SHRI SHAKUN OILS LTD., Jaipur V. ACIT, Jaipur

ITA 858/JPR/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7552 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 03-10-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VINOD JOHRI
• Keywords: Agreed addition

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR (BEFORE SHRI R.K.GUPTA AND SHRI N.L.KALRA) ITA NO.858/ JP/2011 ASSESSMENT YEAR 2005-06 PAN: AADCS 4521 Q M/S. SHAKUN OIL LTD. VS. THE ACIT ITI ROAD, INDUSTRIAL AREA RANGE-1 ALWAR ALWAR (APPELLANT ) (RESPONDENT) ASSESSEE BY : SHRI P.C. PARWAL DEPARTMENT BY : SHRI VINOD JOHRI DATE OF HEARING: 12-01-2012 DATE OF PRONOUNCEMENT: 25-01-2012 ORDER PER N.L. KALRA, AM:- THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDE R OF THE LD. CIT(A), ALWAR DATED 08-12-2011 FOR THE ASSESSMENT YEAR 2005-06. 2.1 THE ONLY GRIEVANCE OF THE ASSESSEE IS THAT LD. CIT(A) HAS ERRED IN CONFIRMING THE TRADING ADDITION OF RS. 2.00 LACS. 2.2 THE ASSESSEE IS DEALING IN MANUFACTURING OF MUS TARD OIL AND OIL CAKE. THE AO HAS REPRODUCED THE CHART SHOWING THE TRADING RESULTS OF VARIOUS ASSESSMENT YEARS. PARTICULARS/A.Y. TURNOVER (IN LACS) GROSS PROFIT RATE NET PROFIT RATE YIELD % OF OIL YIELD OF OIL CAKE SHORTAGE INCLUDING DRIAGE 2002-03 129969092 6.12% 4.82% 36.53% 61.34% 2.13 2003-04 140065930 8.11% 4.81% 35.91% 62.00% 2.09 2004-05 134865747 4.99% 3.09% 34.89% 62.79% 2.32 2005-06 162969354 6.04% 5.945% 36.41% 62.14% 1.45 THE AO ALSO EXAMINED THE BOOKS OF ACCOUNTS AND NOTI CED THE FOLLOWING DEFECTS. 2 1. THE PRODUCTION MUSTARD OIL YIELD VARIES 23.14% T O 45.9% ON DAY TO DAY BASIS. 2. THE MUSTARED CAKE IS CONSTANTLY FILLED AT THE RA TE OF 60 KG PER BAG BUT THERE IS NO INDICATION IN THE KHAL BHARATI/ PR ODUCTION REGISTER. 3. IT WAS ORALLY STTEDTHT THE KHAL BAG IS 60 TO 65 KG PER BAG BUT SALES ARE OF 60 KG.ONLY. 4. THE PRODUCTION OF BOTH OIL AND CAKE IS NOT APPEA RING ON THE SAME DATE. 5. NO REGISTER WAS MAINTAINED WHICH SHOWS THE QUALI TY OF MUSTARD SEEDS. 6. VALUATION OF FOLLOWING (CLOSING STOCK) IS THE VA LUE DETERMINED (SALE PRICE MINUS G.P. DECLARED). HOW, THE VALUATIO N CAN BE DONE WHEN G.P. IS WORKED OUT AFTER TAKING INTO ACCOUNT T HE VALUE OF CLOSING STOCK. 7. NO STOCK REGISTER FOR BOTTLES HAVE BEEN MAINTAIN ED. 8. NO REGISTERS HAVE BEEN PRODUCED TO SHOW DAY TO DAY SHORTAGE. 9. THE MONTHWISE SALE AND PURCHASES OF LTR, , 1 L T., 2 LTR AND 15 LTR HAVE NOT BEEN FURNISHED ALTHOUGH MONTHLY SALES AND PURCHASES OF 15 KG/ LT TINS HAVE BEEN FILLED. 2.3 IN VIEW OF THE DEFECTS NOTICED BY THE AO, THE A SSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY BOOKS OF ACCOUNTS BE NOT REJECTED AND THE PR OVISIONS OF SECTION 145(3) BE NOT APPLIED. THE ASSESSEE FILED THE REPLY VIDE LETTER D ATED 12 TH SEPT. 2007. THE AO IN HIS ORDER HAS MENTIONED AS UNDER:- BUT AFTER DISCUSSION AND EXAMINATION OF BOOKS, S HRI S.K. RASTOGI, ADVOCATE, SHRI SANJAY GARG, DIRECTOR OF TH E CO. HAS OFFERED ADDITIONAL INCOME OF S 2.00 LACS TO BE ADDED TO THE INCOME OF THE COMPANY AS TRADING/ MANUFACTURING ADDITION. 2.4 THE ASSESSEE FILED AN APPEAL AND DURING THE COU RSE OF APPELLATE PROCEEDINGS, THE ASSESSEE RAISED THE ADDITIONAL GROUND THAT THE AO H AS ERRED IN THE FACT AND IN LAW IN 3 MAKING THE TRADING ADDITION OF RS. 2.00 LACS WITHOU T REJECTING THE BOOKS OF ACCOUNTS. THE LD. CIT(A) DISMISSED THE ADDITIONAL GROUND OF APPEA L AS ACCORDING TO HIM, THIS WAS AN AFTER THOUGHT. THE FINDINGS OF THE LD. CIT(A) ARE A S UNDER:- 5.3 I HAVE PERUSED THE ASSESSMENT ORDER AND THE SUBMISSIONS MADE BY THE APPELLANT AND CASES RELIED UPON. IT IS SEEN THAT THE AO HAS MADE ADDITION BY RECORDING THAT A SSESSEE COMPANY HAS SUBMITTED THE WRITTEN REPLY OF SHOW CAU SE BUT AFTER DISCUSSION AND EXAMINATION OF BOOKS, SHRI SATISH RA STOGI, ADVOCATE ALONGWITH SHRI SANJAY GARG DIRECTOR OF THE CO. HAS OFFERED AN ADDITIONAL INCOME OF RS. 2,00,000/- TO B E ADDED TO THE INCOME OF THE CO. AS TRADING ADDITION. HOWEVER, A R OF THE ASSESSEE SUBMITTED THE AFFIDAVIT OF DIRECTOR OF COM PANY IN WHICH HE CATEGORICALLY DENIED THE FACT THAT ANY ADDITIONA L INCOME WAS OFFERED BY HIM, AND ALSO SUBMITTED THAT THE RESULTS OF A.Y. 2005-06 ARE BETTER THAN PRECEDING YEAR 2004-05. ON GOING THROUGH THE ASSESSMENT ORDER RECORDS, IT I S FOUND THAT AR OF THE ASSESSEE HAS CHANGED THE STAND TAKEN BEFORE THE AO AT THE TIME OF ASSESSMENT PROCEEDINGS AND AT THE TI ME OF APPEAL WHICH IS AFTER THOUGHT THAT ADDITIONAL INCOME WAS N OT SURRENDERED BY THEM AT THE TIME OF ASSESSMENT PROCEEDINGS AS IT FOUND THAT AR OF THE ASSESSEE HAS FILED WRITTEN REPLY IN RESPECT OF PENALTY NOTICE U/S 271(1) FOR SAME ASSESSMENT YEAR BY STATING T HAT THE DIRECTOR HAVE OFFERED THE ADDITIONAL INCOME OF RS. 2,0,000/- IN ASSESSMENT PROCEEDINGS ON THE CONDITION THAT NO PENALTY WILL B E LEVIED. THUS IT IS VERY MUCH CLEAR THAT THIS GROUND OF THE ASSESSEE IS NOT TENABLE AS HE HAS BEEN GIVING DIFFERENT STATEME NTS AT DIFFERENT LEVEL EVEN AFTER ASSESSMENT ORDER, AT THE TIME OF H EARING OF PENALTY BEFORE AO HE ACCEPTED THAT ADDITIONAL INCOME WAS OF FERED BY ASSESSEE HIMSELF. THE AO HAD POINTED OUT VARIOUS DE FECTS FROM 4 SERIAL NO (I) TO (IX) AND REJECTED THE BOOKS OF ACC OUNTS 145(3) OF I.T. ACT. THEREFORE, GROUND OF APPEAL OF ASSESSEE I S DISMISSED 2.5 WE HAVE HEARD BOTH THE PARTIES. THE ASSESSEE FI LED AN APPEAL AGAINST THE ORDER OF THE AO ON 14 TH NOV. 2007. IN THE ORIGINAL GROUND OF APPEAL, IT WA S NOWHERE MENTIONED THAT THE ASSESSEE HAS NOT AGREED TO THE ADDITION. E VEN AFTER RECEIPT OF THE ORDER AND EVEN AFTER FILING THE APPEAL, THE ASSESSEE HAS NOT RAISE D THIS ISSUE. THE ASSESSEE FILED THE WRITTEN SUBMISSION BEFORE THE LD. CIT(A) ON 21-06-2011 VIDE WHICH IT WAS CLAIMED THAT THE DIRECTOR HAS NOT AGREED TO THE ADDITION. THE AO HAS MENTIONED THAT THE ADVOCATE OF THE ASSESSEE AND THE DIRECTOR BOTH ATTENDED THE PROCEED INGS. THE ASSESSEE HAS FILED ONLY THE AFFIDAVIT OF THE DIRECTOR AND THE AFFIDAVIT IS DATE D 19-06-2011. IN THE REPLY TO THE SHOW CAUSE NOTICE, IT WAS ALSO MENTIONED THAT THE PENALT Y BE NOT IMPOSED BECAUSE THE ADDITION HAS BEEN MADE ON AGREED BASIS. HENCE, THERE IS NO M ATERIAL TO SUGGEST THAT THE ASSESSEE HAS NOT AGREED TO THE ADDITION. ONCE THE ASSESSEE H AS AGREED IN RESPECT OF THE FACT THAT THEN THE ASSESSEE CANNOT BE CONSIDERED TO BE AGGRIE VED. IN RESPECT OF AGREED ADDITION, THE HON'BLE KERALA HIGH COURT IN THE CASE OF CIT V S. VAMADEVAN BHANU 330 ITR 559 HELD THAT EVEN THE APPEAL IS NOT MAINTAINABLE. IT W AS OBSERVED THAT AFTER DISABLING THE AO TO CONDUCT ENQUIRY AND TO SUSTAIN ASSESSMENT ON HIS OWN REASONING BY AGREEING FOR SPECIFIC ADDITIONS THEN IT IS NOT FAIR ON THE PART OF THE ASSESSEE AND THE AUDITOR TO BACKTRACK AND DISOWN THE COMMITMENTS. HENCE, WE HOLD THAT THE LD. CIT(A) WAS JUSTIFIED IN DISMISSING THE ADDITIONAL GROUND OF APPEAL AND HOL DING THAT NO APPEAL IS MAINTAINABLE AGAINST AGREED ADDITION. 5 3. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 25-01 -2012. SD/- SD/- (R.K. GUPTA) (N.L. KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR DATED; 25 /01/2012 *MISHRA COPY FORWARDED TO :- 1. M/S. SHAKUN OILS LTD. , ALWAR 2. THE ACIT, RANGE-1, ALWAR 3 THE LD. CIT BY ORDER 4. THE LD. CIT(A) 5 THE LD.DR 6 THE GUARD FILE (ITA NO.858/JP /11) A.R, ITAT, JAIPUR