ITO, Nahan V. M/s Jagdamba Rice & General Mills, Nabha

MA 287/CHANDI/2006

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 8600 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 year(s) 4 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-07-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 29-06-2012
• Assessment Year: 1998-1999
• Appeal Filed On: 28-02-2006
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Rectification of order

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI H.L. KARWA, VP AND SHRI T.R. SOOD, AM MISC. APPLICATION NO. 287/CHD/2006 ARISING OUT OF ITA NOS. 66 & 54/CHANDI/2002 ASSESSMENT YEAR: 1998-99 THE ITO, VS M/S JAGDAMBA RICE & GENL MILLS, NABHA NABHA (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AKHILESH GUPTA RESPONDENT BY : NONE DATE OF HEARING : 29.06.2012 DATE OF PRONOUNCEMENT: 02.07.2012 ORDER PER T.R. SOOD, A.M THROUGH THIS MISC. APPLICATION THE REVENUE HAS SOUG HT RECTIFICATION OF MISTAKE WHICH HAS CREPT INTO THE ORDER OF THE TRIBU NAL IN ITA NO. 54/CHANDI/2002. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SERVICE OF NOTICE. SINCE THE CASE HAS BEEN POSTED ON VARIOUS OCCASIONS, THER EFORE, WE PROCEED IT TO HEAR THE REVENUES MISC. APPLICATION ON EX.PARTE BASIS. 3. IT HAS BEEN POINTED OUT THAT ASSESSEE HAS RAISED TWO GROUNDS REGARDING ADDITION ON ACCOUNT OF UNDER STATEMENT OF SALES IN HUSK ACCOUNT AMOUNTING TO RS. 2,77,885/- AND ON ACCOUNT OF UNDER VALUATION OF CLO SING STOCK OF HUSK AT RS. 24,649/- BUT THE TRIBUNAL HAS RESTRICTED THE ADDITI ON ON ACCOUNT OF CLOSING STOCK TO RS. 50,000/- WHICH IS NOT CORRECT. 2 4. THE LD. DR REFERRED TO THE GROUND OF APPEAL RAIS ED BY THE ASSESSEE REPRODUCED IN PARA 2 OF THE ORDER OF THE TRIBUNAL AND POINTED OUT THAT ASSESSEE HAS CHALLENGED TWO ADDITIONS NAMELY UNDERSTATEMENT OF SALE IN HUSK AMOUNTING TO RS. 2,77,885/- AND UNDERVALUATION OF CLOSING STOCK AMOUNTING TO RS. 24,649/-. THE TRIBUNAL HAS ADJUDICATED THE ISSUE VIDE GROUND NOS. 4 & 5 BUT THROUGH PARA 5, IT HAS BEEN STATED THAT GROUND REGARDING UNDERVALUATIO N OF CLOSING STOCK WAS NOT PRESSED, THEREFORE, THE SAME WAS DISMISSED. IN PAR A 4.1 AGAIN, THE DISCUSSION WAS MADE IN RESPECT OF CLOSING STOCK ONLY AND THE ADDIT ION IS RESTRICTED TO RS. 50,000/- WHICH IS INCORRECT. 5. AFTER CONSIDERING THE SUBMISSIONS OF THE LD. DR AND RELEVANT MATERIALS ON RECORD, WE FIND THAT GROUNDS OF APPEAL FILED BY THE ASSESSEE HAVE BEEN REPRODUCED BY TRIBUNAL IN PARA 2, WHICH READS AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE IN THE INCOME O F THE FIRM ON ACCOUNT OF UNEXPLAINED MONEY BROUGHT BY THE PARTNER S VIZ. SMT. KAUSHALYA DEVI, SHRI PAWAN KUMAR AND SHRI PAUL CHAN D. 2. THE LD. CIT(A) HAS FURTHER ERRED IN DELETING THE ADDITION MADE IN THE INCOME OF THE FIRM OF UNEXPLAINED CASH CREDIT B Y SHRI RAM KISHAN. 6. THE ISSUES HAVE BEEN ADJUDICATED BY THE TRIBUNAL VIDE PARA 4, 4.1 AND 5, WHICH READS AS UNDER:- 4. COMING TO THE CROSS-APPEAL BY THE ASSESSEE, IN RESPECT OF HUSK ACCOUNT, AT THE OUTSET IF WAS POINTED OUT BY L D. AR THAT THE ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER ON ACCOUNT OF CLOSING STOCK OF HUSK WHICH WAS MADE ON ESTIMATE BA SIS. HE SUBMITTED THAT IF ADDITION ON ACCOUNT OF CLOSING ST OCK IS CONSIDERED 3 THEN SAME SHOULD BE CARRIED FORWARD TO THE OPENING STOCK OF NEXT YEAR. ON THE OTHER HAND, THE LD. DR HEAVILY RELIED ON THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT THE PLEA O F THE ASSESSEE THAT ADDITION ON ACCOUNT OF CLOSING STOCK SHOULD BE CONSIDERED FOR CARRYING THE OPENING STOCK OF NEXT YEAR CANNOT BE E NTERTAINED, IN VIEW OF THE FACT THAT THE SAME WILL DISTURB THE SUB SEQUENT RESULT SHOWN BY THE ASSESSEE. 4.1 WE AFTER HEARING BOTH THE PARTIES AND CONSIDE RING THE ABOVE FACT THAT THE ADDITION MADE BY THE ASSESSING OFFICE R ON ACCOUNT OF CLOSING STOCK OF HUSK WAS BASED ON ESTIMATE AND SUC H ESTIMATE WILL HAVE A DEFINITE BEARING ON THE CLOSING STOCK SHOWN IN NEXT YEAR. HOWEVER, KEEPING IN VIEW THE FACT THAT THE ADDITION WAS MADE AND BENEFIT OF SUCH ADDITION HAS NOT BEEN GIVEN IN SUBS EQUENT YEAR, WE ARE OF THE OPINION THAT A FAIR AND REASONABLE ADDIT ION OF RS. 50,000/- WILL MEET THE ENDS OF JUSTICE. WE, THEREF ORE, RESTRICT THE ADDITION OF RS. 50,000/- AND ACCEPT THE GROUND IN P ART 5. SECOND PART OF THE GROUND REGARDING ADDITION OF RS. 24,649/- ON ACCOUNT OF UNDERVALUATION OF CLOSING STOCK OF HU SK WAS NOT PRESSED BY LD AR BEFORE US. IT IS REJECTED AS SUCH. 7. THE COMBINED READING OF ABOVE PARAS CLEARLY SHOW THAT ADDITION IN RESPECT OF CLOSING STOCK AMOUNTING TO RS. 24,649/- WAS NOT PRESSED AND, THEREFORE, THE SAME WAS DECIDED AGAINST THE ASSESSEE. IN RESPECT OF OTHER ADDITION, THE SAME WAS RESTRICTED TO RS. 50,000/-. IN THE DISCUSSION, REFERENCE IS MADE TO CLOSING STOCK WHICH SEEMS TO BE ERRONEOUS. FROM THE COMBIN ED READING OF THE ORDER IT SEEMS THAT TRIBUNAL WANTED TO CONFIRM THE ADDITION OF RS. 50,000/- IN THE HUSK ACCOUNT ON ACCOUNT OF UNDER STATEMENT. THEREFORE, WE RECTIFY THIS MISTAKE AND SUBSTITUTE PARA 4.1 AS UNDER:- 4 4.1 AFTER HEARING BOTH THE PARTIES AND CONSIDERING THE VARIOUS FACTS OF THE CASE, THE ADDITION ON ACCOUNT OF UNDER STATEMENT OF SALES IN HUSK ACCOUNT IS RESTRICTED TO RS. 50,000/-. THI S IS BECAUSE ASSESSEE HAVE SHOWN THE AVERAGE RATE OF SALE OF HUS K AT RS. 72.9 PER QUINTAL WHEREAS AS PER THE INFORMATION GATHERED BY ASSESSING OFFICER IT IS CLEAR THAT MARKFED HAD PURCHASED HUSK IN THE RANGE OF RS. 93/- TO RS. 112.50 IN VARIOUS MONTHS DURING THE ASSESSMENT YEAR 1998-99. SIMILARLY, M/S AMRIT VANASPATI COMPANY LT D AND M/S PUNJAB MAIZE PRODUCTS LTD HAVE PURCHASED THE HUSK AT HIGHER RATE, THEREFORE, IN OUR OPINION, ADDITION OF RS. 50,000/- WOULD MEET THE ENDS OF JUSTICE. 8. IN THE RESULT, MISC. APPLICATION IS ALLOWED. ORDER PRONOUNCED ON 2.7.2012 SD/- SD/- (H.L. KARWA) (T.R. SOOD) VICE PRESIDENT ACCOUNTANT MEM BER DATED: 2 ND JULY, 2012 RKK COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/ THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR