CIT, FARIDABAD V. M/S PUNEET UDYOG, FARIDABAD

ITA/337/2009

AI Insights

The case revolves around an appeal by the Commissioner of Income Tax, Faridabad, challenging the order of the Income Tax Appellate Tribunal, which had upheld the CIT(A)'s decision. The CIT(A) had deleted the additions of Rs. 34,60,650 made by the Assessing Officer, alleging unaccounted sales by M/s. Puneet Udyog for the assessment year 2003-04. The Tribunal and CIT(A) found that the Assessing Officer's conclusions were not supported by evidence, and the yield of the assessee was comparable to previous years and other concerns in the same line of business. The High Court, after hearing the arguments, concurred with the findings of the lower authorities and dismissed the appeal, noting that no substantive question of law was involved, only factual issues.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 720662 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 16-02-2010
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: URVASHI DHUGGA
• Keywords: Assessing Officer; CIT(A); Income tax appellate tribunal; Remand Report; Unaccounted sales; Yield comparison
• Section: 260A

Judgement Text

" I.T.A. No. 337 of 2009 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH I.T.A. No. 337 of 2009 Date of Decision: February 16, 2010 The Commissioner of Income Tax, Faridabad ----Appellant Versus M/s. Puneet Udyog, Plot No. 37E, Sector-6 Faridabad. ` ---Respondent CORAM: HON'BLE MR. JUSTICE M.M. KUMAR HON'BLE MR. JUSTICE JITENDRA CHAUHAN Present: Mr. Urvashi Dhugga, Advocate for the appellant. 1. To be referred to the Reporters or not? 2. Whether the judgment should be reported in the Digest? **** M.M. KUMAR, J. The Revenue has approached this court by filing instant appeal under Section 260A of the Income Tax Act (for brevity 'the Act') by challenging order dated 08.08.2008 passed by the Income Tax Appellate Tribunal Delhi Bench 'F', New Delhi (for short 'the Tribunal') in ITA No.2419/D/ 2007 in respect of the assessment year 2003-04. The Tribunal has upheld the order dated 14.03.2007 passed by the CIT(A), Faridabad, who has deleted the additions of Rs. 34,60,650 made by the Assessing Officer alleging unaccounted I.T.A. No. 337 of 2009 -2- sales. On the appeal filed by the assessee-respondent, CIT(A) forwarded all the submissions made by the assessee-respondent to the Assessing Officer and has taken into account the remand report of the Assessing Officer, as also the submission made by the assessee-respondent in paragraph 3.4 of the order of CIT(A) (Annexure-II). The assessee-respondent is engaged in production of washing soap and is a partnership firm. The working out of the yield of 96.35% was correctly done and there was no wastage as such claimed by the assessee. Output weight of soap was quite satisfactory in view of the norms of the industry. The assumption derived by Assessing Officer from the statement of Sh. Desh Bandhu, partner has not been accepted. The purchase work out by the Assessing Officer at 33% and 24% were found to be factual incorrect and was not accepted by CIT(A) to constitute basis for making addition. It has been found by the CIT(A) that the presumptions were not confronted to the assessee-respondent during the assessment proceedings, which was evident from the assessment order and order-sheet maintained by the Assessing Officer. The only opportunity given was at the time of rejecting the books of account without pin-pointing or bringing out any specific defects or deficiencies in the line of business and without finding fault with the purchase bills or stock registers. Accordingly, efforts of the Assessing Officer to work out the undeclared sales at Rs. 34,60,650/- was found to be without any basis, especially, in view of the fact that the Sales Tax order dated 29.01.2004 and balance- I.T.A. No. 337 of 2009 -3- sheet matched with the income declared in the return. The assessment was found to be inconsistent with the sales by the assessee in the income tax record which is an authentic document. The CIT(A) held that Assessing Officer could not have found fault with the sale bills or detected suppressed sale bills or production result on sound footings. It was considered to be a case of no evidence for making addition of such a huge amount. The CIT(A) have also examined the chart of comparative yield on actual method of the assessee from the assessment years 1997- 98 to 2003-04. It has been found that the yield is more or less same, in the assessment year in question 2003-04, which has been accepted by the Tribunal in respect of the assessment year 2000- 01, the result of the assessee in the assessment year 2003-04 have been found to be better at 96.35 and 119.19 on actual weight method and sold weight method. The CIT(A) also compared yield shown by the assessee with the other concerns in the same line of business or its sisters concerns, where the yield is more or less the same. The appeal of the revenue before the Tribunal has also failed and the finding recorded by the Tribunal reads as under: “........As is clearly evident from the comparative figures given above, the yield shown by the assessee for the year under consideration by both the methods was not only comparable with that of the previous years but the same was indeed higher than that of AY 2000-01 and 2001- I.T.A. No. 337 of 2009 -4- 02. It is pertinent to note here that the yield shown by the assessee at 94.12% in AY 2000-01 has been accepted by the Tribunal and relying on the said decision of the Tribunal, the learned CIT (A) has accepted the yield shown by the assessee at 96.36% in the year under consideration being higher than that of AY 2000-01. Keeping in view the said decision of the Tribunal in assessee's own case for AY 2000-01 on a similar issue as well as taking into consideration all the facts of the case, we find no infirmity in the impugned order of the learned CIT(A) accepting the yield shown by the assessee and deleting the addition made by the AO on account alleged unaccounted safe. The same is therefore upheld dismissing ground no.1 of the Revenue's appeal.” Moreover, in respect of the assessment year 2001-02, the appeal filed by the revenue being ITA No. 70 of 2009 was dismissed by holding that the concurrent finding recorded by the CIT(A) as well as the Tribunal were based on appreciation of evidence which would not rise any substantive question of law. We have heard learned counsel for the Revenue at a considerable length and find that no substantive question of law would arise for determination of this Court. The question regarding addition of Rs. 34,60,650/- on the allegation of unaccounted sale is necessarily a question of fact and the CIT(A) as well as the Tribunal after re-appreciating evidence have found that there was nothing on the record to reach a conclusion of any unaccounted sale warranting I.T.A. No. 337 of 2009 -5- addition made to the income of the assessee. As is evident from the preceding para, the CIT(A) as well as the Tribunal examined the matter in detail and found that there was no evidence to support the view of the Assessing Officer for making addition. The concurrent findings of fact would not warrant any interference of this Court in exercise of jurisdiction under Section 260-A of the Act. The appeal is wholly without merit and the same is accordingly dismissed. (M.M. KUMAR) Judge (JITENDRA CHAUHAN) 16th February, 2010 Judge Atul "