ACIT,C.C., Dhanbad V. M/S Jagat Jagdamba Flour Pvt. Ltd, Dhanbad

ITSSA 140/RAN/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6363 (ITAT-RANCHI)
• Duration Of Justice: 9 month(s) 5 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 10-09-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 05-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: INDRAJIT SINGH
• Assessee Lawyers: R R MITTAL
• Keywords: Search and seizure; Document seized; Question of law; Reason to believe; Documents seized
• Section: 64; 48; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI E-COURTAT KOLKATA BEFORE SHRI S.S, GODARA, JM & DR. A.L. SAINI, AM IT(SS)A. NO.140/RAN/2019 (ASSESSMENT YEAR: 2014-15) ACIT, CENTRAL CIRCLE, DHANBAD VS. M/S JAGAT JAGDAMBA FLOUR PVT. LTD. VILL- KRISHANPURA, BALUKARAM, KISHANPURA, BIHAR 844113. ./ ./PAN/GIR NO. : AABCJ9866F ( /APPELLANT ) .. ( / RESPONDENT ) APPELLANT BY : SHRI INDRAJIT SINGH, CIT, DR RESPONDENT BY : SHRI R. R. MITTAL, AR / DATE OF HEARING : 22/07/2020 /DATE OF PRONOUNCEMENT : 10/09/2020 / O R D E R PER BENCH: THE CAPTIONED APPEAL FILED BY THE REVENUE, PERTAINING TO ASSESSMENT YEAR 2014-15, IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX(APPEALS)-3, PATNA, DATED 16.09.2019, WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY ASSESSING OFFICER U/S 153A/143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS FOLLOWS: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 4,71,19,148/- ON ACCOUNT OF UNDISCLOSED PROFIT- (I) BY OVERLOOKING THE FACT THAT ALTHOUGH THERE IS DIFFERENCE IN QUANTITY IN TWO PURCHASE REGISTERS (DUE TO TYPOGRAPHICAL MISTAKE AS CLAIMED BY THE ASSESSEE) BUT THE VALUE OF THE GOODS REMAINS SAME WHICH HAS NO EFFECT ON THE VALUATION OF CLOSING STOCK OF RAW MATERIAL AND FURTHER THAT IF THE QUANTITY OF RAW MATERIALS DIFFERS, THE VALUES OF OTHER CLOSING STOCK SHOULD ALSO DIFFER WHICH HAS NOT HAPPENED IN THIS CASE; (II) BY ACCEPTING THE SUBMISSION OF THE ASSESSEE WITHOUT DUE APPLICATION OF MIND AND VERIFICATION OF THE DETAILS FURNISHED BY THE ASSESSEE AND. (III) BY DISREGARDING THE FACT THAT THE IMPUGNED ADDITION WAS MADE BY THE A.O. ON THE BASIS OF SEIZED MATERIALS / DOCUMENTS AS WELL AS THE CONFESSIONAL STATEMENT U/S 132(4) MADE BY THE DIRECTOR OF THE COMPANY DURING THE COURSE OF SEARCH AND SEIZURE OPERATION IT(SS)A. NO.140/RAN/2019 M/S JAGAT JAGDAMBA FLOUR PVT. LTD. 2 VOLUNTARY ADMITTING UNDISCLOSED PROFIT OF RS. 4,71,19,148/- AND AGREEING TO PAY TAX THEREON. 2. THAT THE APPLICANT CRAVES LEAVE TO ADD, ALTER, DELETE, MODIFY THE GROUNDS OF APPEAL BEFORE THE HON'BLE ITAT. 3. BRIEF FACTS QUA THE ISSUE ARE THAT DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER GONE THROUGH THE SEIZED MATERIAL MARKED AS JJFL-12, WHICH WAS IMPOUNDED FROM THE FACTORY PREMISES OF M/S JAGAT JAGDAMBA FLOUR MILLS PVT. LTD, AND NOTICED THAT THE PAGE NO.86-87 OF THE SAID DOCUMENT IS THE PROFIT AND LOSS ACCOUNT FOR THE PERIOD 01.04.2013 TO 31.03.2014. NET PROFIT SHOWN IN THE SAID PROFIT AND LOSS ACCOUNT WAS RS.4,71,19,198/- WHEREAS ASSESSEE SHOWN NET LOSS OF RS.12,22,303/- IN ITS PROFIT AND LOSS ACCOUNT SUBMITTED ALONG WITH RETURN OF INCOME. THE ASSESSEE WAS ASKED TO EXPLAIN THE DIFFERENCE BETWEEN NET PROFIT SHOWN IN SEIZED MATERIAL MARKED AS JJFL-12 AND NET PROFIT SHOWN IN THE RETURN OF INCOME, AS NOTED ABOVE. IN RESPONSE, THE ASSESSEE SUBMITTED WRITTEN SUBMISSIONS BEFORE THE ASSESSING OFFICER, WHICH IS REPRODUCED BELOW: IN RESPONSE TO YOUR LETTER NO.ACIT/DD/DHN/JAGDAMBA GROUP/2016-17/744 DATED 09.12.2016 WHEREIN YOUR GOODSELF HAS DESIRED TO KNOW OUR COMMENTS ON PAGE NUMBER 86 & 87 OF THE LOOSE SHEETS MARKED AS JJFL-12, ACCORDINGLY WE SUBMIT OUR COMMENTS AS FOLLOWS: PLEASE REFER THE SEIZED TALLY DATA OF M/S JAGAT JAGDAMBA FLOUR MILLS PVT LTD. FROM WHERE THE PROFIT & LOSS ACCOUNT WAS PRINTED BY THE SEARCH TEAM MARKED AS PAGE NUMBER 86 & 87 WHEREIN THE NET PROFIT FOR THE PERIOD 01.04.2013 TO 31.03.2014 IS STATED AS RS.4,71,19,198.42. IN THE ABOVE SEIZED DATA YOUR HONOUR WILL KINDLY APPRECIATE THAT THE COMPUTER OPERATOR HAD COMMITTED THE FOLLOWING ERRORS IN THE PURCHASE REGISTER:- 1. ON 18.04.2013, 182.79 QL. QUANTITY OF WHEAT @RS.1,499.96 AMOUNTING TO RS.2,74,177.69 VIDE HAT PURCHASE BILL NO.48 WAS PURCHASED FROM KANHAI KUMAR FARMER AND OTHERS (COPY OF HAT PURCHASE BILL ENCLOSED). AT THE TIME OF DATA PUNCHING; THE OPERATOR HAD WRONGLY PUNCHED ONLY THE VALUE OF WHEAT PURCHASED AND OMITTED THE PUNCHING OF QUANTITY PURCHASED. THUS, THOUGH THE VALUE I.E. RS.2,74,177.69 WAS REFLECTED IN THE PURCHASE REGISTER THE QUANTITY OF 182.79 WAS NOT REFLECTED. (DETAILS GIVEN VIDE ANNEXURE-B). 2. ON 18.04.2013, 190.82 QL. QUANTITY OF WHEAT @ RS.1,500.03 AMOUNTING TO RS.2,86,235.00 VIDE HAT PURCHASE BILL NO.49 WAS PURCHASED FROM M/S. RABI TRADING & OTHERS (COPY OF HAT PURCHASE BILL ENCLOSED). AT THE TIME OF DATA PUNCHING; THE OPERATOR HAD WRONGLY PUNCHED ONLY THE VALUE OF WHEAT PURCHASED AND OMITTED THE PUNCHING OF QUANTITY PURCHASED. THUS, THOUGH THE VALUE I.E. RS.2,74,177.69 WAS REFLECTED IN THE PURCHASE REGISTER THE QUANTITY OF 190.82 WAS NOT REFLECTED. (DETAILS GIVEN VIDE ANNEXURE-B). 3. ON 09.09.2013, 160.55 QL. QUANTITY OF WHEAT @ RS.1868.54 AMOUNTING TO RS.3,00,000.00 VIDE HAT PURCHASE BILL NO.644 WAS PURCHASED FROM ANAND KUMAR & OTHERS (COPY OF HAT PURCHASE IT(SS)A. NO.140/RAN/2019 M/S JAGAT JAGDAMBA FLOUR PVT. LTD. 3 BILL ENCLOSED). AT THE TIME OF DATA PUNCHING; THE OPERATOR HAD WRONGLY PUNCHED 1868.54 QL. OF WHEAT @160.55 INSTEAD OF 160.55 QL. OF WHEAT @1,868.54 (DETAILS GIVEN VIDE ANNEXURE-B). 4. ON 22.09.2013, 140.45 QL. QUANTITY OF WHEAT @RS.1779.99 AMOUNTING TO RS.2,50,000.00 VIDE HAT PURCHASE BILL NO.731 WAS PURCHASED FROM DEEPAK BHAGAT & OTHERS (COPY OF HAT PURCHASE BILL ENCLOSED). AT THE TIME OF DATA PUNCHING; THE OPERATOR HAD WRONGLY PUNCHED 14,045.00 QL. OF WHEAT INSTEAD OF 140.45 QL. WHEREIN THE TOTAL VALUE PURCHASED WAS PUNCHED AS RS.2,50,000. (DETAILS GIVEN VIDE ANNEXURE-B). 5. ON 22.01.2014, 205.41 QL. QUANTITY OF WHEAT @RS.1849.96 AMOUNTING TO RS.3,80,000.00 VIDE HAT PURCHASE BILL NO.1227 WAS PURCHASED FROM SHARDA NITIN & OTHERS (COPY OF HAT PURCHASE BILL ENCLOSED). AT THE TIME OF DATA PUNCHING; THE OPERATOR HAD WRONGLY PUNCHED 20,541.00 QL. OF WHEAT INSTEAD OF 205.41, WHEREIN THE TOTAL VALUE PURCHASED WAS PUNCHED AS RS.3,80,000. (DETAILS GIVEN VIDE ANNEXURE-B). FROM THE ABOVE FACTS, YOUR HONOUR WILL KINDLY APPRECIATE THAT DUE TO ABOVE PUNCHING MISTAKES OF THE DATA OPERATOR THE TOTAL QUANTITY OF WHEAT PURCHASE AS ON 31.03.2014 WAS WRONGLY REFLECTED AS 3,24,893.95 QLS. IN PLACE OF ACTUAL QUANTITY OF 2,89,319.43 QLS (CALCULATION ENCLOSED VIDE ANNEXURE C). SIMILARLY, THE CLOSING VALUE OF WHEAT WAS WRONGLY REFLECTED AS RS.7,80,45,414.25 INSTEAD OF ACTUAL CLOSING VALUE OF WHEAT WHICH COMES TO RS.2,64,90,186.62 (COPY OF STOCK SUMMARY MISTAKE THE PROFIT FIGURE OF RS.4,71,19,198.42 IS CONVERTED INTO LOSS OF RS.44,76,026.21 (RS.5,15,95,227.63 RS.4,71,19,198.42). (COPY OF P/L ACCOUNT ENCLOSED). IN VIEW OF WHAT IS EXPLAINED ABOVE, YOU WILL KINDLY APPRECIATE THAT DUE TO CLERICAL MISTAKE OF DATA OPERATOR THE MISTAKE HAS OCCURRED. THUS, WE HUMBLY REQUEST YOU IN THE INTEREST OF JUSTICE, NOT TO MAKE ANY ADDITION ON THE ABOVE ISSUE. 4. THE ASSESSING OFFICER HAD GONE THROUGH THE WRITTEN SUBMISSIONS OF THE ASSESSEE AND HELD THAT IN THE STATEMENT RECORDED IN REPLY TO QUESTION NO.19 WHEREIN IT WAS MENTIONED THAT THE ACTUAL PROFIT DETECTED DURING SEARCH WAS RS.4,71,19,198 FOR F.Y 2013-14 IN M/S JAGAT JAGDAMBA FLOUR MILL PVT. LTD AND THE ASSESSEE HAD AGREED TO PAY TAXES UPON THE ABOVE FINDING BEING UNDISCLOSED INCOME. IN REPLY TO QUESTION NO.28 THE ASSESSEE HAS CONFIRMED THAT HE HAS DISCLOSED AN AMOUNT OF RS.4,71,19,198 ON ACCOUNT OF UNDISCLOSED PROFIT AND AGREED TO PAY TAXES. THE ASSESSEE HAD NOT MADE ANY CLARIFICATION OR SUBMISSION REGARDING THE ERRORS MADE BY THE COMPUTER OPERATOR IN THE PURCHASE REGISTER EITHER AT THE TIME OF RECORDING THE STATEMENT OR DURING THE POST SEARCH INVESTIGATION WHEN THE ASSESSEE WAS PROVIDED WITH XEROX COPIES OF ALL THE SEIZED MATERIAL. THEREFORE, AO MADE ADDITION TO THE TUNE OF RS.4,71,19,198/-. 5.. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER OBSERVING THE FOLLOWING: 3.3 APPELLATE FINDING AND DECISION: IT(SS)A. NO.140/RAN/2019 M/S JAGAT JAGDAMBA FLOUR PVT. LTD. 4 I HAVE CAREFULLY CONSIDERED THE FINDINGS OF THE AO IN THE ASSESSMENT ORDER, SUBMISSION OF THE APPELLANT AND ALSO PERUSED THE COPIES SEIZED MATERIAL. AT THE OUTSET THE APPELLANT AS PART OF HIS LEGAL SUBMISSION RELATING TO ASSESSMENT OF SEARCH CASES U/S.153A CONTENDED THAT AS NO INCRIMINATING MATERIAL WAS FOUND DURING SEARCH, NO ADDITION IS CALLED FOR U/S.153A. IN SUPPORT OF THE SAME THE APPELLANT RELIED ON THE LEADING DECISIONS IN THE CASE OF CIT VS. CONTINENTAL WAREHOUSING CORPN. LTD., 374 ITR 645 AND CIT VS. KABULCHAWLA 380 ITR 573 AND SEVERAL OTHER PLETHORA OF DECISIONS. THE CONTENTION OF THE APPELLANT HAS BEEN CONSIDERED. THERE ARE DICHOTOMOUS DECISIONS ON THIS ISSUE. ONE SET OF LEADING DECISIONS IN THE CASE OF CIT VS. CONTINENTAL WAREHOUSING CORPN. LTD., 374 ITR 645 AND CIT VS. KABUL CHAWLA 380 ITR 573 HELD THAT NO ADDITION CAN BE MADE IN AN UNABATED ASSESSMENT IN ABSENCE OF ANY INCRIMINATING MATERIAL FOUND AS A RESULT OF SEARCH. THE OTHER SET OF LEADING DECISIONS IN THE CASE OF CIT VS. ANIL KUMAR BHATIA [2013] 352 ITR 493, E. N. GOPAKUMAR VS CIT [2017] 390 ITR 131, CIT VS RAJ KUMAR ARORA [2014] 367ITR 517 AND DR. A.V. SREEKUMAR VS. CIT [2018] 404 ITR 642 HELD THAT ADDITIONS CAN BE MADE IN AN UNABATED ASSESSMENTS EVEN THOUGH NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. MOREOVER, THE DEPARTMENT HAS CHALLENGED THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD [2015] 58TAXMANN.COM 78 BY WAY OF SLP AND THE HON'BLE APEX COURT ADMITTED THE SLP AS REPORTED IN [2015] 64 TAXMANN.COM 34 (SC). HENCE THE QUESTION OF LAW ON THIS ISSUE IS STILL PENDING AND SUB-JUDICE. 3.3.2 HOWEVER, ON A CAREFUL READING OF THESE SETS OF DICHOTOMOUS DECISIONS, I AM OF THE CONSIDERED VIEW THAT THERE IS NO DISPUTE WITH REGARD TO ABATED ASSESSMENTS. THE SOLE DISPUTE IS WITH REGARD TO THE SOURCE AND THE QUALITY/CREDIBILITY OF MATERIAL REQUIRED FOR TAMPERING WITH UNABATED ASSESSMENTS. AS LONG AS THERE IS A MATERIAL FOUND DURING THE COURSE OF SEARCH THERE IS NO DISPUTE TO TAMPER THE UNABATED ASSESSMENT. FURTHER ON A CAREFUL READING OF CASE LAWS CITED (SUPRA), I AM OF THE VIEW THAT ANY OTHER MATERIAL IN THE POSSESSION OF THE AO AND HE HAS REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT IS CAPABLE OF TAMPERING THE UNABATED ASSESSMENT. THE NATURE AND CREDIBILITY OF INFORMATION IN THE POSSESSION OF ASSESSING OFFICER CAN EITHER BE IN THE FORM CAG REPORT, TAX EVASION PETITION (TEP), INVESTIGATION REPORT RECEIVED FROM THE DGIT (INV.), REPORTS OF OTHER LAW ENFORCING AGENCIES SUCH AS ENFORCEMENT DIRECTORATE, CBI, DRI, RBI, SEBI, GST ETC., ETC., OR WHERE ITR RAISES MORE QUESTIONS THAN SATISFYING THE QUERIES ALREADY RAISED. TO ASSUME JURISDICTION IN THESE TYPE OF CASES THE AO IS SAVED FROM THE FETTERS IMPOSED BY THE STRICT PROCEDURE OF SECTIONS 147, 148 AND 149 AS SECTION 153A(1) OPENS WITH NON OBSTANTE CLAUSE. AT THE SAME TIME THE AO IS NOT ALLOWED TO TAMPER THE UNABATED ASSESSMENT FOR MAKING ROWING ENQUIRIES OR FOR MAKING AD-HOC DISALLOWANCES/ADDITIONS BASED ON SURMISE AND CONJECTURE. IN NUTSHELL THE SOURCE, QUALITY AND CREDIBILITY OF MATERIAL EMPOWERS THE AO TO TAMPER THE UNABATED ASSESSMENT. 3.3.3 HOWEVER, WITHOUT PREJUDICE TO THE ABOVE LEGAL SUBMISSION, THE UNDISPUTED FACTS IN THE CASE OF APPELLANT ARE THAT A SEARCH AND SEIZURE OPERATION U/S 132(1) OF THE INCOME TAX ACT, 1961 WAS CONDUCTED ON 03.09.2014 WHEREIN VARIOUS INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED AND IN PARTICULAR DOCUMENT MARKED AS JJFL-12. FURTHER, IN THE STATEMENT RECORDED U/S.132(4) THE DIRECTOR OF THE APPELLANT COMPANY ADMITTED TO THE UNDISCLOSED INCOME TO THE TUNE OF RS.4,71,19,198/-. IN VIEW OF THESE UNDISPUTED FACTS, THE CONTENTION OF THE APPELLANT THAT NO INCRIMINATING MATERIAL FOUND DURING THE SEARCH IS BASELESS AND UNFOUNDED. FURTHER, THE CONTENTION OF THE APPELLANT THAT THE ASSESSMENT YEAR UNDER APPEAL IS AN UNABATED ASSESSMENT IS ALSO FACTUALLY INCORRECT FOR THE SIMPLE REASON THAT THE APPELLANT HAS NOT FILED ITS REGULAR RETURN U/S.139(1) AS THE DUE DATE HAS NOT EXPIRED AND MORE SO THERE IS TIME AVAILABLE FOR ISSUANCE OF NOTICE U/S.143(2)EVEN IF THE RETURN WAS FILED BEFORE THE DE DATE. ACCORDINGLY, THE SUBMISSIONS OF THE APPELLANT ON THESE ISSUES ARE HEREBY REJECTED. IT(SS)A. NO.140/RAN/2019 M/S JAGAT JAGDAMBA FLOUR PVT. LTD. 5 3.3.4 NOW COMING TO THE MERITS OF THE ISSUE, THE UNDISPUTED FACT IS THAT DURING THE COURSE OF SEARCH, THE SEARCH TEAM TOOK THE PRINTOUT OF COMPUTER DATA ALONG WITH ACCOUNTS MAINTAINED IN TALLY ACCOUNTING PACKAGE AT THE FACTORY PREMISES OF M/S JAGAT JAGDAMBA FLOUR MILLS PVT. LTD. DURING THE COURSE OF ASSESSMENT PROCEEDING, THE AO ON PERUSAL OF PAGE NO.86 & 87 OF SEIZED MATERIAL MARKED AS JJFL-12 NOTED THAT THESE PAGES CONTAINED PROFIT & LOSS A/C OF THE APPELLANT FOR THE PERIOD 01.04.2013 TO 31.03.2014. ACCORDING TO THE SEIZED PAPERS (PAGE NO.86 & 87 OF JJFL-12), THE NET PROFIT SHOWN WAS RS.4,71,19,198/- WHEREAS THE APPELLANT IN ITS P&L A/C. FILED WITH THE RETURN OF INCOME SHOWN NET LOSS OF RS.12,22,303/-. ACCORDINGLY, THE AO SHOW-CAUSED THE ASSESSEE TO EXPLAIN THE DISCREPANCY. IN REPLY, THE ASSESSEE EXPLAINED WITH DOCUMENTARY EVIDENCES THAT THE DISCREPANCY WAS DUE TO TYPOGRAPHICAL MISTAKES COMMITTED BY THE COMPUTER OPERATOR WHILE POSTING THE ENTRIES IN PURCHASE REGISTER, WHEREIN THE DATA ENTRY OPERATOR EITHER OMITTED TO ENTER THE QUANTITY OF WHEAT PURCHASED OR ENTERED WRONG QUANTITY. ACCORDINGLY, THE APPELLANT SUBMITTED BEFORE THE AO THAT, DUE TO THESE TYPOGRAPHICAL / CLERICAL MISTAKES THE TOTAL QUANTITY OF WHEAT PURCHASED AS ON 31.03.2014 WAS REFLECTED AT 3,24,893.95 QUINTALS IN PLACE OF ACTUAL PURCHASES OF 2,89,319.43 QUINTALS. THE APPELLANT FURTHER SUBMITTED THAT THIS MISTAKE RESULTED IN CLOSING STOCK OF WHEAT AT RS.7,80,85,414.25 AS AGAINST THE ACTUAL CLOSING STOCK OF RS.2,65,06,108.35 WHEREBY THE PROFIT WAS OVERSTATED BY RS.5,15,79,306/-.HOWEVER, THE AO ON PERUSAL AND COMPARISON OF VARIOUS FIGURES OF OPENINGS STOCK OF RAW MATERIALS & FINISHED GOODS, SALES, PACKING MATERIAL AND VARIOUS OTHER EXPENSES ETC. VIS-A VIS SEIZED DOCUMENTS AND AUDITED BOOKS OF ACCOUNT REJECTED THE CLAIM OF THE ASSESSEE, FURTHER, THE AO ALSO REFERRING TO THE STATEMENT GIVEN BY THE DIRECTOR OF THE APPELLANT COMPANY U/S.132(4) ADDED RS.4,71,19,198/- AS UNDISCLOSED PROFIT. 3.3.5 ON THE OTHER HAND THE APPELLANT SUBMITTED THAT A SEARCH U/S.132(1) WAS CONDUCTED ON 03.09.2014 AND THE DUE DATE FOR FILING THE RETURN FOR A.Y.2014-15 WAS NOT EXPIRED AND MOREOVER, THE ACCOUNTS WERE NOT AUDITED AS ON THE DATE OF SEARCH. THE APPELLANT BY PRODUCING COPY OF SEIZED PAGE.NO.86 & 87 OF JJFL-12 AND COPY OF AUDITED TRADING AND P&L A/C SUBMITTED THAT THE DISCREPANCY STATED BY THE AO WAS ON ACCOUNT TYPOGRAPHICAL MISTAKES COMMITTED BY THE COMPUTER OPERATOR WHILE POSTING THE ENTRIES IN PURCHASE REGISTER WITH RESPECT TO FIVE PARTIES/ INVOICES, WHEREIN THE DATA ENTRY OPERATOR EITHER OMITTED TO ENTER THE QUANTITY OF WHEAT PURCHASED OR ENTERED WRONG QUANTITY. THESE MISTAKES WERE DETECTED WHILE AUDITING AND FINALIZING THE ACCOUNTS FOR THE PURPOSE OF FILING THE RETURN. ACCORDINGLY, THE APPELLANT BY FURNISHING THE COPY OF INVOICES OF FIVE PARTIES HIGHLIGHTED THE FOLLOWING ERRORS /MISTAKES COMMITTED BY THE COMPUTER OPERATOR AS UNDER: (I) ON 18.04.2013, 182.79 QL. QUANTITY OF WHEAT @ RS 1,499.96 AMOUNTING TO RS.2,74,177.69 VIDE HAT PURCHASE BILL NO. 48 WAS PURCHASED FROM KANHAI KUMAR FARMER & OTHERS (COPY OF HAT PURCHASE BILL ENCLOSED- REFER PAPER BOOK). AT THE TIME OF DATA PUNCHING; THE OPERATOR HAD WRONGLY PUNCHED ONLY THE VALUE OF WHEAT PURCHASED AND OMITTED THE PUNCHING OF QUANTITY PURCHASED. THUS, THOUGH THE VALUE I.E. RS 2,74,177.69 WAS REFLECTED IN THE PURCHASE REGISTER THE QUANTITY OF 182.79 WAS NOT REFLECTED. (REFER PAPER BOOK) (II) ON 18.04.2013, 190.82 QI. QUANTITY OF WHEAT @ RS 1,500.03 AMOUNTING TO RS. 2,86,235.00 VIDE HAT PURCHASE BILL NO. 49 WAS PURCHASED FROM M/S RABI TRADING & OTHERS ( COPY OF HAT PURCHASE BILL ENCLOSED- REFER PAPER BOOK). AT THE TIME OF DATA PUNCHING; THE OPERATOR HAD WRONGLY PUNCHED ONLY THE VALUE OF WHEAT PURCHASED AND OMITTED THE PUNCHING OF QUANTITY PURCHASED. THUS, THOUGH THE VALUE I.E. RS 2,86,235 WAS REFLECTED IN THE PURCHASE REGISTER THE QUANTITY OF 190.82 WAS NOT REFLECTED ( REFER PAPER BOOK) IT(SS)A. NO.140/RAN/2019 M/S JAGAT JAGDAMBA FLOUR PVT. LTD. 6 (III) ON 09.09.2013, 160.55 Q1. QUANTITY OF WHEAT @ RS 1868.54 AMOUNTING TO RS 3,00,000 VIDE HAT PURCHASE BILL NO. 644 WAS PURCHASED FROM ANAND KUMAR & OTHERS ( COPY OF HAT PURCHASE BILL ENCLOSED- REFER PAPER BOOK ). AT THE TIME OF DATA PUNCHING; THE OPERATOR HAD WRONGLY PUNCHED 1868.54 QI. OF WHEAT @ 160.55 INSTEAD OF 160.55 QI. OF WHEAT @ RS 1,868.54. (REFER PAPER BOOK) (IV) ON 22.09.2013, 140.45 QI. QUANTITY OF WHEAT @ RS. 1,779.99 AMOUNTING TO RS. 2,50,000 VIDE HAT PURCHASE NO. 731 WAS PURCHASED FROM DEEPAK BHAGAT & OTHERS (COPY OF HAT PURCHASE BILL ENCLOSED-REFER PAPER BOOK). AT THE TIME OF DATA PUNCHING; THE OPERATOR HAD WRONGLY PUNCHED 14,045 QL. QUANTITY OF WHEAT INSTEAD OF 140.45 QI. WHEREIN THE TOTAL VALUE PURCHASED WAS PUNCHED AS RS 2,50,000. (REFER PAPER BOOK) (V) ON 2.01.2014, 205.41 QI. QUANTITY OF WHEAT @ RS. 1,849.96 AMOUNTING TO RS. 3,80,000 VIDE HAT PURCHASE BILL NO. 1227 WAS PURCHASED FROM SHARDA NITIN & OTHERS (COPY OF HAT PURCHASE BILL ENCLOSED-REFER PAPER BOOK). AT THE TIME OF DATA PUNCHING; THE OPERATOR HAD PUNCHED 20,541 QI. QUANTITY OF WHEAT INSTEAD OF205.41 WHEREIN THE TOTAL VALUE PURCHASED WAS PUNCHED AS RS.3,80,000. (REFER PAPER BOOK) IN VIEW OF THE ABOVE MISTAKE THE APPELLANT SUBMITTED THAT THE TOTAL QUANTITY OF WHEAT PURCHASED AS ON 31.03.2014 WAS REFLECTED AT 3,24,893.95 QUINTALS IN PLACE OF ACTUAL PURCHASES OF 2,89,329.33 QUINTALS RESULTING IN A DIFFERENCE OF 35,564.62 QUINTALS. THE APPELLANT FURTHER SUBMITTED THAT THIS MISTAKE RESULTED IN CLOSING STOCK OF WHEAT AT RS.7,80,85,414.25 AS AGAINST THE ACTUAL CLOSING STOCK OF RS.2,65,06,108.35 WHEREBY THE PROFIT WAS OVERSTATED BY RS.5,15,79,306/-. THE APPELLANT FURTHER SUBMITTED THAT, EVEN THOUGH ALL THESE DETAILS OF INVOICES WERE SUBMITTED BEFORE THE AO AND THE AO WITHOUT POINTING OUT ANY MISTAKE AND CONDUCTING FURTHER ENQUIRY HAS SIMPLY DISBELIEVED THE SAME AND SQUARELY RELYING ON THE UNSUBSTANTIATED STATEMENT RECORDED U/S.132(4) OF THE DIRECTOR OF THE APPELLANT COMPANY MADE AN ADDITION OFRS.4,71,19,198/- AS UNDISCLOSED PROFIT WHICH DESERVES TO BE DELETED. 6. AGGRIEVED BY THE ORDER OF LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 7. WE HEARD BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCUMENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLUDING THE FINDINGS OF THE LD CIT(A) AND OTHER MATERIALS BROUGHT ON RECORD. BEFORE US, LD. DR FOR THE REVENUE HAS PRIMARILY REITERATED THE STAND TAKEN BY THE ASSESSING OFFICER, WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. ON THE OTHER HAND, LD COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF LD CIT(A). WE NOTE THAT LD CIT(A) EXAMINED THE RECONCILIATION OF QUANTITY OF WHEAT AND FOUND CORRECT. EVEN DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED ALL THE INVOICES AND DOCUMENTS, THE ASSESSING OFFICER DID NOT FIND ANY MISTAKE EXCEPT TO SAY THAT EXPLANATION OF THE ASSESSEE IS NOT ACCEPTABLE. THEREFORE, THE ASSESSING OFFICER WITHOUT POINTING OUT ANY MISTAKE AND CONDUCTING FURTHER ENQUIRY HAS SIMPLY DISBELIEVED THE INVOICES AND DOCUMENTS IT(SS)A. NO.140/RAN/2019 M/S JAGAT JAGDAMBA FLOUR PVT. LTD. 7 SUBMITTED BY THE ASSESSEE. THE ASSESSING OFFICER SQUARELY RELYING ON THE UNSUBSTANTIATED STATEMENT RECORDED U/S.132(4) OF THE ACT, OF THE DIRECTOR OF THE ASSESSEE COMPANY, MADE AN ADDITION OF RS.4,71,19,198/- AS UNDISCLOSED PROFIT, WHICH IS NOT ACCEPTABLE. THAT BEING SO, WE DECLINE TO INTERFERE WITH THE ORDER OF ID. C.I T.(A) IN DELETING THE AFORESAID ADDITIONS. HIS ORDER ON THIS ADDITION IS THEREFORE, UPHELD AND THE GROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. 8. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10/09/2020. SD/- (S. S. GODARA) SD/- (A. L. SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; DATED: 10/09/2020 RS / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-ACIT, CENTRAL CIRCLE, DHANBAD 2. /RESPONDENT- M/S JAGAT JAGDAMBA FLOUR PVT. LTD. 3. / CONCERNED CIT 4. - / CIT (A) 5. , / DR, ITAT, 6. [ / GUARD FILE. // TRUE COPY// BY ORDER/ , SR. PRIVATE SECRETARY