M/s. R A Shaikh Paper Mills Pvt.Ltd., Valsad V. The Dy.CIT.,Cent.Circle-3, Surat

ITSSA 607/AHD/2012

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2338 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 05-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 02-08-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 13-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R I PATEL
• Assessee Lawyers: M K PATEL
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) IT(SS)A. NO: 607/AHD/2012 (ASSESSMENT YEAR: 2010-11) M/S. R A SHAIKH PAPER MILLS PRIVATE LTD. PLOT NO. 185, 2 ND PHASE, GIDC, GIDC, VAPI-396195 V/S DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE- 3, SURAT (APPELLANT) (RESPONDENT) PAN: AABCR1454K APPELLANT BY : SHRI M.K. PATEL, AR RESPONDENT BY : SHRI R.I. PATEL, CIT/ D.R. ( )/ ORDER DATE OF HEARING : 02 -08-201 6 DATE OF PRONOUNCEMENT : 05-08-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE LD. CIT(A)-II, AHMEDABAD DATED 23.10.2012 PERTAINING TO A.Y. 2010-11. IT(SS)A NO. 607/AHD/2012 . A.Y. 2010-11 2 2. THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO THE A DDITION OF RS. 16,97,205/- ON ACCOUNT OF EXCESS STOCK OF FINISHED GOODS FOUND DURING THE COURSE OF SEARCH. 3. HAVING HEARD THE RIVAL SUBMISSIONS, WE HAVE CAREFUL LY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. 4. FACTS OF THE CASE ARE THAT A SEARCH ACTION U/S. 132 OF THE ACT WAS CARRIED OUT ON 16.07.2009 IN THE CASE OF N.R. AGARW AL GROUP AND OTHERS. ASSESSEE WAS ONE OF THE SUB-GROUP COVERED I N THE SEARCH ACTION. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF KRAFT PAPER. 5. DURING THE COURSE OF THE SEARCH OPERATION, THE MANA GING DIRECTOR OF THE ASSESSEE COMPANY SHRI ABBAS NABI SHAIKH ADMITTE D UNDISCLOSED INCOME OF RS. 35,00,000/- ON ACCOUNT OF EXCESS STOC K AND RS. 36,000/- ON ACCOUNT OF UNRECORDED PROFIT ON SALE OF SCRAP. 6. WHILE SCRUTINIZING THE RETURN OF INCOME, THE A.O. F OUND THAT THE ASSESSEE HAS INCLUDED THE AMOUNT OF RS. 35,00,000/- IN ITS NET PROFIT. 7. HOWEVER, TAKING A LEAF OUT OF THE INVENTORY OF PHYS ICAL STOCK TAKEN AT THE TIME OF SEARCH AND COMPARING THE SAME WITH FINI SHED STOCK FOUND AS PER THE BOOKS OF ACCOUNTS, THE A.O. FOUND THAT T HERE WAS A DIFFERENCE OF RS. 16.97 LACS. THE A.O. ADDED THE SA ME AS EXCESS FINISHED GOODS. 8. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. IT(SS)A NO. 607/AHD/2012 . A.Y. 2010-11 3 9. ONCE THE A.O. HAS ADMITTED THAT THE ASSESSE E HAS OFFERED THE UNDISCLOSED INCOME OF RS. 35,00,000/- IN ITS RETURN OF INCOME AND HAS ALSO ADMITTED THAT THE VOLUNTARY DISCLOSURE WAS ON ACCOUNT OF EXCESS STOCK, WE DO NOT FIND ANY REASON FOR MAKING THE IMP UGNED ADDITIONS. ONCE AGAIN ON ACCOUNT OF EXCESS STOCK SINCE THE SAM E HAS BEEN VOLUNTARILY SURRENDERED AT THE TIME OF SEARCH ITSEL F AND HAVE BEEN OFFERED FOR TAXATION. 10. WE, ACCORDINGLY, SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE A.O. TO DELETE THE ADDITION OF RS. 16,97 ,205/-. 11. APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 05 - 08- 20 16. SD/- SD/- (R.P. TOLANI) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD