RADHEY SHYAM LADDHA, Kota V. ACIT, Kota

ITA 97/JPR/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6118 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 15-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 30-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT DHK
• Assessee Lawyers: B L BHOJWANI
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA-@ ITA NO. 97/JP/2017 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2011-12 RADHEY SHYAM LADDHA, RAJA INDIA COMPANY, NEAR MANDI YARD GATE, D-263, BHAMASHAH MANDI, KOTA. CUKE VS. A.C.I.T., CIRCLE-2, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAHPL 3516 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI B.L. BHOJWANI (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJ MEHRA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16/05/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 21/05/2018 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THE APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LD. CIT(A), KOTA DATED 30/11/2016 FOR THE A.Y. 2011- 12, WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD ASSESSING OFFICER HAS ERRED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW IN VALUING THE CLOSING STOCK AT AVERAGE PURCHASE PRICE EVEN THOUGH THE ASSESSEE WAS CONSISTENTLY VALUING THE STOCK AT MARKET PRICE AND THE LD CIT(A) TOO HAS SIMILARLY ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFF ICER. 2. WITHOUT PREJUDICE TO GROUND NO.1 ITA 97/JP/2017_ RADHEY SHYAM LADDHA VS. ACIT 2 THAT THE LD CIT(A) HAS ERRED ON THE FACTS AND IN T HE CIRCUMSTANCES OF THE CASE IN SUSTAINING THE ADDITION TO THE EXTENT O F RS. 3,96,252/- OUT OF THE ADDITION OF RS. 22,57,977/- MADE BY THE LD A SSESSING OFFICER ON ACCOUNT OF ENHANCEMENT IN THE VALUATION OF VARIOUS ITEMS OF CLOSING STOCK. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE RETURN O F INCOME WAS FILED BY THE ASSESSEE ON 30/09/2011 DECLARING TOTAL INCOM E OF RS. 56,72,730/-. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT AT AN INCOME OF RS. 82,69,600/-. THE ASSESSING OFFICER MAD E VARIOUS ADDITIONS. 3. THE LD. CIT(A) HAS GIVEN PART RELIEF TO THE ASSESS EE BY HOLDING AS UNDER: I HAVE GONE THROUGH ASSESSEES SUBMISSION AND AOS FINDINGS. AS REGARDS GROUND OF APPEAL NO. 1, THE SAME ISSUE O F VALUATION OF CLOSING STOCK HAD ALSO COME INTO CONSIDERATION IN THE ASSES SEES CASE FOR A.Y 2009-10 AND MY PREDECESSOR CIT (A) VIDE APPEAL ORDER NO 551 /11-12 DATED 26.02.2013 HAD TAKEN THE VALUE OF CLOSING STOCK ON ESTIMATION BASIS IN RESPECT OF MOST OF THE ITEMS/COMMODITIES MENTIONED IN THIS GROUND. FOLLOWING THE SAME LINE OF DECISION, I AM OF THE OP INION THAT SINCE THE PRICING OF THESE ITEMS ARE VERY VOLATILE AND FLUCTUATE YEAR TO YEAR, THE ONLY METHOD OF VALUATION CAN BE ESTIMATION IN THE ABSENCE OF PROPE R AND MINUTE DETAILING ADOPTED BY THE ASSESSEE AS WELL AS THE A.O, WHO ADO PTED THE AVERAGE PRICING METHOD. FURTHER, SINCE THE ASSESSEE HAS BEEN FOLLOW ING THE SAME METHOD YEAR AFTER YEAR, THE LEGAL PRECEDENTS ON THE METHOD ARE IN HIS FAVOUR. ITA 97/JP/2017_ RADHEY SHYAM LADDHA VS. ACIT 3 LOOKING TO THE TOTALITY OF THE FACTS INVOLVED, SINC E THE ASSESSEE HAS ALSO NOT BEEN ABLE TO JUSTIFY HIS ARGUMENTS REGARDING MOST O F THE BARDANA BEING USED AND OLD, THE VALUATION IS ENHANCED FROM 11/- PER BA G ADOPTED BY HIM TO RS. 16/- PER BAG BUT REDUCED FROM THE FIGURE OF RS. 26. 27/- TAKEN BY THE A.O BEING VEIY HIGH AND BASED ON AVERAGE OF TOTAL PURCHASES W HEN AVERAGE SALE RATE IS 27/-. THE ADDITION WOULD BE 20,210 BAGS *5/- WHICH WOULD BE EQUAL TO RS. 101, 050/-. THE BALANCE ADDITION OF RS. 1,87,347/- IS TO BE DELETED. AS REGARDS THE ADDITION ON CLOSING STOCK IN THE GUNWAR ACCOUNT, IT IS SEEN THAT IN THE EARLIER YEAR ORDER REFERRED ABOVE, THE CIT ( A) HAD CONFIRMED A LUMP SUM AMOUNT TOWARDS THIS COMMODITY. IN THE CURRENT APPEA L ALSO, THE VALUATION TAKEN BY THE A.O APPEARS TO BE ON THE HIGHER SIDE C ONSIDERING THE SUBMISSION MADE BY THE ASSESSEE AND THE FACTS EXAMINED. THE AD DITION IN THE VALUATION OF CLOSING STOCK IS RESTRICTED TO RS. 1,00,000/-. THE BALANCE ADDITION OF RS. 8, 01,064/- IS DIRECTED TO BE DELETED. AS REGARDS THE ADDITION ON ACCOUNT OF OIL SEEDS ALSO THE A.O CANNOT TAKE THE AVERAGE PURCHASE PRICE AS THE BASIS IN THE ABSENCE OF QUALITATIVE AND COMMODITY WISE ANALYSIS. THE ADDITION IS ACCORDINGL Y RESTRICTED TO RS. 50,000/- . THE BALANCE ADDITION OF RS. 1,23,346/- IS DIRECTE D TO BE DELETED. AS REGARDS THE ADDITION MADE IN RESPECT OF KIRANA ITEMS, THE QUANTUM BEING VERY LOW, THE ACTION OF THE A.O IS NOT HELD TO BE U NJUSTIFIED AND THE ADDITION OF RS. 9,164/-IS ACCORDINGLY CONFIRMED. AS REGARDS THE ADDITION MADE IN RESPECT OF DALHAN ACCOUNT, MY PREDECESSOR HAD HELD IN THE ABOVE REFERRED APPEAL ORDER THAT SI NCE THE ASSESSEE DID NOT MAINTAIN A STOCK REGISTER, AN ESTIMATED ADDITION WA S REQUIRED TO BE SUSTAINED. FOLLOWING THE SAME LINE OF DECISION, I AM OF THE VI EW THAT IN THE PRESENT ITA 97/JP/2017_ RADHEY SHYAM LADDHA VS. ACIT 4 APPEAL, IT WILL BE FAIR TO RESTRICT THE ADDITION TO RS. 1, 00,000/-. THE BALANCE ADDITION OF RS. 5, 98,854/- IS DIRECTED TO BE DELET ED. AS REGARDS THE ADDITION MADE ON MAIZE/JOWAR ACCOUNT, THE QUANTUM BEING VERY LOW, THE ACTION OF THE A.O IS NOT HELD TO BE U NJUSTIFIED AND THE ADDITION OF RS. 11,038/- IS ACCORDINGLY CONFIRMED. AS REGARDS THE ADDITION MADE IN RESPECT OF WHEAT ACCOUNT ALSO THE A.O CANNOT TAKE THE AVERAGE PURCHASE PRICE AS THE BASIS IN THE ABSENCE OF QUALITATIVE AND COMMODITY WISE ANALYSIS. THE ADDITION IS ACCORDINGL Y RESTRICTED TO RS. 25,000/- . THE BALANCE ADDITION OF RS. 1,30,904/- IS DIRECTE D TO BE DELETED. THUS, THE TOTAL ADDITION CONFIRMED ON THIS GROUND C OMES TO RS.3,96,252/- AND THE BALANCE ADDITION OF RS. 18,61,725/- IS DIRECTED TO BE DELETED. 4. AFTER HEARING BOTH THE SIDES AT LENGTH AND CONSI DERING THE VARIOUS FACTUAL ASPECTS OF THE MATTER, WE ARE OF THE VIEW THA T THE LD. CIT(A) HAS SUSTAINED SMALL ADDITIONS. THE FACTS REGARDING THE B ARDANA USED AND OLD THE VALUE ADOPTED BY THE ASSESSEES A.O. AND AVERAG E PRICE HAS BEEN SPECIFICALLY DEALT BY THE LD. CIT(A). SINCE THIS IT EM WAS USED/OLD HENCE THE COST OR MARKET VALUE CANNOT BE THE BASIS OF VAL UATION FOR STOCK. THE LD. CIT(A) HAS ADOPTED THE REASONABLE BASIS TO VALUE IT AND THE ADDITION OF RS. 1,01,050/- HAS BEEN RIGHTLY SUSTAINED. HOWEVE R, ADDITIONS IN THE CASE OF VALUATION OF CLOSING STOCK OF OTHER ITEMS, HAS BEEN SUSTAINED ON AD HOC BASIS. IN VIEW OF THESE FACTS, THE ADDITION I N RESPECT OF CLOSING STOCK FOR THE GUNWAR, OIL SEEDS, KIRANA, DALHAN, MAI ZE/JOWAR AND WHEAT ITA 97/JP/2017_ RADHEY SHYAM LADDHA VS. ACIT 5 ARE SUSTAINED ON AD HOC BASIS WHICH IS NOT JUSTIFIED . ACCORDINGLY, WE DIRECT TO DELETE THE ADDITION SO SUSTAINED BY THE L D. CIT(A). 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21/05/2018. SD/- SD/- FOT; IKY JKO HKKXPAN (VIJAY PAL RAO) (BHAGCHAND) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 21 ST MAY, 2018 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI RADHEY SHYAM LADDHA, KOTA. 2. IZR;FKHZ @ THE RESPONDENT- THE ACIT, CIRCLE-2, KOTA. 3. VK;DJ VK;QDR @ THE 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. 97/JP/2017) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR