Shri Deepak Chourasia, Prop. M/s. Chourasia Trading Co.., , Vidisha V. The ACIT, 2(1), Bhopal

ITSSA 104/Ind/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6775 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 07-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 22-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALCHAND
• Assessee Lawyers: S S DESHPANDE
• Keywords: Gross profit estimation; Unexplained investment; Set aside
• Section: 153A

Judgement Text

[IT(SS)A NO.104 OF 2018] [SHRI DEEPAK CHOURASIA, VIDISHA] , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER IT(SS)A NO.104/IND/2018 ASSESSMENT YEAR: 2009-10 SHRI DEEPAK CHOURAS IA PROP. M/S. CHOURASIA TRADING CO. STATION ROAD, GANJBASODA DISTRICT VIDISHA, M.P. / VS. ACIT - 2(1) BHOPAL ( APPELLANT ) ( REVENUE ) P.A. NO. AESPC5107Q APPELLANT BY SHRI S.S. DESHPANDE, A.R. RESPONDENT BY SHRI LAL CHAND, D.R. DATE OF HEARING: 05.02.2020 DATE OF PRONOUNCEMENT: 07.02.2020 / O R D E R PER KUL BHARAT, J.M: THIS APPEAL, BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF THE CIT(A)-1, BHOPAL DATED 17.5.2018 PERTAINING TO THE [IT(SS)A NO.104 OF 2018] [SHRI DEEPAK CHOURASIA, VIDISHA] 2 ASSESSMENT YEAR 2009-10. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT JUSTIF IED IN CONFIRMING THE ADDITIONS MADE TOWARDS UNACCOUNTED S TOCK OF RS.10,87,979/-. 2. THE ASSESSEE CRAVES LEAVE TO ADD, ALTER AMEND OR WI THDRAW ANY GROUND OF APPEAL ON OR BEFORE THE TIME OF HEARING. 2. THE ONLY EFFECTIVE GROUND IS AGAINST CONFIRMING TH E ADDITIONS MADE TOWARDS UNACCOUNTED STOCK OF RS.10,87,979/-. THE FACTS GIVING RISE TO THE PRESEN T APPEAL ARE THAT A SEARCH ACTION WAS CARRIED OUT ON THE FAMILY OF THE ASSESSEE ON 22.1.2009, DURING THE COURSE OF WHIC H, THE BOOKS OF ACCOUNTS AND OTHER DOCUMENTS WERE SEIZED. T HE ASSESSMENT WAS COMPLETED U/S 153A OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT), THEREBY V ARIOUS ADDITIONS WERE MADE. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) {IN SHORT CIT(A)}, DELETED THE ADDITIONS. THE ORDER OF THE LD. [IT(SS)A NO.104 OF 2018] [SHRI DEEPAK CHOURASIA, VIDISHA] 3 CIT(A) WAS CHALLENGED BY THE REVENUE BEFORE THIS TRI BUNAL AND THIS TRIBUNAL VIDE ITS ORDER DATED 16.7.2013 IN IT (SS)A NO.394 & 395/IND/2012 CONFIRMED THE ORDER OF THE LD . CIT(A) ON VARIOUS DELETIONS MADE AND HOWEVER, SET ASIDE THE ISSUE OF ADDITION IN RESPECT OF CLOSING STOCK FO R RECONSIDERATION. IT WAS ALSO DIRECTED THAT CLOSING STO CK TO BE TAKEN BY CONSIDERING THE FIGURES OF OPENING STOCK ON INCORPORATING THE PURCHASE AND SALE MADE UP TO THE DATE O F SEARCH. IN COMPLIANCE THERETO, THE ASSESSING OFFICER (IN SHORT A.O.) COMPLETED THE ASSESSMENT IN THE SET ASI DE PROCEEDINGS VIDE ORDER DATED 31.3.2015. THEREBY, TH E A.O. DREW THE TRADING ACCOUNT. THE OPENING STOCK FIGURE W AS TAKEN AS DIRECTED BY THE TRIBUNAL, SALES AND PURCHASES WERE INCORPORATED AND G.P. (GROSS LOSS OF RS.2,47,07 2/-) WAS TAKEN AND ACCORDINGLY FIGURE OF CLOSING STOCK OF RS.65,49,852/- WAS ARRIVED AT. AS THE CLOSING STOCK F OUND DURING THE SEARCH WAS RS.85,80,563/-, THE DIFFERENCE OF [IT(SS)A NO.104 OF 2018] [SHRI DEEPAK CHOURASIA, VIDISHA] 4 RS.20,30,711/- WAS TREATED AS SUPPRESSION OF STOCK AND ADDITION WAS MADE TO THE RETURNED INCOME. FEELING AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE L D. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS, PARTL Y ALLOWED THE APPEAL. THEREBY, THE LD. CIT RE-CASTED THE TRADING ACCOUNT AND TREATED DIFFERENCE OF RS.10,87,979/ - AS UNEXPLAINED INVESTMENT. AGAINST THIS, THE ASSESSEE IS IN PRESENT APPEAL. 3. LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE PART A DDITION. HE REITERATED THE SUBMISSIONS AS MADE BEFORE THE LD. CIT(A). HE CONTENDED THAT THE GROSS PROFIT OF THE Y EAR UNDER CONSIDERATION IS HIGHER THAN THE EARLIER YEAR. H E FURTHER SUBMITTED THAT HAD THE LD. CIT(A) INCLUDED TH E GROSS PROFIT OF CURRENT YEAR, THERE WOULD NOT HAVE BE EN ANY DIFFERENCE IN STOCK. [IT(SS)A NO.104 OF 2018] [SHRI DEEPAK CHOURASIA, VIDISHA] 5 4. LD. D.R. OPPOSED THESE SUBMISSIONS AND SUBMITTED THAT IN THE YEAR UNDER CONSIDERATION, THERE WERE CERTAI N DISCREPANCIES. THEREFORE, THE LD. CIT(A) HAS RIGHTL Y NOT INCLUDED THE GROSS PROFIT RATE OF THE YEAR UNDER APPE AL. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORDS AND GONE THROUGH THE ORDER S OF THE AUTHORITIES BELOW. WE FIND THAT LD. CIT(A) IN PARAS 11 & 12 OF THE ORDER HAS DECIDED THIS ISSUE AS UNDER: [IT(SS)A NO.104 OF 2018] [SHRI DEEPAK CHOURASIA, VIDISHA] 6 [IT(SS)A NO.104 OF 2018] [SHRI DEEPAK CHOURASIA, VIDISHA] 7 6. THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A ) SHOULD HAVE INCLUDED THE GROSS PROFIT OF THE YEAR UND ER APPEAL FOR WORKING OUT THE AVERAGE. WE FIND THAT LD. CI T(A) HAS TAKEN AVERAGE OF TWO YEARS I.E. FOR THE FINANCIAL YE ARS 2005-06 & 2006-07. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THERE IS A HIGHER GROSS PROFIT DECLARED IN T HE YEAR UNDER CONSIDERATION. EXCLUSION OF THE YEAR UNDER APPE AL HAS RESULTED INTO A LOWER GROSS PROFIT. THE LD. CIT( A) WHILE MAKING ESTIMATION ON THE AVERAGE BASIS OUGHT TO HAVE INCLUDED THE YEAR UNDER CONSIDERATION. THEREFORE, W E SET ASIDE THE FINDING OF THE LD. CIT(A) AND DIRECT THE A. O. TO INCLUDE GROSS PROFIT OF THE FINANCIAL YEARS 2008-09, 2 007- 08, 2006-07 & 2005-06 FOR WORKING OUT THE AVERAGE GRO SS PROFIT AND RE-COMPUTE THE DISALLOWANCE ACCORDINGLY. TH IS GROUND OF THE ASSESSEES APPEAL IS ALLOWED IN TERMS INDICATED ABOVE. [IT(SS)A NO.104 OF 2018] [SHRI DEEPAK CHOURASIA, VIDISHA] 8 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE FOR THE A.Y. 2009-10 IS ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 07 . 02.2020. SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBER JUDICIAL MEMBER INDORE; DATED : 07/02/2020 VG/SPS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE