ITO, Rohtak v. Shri Jashwant Singh Deshwal, Jhajjar

ITA 1396/DEL/2010 | 2005-2006
Pronouncement Date: 30-03-2012 | Result: Dismissed

Appeal Details

RSA Number 139620114 RSA 2010
Assessee PAN ADFPD6119D
Bench Delhi
Appeal Number ITA 1396/DEL/2010
Duration Of Justice 1 year(s) 11 month(s) 30 day(s)
Appellant ITO, Rohtak
Respondent Shri Jashwant Singh Deshwal, Jhajjar
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 30-03-2012
Date Of Final Hearing 20-03-2012
Next Hearing Date 20-03-2012
Assessment Year 2005-2006
Appeal Filed On 31-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI SHAMIM YAHYA ITA NO. 1396/DEL/2010 ASSESSMENT YEAR: 2005-06 INCOME-TAX OFFICER VS. SHRI JASHWANT SINGH DESHW AL WARD 4 PROP. DESHWAL BHATTA CO. ROHTAK. R/O CHHIKKARA CHOWK ARYA NAGAR JHAJJAR (HR.) (PAN: ADFPD6119D) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI ANOOP KU MAR SINGH DR RESPONDENT BY: SHRI CS GUPTA A R DATE OF HEARING : 27.03.2012 DATE OF PRONOUNCEMENT : 30.03.2012 ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LEARNED CIT(APPEALS) DATED 29.01.2010 PASSED FOR ASSESSMENT YEAR 2005-06. THE SOLITARY GRIEVANCE OF THE REVENUE IS THAT LEARNED C IT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.4 07 015 WHICH WAS ADDE D BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED PROFIT ON UNRECOR DED SALES. SIMILARLY IN SECOND GROUND OF APPEAL REVENUE IS IMPUGNING THE D ELETION OF RS.4 81 660 WHICH WAS ADDED BY THE ASSESSING OFFICER ON THE GRO UND THAT IN ORDER TO ACHIEVE UNRECORDED SALES ASSESSEE MUST HAVE MADE I NVESTMENT IN THE 2 BUSINESS WHICH HAS NOT BEEN DISCLOSED. HE ESTIMATED SUCH INVESTMENT AT RS.4 81 660. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS AN INDIVIDUAL. HE IS RUNNING A PROPRIETARYSHIP IN THE NAME AND STYLE OF DESHWAL BHATTA COMPANY. HE DERIVES INCOME FROM SALE/PURCHASES OF B RICKS. HE HAS FILED HIS RETURN OF INCOME ON 28.10.2005 DECLARING AN INCOME OF RS.2 21 000. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSE SSMENT AND A NOTICE UNDER SEC. 143(2) OF THE INCOME-TAX ACT 1961 WAS ISSUED AND SERVED UPON THE ASSESSEE. A SURVEY UNDER SECTION 133A WAS CARRIED O UT ON THE BUSINESS PREMISES OF THE ASSESSEE ON 4.8.2005. DURING THE CO URSE OF SURVEY DOCUMENTS INVENTORIZED AS ANNEXURE-3 WAS FOUND AND SEIZED. ACCORDING TO THE ASSESSING OFFICER ON PERUSAL OF THIS DOCUMENT IT REVEALS THAT ASSESSEE HAS CALCULATED THE SALES FOR THE PERIOD RELEVANT TO ASSESSMENT YEAR 2005-06 AT RS.65 78 535 WHEREAS HE HAS DECLARED THE SALES IN T HE RETURN AT RS.43 17 340. ASSESSING OFFICER DIRECTED THE ASSESSEE TO EXPLAIN THE DISCREPANCY IN THE SALES SHOWN BY HIM IN THE RETURN VIS--VIS AVAILABL E IN THE DOCUMENTS FOUND DURING THE COURSE OF SURVEY. IN RESPONSE TO THE QUE RY OF THE ASSESSING OFFICER ASSESSEE HAS SUBMITTED HIS REPLY ON 12.12. 2008 WHICH IS AS UNDER: THE SALES FIGURE AS ASCERTAINED FROM THE IMPOUNDED DOCUMENTS SHOWING DATE OF 31.01.05 TO THE TUNE OF RS.65 78 53 5 DO NOT PERTAINS 3 FOR THE FULL FINANCIAL YEAR 2004-05 BECAUSE AS PER BHATTA BUSINESS TREND THE ACCOUNTING ETC. OR THE TOTAL BUSINESS CA LCULATIONS ARE RECORDED BY THEM FOR THEIR PERSONAL MEANS ARE FROM SEASON TO SEASON THAT MEANS WHEN THE BHATTA WAS LAST CLOSED IN LAST SEASON TILL THE BUSINESS START FOR NEXT SEASON MEANS WHEN BHATTA GO T FIRED IN THE LAST SEASON TILL THE NEXT FIRING DATE AS GENERALLY THE F IRING DATES ARE NORMALLY IN LAST WEEK OF JANUARY OF EVERY YEAR OR 2 ND WEEK OF FEBRUARY OF EVERY YEAR AND IN THE YEAR 2004-05 THE DATE OF FIRING THE RAW BRICKS IN THE KILN IS ITSELF IS 16.02.05 WHICH YOU CAN VERIFY FROM THE RECORDS IMPOUNDED WHICH SHOWS THAT THIS SALES F IGURES PERTAINS TO ALSO LAST SEASON AND ON THE OTHER HAND THIS YEAR ME ANS F.Y. 2004-05 THE MANUFACTURING OF BRICKS WAS ALSO VERY LESS DUE TO HEAVY RAINFALL (RAINFALL FIGURES FROM TEHSIL ARE ENCLOSED HEREWITH ) SO THE QUESTION OF SALES FIGURE FOR RS.65 78 535 CANNOT BE JUSTIFIED. THE ASSESSEE ALSO FILED THE DATE WISE RECORDS OF RAIN FALL WHICH IS P LACED ON FILE. 3. ASSESSING OFFICER DID NOT FIND MERIT IN THE CONT ENTIONS OF THE ASSESSEE. HE HELD THAT ASSESSEE FAILED TO DISCLOSE THE SALES AMOUNTING TO RS.22 61 195 I.E. (RS.65 78 535 43 17 340 ).ACCORDING TO THE A SSESSING OFFICER ASSESSEE HAS DECLARED GROSS PROFIT @ 18% IN THE RET URN OF HIS INCOME ON THE SALES RECORDED IN THE BOOKS. HE ESTIMATED THIS G.P. ON THE SALES WHICH WERE NOT ALLEGED TO HAVE BEEN RECORDED. IN THIS WAY G.P . HAS BEEN CALCULATED ON THE UNRECORDED SALES OF RS.22 61 195 AT RS.4 07 015 . LD. ASSESSING OFFICER MADE THE ADDITION OF THIS AMOUNT. ASSESSING OFFICER FURTHER OBSERVED THAT FOR 4 ATTAINING THE CLOSING STOCK OF RS.52 52 484 ASSESS EE HAS TO INCUR EXPENSES OF RS.44 75 353. ON THE STRENGTH OF THIS FIGURE HE WO RKED OUT THE OVERALL EXPENSES INCURRED BY THE ASSESSEE AND APPLIED THAT AVERAGE ON THE UNRECORDED SALES. IN THIS WAY HE WORKED OUT A SUM OF RS.4 81 660 WHICH ASSESSEE MUST HAVE INVESTED AT THE VERY START OF TH E BUSINESS FOR ACHIEVING THE UNRECORDED SALES OF RS.22 61 155. HE MADE THE A DDITION OF THIS AMOUNT. 4. IN APPEAL LEARNED FIRST APPELLATE AUTHORITY HAS REAPPRECIATED THE SEIZED MATERIAL AND THEREAFTER DELETED THE ADDITION . THE OBSERVATIONS OF THE LEARNED FIRST APPELLATE AUTHORITY READ AS UNDER: UNQUOTE THE VERSION OF THE APPELLANT HAS BEEN CONSIDERED A ND PAGE 4 OF A3 HAS BEEN CAREFULLY SEEN. PAGE 4 RECORDS THE FOLL OWING ITEMS RELIED UPON BY THE ASSESSING OFFICER:- 1 4796 900 1100 5276590 2 505.600 800 404480 3 25.000 300 7500 CHOT 76.800 900 69120 MUNJAR 3.000 383.33 1150 5 N 752.750 900 677475 RORA 33.50RD 200 6700 TILE 123.200 1100 135520 TOTAL 6316.750 6578535 ON THE OTHER SIDE OF THIS PAGE I.E. ON THE BACK OF PAGE NO. 3 IT HAS BEEN WRITTEN PATHAI/04-05 AND FURTHER CHER 7/0 3-04. A COMBINED READING OF WHAT EVER HAS BEEN WRITTEN ON PAGE 4 AND ON BACK SIDE OF PAGE NO.3 WOULD MAKE IT CLEAR THAT THE FIGURES ALTH OUGH NOTED IN THE ACCOUNTS FOR THE PERIOD 31.1.2005 TO 25.3.2005 DO N OT PERTAIN TO THIS PERIOD BECAUSE THE RATES OF VARIOUS ITEMS WERE NOT AS THOSE APPLIED FOR WORKING OUT THE ABOVE FIGURE; THESE RATES WERE DURI NG THE YEAR 2003- 04 & 2004-05. FURTHER THE FIGURE OF RS.65 78 535 H AS BEEN SUBMITTED AS ESTIMATE TILL 31.3.2005 AND FOR THE MONTHS OF FE B. & MARCH THE FIGURE HAS BEEN SHOWN BY THE APPELLANT AT RS.4 72 7 20 FOR FILING ITS RETURNS OF INCOME. TAKING THIS FIGURE OF RS.4 72 72 0 THE TOTAL WORKS OUT TO 70 51 255 (68 78 535 + 4 72 720 ); THE APPEL LANT HAS SHOWN THE VALUE OF SALES FOR THE A.Y. 2003-04 & 2004-05 AT RS .27 33 915 AND RS.43 17 340 RESPECTIVELY AGGREGATING TO RS.70 51 2 55. THEREFORE NO COGNIZANCE CAN BE TAKEN OF THIS PAPER ON THE LINES AS ADOPTED BY THE ASSESSING OFFICER. THEREFORE ADDITION OF RS.8 88 675 MADE BY THE ASSES SING OFFICER IS DELETED. THE ASSESSING OFFICER HAS WORKE D OUT SALES OUT OF BOOKS AT RS.4 07 015 AND HAS WORKED OUT UNDISCLOSED EXPENDITURE ON MAKING THE UNDISCLOSED SALES AT RS.4 81 660 AND HAS MADE ADDITION OF 6 RS.8 88 675. FOR MAKING THE AFORESAID ADDITION THE ASSESSING OFFICER HAS ADOPTED ITS OWN METHOD FOR WORKING OUT INVESTME NT AND PROFITABILITY WITHOUT ANY BASIS. THE APPEAL IS ALLO WED. 5. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES WE HAVE GONE THROUGH THE RECORD CAREFULLY. LEARNED DR HAS PLACED ON REC ORD COPY OF ANNEXURE A- 3 FOUND DURING THE COURSE OF SEARCH. WE HAVE PERUSE D THIS ANNEXURE IN THE LIGHT OF LEARNED FIRST APPELLATE AUTHORITYS FINDIN G. WE FIND THAT ON THE BACK OF PAGE A-3 ASSESSEE HAS WRITTEN PRIMARY BAT CH 04-05 CHER 7 03- 04 GHER 04-05/1.10.04 PATHAI 04-05 ETC. THE LEAR NED COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE GHER REPRESENTS THE O NE LAIR OF BRICKS IN THE BRICK KILN. PATHAI IS THE PROCESS OF PREPARING RAW BRICKS BY THE LABOURER. IT REPRESENTS THE CHARGES FOR SUCH AN ACTIVITY. ALL TH ESE FIGURES HAVE BEEN NOTICED BY THE ASSESSEE WHICH RELATE TO EARLIER YEA RS. THE BRICK KILN REMAINED CLOSED DURING RAINY SEASON AND THEREFORE IT CANNO T BE ESTIMATED THAT ALL THESE DETAILS PERTAIN TO ASSESSMENT YEAR 2005-06 ON LY. ON AN ANALYSIS OF THESE DETAILS WE FIND THAT LEARNED FIRST APPELLATE AUTHORITY HAS ARRIVED AT A RIGHT CONCLUSION THAT THESE DETAILS DO NOT PERTAIN TO ACCOUNTING YEAR 2004-05 RELEVANT FOR ASSESSMENT YEAR 2005-06 ALONE. THEY CO VER THE EARLIER PERIOD ALSO. THUS ON THE STRENGTH OF THESE DETAILS IT CA NNOT BE CONCLUSIVELY HELD THAT ASSESSEE HAS SUPPRESSED THE SALES. LEARNED FIR ST APPELLATE AUTHORITY HAS 7 RIGHTLY DELETED THE ADDITION. WE DO NOT FIND ANY ER ROR IN THE ORDER. ACCORDINGLY THE APPEAL OF REVENUE IS DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 30.03.2 012 SD/- SD/- ( SHAMIM YAHYA ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30/03/2012 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR