R.K.STEELS, Jaipur V. ACIT, Jaipur

ITA 910/JPR/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5296 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 30-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RUNI PAL JCIT DHK
• Keywords: Retraction
• Section: 133A

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA-@ ITA NOS. 910/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2010-11 . M/S. R.K. STEELS, B-22A, MANDIR MARG, SUBHASH NAGAR, JAIPUR. CUKE VS. THE ACIT RANGE-4, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AABFR 5940 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY S : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SMT. RUNI PAL (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 25.04.2016. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 23/05/2016. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THE APPEAL FILED BY THE ASSESSEE IS ARISING FROM TH E ORDER DATED 19.11.2014 PASSED BY THE LEARNED CIT (A)-2, JAIPUR FOR THE A.Y. 2010-11. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL :- THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN MAKING ADDITION OF RS. 47,19,972/- ON ACCOUNT OF ALLEGED UNDISCLOSED STOCK FOUND DURING T HE COURSE OF SURVEY ONLY ON THE BASIS THAT ASSESSEE HAS ADMITTED THE SAME AS UN DISCLOSED STOCK IN THE STATEMENT RECORDED IN SURVEY AND THAT HE HAS NOT SU BMITTED THE DELIVERY CHALLAN OR INWARD GATE REGISTER TO SHOW THE EXACT D ATE AND TIME WHEN THE STOCK WAS RECEIVED BY IGNORING THE VARIOUS OTHER EVIDENCE S FILED BY THE ASSESSEE. ITA NO. 910/JP/14 M/S R.K. STEELS, JAIPUR VS. ACIT. RANGE-4, JAIPUR 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED ITS RETURN DECLARING INCOME AT RS. 3,09,58,010/- ON 14.10.2010. THE ASS ESSEE DERIVES INCOME FROM BUSINESS OF TRADING IN STEEL SHEETS, RAIL, CHANNEL ETC. DURING THE YEAR UNDER CONSIDERATION, A SURVEY U/S 133A WAS CONDUCTED AT T HE BUSINESS PREMISES OF THE ASSESSEE ON 17.03.2010. IN SURVEY, THE SURVEY P ARTY FOUND EXCESS STOCK OF SHEET BY 177.73 MT WHICH IS VALUED AT RS.62,73,861/ -. SIMILARLY, STOCK OF STRUCTURE WAS FOUND IN EXCESS BY 185.628 MT WHICH I S VALUED AT RS.55,68,849/-. THIS EXCESS STOCK OF RS.1,18,42,718/- WAS SURRENDER ED BY SH. KAILASH AGARWAL, PARTNER OF THE FIRM FOR TAX IN HIS STATEMENT DATED 17.03.2010. THE ASSESSEE, HOWEVER, IN THE RETURN FILED ON 14.10.2010, OFFERED THE EXCESS STOCK AT RS.71,22,746/- BY ACCEPTING THE EXCESS STOCK OF STR UCTURE AT RS.55,68,840/- BUT CONSIDERED THE EXCESS STOCK OF SHEET/PLATE AT 44.02 0 MT VALUED AT RS.15,53,906/-. 2.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A SSESSEE SUBMITTED THAT IN SURVEY EXCESS STOCK OF SHEET/PLATE WORKED OUT AT 177.73 MT INCLUDES STOCK OF 133.71 MT VALUED AT RS.47,19,972/- RECEIVED FROM STEEL AUTHORITY OF INDIA LTD. WHICH WAS INCLUDED IN THE PHYSICAL STOCK BUT N OT ENTERED IN THE BOOKS OF ACCOUNTS AS THE BILLS WERE NOT RECEIVED AT THE TIME OF SURVEY. THE NECESSARY EVIDENCE IN SUPPORT WAS FILED. AFTER SUBMISSION OF THESE EVIDENCES, THE AO AGAIN RECORDED THE STATEMENT OF THE ASSESSEE IN COU RSE OF ASSESSMENT PROCEEDINGS ON 22.02.2013 WHERE HE EXPLAINED THAT A T THE TIME OF SURVEY BECAUSE OF ANXIETY/NERVOUSNESS HE COULD NOT EXPLAIN ABOUT THESE PURCHASES BUT THE FACT IS THAT THESE GOODS WERE RECEIVED FROM STEEL AUTHORITY OF INDIA LTD. FOR WHICH NECESSARY DOCUMENTS HAVE BEEN SUBMITTED. 2.2. THE AO, HOWEVER, HELD THAT ASSESSEE FAILED TO PRODUCE ANY EVIDENCE ON RECORD AS TO WHEN THE CONTENDED BILLS WERE ACTUALLY RECEIVED BY IT. THESE BILLS DO NOT CARRY ANY SIGNATURE, DATE OR SIGN OF THE REC IPIENT TO ASCERTAIN WHEN EXACTLY THE BILLS WERE RECEIVED BY THE ASSESSEE. HE HELD THAT RETRACTION MADE BY THE ASSESSEE AFTER EXTRAORDINARY DELAY IS ONLY A N AFTERTHOUGHT AND THUS MADE ADDITION AN OF RS.47,19,972/-. 3. THE ASSESSEE BEING AGGRIEVED BY THE ORDER OF AO, PREFERRED APPEAL BEFORE LD. CIT (A) WHO OBSERVED AS UNDER :- ITA NO. 910/JP/14 M/S R.K. STEELS, JAIPUR VS. ACIT. RANGE-4, JAIPUR 3 (I) THE APPELLANT HAS SUBMITTED COPY OF TAX INVOIC E CUM CONSIGNMENT NOTES OF SAIL LTD. BOKARO DT. 11.03.2010, INTIMATION LETTER OF SAIL JAIPUR DT.16.03.2010, TRANSPORTATION RECEIPTS DT. 16.03.2010, WEIGHMENT S LIPS DT. 17.03.2010. THIS EVIDENCE SUBMITTED BY THE APPELLANT SHOWS THAT IT H AS PURCHASED THESE ITEMS FROM SAIL LTD. HOWEVER, IT DOES NOT SHOW WHEN THESE ITEMS WERE RECEIVED BY THE APPELLANT FIRM. THE APPELLANT HAS NOT SUBMITTED PRIMARY RECORDS LIKE DELIVERY CHALLAN OR INWARD GATE REGISTER WHICH WOUL D SHOW THE EXACT DATE AND TIME WHEN THE APPELLANT HAS RECEIVED THIS STOCK. MO RE IMPORTANTLY, THE APPELLANT HAS ALSO NOT STATED THE PREMISES/GODOWN W HERE THIS STOCK HAS BEEN RECEIVED. THEREFORE, THE EVIDENCE FURNISHED BY THE APPELLANT DURING THE ASSESSMENT AS WELL AS APPELLATE PROCEEDINGS DO NOT GIVE CRUCIAL INFORMATION AS TO WHEN THIS STOCK WAS RECEIVED AND ALSO THE PREMIS ES WHERE THIS STOCK WAS RECEIVED. ON THE BASIS OF ABOVE FINDINGS, CIT(A) HELD THAT ST OCK OF 133.71 MT WAS NOT DELIVERED AT THE PREMISES OF THE ASSESSEE BEFORE TH E SURVEY ACTION BECAUSE IF THIS HAD BEEN THE CASE, THE PARTNER WOULD HAVE STAT ED SO IN HIS STATEMENT RECORDED DURING SURVEY OR IMMEDIATELY THEREAFTER. H E ACCORDINGLY CONFIRMED THE ADDITION OF RS.47,19,972/-. 4. NOW THE ASSESSEE IS BEFORE US. 4.1. THE LD. A/R FOR THE ASSESSEE SUBMITTED THAT TH E AO MADE THE ADDITION FOR THE REASON THAT ASSESSEE HAS NOT FILED EVIDENCE AS TO WHEN ACTUALLY THE BILLS WERE RECEIVED BY THE ASSESSEE, WHEREAS, CIT(A) HAS CONFIRMED THE ADDITION FOR THE REASON THAT ASSESSEE COULD NOT FILE EVIDENCE AS TO WHEN THIS STOCK WAS RECEIVED. THEREFORE, THE ISSUE IN THE PRESENT CASE IS TO DECIDE WHETHER THE PURCHASE OF 133.71 MT OF SHEET/PLATE FROM STEEL AUT HORITY OF INDIA LTD. WERE RECORDED IN THE BOOKS OF ACCOUNTS AT THE TIME OF SU RVEY OR NOT AND WHETHER THESE GOODS WERE RECEIVED BEFORE THE SURVEY AT THE GODOWN OF THE ASSESSEE OR NOT. IN THIS CONNECTION IT WOULD BE RELEVANT TO NOT E THE FOLLOWING EVIDENCE ON RECORD:- (A) DETAILS OF BILLS BY WHICH ABOVE PURCHASES WERE MADE : ITA NO. 910/JP/14 M/S R.K. STEELS, JAIPUR VS. ACIT. RANGE-4, JAIPUR 4 S.NO. SELLER NAME OF ITEM INVOICE NO DATE QTY IN MT AMOUNT 1 SAIL SHEET & PLATE 088351 11.03.1 0 66.980 RS.25,01,908/- 2 SAIL SHEET & PLATE 089238 11.03.1 0 66.730 RS.24,98,159/- TOTAL 133.710 RS.50,00,067/- (B) DETAILS OF INTIMATION LETTER BY SELLER : S.NO. NAME OF SELLER DATE QTY IN MT 1 STEEL AUTHORITY OF INDIA LTD. 16.03.2010 66.980 2 STEEL AUTHORITY OF INDIA LTD. 16.03.2010 66.730 TOTAL 133.710 (C) DETAILS OF TRANSPORTER : S.NO. NAME OF TRANSPORTER TRUCK NO. G.R. NO. DATE FR EIGHT 1 RIYA GOLDEN TRANSPORT CO. RJ14-GA-3352 & 5932 351 16.03.2010 RS.8,777/- 2 RIYA GOLDEN TRANSPORT CO. RJ14-GA-2883 352 16.03.2010 RS.4,545/- (D) DETAILS OF DHARAM KANTA PARCHI/WEIGHTMENT SLIP : S.NO NAME OF TRANSPORTER TRUCK NO. WEIGHTMENT SLIP NO. DATE NET WEIGHT 1 RANI SHAKTI COMPUTERISED KANTA RJ14-GA-3352 190 16.03.2010 17.03.2010 44880 2 RANI SHAKTI COMPUTERISED KANTA RJ14-GA-5932 191 16.03.2010 17.03.2010 42890 3 RANI SHAKTI COMPUTERISED KANTA RJ14-GA-2883 193 17.03.2010 17.03.2010 45450 TOTAL 133220 4.2 FROM THE ABOVE DETAILS, IT CAN BE NOTED THAT TH E ABOVE GOODS WERE LOADED IN THE TRUCKS FROM RAILWAY WAGON ON 16.03.20 10/17.03.2010 AND AFTER UNLOADING THESE GOODS AT THE GODOWN OF THE ASSESSEE , THESE TRUCKS WERE AGAIN WEIGHED ON 17.03.2010 TO ARRIVE AT THE EXACT QUANTI TY OF GOODS RECEIVED AT THE GODOWN. THESE EVIDENCES CLEARLY PROVED THAT THE GOO DS WERE RECEIVED BY THE ASSESSEE IN THE MORNING ON 17.03.2010 WHEREAS SURVE Y WAS STARTED AT AROUND 1.00 PM ON 17.03.2010. HOWEVER, AS THE BILLS WERE N OT RECEIVED AT THE OFFICE, THEY WERE NOT INCORPORATED IN THE BOOKS OF ACCOUNTS . THESE BILLS WERE ITA NO. 910/JP/14 M/S R.K. STEELS, JAIPUR VS. ACIT. RANGE-4, JAIPUR 5 INCORPORATED AFTER SURVEY AS IS EVIDENT FROM THE ST OCK REGISTER OF PLATE. THESE PURCHASES ARE MADE FROM STEEL AUTHORITY OF INDIA AN D THEREFORE THE GENUINENESS OF THESE PURCHASES IS NOT IN DOUBT. THE LD. CIT(A) HAS ALSO ACCEPTED THAT THE EVIDENCES SUBMITTED SHOWS THAT TH ESE ITEMS WERE PURCHASED FROM SAIL BUT HE IGNORED IT ON THE GROUND THAT EVID ENCE AS TO WHEN THE STOCK WAS RECEIVED AND THE PREMISES WHERE IT WAS RECEIVED IS NOT FURNISHED. IN HOLDING SO HE DID NOT RAISED ANY QUERY TO THE ASSES SEE AND ALSO IGNORED THE FACT THAT SURVEY WAS STARTED IN THE AFTERNOON ON 17 .03.2010 AND WAS CONCLUDED ON 18.03.2010 AND THESE GOODS WERE RECEIVED AT THE GODOWN OF THE ASSESSEE AT PLOT NO.305, MALHOTRA NAGAR BEFORE THE START OF THE SURVEY BUT AS THE BILLS WERE NOT RECEIVED AT THE OFFICE WHICH IS AT B-22A, MANDIR MARG, SUBHASH NAGAR, JAIPUR, THE SAME WAS NOT INCORPORATED IN THE BOOKS AND ALSO COULD NOT BE SPECIFIED AT THE TIME OF SURVEY. THE ASSESSEE DO NOT MAINTAIN RECORD LIKE INWARD GATE REGISTER AND THEREFORE IT IS NOT POSSIB LE TO SPECIFY THE EXACT TIME WHEN THE GOODS WERE RECEIVED BUT THE EVIDENCE ON RE CORD CLEARLY PROVES THAT THESE GOODS WERE RECEIVED ON 17.03.2010 BEFORE THE START OF SURVEY. 4.3 THE LD. A/R HAS ALSO SUBMITTED THAT AO HAS MADE THE ADDITION FOR THE REASON THAT ASSESSEE HAS NOT FURNISHED EVIDENCE AS TO WHEN ACTUALLY THE BILLS WERE RECEIVED BY THE ASSESSEE. HOWEVER, THE CIT(A) HAS CONFIRMED THE ADDITION FOR THE REASON THAT ASSESSEE HAS NOT FURNISHED EVID ENCE AS TO WHEN THE STOCK WAS RECEIVED AND WHERE IT WAS RECEIVED. AS AGAINST THIS THE ASSESSEE HAS PRODUCED THE EVIDENCE THAT THE STOCK WAS RECEIVED O N 17.03.2010 BEFORE THE START OF SURVEY BUT THE BILLS WERE NOT RECEIVED IN AS MUCH AS THESE BILLS WERE NOT INCORPORATED IN THE BOOKS OF ACCOUNTS AT THE TI ME OF SURVEY. THUS, THE ASSESSEE HAS PRODUCED SUFFICIENT EVIDENCE THAT THES E GOODS WERE PHYSICALLY AVAILABLE AT THE TIME OF SURVEY BUT NOT MADE A PART OF THE BOOKS STOCK ARRIVED AT THE TIME OF SURVEY. THE OBSERVATIONS OF THE AO T HAT BILL DO NOT CARRY ANY SIGNATURE, DATE OR SIGN OF THE RECIPIENT IS IRRELEV ANT AS THERE IS NO PRACTICE OF PUTTING THE SIGNATURE OF RECIPIENT ON THE BILL AND THE INVOICE CUM CONSIGNMENT NOTE DT. 11.03.2010 IS A DELIVERY CHALLAN IN ITSELF WHICH WAS GIVEN TO THE ASSESSEE BY SAIL ON 16.03.2010 ON THE BASIS OF WHIC H THE MATERIAL WAS LOADED IN THE TRUCKS FROM THE RAILWAY WAGON AND UNLOADED A T THE GODOWN OF THE ASSESSEE IN MORNING ON 17.03.2010. ITA NO. 910/JP/14 M/S R.K. STEELS, JAIPUR VS. ACIT. RANGE-4, JAIPUR 6 4.4 REGARDING OBSERVATIONS OF THE AO THAT THE ASSES SEE HAS RETRACTED FROM HIS STATEMENT AFTER EXTRAORDINARY DELAY, IT WAS FUR THER SUBMITTED THAT IT IS NOT A CASE OF RETRACTION FROM STATEMENT BUT TO WORK OUT T HE CORRECT QUANTITY OF THE EXCESS STOCK FOUND AT THE TIME OF SURVEY. FURTHER, STATEMENT AT THE TIME OF SURVEY HAS NO EVIDENTIARY VALUE AS HELD BY SUPREME COURT IN CASE OF CIT VS. S. KHADER SON 352 ITR 480. THEREFORE, THE ASSESSEE WHI LE FINALISING THE ACCOUNTS WORKED OUT THE EXACT QUANTITY OF EXCESS STOCK AND A CCORDINGLY OFFERED THE SAME FOR TAX. ONLY BECAUSE ASSESSEE DID NOT STATE A BOUT THE RECEIPT OF GOODS FROM SAIL IN HIS STATEMENT RECORDED AT THE TIME OF SURVEY, THE RECEIPT OF THE ABOVE GOODS CANNOT BE DENIED IN VIEW OF THE DOCUMEN TARY EVIDENCES FILED AND ALSO WHEN THE ASSESSEE IN HIS STATEMENT DT. 22.03.2 013 RECORDED IN COURSE OF ASSESSMENT PROCEEDINGS HAS EXPLAINED THE REASONS AS TO WHY THIS FACT CANNOT BE STATED AT THE TIME OF SURVEY. 5. ON THE OTHER HAND, THE LD. D/R SUPPORTED THE ORD ERS OF THE AUTHORITIES BELOW AND REQUESTED TO CONFIRM THE ORDER OF LD. CIT (A). 6. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ISSUE UNDER CONSIDERATION RELATES TO A DDITION OF RS. 47,19,972/- ON ACCOUNT OF UNDISCLOSED STOCK SURRENDERED DURING THE COURSE OF SURVEY ON THE BASIS OF STATEMENT RECORDED OF ONE OF THE PARTNERS OF THE ASSESSEE FIRM AND SUBSEQUENT RETRACTION BY THE ASSESSEE FIRM. IN THI S REGARD, THE QUESTION THAT ARISES FOR CONSIDERATION WHAT IS EVIDENTIARY VALUE OF THE STATEMENT RECORDED DURING THE COURSE OF SURVEY. IN THIS REGARD, REFE RENCE IS DRAWN TO THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF S.KHADAR KH AN SON VS. CIT (300 ITR 157) WHICH HAS SUBSEQUENTLY BEEN CONFIRMED BY THE HONB LE SUPREME COURT WHEREIN THE FOLLOWING PRINCIPLES OF LAW HAVE BEEN LAID DOWN: (I) AN ADMISSION IS AN EXTREMELY IMPORTANT PIECE OF EVIDENCE BUT IT CANNOT BE SAID THAT IT IS CONCLUSIVE AND IT IS OPEN TO THE PERSON WHO MADE THE ADMISSION TO SHOW THAT IT IS INCORRECT AND THAT THE ASSESSEE SHOULD BE GIVEN A PROPER OPPORTUNITY TO SHOW THAT THE BOOKS O F ACCOUNT DO NOT CORRECTLY DISCLOSE THE CORRECT STATE OF FACTS, VIDE DECISION OF THE APEX COURT IN PULKNGODE RUBBER PRODUCE CO. LTD. VS. STAT E OF KERALA (1973) 91 ITR 18. ITA NO. 910/JP/14 M/S R.K. STEELS, JAIPUR VS. ACIT. RANGE-4, JAIPUR 7 (II) IN CONTRADISTINCTION TO THE POWER U/S 133A, SE CTION 132(4) OF THE INCOME TAX ACT ENABLES THE AUTHORISED OFFICER TO EXAMINE A PERSON ON OATH AND ANY STATEMENT MADE BY SUCH PERSON DURING SUCH EXAMI NATION CAN ALSO BE USED IN EVIDENCE UNDER THE INCOME TAX ACT. ON THE OTHER HAND, WHATEVER STATEMENT IS RECORDED U/S 133A OF THE IN COME TAX ACT IS NOT GIVEN ANY EVIDENTIARY VALUE OBVIOUSLY FOR THE REA SON THAT THE OFFICER IS NOT AUTHORISED TO ADMINISTER OATH AND TO TAKE ANY S WORN STATEMENT WHICH ALONE HAS EVIDENTIARY VALUE AS CONTEMPLATED U NDER LAW, VIDE PAUL MATHEWS AND SONS VS. CIT (2003) 263 ITR 101 (KER.). 6.1 IN LIGHT OF ABOVE PRINCIPLES OF LAW, ONE NEEDS TO EXAMINE THE FACTS IN THE INSTANT CASE. IN THE INSTANT CASE A SURVEY U/S 133 A WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE FIRM ON 17.3.2010 . IN SURVEY, THE SURVEY PARTY FOUND EXCESS STOCK OF STEEL VALUED AT RS. 6 2,73,861/- IN ADDITION TO STOCK OF STRUCTURE VALUED AT RS. 55,68,849/-. THIS EXCES S STOCK OF RS 1,18,42,718 WAS SURRENDERED BY THE ASSESSEE FIRM AND A STATEMENT W AS RECORDED OF SHRI KAILASH AGARWAL PARTNER OF THE ASSESSEE FIRM. SUB SEQUENTLY THE ASSESSEE FIRM FILED ITS RETURN ON 14.10.2010 WHEREIN EXCESS STOCK OF RS. 71,22,746 WAS OFFERED TO TAX. THIS EXCESS STOCK INCLUDES STOCK O F SHEET VALUED AT RS. 15,53,906/- INSTEAD OF RS 62,73,861/- AND STOCK OF STRUCTURE VALUED AT RS. 55,68,849/-, THUS STOCK OF SHEET WORTH RS 47,19,972 WAS NOT OFFERED TO TAX. IN THIS REGARD, ASSESSEE SUBMITTED THAT IN SURVEY EXCE SS STOCK OF SHEET/PLATE WORKED OUT AT 177.73 MT INCLUDES STOCK OF 133.71 MT VALUED AT RS.47,19,972/- RECEIVED FROM STEEL AUTHORITY OF INDIA LTD. WHICH W AS INCLUDED IN THE PHYSICAL STOCK BUT NOT ENTERED IN THE BOOKS OF ACCOUNTS AS T HE BILLS WERE NOT RECEIVED AT THE TIME OF SURVEY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO AGAIN RECORDED STATEMENT OF SHRI KAILASH AGARWAL ON 22.2. 2013 WHEREIN HE EXPLAINED THAT AT THE TIME OF SURVEY DUE TO STRESS AND ANXIE TY THOUGH HE DEPENDS VERY MUCH ON HIS MEMORY HE COULD NOT EXPLAIN ABOUT THESE PURCHASES AND THE FACT IS THAT THESE GOODS WERE RECEIVED FROM STEEL AUTHO RITY OF INDIA LTD. FOR WHICH NECESSARY DOCUMENTS HAVE BEEN SUBMITTED. 6.2 THE AO NOTED THAT THE STAND TAKEN BY THE ASSESS EE FIRM WAS AT A TOTAL VARIATION TO THE SPECIFIC REPLIES GIVEN BY PARTNER IN HIS STATEMENT RECORDED ON 17.3.2010. DURING THE COURSE OF ASSESSMENT PROCEED INGS, IT IS NOTED THAT THE APPELLANT SUBMITTED TWO SALES INVOICES OF SAIL LTD. , AND TRANSPORTATION ITA NO. 910/JP/14 M/S R.K. STEELS, JAIPUR VS. ACIT. RANGE-4, JAIPUR 8 RECEIPTS, WEIGHTMENT RECEIPTS, INTIMATION LETTER OF SAIL LTD. FORM NO. 47 OF VAT. THE AO DID NOT ACCEPT THE EVIDENCES AND RETRAC TION OF THE EARLIER REPLIES GIVEN DURING THE STATEMENT RECORDED DURING THE COUR SE OF SURVEY PROCEEDINGS AND ADDED THIS AMOUNT TO THE TOTAL INCOME AS UNDISC LOSED STOCK OF THE APPELLANT. DURING THE APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A), THE CIT(A) NOTED THAT THE QUESTION WHICH NEEDS TO BE EXAMINED IS WHETHER THE STOCK OF 133.71 MT OF STEEL PLATES PURCHASED FROM SAIL LTD H AS BEEN RECEIVED BY THE APPELLATE BEFORE COMMENCEMENT OF SURVEY PROCEEDING S ON 17.3.2010 OR NOT. AFTER GOING THROUGH THE EVIDENCE FURNISHED BY THE A PPELLANT THE LD. CIT(A) HELD THAT NO INFORMATION HAS BEEN FURNISHED AS TO WHEN THESE STOCK WAS RECEIVED AND THE PREMISES WHERE THE STOCK WAS RECEI VED. RELYING ON THE EARLIER STATEMENT OF SHRI KAILASH AGARWAL RECORDED DURING THE COURSE OF SURVEY, PARTNER OF THE ASSESSEE FIRM, HE CONFIRMED THE ADDI TION ON A/C OF UNDISCLOSED STOCK OF RS. 47,19,972/-. ON PERUSAL OF THE ORDER OF THE LOWER AUTHORITIES, IT IS THUS CLEAR THAT THE ASSESSEE FIRM HAS ADDUCED CERTA IN EVIDENCES/SUPPORTING DOCUMENTATION IN SUPPORT OF ITS POSITION THAT STATE MENT RECORDED EARLIER DURING THE COURSE OF SURVEY WAS NOT CORRECT, HOWEVE R THE LOWER AUTHORITIES HAVE NOT FOUND SUCH EVIDENCES SUPPORTING THE CASE O F THE ASSESSEE FIRM AND HAVE CONFIRMED THE ADDITION AS PER STATEMENT RECORD ED DURING THE COURSE OF SURVEY. BEFORE WE PROCEED FURTHER, IT WOULD THUS B E RELEVANT TO LOOK AT THESE EVIDENCE/DOCUMENTATION. 6.3 UNDISPUTEDLY THE IMPUNGED STOCK OF 133.71 MT OF STEEL PLATES HAS BEEN PURCHASED BY THE ASSESSEE FIRM FROM SAIL LTD. IN T HIS REGARD, THE ASSESSEE HAS SUBMITTED INVOICE ISSUED BY SAIL LTD NO.88351 DATED 11.03.2010 AND NO. 89278 DATED 11.3.2010. SUBSEQUENTLY, INTIMATION LE TTERS DATED 16.03.2010 HAVE BEEN SENT BY SAIL INTIMATING ABOUT THE ARRIVAL OF THESE GOODS AND TO TAKE IMMEDIATE DELIVERY OF THE GOODS AGAINST FULL PAYMEN T. IN THIS REGARD, THE ASSESSEE FIRM HAS SUBMITTED COPY OF GR RECEIPTS NO. 351 & 352 DATED 16.03.2010 OF RIYA GOLDEN TRANSPORT CO. FOR TRANSPO RTATION OF GOODS FROM RAILWAY YARD TO THE ASSESSEES GODOWN. IN THESE G.R . RECEIPTS, THE TRUCK NOS. HAVE BEEN MENTIONED, CONSIGNER NAME HAS BEEN MENTIO NED AS M/S STEEL AUTHORITY OF INDIA AND THE CONSIGNEE NAME HAS BEEN MENTIONED AS M/S R.K. STEELS, V.K.I.AREA, JAIPUR. HERE IT IS TO BE NOTED THAT THE ASSESSEE HAS ITS OWN GODOWN AT 301-310 MALHOTRA NAGAR, V.K.I AREA, JAIPU R. THIS PROVES THAT THE GOODS WERE LOADED FROM RAILWAY YARD ON 16.3.2010 AN D THE SAME WERE TO BE ITA NO. 910/JP/14 M/S R.K. STEELS, JAIPUR VS. ACIT. RANGE-4, JAIPUR 9 TRANSPORTED TO THE ASSESSEE GODOWN AT VKI AREA, JA IPUR. FURTHER, THE ASSESSEE HAS SUBMITTED WEIGHTMENT SLIPS NO. 190, 191 & 193 ISSUED BY RANI SHAKTI COMPUTERISED KANTA WHEREBY THE WEIGHT OF THE TRUCK S FULLY LOADED AND AFTER UNLOADING HAVE BEEN MENTIONED. HERE IT IS TO BE N OTED THAT THE WEIGHTMENT SLIPS RELATES TO THE SAME THREE TRUCKS WHOSE REGIST RATION NUMBERS WERE MENTIONED IN THE GR RECEIPTS WHICH WERE CARRYING TH E GOODS FROM RAILWAY YARD TO ASSESSEES GODOWN AND THIS COMPANY BY NAME OF R ANI SAKTI COMPUTERISED KANTA IS BASED OUT OF VKI AREA, JAIPUR AND IN THESE WEIGHTMENT SLIPS, THE DATE OF WEIGHTMENT OF FULLY LOADED TRUCKS HAVE BEEN MENT IONED AS 16.3.2010 AND AFTER UNLOADING THE GOODS THE DATE OF WEIGHTMENT HA S BEEN MENTIONED AS 17.03.2010. LOOKING INTO ALL THESE DOCUMENTARY EVI DENCES AVAILABLE ON RECORD, IT IS CLEAR THAT THE IMPUNGED GOODS WERE RECEIVED B Y THE ASSESSEE AT HIS GODOWN ON 16.3.2010/17.3.2010. GIVEN THAT THE SURV EY HAS HAPPENED ON 17.3.2010, IT IS CLEAR THESE GOODS WERE PHYSICALLY AVAILABLE AT THE ASSESSEES GODOWN 301-310 MALHOTRA NAGAR, V.K.I AREA, JAIPUR A T THE TIME OF SURVEY. FURTHER, THE ASSESSEE FIRM HAS SUBMITTED THAT THOUG H THE GOODS WERE RECEIVED AT THE GODOWN OF THE ASSESSEE BEFORE THE START OF T HE SURVEY BUT AS THE BILLS WERE NOT RECEIVED AT THE OFFICE WHICH IS AT B-22A, MANDIR MARG, SUBHASH NAGAR, JAIPUR, THE SAME WAS NOT INCORPORATED IN THE BOOKS AND ALSO COULD NOT BE SPECIFIED AT THE TIME OF SURVEY. THESE BILLS WER E INCORPORATED AFTER SURVEY AS IS EVIDENT FROM THE STOCK REGISTER OF PLATE AND PAY MENT BY CHEQUE. GIVEN THE FACT THAT THE GOODS WERE RECEIVED IN GODOWN ON 17.3 .2010 AND THE SAME DAY THE SURVEY HAS HAPPENED AT THE OFFICE OF THE ASSESS EES FIRM, WE AGREE WITH THE CONTENTION OF THE APPELLANT THAT IT IS PROBABLE THA T THE ASSESSEE HAS NOT RECORDED THE SAID PURCHASES IN ITS BOOKS OF ACCOUNT S AT THE TIME OF SURVEY THOUGH THE SAME HAVE BEEN RECORDED SUBSEQUENTLY AFT ER THE CLOSE OF THE SURVEY. THE SAID PROBABILITY TAKEN INTO ACCOUNT THE FACTORS SUCH AS TIME GAP IT TYPICALLY TAKES TO RECORD PURCHASES IN THE BOOKS OF ACCOUNTS WHICH CAN VARY FROM BUSINESS TO BUSINESS, THE TIME GAP FOR RECEIPT OF BILLS FROM THE GODOWN TO THE BUSINESS PREMISES WHERE THE PURCHASES ARE TO BE RECORDED, AVAILABILITY OF ACCOUNTANT, ETC. IN ABSENCE OF ANYTHING TANGIBLE TO THE CONTRARY, THE SAID PROBABILITY CANNOT BE RULED OUT IN THE INSTANT CASE APPLYING THE TEST OF HUMAN PROBABILITIES AS LAID DOWN BY THE HONBLE SUPREME C OURT IN CASE OF SUMATI DAYAL VS CIT (214 ITR 801). IN LIGHT OF ABOVE, IT IS CLEAR THAT THE APPELLANT HAS DEMONSTRATED THROUGH APPROPRIATE DOCUMENTATION THAT 133.71 MT STOCK OF ITA NO. 910/JP/14 M/S R.K. STEELS, JAIPUR VS. ACIT. RANGE-4, JAIPUR 10 SHEET/PLATE VALUED AT RS.47,19,972/- RECEIVED FROM STEEL AUTHORITY OF INDIA LTD. WAS INCLUDED IN THE PHYSICAL STOCK BUT NOT ENTERED IN THE BOOKS OF ACCOUNTS AS THE BILLS WERE NOT RECEIVED AT THE TIME OF SURVEY. 6.4 NOW THE QUESTION THAT ARISES IS WHETHER THE AO WAS RIGHT IN IGNORING ALL THESE EVIDENCES ON RECORD AND GOING BY THE STATEMEN T OF ONE OF THE PARTNERS OF THE ASSESSEE FIRM WHICH WAS RECORDED DURING THE COURSE OF SURVEY U/S 133A OF THE ACT. IN THIS REGARD, AS WE DISCUSSED EARLIE R, THE HONBLE SUPREME COURT IN CASE OF PULLANGODE RUBBER PRODUCE CO. LTD. VS. STATE OF KERALA (SUPRA) HAS HELD THAT THOUGH THE ADMISSION IS AN EXTREMELY IMPO RTANT PIECE OF EVIDENCE BUT IT CANNOT BE SAID THAT IT IS CONCLUSIVE AND IT IS OPEN TO THE PERSON WHO MADE THE ADMISSION TO SHOW THAT IT IS INCORRECT. I N THE PRESENT CASE THE APPELLANT ASSESSEE HAS PRODUCED SUFFICIENT MATERIAL BEFORE THE LOWER AUTHORITIES WHICH, WE HAVE DISCUSSED ABOVE, SHOWS C LEARLY THAT THE ADMISSION MADE BY HIM EARLIER WAS INCORRECT. THE APPELLANT HA S CORRECTED ITS POSITION IN THE RETURN OF INCOME FILED ON 17.10.2010 AND THEREA FTER SUBMITTED SUFFICIENT EVIDENCES IN SUPPORT OF ITS POSITION AND THEREFORE, IT CANNOT BE HELD THAT THE RETRACTION WAS MADE AFTER AN EXTRAORDINARY DELAY. FURTHER, AS HELD BY THE HONBLE MADRAS HIGH COURT IN THE CASE OF S. KHADER KHAN SON (SUPRA), THE STATEMENT RECORDED UNDER SECTION 133A HAS NO EVIDEN TIARY VALUE AND ANY ADMISSION MADE DURING THE COURSE OF STATEMENT CANNO T BE MADE BASIS OF THE ADDITION. 6.5 IN THE ENTIRETY ON FACTS AND CIRCUMSTANCES OF T HE CASE, WE HEREBY DELETE THE ADDITION OF RS. 47,19,972/- ON ACCOUNT OF UNDIS CLOSED STOCK IN THE HANDS OF THE APPELLANT. HENCE THE GROUND RAISED BY THE APPE LLANT IS ALLOWED. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23/05/2 016. SD/- SD/- VKJ-IH-RKSYKUH FOE FLAG ;KNO (R.P.TOLANI) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 23/05/2016 DAS/ ITA NO. 910/JP/14 M/S R.K. STEELS, JAIPUR VS. ACIT. RANGE-4, JAIPUR 11 VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S. R.K. STEELS, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT, RANGE-4, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDRVIHY@ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 910/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR.