The Dy. CIT, Circle-3, Baroda V. Shri Shankarbhai R. Patel, Borsad

MA 181/AHD/2014

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5506 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-04-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 18-11-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 31-10-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVETIA
• Keywords: Unexplained investment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I S.S. GODARA , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER THE DCIT, CIRCLE - 3, 3 RD FLOOR, AAYKAR BHAVAN, RACE COURSE CIRCLE, BARODA (APPELLANT) VS SHRI SHANKARBHAI RAMBHAI PATEL , AT & PO: KAVITHA, TA: BORSAD PAN: ADKPP8154H (RESPONDENT) REVENUE BY : S H RI ALOK KUMAR , SR. D . R. ASSESSEE BY: S H RI S.N. DIVETIA , A.R. DATE OF HEARING : 07 - 02 - 2 017 DATE OF PRONOUNCEMENT : 18 - 04 - 2 017 / ORDER P ER : AM ARJIT SINGH, ACCOUNTANT MEMBER : - THE REVENUE HAS FILED MISCELLANEOUS APPLICATION NO. 181/AHD/2014 DATED 31/10/2014 AS AGAINST ITAT ORDER ON ITA NO. 1791 OR 2055/AHD/2010 DATED 21 - 02 - 2014. THE REVENUE AS FILED THIS APPLICATION ON TWO ISSUES AS UNDER: - M.A. NO. 181/AHD/2014 (IN I T A NO . 1791 / A HD/20 10 ) A SSESSMENT YEAR 200 3 - 04 M.A. 181/AHD/2014 (IN I.T.A NO. 1791/AHD/2010) A.Y. 2003 - 04 PAGE NO DCIT VS. SH. SHANKARBHAI RAMBHAI PATEL 2 (I) ADDITION OF RS. 24,27,523/ - MADE BY THE ASSESSING OFFICER ON DIFFERENCE OF STOCK. (II) NON - ADJUDICATION OF ADDITION OF RS. 15 , 29 , 016/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SHORTAGE IN STOCK. 3. THE BRIEF FACTS STATED BY THE APPLICANT IS THAT THE ASSES SING OFFICER HAS MADE ADDITION OF RS. 24,27,523/ - ON ACCOUNT OF UNEXPLAINED INVESTMENT/EXCESS AND SHORTAGE OF STOCK. IN THIS CONNECTION, THE ITAT HAS H E LD THAT ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION OF THE ENTIRE DIFFERENCE FOUND IN TH E STOCKS A S INCOME OF THE ASSESSEE. THE ITAT HAS CONSIDER ED THAT THE ASSESSEE HAS DECLARED GROSS PROFIT @ 22.69% DURING THE YEAR UNDER CONSIDERATION, SO IT HAS RESTRICTED THE ADDITION TO THE EXTENT OF GROSS PROFIT RATIO AFTER APPLYING GROSS PROFI T @ 22.69% TO THE DIFFERENCE OF STOCK OF RS. 24,27,523/ - WHICH RESULTED IN ADDITION OF RS. 6 LACS TO THE TOTAL INCOME OF THE ASSESSEE. 4. AGAINST THIS , THE REVENUE CONTENDED IN THE MIS C . APPLICATION THAT ADDITION ON THE BASIS OF GROSS PROFIT ON ACCOU NT OF SHORTAGE OF STOCK WAS TENABLE BUT ADDITION ON THE BASIS OF GROSS PROFIT ON THE EXCESS STOCK WAS NOT TENABLE. IT WAS FURTHER STATED THAT THE ADDITION OF RS. 24,27,523/ - MADE BY THE ASSESSING WAS ON ACCOUNT OF SHORTAGE AND EXCESS STOCK FOUND DURING T HE COURSE OF SURVEY. 5. WE HAVE HEARD THE RIVAL CONTENTIONS. WE HAVE NOTICED THAT THAT THE ITAT HAD DECIDES THIS MATTER AFTER TAKING INTO CONSIDERATION THE M.A. 181/AHD/2014 (IN I.T.A NO. 1791/AHD/2010) A.Y. 2003 - 04 PAGE NO DCIT VS. SH. SHANKARBHAI RAMBHAI PATEL 3 FINDING OF THE LD.CIT(A).WE FIND THAT REVENUE HAS NOT CONSIDERED THE FINDING S OF THE LD. CIT(A) WH ICH HAVE ALSO BEE N REPRODUCED AT PAGE 4 OF THE IT AT OR D ER . THE LD. CIT(A) IN HIS DECISION HAS PROVIDED COMPLETE FAC T S AND FINDINGS WHICH DEMONSTRATE THAT THE DIFFERENCES IN THE STOCK ARISES BECAUSE OF WRONGLY INVENTORIED OF TOBACCO KANDI STOCK AND TOBACCO P A LTI STOCK . THE L D . CIT(A) HAS ON RECONCILIATION OF THE STOCK HAD CONFIRMED THAT THE EXTENT OF RS . 38 , 571/ - (EXCESS STOCK OF TOBACCO P ATI) PLUS RS. 1 , 19 , 256/ - (UNACCOUNTED SALE OF TOBACCO KANDI) P LUS RS. 5000/ - (UNACCOUNTED STOCK OF TOBACCO DUES) RS. 1 , 62 , 827/ - AS AGAINST THE TOTAL ADDITION OF RS. 24,27,523/ - MADE BY THE ASSESSING OFFICER. 5.1 CONSIDERING THE F INDINGS OF THE LD. CIT(A), THE ITAT VIDE THE ABOVE REFERRED DECISION HAS INCREASED THE DISALLOWANCE TO THE AMOUNT OF RS . 6 LACS AS THE REVENUE FAILED TO DISPROVE D THE FINDINGS OF THE LD.CIT(A). IN VIEW OF THE ABOVE STATED FACTS AND FINDINGS, WE FIND THAT THE COMPLETE FACTS OF THE CASE TAKEN IN THE MISCELLANEOUS APPLICATION ACCORDING TO THE ASSESSMENT ORDER WAS NOT CORRECT AS THE DECISION OF TH E ITAT IS BASED ON THE DIFFERENT FINDINGS MADE BY THE LD. CIT(A) WHICH WAS NOT DISPROVED, THEREFORE, WE DO NOT FIND ANY MERIT IN THE MISC. APPLICATION OF THE REVENUE ON THIS ISSUE. 6. REGARDING MISC. APPLICATIO N ON THE SECOND GROUND THAT THE ITAT HAS NOT ADJUDICATED THE ADDITION ON ACCOUNT OF SHORTAGE IN STOCK OF RS. 15 , 29 , 016/ - . IN THIS CONNECTION, WE HAV E PERUSED THE ORDER OF THE ITAT AND FIND THAT THE ITAT CO - ORDINATE BENCH HAS NOT M.A. 181/AHD/2014 (IN I.T.A NO. 1791/AHD/2010) A.Y. 2003 - 04 PAGE NO DCIT VS. SH. SHANKARBHAI RAMBHAI PATEL 4 SPECIFICALLY DE ALT ON THIS ISSUE IN THE ORDER. THEREFORE, WE RECALL THIS ORDER, TO THE EXTENT OF ADJUDICATING THE SECOND GROUND RELATING TO THE ADDITION ON ACCOUNT OF SHORTAGE IN STOCK OF RS. 15,29,016/ - . 7. IN THE RESULT, THE MISC. APPLICATION FILED BY THE REVENUE IS PARTLY ALLOWED. 8. THE REGISTRY SHALL FIX THIS REV ENUE S APPEAL ONLY QUA THE ABOVE ISSUE OF SHORTAGE OF STOCK. ORDER PR ONOUNCED IN THE OPEN C OURT ON 18 - 04 - 201 7 SD/ - SD/ - ( S.S. GODARA ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 18 /04 /2017 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,