Smt. Sunita Rani, Sirhind V. ITO, Gobindgarh

MA 19/CHANDI/2011

• Counselvise Citation: [2013] 123 COUNSELVISE.COM (IT) 9948 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 9 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-02-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 01-02-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 18-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE MS.SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER MA NO. 19/CHD/2011 IN ITA NO.918/CHD/2009 ASSESSMENT YEAR: 2006-07 SMT.SUNITA RANI, V ITO, SIRHIND, PROP. M/S GOEL SAREES, (HQ AT GOBINDGARH) ANAJ MANDI, SIRHIND. (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI AKHILESH GUPTA DATE OF HEARING : 01.02.2013 DATE OF PRONOUNCEMENT : 06.02.2013 ORDER PER MEHAR SINGH, AM THE PRESENT MISCELLANEOUS APPLICATION, ARISING OUT OF APPEAL IN ITA NO. 918/CHD/2009, FOR THE ASSESSMENT YEAR 2006-07 IN CASE OF SMT. SUNITA RANI, HAS BEEN FILED BY THE APPELLANT ON 18.04.2011. 2. IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS, LD. 'AR' STATED THAT THE WRITTEN SUBMISSIONS FILED BY THE AS SESSEE APPELLANT IN THE IMPUGNED M.A., MAY PLEASE BE CONSI DERED FOR THE PURPOSE OF DISPOSAL OF THE SAME. 3. LD. 'DR', ON THE OTHER HAND, VEHEMENTLY CONTENDE D THAT THERE DOES NOT EXIST ANY MISTAKE, APPARENT FROM REC ORD WITHIN THE MEANING OF PROVISIONS OF SECTION 254(2) OF THE INCOME-TAX ACT,1961 ( IN SHORT 'THE ACT') AND THE RATIO LAID D OWN BY THE JURISDICTIONAL HIGH COURT, HON'BLE SUPREME COURT, I N PLETHORA OF 2 DECISIONS. THE ASSESSEE HAS NOT RAISED ANY ISSUE I N THE IMPUGNED M.A., WHICH CAN BE CONSTRUED AS THE EXISTE NCE OF FACTUAL AND LEGAL ERROR, APPARENT FROM THE RECORD W ITHIN THE CONTEMPLATION OF SECTION 254(2) OF THE ACT. THE AP PEAL HAS BEEN ADJUDICATED BY THE BENCH, ON MERIT, BY WAY OF PASSI NG A DETAILED AND WELL REASONED ORDER. CONSEQUENTLY, THE M.A. DO ES NOT FALL UNDER THE PROVISIONS OF SECTION 254(2) OF THE ACT. THE ASSESSEE APPELLANT, IN THE IMPUGNED M.A. STATED THAT THE HON 'BLE BENCH HAS NOT GIVEN DECISION ON THE SUBMISSIONS OF THE AS SESSEE, WHICH ARE LISTED HEREUNDER : 1. THE ASSESSEE HAS DISPUTED THE CORRECTNESS OF THE VALUE OF STOCK TAKEN AT THE TIME OF SURVEY. THE ASSESSEE SUBM ITTED THAT THERE IS NO DIFFERENCE BETWEEN THE QUANTITATIVE DETAILS PREPARE D AT THE TIME OF SURVEY IN COMPARISON TO QUANTITATIVE DETAILS AS P ER BOOKS OF ACCOUNTS AS ON 22.1.2006 I.E. THE DATE OF SURVEY. THE DIFF ERENCE IS ONLY WITH REGARD TO THE VALUATION THEREOF. THE DEPARTMENT HA S VALUED THE STOCKS AT THE TIME OF SURVEY BY TAKING THE ESTIMATED COST WHICH IS NOT TO BE ACCEPTED, WHEREAS THE ASSESSEE HAS VALUED THE STOCK S AS PER ACTUAL PURCHASE BILLS AND THE SAME IS TO BE ACCEPTED. TH E COMPLETE DETAIL OF THE CLOSING STOCK AS PER BOOKS OF ACCOUNTS AS ON 22.01.2006 SHOWING BILLWISE PURCHASE BILLS AND VALUATION THEREOF WAS F URNISHED BEFORE THE LD. CIT (A) AND THE SAID DETAILS WERE SENT BY THE L D. CIT (A) FOR THE COMMENTS OF THE LD. A. O. WHICH WERE DULY REPLIED BY THE LD. A. O. VIDE ITO'S LETTER DT. 3.6.2009 / 5.6.2009 IN WHICH NO ADVERSE COMMENTS WERE GIVEN BY THE A. O. FOR THE SA ME. ALL THE SAID DETAILS AND LD. A. O'S COMMENTS WERE ALSO FURNISHED BEFORE THE HON'BLE BENCH VIDE P. B. PAGES 1 TO 42 AT THE TIME OF HEAR ING. THE SAID SUBMISSIONS THAT THERE IS NO DIFFERENCE BE TWEEN THE QUANTITY AS PER INVENTORY PREPARED BY THE DEPTT. IN COMPARIS ON TO QUANTITY AS PER BOOKS OF ACCOUNTS AND THERE IS DIFFERENCE ONLY WITH REGARD TO VALUATION THEREOF AND IN SUCH CASE NO ADDITIONS ARE CALLED FOR AS THE DEPTT. HAS VALUED THE STOCKS ON ESTIMATED COST, WHE REAS THE ASSESSEE HAS VALUED THE STOCKS ON THE BASIS OF ACTUAL PURCHA SE BILLS HAS NOT BEEN DECIDED BY THE HON'BLE BENCH BY GIVING SPECIFI C REASONING AND SPEAKING ORDER. 3 2. THE ASSESSEE HAS SUBMITTED AT THE TIME OF HEARING THAT THE STOCK FOUND AT THE TIME OF SURVEY WAS LOWER THAN THE STOC K RECORDED IN THE BOOKS OF ACCOUNTS AS ON THAT DATE AND THEREFORE, IT WAS NOT OPEN TO THE A. O. TO MAKE ADDITION IN THIS BEHALF AS THE VALUAT ION OF STOCK RECORDED IN THE BOOKS OF ACCOUNTS WAS HIGHER AND TH EREFORE, IT HAS HIGHER ELEMENT OF PROFIT EMBEDDED IN IT AND THE ASS ESSEE ALSO RELIED UPON THE JUDGEMENT OF CIT VS. LALSONS ENTERPRISES 3 24 ITR 426 (DEL.), IN WHICH IT WAS HELD THAT NO ADDITIONS ON A CCOUNT OF EXCESS STOCK IS CALLED FOR AS THE ASSESSEE HAD DISCLOSED H IGHER VALUATION OF CLOSING STOCK AND THEREBY HIGHER PROFIT WHEN THERE WAS NO DIFFERENCE IN QUANTITATIVE TALLY. THE SAID SUBMISSIONS HAS NOT BEEN DECIDED BY THE HON'BLE BENCH BY GIVING SPECIFIC REASONING AND SPEA KING ORDER. 3. THE ASSESSEE HAS ALSO SUBMITTED AT THE TIME OF HEAR ING THAT THE STOCK AMOUNTING TO RS. 25,65,249/- AS VALUED AS PER BOOKS OF ACCOUNTS ON THE DATE OF SURVEY I.E. 22.1.2006 HAS BEEN TAKEN AS OPENING STOCK AS ON 23.1.2006 (THE COPIES OF SUCH TRADING ACCOUNTS W ERE SUBMITTED IN THE P. B. PAGES 45-47 AT THE TIME OF HEARING) AND S UCH STOCK HAS BEEN SOLD IN THE PERIOD SUBSEQUENT TO THE DATE OF SURVEY AND ALL THE PROFITS EARNED ON SUCH STOCK HAS DULY BEEN DISCLOSED AT THE TIME OF SALE OF SUCH STOCK AND THIS WILL AMOUNT TO DOUBLE TAXATION I.E. ONCE AS PER ADDITIONS MADE BY LD. A. O. AND AGAIN AT THE TIME O F SUBSEQUENT SALE OF SUCH STOCK. THE SAID SUBMISSIONS HAS NOT BEEN DE CIDED BY THE HON'BLE BENCH BY GIVING SPECIFIC REASONS & SPEAKING ORDER. 4. WITHOUT PREJUDICE TO THE ABOVE SUBMISSIONS, IT WAS SUBMITTED THAT THERE WAS DIFFERENCE OF STOCK AMOUNTING TO RS . 14,21,168/- WHICH WAS FOUND SHORT AT THE TIME OF SURVEY IN COMPARISON TO THE STOCK AS PER BOOKS OF ACCOUNTS. THE LD. A. O. APPLIED THE RAT E OF G. P. @ 11.24% ON ESTIMATED SALE OUTSIDE THE BOOK OF RS. 18,00,000 /-, WHEREAS THE DIFFERENCE IN STOCK FOUND WAS OF RS. 14,21,168/- WH ICH WAS VALUED AT COST. BY TAKING 11.24% AS G. P. ON SALES WHICH HA S BEEN APPLIED BY THE LD. A. O., IF WE CALCULATE THE G. P. RATE ON COST OF GOODS SOLD (WHICH IN THE PRESENT CASE IS RS. 14,2 1,168/-) THE SAME COMES 12.66% (11.24 X 100/88.76 ) AND IF WE APPLY 12.66% ON 14,21,168/-, THE AMOUNT OF ADDITION WILL BE RS. 1,79,920/- AND NOT RS. 2,02,300/- AS HAS BEEN MADE BY LD. A. O. AND TH E ADDITION OF RS. 22,380/- ( RS. 2,02,300 -1,79,920) IS TO BE DELETED , WHEREAS THE HON'BLE BENCH HAS NOT DECIDED THE SAID ISSUE BY GIV ING THE SPECIFIC 4 REASONING AND SPEAKING ORDER. KEEPING IN VIEW THE ABOVESAID FACTS & CIRCUMSTANCES OF THE CASE, WE PRAY THAT THE ORDER PASSED BY HON'BLE BENCH BE RE-C ALLED AND THE SUBMISSIONS OF THE ASSESSEE BE DECIDED BY GIVING SP ECIFIC REASONS AND SPEAKING ORDER. THE CHALLAN FOR FILING FEES HAS SEP ARATELY BEEN DEPOSITED AND THE COPY OF THE SAME IS ENCLOSED AT P . B. PAGE: 7. 4. WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSIONS, FACTS OF THE CASE AND RELEVANT RECORD, ON THE ISSUE IN QUEST ION. IN THIS CASE, AFTER THE SURVEY U/S 133A OF THE ACT ON 22.01 .2006, THE ASSESSMENT WAS COMPLETED U/S 143(3) ON 02.12.2008 A ND THE TOTAL INCOME WAS ASSESSED AT RS.4,57,060/-. THE AO , REJECTED THE BOOK VERSION AND ESTIMATED THE SALES AT RS.18,0 0,000/- AS HAVING BEEN EFFECTED OUTSIDE THE BOOKS OF ACCOUNT. THE BOOKS OF ACCOUNT WERE REJECTED ON THE GROUND THAT THE SAME W ERE NOT COMPLETE AND CORRECT. LD. CIT(APPEALS) UPHELD THE FINDING OF THE AO, ON BOTH THESE COUNTS. THE BENCH, VIDE ORDER DA TED 13.01.2011, IN ITA NO. 918/CHD/2009, ASSESSMENT YEA R 2006-07, DISMISSED THE APPEAL OF THE ASSESSEE. A B ARE PERUSAL OF THE FINDINGS OF THE BENCH, CLEARLY REVEALS THAT THE ISSUES IN QUESTION BEFORE LD. CIT(APPEALS) AND THE GROUNDS OF APPEAL BEFORE THE BENCH, HAVE BEEN CAREFULLY CONSIDERED AN D ADJUDICATED BY WAY OF DETAILED AND WELL REASONED OR DER. FINDINGS OF THE BENCH ARE PURELY BASED ON APPRECIAT ION OF FACTUAL MATRIX OF THE CASE, RELEVANT PROVISIONS OF THE ACT AND THE APPEAL HAS BEEN DISMISSED ON MERIT. THE RELEVANT F INDINGS OF THE BENCH ARE REPRODUCED HEREUNDER : 8. I HAVE HEARD BOTH PARTIES. DURING THE COURSE OF SURVEY CARRIED OUT BY THE DEPARTMENT, STOCK WAS PHYSICALLY VERIFIE D IN THE PRESENCE OF 5 THE REPRESENTATIVES OF THE ASSESSEE AND VALUED AT R S. 11,44,881/- ON THE DATE OF SURVEY. THE POSITION OF STOCK ON THE DA TE OF SURVEY AS PER BOOKS OF THE ASSESSEE WAS RS.25,65,249/-. THUS, THE VALUE OF STOCK AS PHYSICALLY FOUND AT THE TIME OF SURVEY WAS SHORT BY RS. 14,21,168/- THAN THE VALUE OF STOCK RECORDED IN THE BOOKS. THE FACT THAT THE INVENTORY OF STOCK WAS TAKEN AND THE VALUATION THER EOF MADE IN THE PRESENCE OF THE REPRESENTATIVES OF THE ASSESSEE IS NOT DISPUTED. THE ASSESSEE DID NOT RAISE ANY DISPUTE REGARDING CORREC TNESS OF THE VALUE OF STOCK TAKEN AT THE TIME OF SURVEY EITHER AT THE TIME OF SURVEY OR AT ANY TIME THEREAFTER TILL THE MATTER CAME UP FOR HEA RING BEFORE THE AO. 9. AT THE TIME OF HEARING BEFORE ME, THE LEARNED AU THORIZED REPRESENTATIVE FOR THE ASSESSEE FAIRLY CONCEDED THA T BOOKS OF ACCOUNT WERE INCOMPLETE AT THE TIME OF SURVEY. HIS SUBMISSI ON WAS HOWEVER THAT THE BOOKS OF ACCOUNT NEED NOT BE COMPLETE DURI NG THE ACCOUNTING PERIOD AND THE ASSESSEE WAS FREE TO WRITE THE BOOKS OF ACCOUNT EVEN AFTER THE CLOSURE OF ACCOUNTING PERIOD. I AM UNABLE TO ACCEPT THE AFORESAID SUBMISSION. THE BOOKS OF ACCOUNT ARE RELE VANT AND THEREFORE ADMISSIBLE IN EVIDENCE ONLY FOR THE REASON THAT THE Y ARE MAINTAINED CONTEMPORANEOUSLY, I.E., THE TRANSACTIONS ARE RECOR DED AS AND WHEN THEY TAKE PLACE. SECTION 34 OF THE EVIDENCE ACT MAK ES THE ENTRIES IN THE BOOKS OF ACCOUNT RELEVANT ONLY IF THE BOOKS OF ACCOUNT ARE REGULARLY MAINTAINED IN THE COURSE OF BUSINESS. THE BOOKS OF ACCOUNT WHICH ARE NOT REGULARLY MAINTAINED IN THE DAY TO DA Y COURSE OF BUSINESS OR WHICH DO NOT RECORD TRANSACTIONS CONTEM PORANEOUSLY AS AND WHEN THEY TAKE PLACE, CAN NOT THEREFORE BE CONS IDERED RELEVANT FOR THE PURPOSE OF ASSESSMENT. IN THE MATTER UNDER APPE AL, THE BOOKS OF ACCOUNT, APART FROM BEING INCOMPLETE, ALSO DID NOT REFLECT THE CORRECT STOCK POSITION AS FOUND AT THE TIME OF SURVEY. IN T HIS VIEW OF THE MATTER, THE AO WAS JUSTIFIED IN COMING TO THE CONCL USION THAT THE BOOKS OF ACCOUNT PRODUCED BY THE ASSESSEE WERE NEIT HER CORRECT NOR COMPLETE AND THEREFORE WAS JUSTIFIED IN INVOKING SE CTION 145(3). THE CONCLUSION REACHED BY THE LD. CIT(A) IN THIS BEHALF IS CONFIRMED. 10. AS REGARDS THE ESTIMATION OF SALES AT RS. 18. 00 LAKHS OUTSIDE THE BOOKS OF ACCOUNT, IT IS NOTICED THAT THE STOCK FOUN D AT THE TIME OF SURVEY WAS SHORT BY RS.14,21,168/-. THE FACT THAT T HE STOCK AT THE TIME OF SURVEY WAS SUBSTANTIALLY LOWER THAT THE STOCK AS PER BOOKS CONFIRMS THE FINDING OF THE AO THAT SUCH SALES MUST HAVE BEE N MADE OUTSIDE THE BOOKS. THE ACTION OF THE AO IN ESTIMATING THE SALES OUTSIDE THE BOOKS AT RS. 18.00 LAKHS, DOES NOT SEEM TO BE ARBIT RARY OR UNREASONABLE ON THE FACTS OF THE CASE. THE AO HAS A PPLIED THE SAME RATE OF PROFIT ON SALES ESTIMATED BY HIM TO HAVE BE EN MADE OUTSIDE THE 6 BOOKS AS DECLARED BY THE ASSESSEE HERSELF ON SALES RECORDED IN THE BOOKS. THE APPROACH OF THE AO IN THIS BEHALF IS FAIR AND REASONABLE. 11. IN VIEW OF THE FOREGOING, THE ORDER PASSED BY THE LD. CIT(A) IS CONFIRMED. CONSEQUENTLY, THE APPEAL FILED BY THE AS SESSEE IS DISMISSED. 5. A BARE PERUSAL AND CONTEXTUALIZATION OF THE CONTENT IONS RAISED IN THE IMPUGNED M.A. AND THE FINDINGS OF THE TRIBUNAL, IN THE IMPUGNED APPELLATE ORDER, OF THE BENCH CLEARLY REVEALS THAT THERE DOES NOT EXIST ANY MISTAKE APPARENT FROM RECO RD, WITHIN THE MEANING OF PROVISIONS OF SECTION 254(2) OF THE ACT. THE BENCH ADJUDICATED THE ISSUES ON MERIT AND THE FINDI NGS OF THE BENCH ARE BASED ON APPRECIATION OF THE FACTUAL AND LEGAL MATRIX OF THE CASE. THE BENCH PASSED THE DETAILED APPELLA TE ORDER, ON APPRECIATION AND HIGHLIGHTING THE FINDINGS OF THE A O AND THE FINDINGS OF THE CIT(APPEALS). THUS, THE ISSUES RAIS ED BY THE APPELLANT, IN THE IMPUGNED M.A., HAVE BEEN DULY CON SIDERED AND ADJUDICATED, ON MERIT, BY THE BENCH, IN THE IMPUGNE D APPELLATE ORDER. THE LEGISLATIVE INTENT, CONTAINED IN THE PR OVISIONS OF SECTION 254(2) OF THE ACT, DOES NOT CONTEMPLATE RE- HEARING OR RE- ARGUING OF THE CASE, FOR THE PURPOSE OF CONVERTING THE RECTIFICATORY PROCEEDINGS INTO APPELLATE PROCEEDING S. IN THE PRESENT M.A., THE ASSESSEE APPELLANT INTENDS AND CO NTENDS THAT THE ISSUES ADJUDICATED BY THE BENCH, IN THE APPELLA TE ORDER, ON MERIT, SHOULD BE REVIEWED, RECONSIDERED AND REVERSE D, IN THE GUISE OF THE ALLEGED MISTAKE APPARENT FROM RECORD. NEEDLESS TO STATE THAT THE BENCH DOES NOT HAVE JURISDICTION, TO REVIEW ITS ORDER, PASSED ON MERIT. THERE ARE AMPLE JUDICIAL V ERDICTS ON THE 7 ISSUE, IN QUESTION, TO SUPPORT THIS VIEW. FURTHER ISSUES ADJUDICATED ON MERIT BY THE BENCH DONT CONSTITUTE MISTAKE APPARENT FROM RECORDS, IN VIEW OF THE PROVISIONS OF SECTION 254(2) OF THE ACT AND PLETHORA OF JUDICIAL PRECEDEN TS. 6. IN VIEW OF THE ABOVE LEGAL AND FACTUAL DISCUSSIO NS, WE DO NOT FIND ANY MERIT IN THE IMPUGNED MISCELLANEOUS AP PLICATION, AS THE SAME IS NOT IN CONSONANCE WITH THE LEGISLATI VE INTENT, CONTAINED IN THE PROVISIONS OF SECTION 254(2) OF TH E ACT. CONSEQUENTLY, THE IMPUGNED MISCELLANEOUS APPLICATIO N, FILED BY THE ASSESSEE, IS DISMISSED. 7. IN THE RESULT, THE MISC. APPLICATION FILED BY TH E ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH FEB.,2013. SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 6 TH FEB.,2013. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH.