTHER FAMILY MEMB ERS) THE SHORTFALL WOULD BE RS.2,59,000/- WHICH IS DIRECTED TO BE ADDED TO THE INCOME OF THE ASSESSEE. THUS GROUND NO.8 IS PA RTLY ALLOWED AND ADDITION FOR HOUSEHOLD EXPENSES IS SUSTAINED A T RS.2,59,000/- 16. GROUND NO.9 IS GENERAL IN NATURE WHICH NEEDS N O ADJUDICATION. 17. IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. THE ORDER PRONOUNCED AS PER RULE 34 OF ITAT RULES, 1963 ON 30.04.2021. SD/- SD/- (MADHUMITA ROY) (MA NISH BORAD) JUDICIAL MEMBER ACCOUNTAN T MEMBER / DATED : 30 TH APRIL, 2021 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE