Sri Gopal Singal, Ambala Cantt. V. ACIT, Ambala

ITSSA 64/CHANDI/2002

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7548 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 year(s) 10 month(s) 17 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 11-05-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 07-05-2012
• Assessment Year: misc
• Appeal Filed On: 24-06-2002
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Assessee Lawyers: ATUL GANDHI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI H.L. KARWA, V.P. AND SHRI T.R. SOOD, AM IT(SS)A NO. 64 /CHD/2002 BP 1.4.1986 TO 31.10.199 6 SHRI GOPAL SINGHAL V. A.C.I.T. AMBALA PROP. M/S LINCO ANAJ MANDI AMBALA CANTT PAN: (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI ATUL GANDHI RESPONDENT BY: SHRI N.K. SAINI DATE OF HEARING: 07.05.2012 DATE OF PRONOUNCEMENT: 11.05.2012 ORDER PER T.R. SOOD, A.M IN THIS APPEAL THE ASSESSEE HAS RAISED THE ADDITIO NAL GROUND AS WELL AS VARIOUS OTHER GROUNDS. 2. OUT OF WHICH ADDITIONAL GROUND AS WELL AS GROUND NOS. 1 TO 3 WERE NOT PRESSED BEFORE US, THE SAME ARE BEING DISMISSED AS NOT PRESSED. 3. GROUND NOS. 4, 5 AND 6 READS AS UNDER: 4 THAT THE ASSESSING OFFICER ERRED IN LAW AND FACT S IN SUSTAINING THE ADDITION OF RS. 87,510/- AS PER PARA 8(I) WHICH HAS BEEN DONE ARBITRARILY AND AFTER DISREGARDING THE EXPLANATIONS OF THE ASSESSEE . 5. THAT THE ASSESSING OFFICER ERRED IN LAW AND FACT S IN MAKING AN ADDITION OF RS. 1,98,266/- ON ACCOUNT OF ALLEGED PURCHASES AND ALLEGED SALES OUT OF THE BOOKS OF ACCOUNT. 6. THAT THE ASSESSING OFFICER ERRED IN LAW AND FACT S IN MAKING AN ADDITION OF RS. 1,94,330/- AS PER PARA 8(II) WHICH HAS BEEN MADE ON THE BASIS OF SUPPOSITIONS AND SURMISES AND WITHOUT ANY BASIS AND IS IN DISREGARD TO THE EXPLANATIONS GIVEN AT THE TIME OF ASSESSMENT. 4. AFTER HEARING BOTH THE PARTIES WE FIND THAT THE ORIGINALLY THIS APPEAL HAS BEEN ADJUDICATED BY THE TRIBUNAL AND DECIDED VIDE O RDER DATED 16.6.2000 AGAINST WHICH THE ASSESSEE HAD MOVED THE HIGH COURT . THE HON'BLE HIGH COURT HAD CONFIRMED A FEW ADDITIONS AND SOME OF THE ISSUE HAS BEEN REMANDED 2 IN VIEW OF PARA 14 & 15 OF THE ORDER OF THE HON'BLE HIGH COURT. RELEVANT PARAS READ AS UNDER: 14. REGARDING THE ISSUE RELATING TO STOCK VALUATIO N, IT WAS NOTICED BY THE TRIBUNAL THAT THE MATTER REQUIRED TO BE LOOKED INTO AFRESH BY THE ASSESSING OFFICER SINCE THE BOOKS OF ACCOUNT HAD BE EN REJECTED IN TERMS OF SECTION 145(2) OF THE ACT. 15. LD. COUNSEL FOR THE REVENUE HAS POINTED OUT THA T AFTER THE REMAND, THE ASSESSING OFFICER HAD ALLOWED CERTAIN BENEFITS TO THE ASSESSEE AND TO THE EXTENT OF ADDITIONS MADE THE ASSESSEE HAD AL READY FILED AN APPEAL. IN VIEW OF THE AFORESAID, QUESTIONS NO. (I II) AND (IV) REGARDING STOCK VALUATION DOES NOT ARISE FOR CONSIDERATION. 5. AFTER HEARING BOTH THE PARTIES WE FIND THAT SEAR CH WAS CONDUCTED IN THE PREMISES OF THE ASSESSEE AND ULTIMATELY BOOKS OF AC COUNT WERE REJECTED BECAUSE OF VARIOUS DISCREPANCIES FOUND IN THE BOOKS OF ACCOUNT. IN VIEW OF THE REJECTION OF BOOKS CERTAIN ADDITIONS HAVE BEEN MADE . THE FIRST ADDITION AMOUNTING TO RS. 2,90,442/- WAS MADE BECAUSE IN HEA D OFFICE AT AMBALA TOTAL STOCK FOUND WAS VALUED AT RS. 27,25,084/- WHEREAS S TOCK IN THE BOOKS WAS RS. 21,37,229/-. THE RECONCILIATION WAS FILED BY WHICH DIFFERENCE CAME ONLY AT RS. 31,873/-. THE MAIN POINT OF DIFFERENCE WAS REGARDI NG PURCHASE BILLS AMOUNTING TO RS. 2,02,932/- WHICH WERE RECEIVED AFTER THE SEA RCH. AFTER TAKING OBSERVATIONS OF THE TRIBUNAL AND VERIFICATION OF TH E RECORDS, THIS SUM OF RS. 2,02,932/- WAS REDUCED FROM THE DIFFERENCE AND THE ADDITION OF RS. 2,90,442/- WAS REDUCED TO RS. 87,510/-. THE SECOND ADDITION I S ON ACCOUNT OF DIFFERENCE IN PATIALA BRANCH. HERE ALSO THE STOCK WAS IN EXCE SS. IT WAS POINTED OUT THAT ADDITION HAS BEEN MADE BY WORKING ON THE MONTHLY TR ADING ACCOUNT WHICH IS NOT PERMISSIBLE. THE DIFFERENCE WAS ACTUALLY 1,01,185/ - WHICH WAS ULTIMATELY RECONCILED TO RS. 8820/. HOWEVER, THE ASSESSING OF FICER AGAIN WORKED OUT THE MONTHLY TRADING ACCOUNT AND REPEATED ADDITION OF RS . 1,98,266/-. THIRD ADDITION IS ON ACCOUNT OF DIFFERENCE IN CHANDIGARH BRANCH AC COUNTS BASED ON EXCESS STOCK FOUND. HERE ALSO IT WAS POINTED OUT THAT CER TAIN BILLS HAVE BEEN RAISED IN THE NAME OF RANBAXY LTD. BUT THE GOODS WERE NOT DIS PATCHED. SINCE NO EVIDENCE WAS FIELD REGARDING THE SAME, THE ADDITION OF RS. 1,93,430/- WAS MADE. THE ASSESSEE HAS CHALLENGED THE ADDITIONS BE FORE US. 6. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE ASSESSEE HAD FILED REVISED TRADING ACCOUNT IN RESPECT OF HE AD OFFICE AND AFTER ALL THE ADJUSTMENTS THE DIFFERENCE WOULD BE NEGLIGIBLE. IT WAS POINTED OUT THAT TRADING DISCOUNT GIVEN TO VARIOUS PARTIES WAS NOT CONSIDERE D. SIMILARLY IN CASE OF DIFFERENCE IN PATIALA BRANCH WAS FOUND DURING SURVE Y ONLY AT RS. 1,01,185/-. HERE ALSO NO RELIEF WAS GIVEN IN RESPECT OF TRADING DISCOUNT GIVEN BY THE ASSESSEE. SIMILAR ARGUMENTS WERE MADE IN RESPECT O F CHANDIGARH BRANCH. 3 THEREAFTER THE LD. COUNSEL FOR THE ASSESSEE REFERRE D TO PAGE 3 OF THE PAPER BOOK AND POINTED OUT THAT GP RATIO IN RESPECT OF HEAD O FFICE AS WELL AS PATIALA AND CHANDIGARH OFFICES WAS MUCH BETTER IN THE CURRENT Y EAR THAN THE PREVIOUS YEAR THEREFORE, NO ADDITION SHOULD HAVE BEEN MADE. 7. ON THE OTHER HAND, LD. DR FOR THE REVENUE STRONG LY RELIED ON THE ORDER OF ASSESSING OFFICER AND SUBMITTED THAT THE ADDITIONS HAVE BEEN MADE ON THE BASIS OF ACTUAL STOCK FOUND AND THEREFORE, THE SA ME ARE JUSTIFIED. 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT BASICALLY THE ADDITIONS HAVE BEEN MADE ON ESTIMATE BASIS BECAUSE OF THE DIFFERENCE IN VALUATION OF CLOSING STOCK. THE ASSESSING OFFICER HAS NOT POINTED OUT ANY SHORT FALL IN THE QUANTITIES SHOWN BY THE ASSESSEE. HOWE VER, AT THE SAME TIME THE ASSESSEE HAS ALSO NOT SHOWN ANY EVIDENCE REGARDING GOODS NOT DISPATCHED TO RANBAXY LTD. AND IT IS ADMITTED THAT CERTAIN ITEMS REMAIN UN-RECONCILED. THERE IS NO DOUBT THAT GP RATE IS BETTER THAN THE EARLIER YEARS IN THE CURRENT YEAR. THEREFORE, CONSIDERING THE OVERALL CIRCUMSTANCES A ND THE FACTS THAT IT IS OLD MATTER, WE PROPOSE THAT ENDS OF JUSTICE WOULD MEET IF OVERALL ADDITION OF RS. 2,40,000/- WAS MADE TO THE UNDISCLOSED INCOME OF THE ASSESSEE. THIS PROPOSAL WAS ACCEPTED BY THE LD. COUNSEL FOR THE AS SESSEE AND HE AGREED FOR THE ADDITION OF RS. 2,40,000/-. ACCORDINGLY WE SET ASIDE THE ORDER OF THE ASSESSING OFFICER AND DIRECT HIM TO MAKE ADDITION O F RS. 2,40,000/- ON ACCOUNT OF DIFFERENCE IN STOCK AT HEAD OFFICE AS WELL AS B RANCH OFFICES. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS P ARTLY ALLOWED. ORDER PRONOUNCED ON 11 .05.2012 SD/- SD/- (H.L. KARWA) (T.R. SOOD) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 11 .05.2012 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/ THE DR 4