Shri Mangatrai G.Goyal(HUF), Surat v. The Income tax Officer, Ward-5(3),, Surat

CO 228/AHD/2007 | 2003-2004
Pronouncement Date: 31-08-2010 | Result: Dismissed

Appeal Details

RSA Number 22820523 RSA 2007
Assessee PAN AACFJ0379F
Bench Ahmedabad
Appeal Number CO 228/AHD/2007
Duration Of Justice 3 year(s) 23 day(s)
Appellant Shri Mangatrai G.Goyal(HUF), Surat
Respondent The Income tax Officer, Ward-5(3),, Surat
Appeal Type Cross Objection
Pronouncement Date 31-08-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 31-08-2010
Date Of Final Hearing 16-08-2010
Next Hearing Date 16-08-2010
Assessment Year 2003-2004
Appeal Filed On 08-08-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABA D (BEFORE HON'BLE SHRI G.D. AGRAWAL V.P.(AZ) & HON BLE SHRI T.K. SHARMA J.M. ) I.T.A. NOS. 2579/AHD./2007 ASSESSMENT YEAR : 2003-2004 INCOME TAX OFFICER WARD-5(2) SURAT -VS.- JINDAL CREATION SURAT(PAN : AACFJ 0379 F) (APPELLANT) (RESPONDENT) & C.O. NO. 225/AHD/2007 (ARISING OUT OF I.T.A. NO.2579 /AHD/2007) ASSESSMENT YEAR : 2003-2004 M/S. JINDAL CREATION SURAT -VS.- INCOME TAX OFFICER WARD-5(2) SURAT (CROSS OBJECTOR) (RESPONDENT) & I.T.A. NOS. 2580/AHD./2007 ASSESSMENT YEAR : 2003-2004 INCOME TAX OFFICER WARD-5(2) SURAT -VS.- M/S. JINDAL FASHION SURAT (PAN : AACFJ 8318 A) (APPELLANT) (RESPONDENT) & C.O. NO. 226/AHD/2007 (ARISING OUT OF I.T.A. NO.2580 /AHD/2007) ASSESSMENT YEAR : 2003-2004 M/S. JINDAL FASHION SURAT -VS.- I NCOME TAX OFFICER WARD-5(2) SURAT (CROSS OBJECTOR) (RESPONDENT) & I.T.A. NOS. 2581/AHD./2007 ASSESSMENT YEAR : 2003-2004 INCOME TAX OFFICER WARD-5(1) SURAT -VS.- SMT. ANITA ASHOKKUMAR JINDAL SURAT (PAN : AAKPJ 5188 L) (APPELLANT) (RESPONDENT) & C.O. NO. 227/AHD/2007 (ARISING OUT OF I.T.A. NO.2581 /AHD/2007) ASSESSMENT YEAR : 2003-2004 SMT. ANITA ASHOKKUMAR JINDAL SURAT -VS.- INCOME TAX OFFICER WARD-5(1) SURAT (CROSS OBJECTOR) (RESPONDENT) & I.T.A. NOS. 2582/AHD./2007 ASSESSMENT YEAR : 2003-2004 INCOME TAX OFFICER WARD-5(3) SURAT -VS.- SHRI MANGATRAI G. GOYAL (HUF) SURAT (PAN : AAFHM 2350 A) (APPELLANT) (RESPONDENT) 2 ITA NOS.2579-2882/AHD/2007 & CO NOS. 225-228/AHD/2007 & C.O. NO. 228/AHD/2007 (ARISING OUT OF I.T.A. NO.2582 /AHD/2007) ASSESSMENT YEAR : 2003-2004 SHRI MANGATRAI G. GOYAL (HUF) SURAT -VS.- INCOME TAX OFFICER WARD-5(3) SURAT (CROSS OBJECTOR) (RESPONDENT) ASSESSEE BY : SHRI R.N. VEPARI DEPARTMENT BY : SHRI ANIL KUMAR SR. D .R. O R D E R PER BENCH : THESE FOUR APPEALS BY THE REVENUE AND FOUR CROSS O BJECTIONS BY THE FOUR DIFFERENT ASSESSEES ARE AGAINST FOUR DIFFERENT ORDERS ALL DA TED 10.04.2007 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-III SURAT FOR THE ASSESSMENT Y EAR 2003-04. ALL THESE APPEALS AND CROSS OBJECTIONS ARE ARGUED BY COMMON LD. REPRESENTATIVE THEREFORE WE PROCEED TO DECIDE ALL THESE APPEALS AND CROSS OBJECTIONS BY THIS COMMON ORDER F OR THE SAKE OF CONVENIENCE. 2. BRIEFLY STATED THE FACTS ARE THAT A SURVEY WAS C ARRIED OUT AT THE BUSINESS PREMISES OF THE FOUR ASSESSEES ON 03.10.2002. DURING THE COURSE OF SURVEY EXCESS STOCK OF RS.1 27 81 757/- AND UNACCOUNTED CASH OF RS.14 03 958/- WAS FOUND WHICH WAS DISCLOSED BY SHRI ASHOKKUMAR JINDAL THE PRIME PERSON OF THE GROUP AS THEIR UNDISCLOSED INCOME. THEREAFTER VIDE LETTERS DATED 31.10.2002 AND 02.12.2002 BIFURCATION OF DISCLOSUR E MADE BY SHRI ASHOKKUMAR JINDAL OF RS.1 41 85 715/- OF HIS FOUR GROUP CONCERNS WAS FUR NISHED WHICH IS AS UNDER :- M/S. JINDAL FASHIONS RS.30 00 000/- IN STOCK AND R S.4 00 000/- IN CASH; M/S. JINDAL CREATION RS.30 00 000/- IN STOCK AND R S.4 00 000/- IN CASH; SMT. ANITA A. JINDAL RS.30 00 000/- IN STOCK AND R S.3 00 000/- IN CASH; SHRI MANGATRAI GOYAL (HUF) RS.37 81 757/- IN STOCK AND RS.3 05 958/- IN CASH. 2.1. SUBSEQUENTLY SHRI ASHOKKUMAR JINDAL VIDE HIS LETTER DATED 21.10.2003 REVERTED THE DISCLOSURE OBJECTING THE VALUATION OF STOCK. IT WAS STATED THAT SHRI ASHOKKUMAR JINDAL AT THE TIME OF SURVEY UNDERSTOOD VALUE AS SALE VALUE AND GAVE S ALE PRICE OF THE ITEMS INSTEAD OF PURCHASE PRICE AND THEREFORE THE RATE APPLIED IN THE INVEN TORY WAS SALES RATE AND THE GROSS PROFIT SHOULD BE 3 ITA NOS.2579-2882/AHD/2007 & CO NOS. 225-228/AHD/2007 REDUCED TO ARRIVE AT THE COST PRICE. THE ASSESSEE F URNISHED BOOKS OF ACCOUNTS WITH SALE BILLS CLAIMING THAT SALE PRICE IS SAME AS IN THE RATE COL UMN OF THE INVENTORY. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER NOTED THAT STOCK OF THE ASSESS EE AND OTHER CONCERNS WERE NOT KEPT CONCERN- WISE AND THE ASSESSEE COULD NOT IDENTIFY THE SAME A S IS EVIDENT FROM THE REPLY TO QUESTION NO. 14 OF THE STATEMENT RECORDED OF SHRI ASHOKKUMAR JINDAL . THE ASSESSING OFFICER FURTHER NOTED THAT THE INVENTORY OF STOCK WAS PREPARED IN THE PRESENCE OF SHRI ASHOKKUMAR JINDAL THE MAIN PERSON OF THE GROUP AND THE RATES WERE APPLIED AS GIVEN BY HIM. IN THE ASSESSMENT ORDER THE ASSESSING OFFICER FURTHER NOTED THAT THE ITEMS MENTIONED IN S ALE BILLS PRODUCED BY THE ASSESSEE DO NOT MATCH WITH THE ITEMS IN INVENTORY. TO SUM UP THE ASSESSI NG OFFICER HELD THAT NOTHING CAN BE EXERTED FROM THE SALE BILLS PROVIDED BY THE ASSESSEE THAT W HATEVER THE SALE BILLS ARE OF THE SAME ITEMS NARRATED IN THE INVENTORY. ACCORDING TO THE ASSESSI NG OFFICER SINCE THE ASSESSEE COULD NOT PRODUCE THE SALE BILLS OF THE ITEMS NARRATED IN INV ENTORY THE ASSESSING OFFICER ADDED RS.30 00 000/- ON ACCOUNT OF INVESTMENT IN EXCESS S TOCK FOUND DURING THE SURVEY IN EACH OF THE FOLLOWING CASES :- M/S. JINDAL FASHIONS RS.30 00 000/- IN STOCK AND RS .4 00 000/- IN CASH; M/S. JINDAL CREATION RS.30 00 000/- IN STOCK AND R S.4 00 000/- IN CASH; SMT. ANITA A. JINDAL RS.30 00 000/- IN STOCK AND R S.3 00 000/- IN CASH; AND RS. 37 81 757/- IN STOCK AND RS.3 05 958/- IN C ASH IN RESPECT OF SHRI MANGATRAI GOYAL (HUF). 3. ON APPEAL IN THE IMPUGNED ORDER THE LEARNED CO MMISSIONER OF INCOME TAX(APPEALS) RESTRICTED THE ADDITION OF RS.30 00 000/- TO RS.7 3 1 800/- IN RESPECT OF THREE CASES NAMELY M/S. JINDAL FASHIONS M/S. JINDAL CREATION AND SMT. ANIT A A. JINDAL AND RESTRICTED THE ADDITION OF RS.37 81 757/- TO RS.9 21 538/- IN THE CASE OF SHRI MANGATRAI GOYAL (HUF). AGGRIEVED BY THE ORDER DATED 10.04.2007 OF LEARNED COMMISSIONER OF I NCOME TAX(APPEALS) REVENUE IS IN APPEALS AS WELL AS FOUR ASSESSEES ARE IN CROSS OBJE CTIONS BEFORE THE TRIBUNAL. 4. GROUNDS OF APPEALS TAKEN BY THE REVENUE IN THE C ASE OF FOUR ASSESSEES AND CROSS OBJECTIONS FILED BY THE FOUR DIFFERENT ASSESSEES AR E AS UNDER :- ITA NOS. 2579 2580 & 2581/AHD/2007 (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A.) HAS ERRED IN RESTRICTING THE ADDITION TO RS .7 31 800/- AS 4 ITA NOS.2579-2882/AHD/2007 & CO NOS. 225-228/AHD/2007 AGAINST THE ADDITION OF RS.30 00 000/- MADE BY THE ASSESSING OFFICER THEREBY DELETING AN ADDITION OF RS.22 68 20 0/-. (2) THE LD. CIT(APPEALS) IS NOT JUSTIFIED IN THE CONSID ERING COGNIZANCE TO THE PLEA OF THE APPELLANT REGARDING VALUATION OF STOCK IN TRADE DESPITE THE FACT THAT THE STOCK WAS INVENTORIED AND VALUED WITH THE ASSISTANCE OF SHRI ASHOK JINDAL KEY PERSON OF THE APPELLANT GROUP. ITA NO. 2582/AHD/2007 (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A.) HAS ERRED IN RESTRICTING THE ADDITION TO RS .9 21 538/- AS AGAINST THE ADDITION OF RS.37 81 757/- MADE BY THE ASSESSING OFFICER THEREBY DELETING AN ADDITION OF RS.22 60 21 9/-. (2) THE LD. CIT(APPEALS) IS NOT JUSTIFIED IN THE CO NSIDERING COGNIZANCE TO THE PLEA OF THE APPELLANT REGARDING VALUATION OF STOCK IN TRADE DESPITE THE FACT THAT THE STOCK WAS INVENTORIED AND VALUED WITH THE ASSISTANCE OF SHRI ASHOK JINDAL KEY PERSON OF THE APPELLANT GROUP. C.O. NOS. 225 226 227/AHD/2007 (IN ITA NOS. 2579 2580 & 2581/AHD/2007) (I) VALIDITY OF ASSESSMENT IN SURVEY PROCEEDINGS :- THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) OU GHT TO HAVE HELD THE SURVEY PROCEEDINGS AS ILLEGAL AND ADDITION MADE THEREON AS INCORRECT BECAUSE :- (I) THE STOCK INVENTORIES WERE SIGNED BY THE INS PECTOR. (II) THE WARRANT WAS NOT IN NAME OF ALL THE PERSONS WHERE ADDITIONS HAVE BEEN MADE. (III) AUTHORIZATION WAS ISSUED IN NAME OF ONE CONCE RN WHICH WAS DISCONTINUED LONG BACK. (IV) SURVEY PARTY HAD NO JURISDICTION. (II) EXCESS STOCK : (1) THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERR ED IN SUSTAINING A SUM OF RS.7 31 800/- OUT OF RS.30 00 0 00/- ADDED BY THE ASSESSING OFFICER AS BEING EXCESS STOCK FOUND AT TH E TIME OF SURVEY OPERATIONS. (2) THE APPELLANT SUBMITS THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) MISCONSTRUED CERTAIN FACTS IN SUSTAINI NG THE ABOVE ADDITION. 5 ITA NOS.2579-2882/AHD/2007 & CO NOS. 225-228/AHD/2007 (3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ADD ITION MADE MAY BE DELETED. C.O. NO. 228/AHD/2007 (IN ITA NO. 2582/AHD/2007) (I) VALIDITY OF ASSESSMENT IN SURVEY PROCEEDINGS :- THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) OU GHT TO HAVE HELD THE SURVEY PROCEEDINGS AS ILLEGAL AND ADDITION MADE THEREON AS INCORRECT BECAUSE :- (I) THE STOCK INVENTORIES WERE SIGNED BY THE INS PECTOR. (II) THE WARRANT WAS NOT IN NAME OF ALL THE PERSONS WHERE ADDITIONS HAVE BEEN MADE. (III) AUTHORIZATION WAS ISSUED IN NAME OF ONE CONCE RN WHICH WAS DISCONTINUED LONG BACK. (IV) SURVEY PARTY HAD NO JURISDICTION. (II) EXCESS STOCK : (1) THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERR ED IN SUSTAINING A SUM OF RS.9 21 538/- OUT OF RS.37 81 7 57/- ADDED BY THE ASSESSING OFFICER AS BEING EXCESS STOCK FOUND AT TH E TIME OF SURVEY OPERATIONS. (2) THE APPELLANT SUBMITS THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) MISCONSTRUED CERTAIN FACTS IN SUSTAINI NG THE ABOVE ADDITION. (3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ADD ITION MADE MAY BE DELETED. 5. AT THE TIME OF HEARING BEFORE US ON BEHALF OF A SSESSEE SHRI R.N. VEPARI LD. COUNSEL APPEARED AND CONTENDED THAT GROUND NO. 1 OF CROSS O BJECTIONS FILED BY THE ASSESSEES IS NOT PRESSED. 5.1. WITH REGARD TO EXCESS STOCK FOUND THE LD. CO UNSEL OF THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). THE LD. COUNSEL OF THE ASSESSEE EXPLAINED THAT IF THE COST PRICE OF TH E PHYSICAL STOCK WAS APPLIED AT THE TIME OF SURVEY THERE WOULD BE NEGLIGIBLE DISCREPANCY AS UN DER :- (A) METHOD ADOPTED BY THE SURVEY PARTY 6 ITA NOS.2579-2882/AHD/2007 & CO NOS. 225-228/AHD/2007 TOTAL SALE VALUE OF THE FINISHED GOODS FOUND AT THE TIME OF SURVEY RS.11 45 54 423/- TOTAL COST OF THE GOODS AS PER BOOKS RS.10 17 7 2 666/- DISCREPANCY ASCERTAINED AT THAT TIME RS. 1 27 8 1 757/- (B) CORRECT PROCESS TO ASCERTAIN DISCREPANCY APPLYING E ARLIER YEARS G.P. TOTAL SALE VALUE OF THE FINISHED GOODS FOUND AT THE TIME OF SURVEY RS.11 45 54 423/- LESS : G.P. @ 13.97% AS APPLIED IN THE BOOKS RS. 1 60 03 253/- COST PRICE OF THE FINISHED GOODS FOUND AT THE TIME OF SURVEY RS. 9 85 51 170/- COST OF GOODS AS PER BOOKS RS.10 17 72 666/- ACTUAL DISCREPANCY SHOULD BE RS. 32 21 496 /- (SHORT PHYSICAL STOCK) IT WAS FURTHER SUBMITTED THAT THE FINISHED STOCK F OUND AT THE TIME OF SURVEY SHOULD BE COMPARED WITH BOOK STOCK ASCERTAINED WITH THE HELP OF ACTUAL RATE OF GROSS PROFIT OF CURRENT YEAR WHICH SHOULD BE AS UNDER :- COMPARISON BASED ON CURRENT YEARS G.P. TOTAL SALE VALUE OF THE FINISHED GOODS FOUND AT THE TIME OF SURVEY RS.11 45 54 423/- LESS : GROSS PROFIT @ 10.66% (AVERAGE OF C.T. G.P.) RS. 1 22 11 501/- COST PRICE OF THE FINISHED GOODS FOUND AT THE TIME OF SURVEY RS.10 23 42 922/- COST OF GOODS AS PER BOOKS RS.10 17 72 666/- ACTUAL DISCREPANCY SHOULD BE RS. 5 70 25 6/- (EXCESS PHYSICAL STOCK) ON THE BASIS OF THE ABOVE THE LD. COUNSEL OF THE A SSESSEE SUBMITTED THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) SHOULD HAVE IGN ORED THE SMALL DIFFERENCE BECAUSE IT MAY BE DUE TO SOME MISTAKES IN TAKING PHYSICAL STOCK OF SUCH A HUGE QUANTITY. IT WAS ALSO SUBMITTED THAT SHRI ASHOKKUMAR JINDAL WAS MENTALLY TIRED AND HE GAVE A ROUGH IDEA OF SOME CASH LYING AT THE RESIDENCES OF ALL THE PARTNERS WHICH WAS INCLUD ED IN CASH FOUND WITHOUT MAKING ANY INVENTORY AND DISCREPANCY RESULTED THEREON WAS ACC EPTED IN THE FORM OF DISCLOSURE. THE LD. COUNSEL OF THE ASSESSEE ACCORDINGLY CONTENDED THAT EVEN THE ADDITION TO THE EXTENT OF RS.7 31 800/- CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IN CASE OF THREE ASSESSEES NAMELY M/S. JINDAL FASHIONS M/S. JINDAL CREATION AND SMT. ANITA A. JINDAL SHOULD BE DELETED AND THE ADDITION TO THE EXTENT OF RS.9 21 538/- CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IN THE CASE OF SHRI MANGATRAI GOYAL (HUF) BE DELETED. THE LD. COUNSEL OF THE ASSESSEE FURTHER SUBMITTED T HAT NO DIFFERENCE IN QUANTITY WAS FOUND DURING 7 ITA NOS.2579-2882/AHD/2007 & CO NOS. 225-228/AHD/2007 THE COURSE OF SURVEY. THE SURVEY PARTY WORKED OUT T HE ADDITION BY VALUING THE STOCK AT A HIGHER PRICE. SUBSEQUENTLY WHEN THE ALLEGED STOCK WAS SOL D THE PRICE REALIZED WAS ACCOUNTED BY THE ASSESSEE. THEREFORE PARTIAL ADDITION ON THIS GROUN D TO THE EXTENT OF RS.7 31 800/- SUSTAINED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IN CASE OF THREE ASSESSEES NAMELY M/S. JINDAL FASHIONS M/S. JINDAL CREATION AND SMT. ANIT A A. JINDAL AND THE ADDITION TO THE EXTENT OF RS.9 21 538/- IN THE CASE OF SHRI MANGATRAI GOYAL ( HUF) BE DELETED. 6. ON THE OTHER HAND SHRI ANIL KUMAR LD. SR. D.R. APPEARING ON BEHALF OF THE REVENUE CONTENDED THAT DURING THE SOURCE OF SURVEY THE PRI ME PERSON NAMELY SHRI ASHOKKUMAR JINDAL OF THE GROUP MADE A DISCLOSURE ON 03.10.2002. SUBSEQUE NTLY VIDE LETTER DATED 31.10.2002 AND 02.12.2002 HE FURNISHED BIFURCATION OF DISCLOSURE MADE BY HIM AT RS.1 41 85 715/-. IN THESE CIRCUMSTANCES THERE IS NO JUSTIFICATION WHATSOEVER FOR REVERTING THE DISCLOSURE VIDE LETTER DATED 21.10.2003. HE CONTENDED THAT RETRACTION MADE BY SH RI ASHOKKUMAR JINDAL VIDE HIS LETTER DATED 21.10.2003 IS NOTHING BUT AN AFTERTHOUGHT. HE FURTH ER SUBMITTED THAT IN THE IMPUGNED ORDER THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ADMITTE D THAT THE ASSESSEE HAS NOT FULLY PROVED THAT AT THE TIME OF SURVEY EXCESS STOCK WAS VALUED AT SALE PRICE. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CALLED THE REMAND REPORT BUT W HILE CALLING THE REPORT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS NOT FORWARD ED TO THE ASSESSING OFFICER THE CHARTS SUBMITTED BY THE ASSESSEE WHICH ARE RE-PRODUCED IN THE IMPUGNED ORDER ON PAGES 9 TO 12. ON THIS GROUND ALONE HE SUBMITTED THAT THE ADDITION M ADE BY THE ASSESSING OFFICER ON ACCOUNT OF EXCESS STOCK AMOUNTING TO RS.1 27 81 757/- BE UPHEL D OR MATTER BE REMANDED TO THE FILE OF ASSESSING OFFICER. 7. IN REJOINDER THE LD. COUNSEL OF THE ASSESSEE SU BMITTED THAT AFTER EXAMINING THE REMAND REPORT WORKING SUBMITTED BY THE ASSESSEE THE LEAR NED COMMISSIONER OF INCOME TAX(APPEALS) HAS PARTIALLY CONFIRMED THE ADDITION. THE REASONING AS GIVEN BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IS THAT AT THE TIME OF SURVEY IT WAS SEEN THAT OUT OF 123 QUALITIES OF CLOTH FOUND THE ASSESSEE HAS CLAIMED THAT 83 QUALITIES O F INVENTORIED AT THE SALE PRICE WHILE 40 QUALITIES WERE VALUED AT THE COST PRICE OR IN SOME OF THE CASES AT LESS THAN THE COST PRICE. AFTER CONSIDERING THIS ASPECT THE LEARNED COMMISSIONER O F INCOME TAX(APPEALS) ESTIMATED THE EXCESS 8 ITA NOS.2579-2882/AHD/2007 & CO NOS. 225-228/AHD/2007 STOCK AT RS.25 00 000/- IN RESPECT OF ALL THE FOUR ASSESSEES AS AGAINST THE EXCESS STOCK WORKED OUT BY THE SURVEY PARTY AT RS.1 27 81 757/-. THIS EXCES S STOCK OF RS.25 00 000/- HAD BEEN BIFURCATED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IN THE HANDS OF FOUR CONCERNS. HE ACCORDINGLY CONTENDED THAT NO USEFUL PURPOSE WILL B E SERVED IN REMANDING THE MATTER BACK TO THE FILE OF ASSESSING OFFICER WHEN DEPARTMENT CANNOT PO INT OUT ANY PATENT MISTAKE IN THE REASONING/ WORKING GIVEN BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). 8. HAVING HEARD BOTH THE SIDES WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS TRUE THAT SHRI ASHOKKUMAR JINDAL WHO IS THE PRIME PERSON OF THE GROUP MADE THE UNDISCLOSED INCOME IN RESPECT OF EXCESS STOCK AND C ASH FOUND AMOUNTING TO RS.1 41 87 715/-. SUBSEQUENTLY ON VERIFYING THE ENTRIES MADE IN THE BOOKS OF ACCOUNTS WITH THE PURCHASE VOUCHERS HE REALIZED A MISTAKE AND REVERTED THE DISCLOSURE V IDE LETTER DATED 21.10.2003. THIS RETRACTION WAS NOT ACCEPTED BY THE ASSESSING OFFICER. HOWEVER THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) FOUND THE RETRACTION PARTIALLY CORRECT . ON THIS BASIS THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) WORKED OUT THE EXCESS STOCK AT RS.31 14 800/- IN CASE OF THE GROUP OF FOUR ASSESSEES NAMELY M/S. JINDAL FASHIONS M/S. JINDAL CREATION SMT. ANITA A. JINDAL AND SHRI MANGATRAI GOYAL (HUF) OBSERVING AS UNDER :- THIS CHART WAS COMPARED WITH THE INVENTORY PREPARE D AT THE TIME OF SURVEY AND IT WAS SEEN THAT OUT OF 123 QUALITIES OF CLOTH FOUND AT THE TIME OF SURVEY THE APPELLANT HAS CLAIMED THAT 83 QUALITIES OF INVENTOR IED AT THE SALE PRICE WHILE 40 QUALITIES WERE VALUED AT THE COST PRICE OR IN SOME OF THE CASES AT LESS THAN THE COST PRICE. IT IS ALSO SEEN THAT THE AVERAGE PRICE OF STOCK FOUND AT THE TIME OF SURVEY WAS TAKEN AT RS.45.36 PER METER AS COMPARED TO RS.41.18 PER METER CLAIMED BY THE APPELLANT. THIS MEANS THAT AS PER TH E APPELLANT THE ACTUAL COST OF GOODS AS ON THE DATE OF SURVEY WAS RS.10 33 92 8 12/- COMPARED TO RS.11 45 54 423/- INVENTORIED BY THE SURVEY PARTY WHEREAS THE STOCK AS PER BOOKS OF ACCOUNTS WAS RS. 10 17 72 666/- WHICH MEAN S THAT THE EXCESS STOCK OF RS 16 20 146/- WAS FOUND AL THE TIME OF SURVEY COMP ARED TO WHAT WAS RECORDED IN THE BOOKS IF THE APPELLANT'S VERSION IS TO BE B ELIEVED HOWEVER AS ALREADY STATED IN THE EARLIER PART OF THIS ORDER THE APPEL LANT'S VERSION CAN NOT BE BELIEVED IN TOTO SINCE NAMES OF SOME OF THE ITEMS M ENTIONED IN THE PURCHASE BILLS DO NOT MATCH WITH THE NAMES MENTIONED IN THE INVENTORY THEREFORE I AM OF THE VIEW THAT IT WOULD BE FAIR AND REASONABLE IF EXCESS STOCK IS TAKEN AT A VALUE WHICH IS HIGHER THAN THE ONE CLAIMED BY THE A PPELLANT AND THEREFORE THE EXCESS STOCK IS ESTIMATED AT RS.25 LAKHS. FURTHER IT IS ALSO SEEN THAT AS PER THE INVENTORY AND AS ALSO ADMITTED BY THE APPELLANT TH ERE WAN AN EXCESS STOCK OF 14 638 METERS OF CLOTH WHICH WERE NOT RECEDED IN TH E BOOKS OF ACCOUNTS AND IF THE VALUE OF THIS UNRECORDED STOCK IS TAKEN AT THE AVERAGE PRICE OF RS.41.18 PER METER WHICH WAS THE AVERAGE COST TO THE APPELLANT O N THE DATE OF SURVEY A FURTHER ADDITION OF RS 6 14 800/- (14 638 METERS X RS.42/-) IS REQUIRED TO BE 9 ITA NOS.2579-2882/AHD/2007 & CO NOS. 225-228/AHD/2007 MADE ON ACCOUNT OF EXCESS STOCK FOUND DINING THE CO URSE OF SURVEY. THIS EFFECTIVELY MEANS THAT THE TOTAL VALUE OF EXCESS ST OCK IN THE EASE OF THE GROUP WOULD BE RS.31 14 800/-. THE PLEA OF THE LD. COUNSEL OF THE ASSESSEE THAT DI SCREPANCY WORKED OUT TO RS.5 70 256/- WHICH IS NEGLIGIBLE AND SHOULD BE IGNORED LOOKING TO THE PE CULIAR FACTS CANNOT BE ACCEPTED. IN THE IMPUGNED ORDER THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS FOUND THE EXPLANATION OF THE ASSESSEE PARTIALLY CORRECT AND ON THAT BASIS HE ALLOWED PARTIAL RELIEF. BY CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES WE ARE OF THE OPINION THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS GIVEN COGENT REASON FOR RES TRICTING THE ADDITION OF RS.30 00 000/- TO RS.7 31 800/- IN RESPECT OF THREE CASES NAMELY M/S. JINDAL FASHIONS M/S. JINDAL CREATION AND SMT. ANITA A. JINDAL AND RESTRICTING THE ADDITION O F RS.37 81 757/- TO RS.9 21 538/- IN THE CASE OF SHRI MANGATRAI GOYAL (HUF). WE THEREFORE DECLINE TO INTERFERE. RESULTANTLY THE GROUND OF THE REVENUES APPEALS AND GROUND NO. 2 OF ASSESSEES CR OSS OBJECTIONS ARE REJECTED. 9. GROUND NO.1 IN RESPECT OF ALL THE ASSESSEES CRO SS OBJECTIONS IS NOT PRESSED BY THE LD. COUNSEL OF THE ASSESSEE AT THE TIME OF HEARING. THE REFORE THIS GROUND IS BEING DISMISSED AS NOT PRESSED. 10. IN THE RESULT ALL THE APPEALS FILED BY THE REV ENUE AS WELL AS THE CROSS OBJECTIONS FILED BY THE DIFFERENT ASSESSEES ARE DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 31.08.20 10 SD/- SD/- (G.D. AGRAWAL) (T.K. SHARMA ) VICE-PRESIDENT (AZ) JUDICIAL MEMBER DATED : 31 / 08 / 2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A) CONCERNED (4) CIT CONCERNED (5) D.R. ITAT AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGI STRAR ITAT AHMEDABAD LAHA/SR.P.S.