Radhey Shyam Chugh, SURATGARH V. ITO, SURATGARH

MA 70/JODH/2013

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0878 (ITAT-JODHPUR)
• Duration Of Justice: 1 month(s) 21 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 09-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G R KOKANI
• Assessee Lawyers: SURESH OJHA SHRI ASHOK KHATRI
• Keywords: Loose papers

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER MA NO. 70/JU/2013 [A/O ITA NO. 526/JU/2010] [A.Y: 2007-08] RADHEY SHYAM CHUGH VS ITO, PROP. M/S. NAREN SINGH GURDITTA RAM SURATGARH SURAGARH. PAN NO. AAXPC9785F (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SURESH OJHA SHRI ASHOK KHATRI DEPARTMENT BY : SHRI G.R. KOKANI DATE OF HEARING : 15.07.2013 DATE OF PRONOUNCEMENT : 30.08.2013 ORDER PER HARI OM MARATHA, J.M. THROUGH THIS MISCELLANEOUS APPLICATION [MA], THE APPLICANT [ASSESSEE] HAS SOUGHT RECTIFICATION OF AL LEGED MISTAKES U/S 254(2) OF THE INCOME-TAX ACT, 1961 2 [HEREINAFTER REFERRED TO AS 'THE ACT', FOR SHORT] I N THE TRIBUNAL ORDER [TO] DATED 14.06.2011 PASSED IN THIS CASE IN ITA NO. 526/JU/2013 FOR A.Y. 2007-08. 2. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE ENTIRE MATERIAL ON RECORD. TH E APPELLANT MOVED AN APPLICATION U/S 254 OF THE TAX A CT BY POINTING OUT MISTAKES IN RESPECT OF THE FINDING GIVEN BY THI S BENCH. WE RECTIFY THE MISTAKES ONE BY ONE AS SUBMITTED BY THE LD. A.R. AS UNDER: 3. IT WAS CONTENDED THAT GROUND NO. 1 WAS NOT PRESS ED. THE MISTAKE POINTED OUT IS NOT A MISTAKE APPARENT FROM THE RECORD, AS THE MEMO OF APPEAL IS HAVING FIRST GROUND THAT TOO IS A GENERAL IN NATURE. HENCE GROUND NO. 1 IS DISMISSED AS BEING G ENERAL IN NATURE. 4. GROUND NOS. 2 AND 3 ARE DISMISSED AS NOT PRESSED . THE MISTAKE IS ALSO NOT MISTAKE APPARENT FROM RECORD, T HE MEMO OF APPEAL IS HAVING SIGNATURE FOR NOT PRESSING THE GRO UND NO. 2 ND , THE 3 GROUND NO. 3 RD IS HAVING DIRECT BEARING, THEREFORE, THE SAME WAS DECIDED. 5. THE OTHER GROUND OF THE APPLICATION WAS THAT THE GROUNDS TAKEN IN THE MEMO OF APPEAL WERE NOT DECIDED. THE D ECISION REFERRED WAS ALSO NOT ADJUDICATED AND THE ARGUMENT SUBMITTED IN WRITING WAS NOT APPRECIATED. IT HAS BEEN SUBMITTED THAT NON- CONSIDERING OF VITAL PIECE OF EVIDENCE AS WELL AS D ECISION TANTAMOUNT TO MISTAKE APPARENT FROM RECORD. THE DR ON THE OTHER HAND ARGUED THAT THE MISTAKE IS NOT MISTAKE COVERED U/S 254(2) OF THE INCOME-TAX ACT AND ARGUED FOR DISMISSAL OF APPL ICATION. 6. WE HAVE CONSIDERED THE MISCELLANEOUS APPLICATIO N IN THE LIGHT OF ORAL SUBMISSION AND FOUND THAT THE MISTAKE MENTI ONED ABOVE COULD NOT BE CONSIDERED BY THE BENCH INADVERTENTLY WHILE DECIDING THIS CASE. THE ARGUMENT HAVING FORCE, THE APPELLANT TOOK GROUND AND ALSO SUBMITTED SUBMISSION IN WRITING BEFORE THE BENCH. THE GROUNDS TAKEN IN THE MEMO OF APPEAL WERE NOT DISPOS ED OFF. IN THESE CIRCUMSTANCES THE MISTAKE IS APPARENT FROM RE CORD IN VIEW OF THE JUDGMENT OF JURISDICTIONAL HIGH COURT DECIDED I N CASE OF M/S 4 RAJESH CHANDER KHATRI REPORTED IN 249 ITR PAGE 323 AND ALSO COVERED BY THE JUDGMENT OF HON'BLE ALLAHABAD HIGH C OURT IN CASE CIT VS. KESHAV FRUIT MART REPORTED IN 199 ITR 771. THEREFORE, WE FIND A MISTAKE APPARENT ON RECORD AND DECIDE THIS G ROUND ACCORDINGLY. 7. THE BRIEF FACTS OF THE CASE ARE THAT SURVEY WAS CONDUCTED AND CERTAIN LOOSE PAPERS WERE IMPOUNDED INCLUDING PAGE NO. 76 & 77 WHICH ARE PLACED ON RECORD AT PAGE NO. 59 OF THE PA PER BOOK. THE ASSESSING OFFICER MADE ADDITION ON THE GROUND OF TH E LOOSE PAPER OF 76 & 77. THE AR IN THE SUBMISSION ARGUED THAT THIS PAPER IS A DUMB AND DEAF DOCUMENT, ON THE PAPER THERE IS NO NAME OF THE ASSESSEE. THE PAPER IS NOT IN THE HAND WRITING OF ANY OF THE ASSESSEE THE INCOME-TAX OFFICER ON THE BASIS OF THIS PAPER MADE ADDITION WHICH IS NOT IN ACCORDANCE WITH THE LAW. ON THE PAPER THE ACCOUNT SO PREPARED IS ACCOUNT OF LABOUR. THE LANGUAGE OF THE ENTRIES ALSO PROVES THAT THE ACCOUNT IS ACCOUNT OF LABOUR. THE I NCOME-TAX OFFICER CONVERTED IN THE VALUE WHICH IS NOT IN ACCO RDANCE WITH THE LAW. IT WAS ALSO ARGUED THAT PAPER HAS TO BE READ A S IT IS AND NO ADVERSE INFERENCE CAN BE DRAWN. IN NUT SHELL IT WAS ARGUED THAT 5 PAPER IS DUMB AND DEAF DOCUMENT AND INFERENCE DRAWN THEREUPON IS ARBITRARY AND AGAINST THE LAW. 8. THE ASSESSEE TOOK GROUND NO. 19 IN THE MEMO OF A PPEAL WHICH IS AGAINST THE ADDITION OF RS. 4275.00, 91996.00, 3 5972.00, RS. 7,65,355/-, 155550.00, 35084.00, 52294.00 AND 8962. 00, THEREFORE, WE ARE DECIDING THE ISSUE ADDITION WISE. 9. THE ADDITION OF RS. 91996.00 HAS ALREADY BEEN DE CIDED IN THE APPELLATE ORDER. 10. THE GROUND NOS. 2 AND 3 RELATE TO RS. 4275.00 W AS DECIDED IN THE APPEAL BUT IN FACT THE GROUND WAS NOT PRESSED. THE RELIEF GRANTED INADVERTENTLY IN THE APPEAL IS HEREBY WITHD RAWN AND TREATED AS DISMISSED THE ADDITION OF RS. 4275.00 IS CONFIRMED. 11. NOW, WE ARE DECIDING THE ADDITION MADE ON THE B ASIS OF LOOSE PAPER OF 76 & 77. THE OTHER ADDITION WAS IN RESPECT OF RS. 35972.00 THE INCOME-TAX OFFICER MADE ADDITION BY APPLYING GP OF 4.70% ON SALES OF RS. 765355.00. THE GROUNDS OF APPEAL NO. 6 SEEMS TO BE 6 WRONGLY TAKEN BEING ADDITION OF RS. 765355.00 BECAU SE THIS WAS THE TOTAL SALES. THE INCOME-TAX OFFICER TREATED THE SAL ES AS OUT OF THE BOOKS AS DEALT WITH IN ASSESSMENT ORDER AT PAGE NO. 4 AND APPLIED THE GP RATE AS HAS BEEN DECLARED BY THE ASSESSEE TH EREFORE, MADE THIS ADDITION, THE AR OF THE ASSESSEE CONTENDED THA T THE ADDITION IS ILLEGAL BASED ON LOOSE PAPER 76 AND 77. IT WAS ALSO ARGUED THAT THE PAGE NO. 76 & 77 IS NOTHING BUT A DUMB AND DEAF DOC UMENT PLACED ON RECORD IN THE PAPER BOOK AT PAGE NO. 59 OF THE P APER BOOK. IT WAS ALSO CONTENDED THAT THE PAPER IS NOT AT ALL SPE AKING AND THE ENTRIES AVAILABLE THEREIN IS NOTHING BUT ACCOUNT OF LABOUR RELATED PARTLY TO THE ASSESSEE AND PARTLY TO THE OTHERS, TH EREFORE, THE INFERENCE DRAWN IS NOT JUSTIFIED. THE DR SUPPORTED THE ORDER OF LOWER AUTHORITY. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND AL SO PERUSED THE MATERIAL PLACED ON RECORD, WE ARE IN AGREEMENT WITH THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE PAPER IS DUMB AND DEAF DOCUMENT, THEREFORE, THE ADDITION MADE ON THE BASIS THEREOF CANNOT BE SUSTAINED BY FOLLOWING THE ORDER OF THE D ELHI BENCH IN 7 CASE OF THE ASHWANI KUMAR VS. INCOME-TAX OFFICER RE PORTED IN 39 ITD 183 THEREFORE, THE ADDITION IS DELETED. 13. THE NEXT ADDITION IS IN RESPECT OF RS. 155550. 00, THE INCOME- TAX OFFICER MADE THE ADDITION OF RS. 155550.00 ALSO CONSIDERING THE LOOSE PAPER NO. 76 & 77. THE INCOME-TAX OFFICER TRE ATED THE PURCHASES ON THE BASIS OF SAID PAPER, BY CONVERTIN G THE NUMBER OF BAGS IN RS. AND TOOK PEAK OF PURCHASES AMOUNT ARRIV ED ON THE BASIS OF SAID PAPER AND MADE ADDITION BEING INVESTMENT MA DE IN THE ITEMS RECORDED ON THE SAID PAPER. 14. THE AR OF THE ASSESSEE ARGUED THAT THE INVESTME NT ADDED BY THE INCOME-TAX OFFICER WAS NOT IN ACCORDANCE WITH T HE LAW. IT WAS ALSO SUBMITTED THAT THE PAPER IS DUMB AND DEAF DOCU MENT, THEREFORE, NO ADDITION CAN BE MADE. 15. WE HAVE CONSIDERED THE ARGUMENT AND FOUND THAT THE INVESTMENT CANNOT BE MADE IN THE INCOME OF THE ASSE SSEE, AT THE MOST, IF AT ALL THE SALES CAN BE CONSIDERED ONLY F OR THE PURPOSE OF APPLICATION OF PROFIT RATE. THE JUDGMENT OF SUPREME COURT REPORTED 8 IN 237 ITR 570 IN CASE OF COMMISSIONER OF INCOME-TA X VS. SMT. P.K. NOORJAHAN IS APPLICABLE IN TOTO, IN WHICH IT WAS HE LD THAT INVESTMENT CANNOT BE ADDED IN THE TOTAL INCOME THER EFORE, RESPECTFULLY FOLLOWING THE RATION LAID DOWN IN THE SAID DECISION, WE HOLD THAT INVESTMENT CANNOT BE ADDED IN THE INCOME. WE HAVE ALREADY GIVEN OUR FINDING IN THE EARLIER PARA THAT THE PAPER IS DUMB AND DEAF DOCUMENT, THEREFORE, WE DELETE THIS ADDITI ON. 16. THE INCOME-TAX OFFICER ALSO MADE THE ADDITION I N THE CLOSING STOCK AMOUNTING TO RS. 35084.00. THE INCOME-TAX OFF ICER OBSERVED THAT THE VALUE TAKEN BY THE ASSESSEE IS NOT CORRECT . THE ASSESSING OFFICER MADE THE ADDITION BY TAKING THE VALUE @ 165 0.00 PER QTL. AS PER THE INSTANT SALE DATED 7.3.2007, THE ASSESSING OFFICER ALSO NOT CONSIDERED THE EVIDENCE SUBMITTED BY THE ASSESSEE I N THE SHAPE OF CERTIFICATE FROM KRISHI MANDI ETC. 17. THE AR OF THE ASSESSEE SUBMITTED THAT THE CLOSI NG STOCK CANNOT BE DISTURBED WITHOUT ANY EVIDENCE. HE RELIED ON ORDER OF THIS BENCH IN CASE OF THE KEDAR DARGAD. IT WAS ARGU ED THAT ADDITION MADE IS ILLEGAL AND THE CERTIFICATE OF KRISHI MANDI CANNOT BE 9 REJECTED WITHOUT ANY CONCRETE EVIDENCE, THEREFORE R EQUESTED FOR DELETION THE ADDITION. 18. WE HAVE CONSIDERED THE ARGUMENT AND FOUND FORCE BECAUSE THE CERTIFICATE ISSUED BY THE KRISHI UPAJ MANDI SUB MITTED IN COURSE OF HEARING WAS NOT ACCEPTED AND APPRECIATED. THE CE RTIFICATE ISSUED IS HAVING THE EVIDENTIAL VALUE BECAUSE THE KRISHI U PAJ MANDI IS A SEMI GOVERNMENT DEPARTMENT AND CERTIFICATE THEREOF CANNOT BE IGNORED IN ABSENCE OF ANY CONTRARY EVIDENCE, WE ACC EPT THE SAME AND ADDITION MADE ON THIS ACCOUNT AMOUNTING TO RS. 35084.00 DELETED. 19. THE INCOME-TAX OFFICER ALSO MADE THE ADDITION O F RS. 52294.00 ON THE BASIS OF PAGE NO. 76 & 77. THE PAPER 76 & 77 HAVE ALREADY BEEN CONSIDERED IN EARLIER PARA AND WE HAVE TREATED IT AS DUMB AND DEAF DOCUMENTS, THEREFORE, THE ADDITION MADE ON THE BASIS OF THESE PAGES CANNOT BE SUSTAINED, AND DELETED. 10 20. THE ADDITION OF RS. 8962.00 IS OUT OF DISALLOWA NCES OF TELEPHONE EXPENSES ETC. THE INCOME-TAX OFFICER MADE DISALLOWANCES MENTIONING THAT THE ASSESSEE IS NOT M AINTAINING CALL REGISTER AND IN ABSENCE THEREOF IT CANNOT BE VERIFI ED. WE ARE OF THE VIEW THAT PERSONAL UTILIZATION CANNOT BE DENIED, TH EREFORE, THE ADDITION MADE ON ACCOUNT OF DISALLOWANCES IS SUSTAI NED. 21. IN THE RESULT, THE M.A. OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE COURT ON 30 TH AUGUST, 2013. SD/- SD/- (N.K.SAINI) [HARI OM MARATH A] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30 TH AUGUST, 2013. VL/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT BY ORDER 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR ITAT, JODHPUR