ITO Ward 34(4), v. Raghav Sewa NIketan,

ITA 1704/DEL/2008 | 2002-2003
Pronouncement Date: 30-04-2010 | Result: Allowed

Appeal Details

RSA Number 170420114 RSA 2008
Assessee PAN AAATR1768G
Bench Delhi
Appeal Number ITA 1704/DEL/2008
Duration Of Justice 1 year(s) 11 month(s) 25 day(s)
Appellant ITO Ward 34(4),
Respondent Raghav Sewa NIketan,
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted F
Tribunal Order Date 30-04-2010
Date Of Final Hearing 28-04-2010
Next Hearing Date 28-04-2010
Assessment Year 2002-2003
Appeal Filed On 05-05-2008
Judgment Text
ITA NOS. 1704&1705/DEL/08 A.YRS. 2002-03 & 2004-05 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER I.T.A. NOS. 1704 & 1705/DEL/2008 ASSESSMENT YEARS : 2002-03 & 2004-05 INCOME-TAX OFFICER M/S. RAGHAV SEWA NIKETAN WARD-34(4) 319 VS. C-8/259 YAMUNA VIHAR D-BLOCK VIKAS BHAVAN DELHI 110 053 NEW DELHI 110 002 (PAN: AAATR 1768 G) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI HK LAL SR. DR ASSESSEE BY : SHRI S.L. GUPTA ADV. O R D E R PER SHAMIM YAHYA ACCOUNTANT MEMBER THESE APPEALS BY THE REVENUE ARE DIRECTED AGAINST THE RESPECTIVE ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FOR T HE CONCERNED ASSESSMENT YEARS. SINCE THE ISSUES INVOLVED ARE COMMON AND CONNECTED AND THE APPEALS WERE HEARD TOGETHER. THESE ARE BEING CONSOLIDATED AND DISPOSED OF TOGETHER FOR THE SAKE OF CONVENIENCE. ITA NOS. 1704&1705/DEL/08 A.YRS. 2002-03 & 2004-05 2 2. THE COMMON ISSUE RAISED IS THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DELETING THE ADDITION MADE B Y THE ASSESSING OFFICER ON ACCOUNT OF LESS SALES SHOWN BY THE ASSESSEE. 3. IN THIS CASE DURING THE COURSE OF ASSESSMENT FOR THE ASSESSMENT YEAR 2002- 03 ASSESSING OFFICER OBSERVED THAT ASSESSEE HAS SH OWN TOTAL PURCHASE AT RS. 78 10 643/- AGAINST WHICH SALES HAVE BEEN SHOWN TO THE TUNE OF RS. 96 80 858/- YIELDING A GP RATE OF 19.17 AND NP AT 0.08. AS PER PARA 28(A) OF THE AUDIT REPORT TOTAL QUANTITY OF MILK PURCHASED IS AT 9 94 280 LI TRES AND QUANTITY OF MILK SOLD IS 9 82 471 LITRES. AFTER TAKING INTO CONSIDERATION TH E SHORGAGE OF 7369 LITRES CLOSING STOCK HAS BEEN SHOWN AT 8300 LITRES. 4. ASSESSING OFFICER OBSERVED THAT ASSESSEE HAS N OT FURNISHED THE STOCK REGISTER. HE FURTHER OBSERVED THAT REGARDING TRADIN G RESULTS THE ASSESSEE HAS FURNISHED ONLY CHART OF SALE AND PURCHASE MONTHWISE . ASSESSING OFFICER FURTHER REFERRED THAT PROCUREMENT PRICE OF MULTINATIONAL CO MPANY LIKE NESTLE DURING THE RELEVANT PERIOD IN THE SAME TRADE WAS RS. 1100/100 KG. FROM THIS THE ASSESSING OFFICER ESTIMATED THAT THE PRICE FOR MILK RANGED BETWEEN RS. 12 TO 13 PER LITRE. ON THIS BASIS ASSESSING OFFICER PROCEEDED TO ESTIM ATE THAT THE TOTAL SALES OF THE ASSESSEE COMES TO RS. 1 17 89 652/- AGAINST THE SA LE OF RS. 96 80 858/- SHOWN BY THE ASSESSEE. ASSESSING OFFICER OBSERVED THAT ASSE SSEE WAS NOT MAINTAINING THE STOCK REGISTER AND THE SALE PRICE SHOWN BY THE ASSE SSEE WAS CONTRADICTORY TO THE ITA NOS. 1704&1705/DEL/08 A.YRS. 2002-03 & 2004-05 3 ACTUAL SALE MADE BY THE ASSESSEE IN THE OPEN MARKE T. ASSESSING OFFICER FURTHER HELD THAT SALES SHOWN BY THE ASSESSEE WAS WITHOUT A NY DOCUMENTARY EVIDENCE AS NO SALES BILLS WERE FILED DURING THE COURSE OF AS SESSMENT PROCEEDINGS. HENCE ASSESSING OFFICER PROCEEDED TO REJECT THE RESULTS SHOWN BY THE ASSESSEE BY INVOKING THE PROVISIONS OF SECTION 145(3) AS ACCOU NTS/ DETAILS MAINTAINED BY THE ASSESSEE ARE NOT CORRECT AND COMPLETE. HE PROCEEDE D TO MAKE ADDITION OF RS. 21 08 794/- ON ACCOUNT SUPPRESSION OF SALES FOR ASS ESSMENT YEAR 2002-03. ON SIMILAR REASONING HE MADE ADDITION OF RS. 97 01 464 /- FOR THE ASSESSMENT YEAR 2004-05. 5. BEFORE THE LD. COMMISSIONER OF INCOME TAX ( APPEALS) IT WAS SUBMITTED THAT ASSESSEE WAS DEALING ONLY IN PURCHASE AND SALE OF MILK. IT WAS CLAIMED THAT AO HAS COMPLETELY ERRED REGARDING THE NATURE OF T HE BUSINESS OF THE ASSESSEE. IT WAS FURTHER CLAIMED THAT ALL THE NECESSARY BOOKS AN D RECORDS WERE PRODUCED BEFORE THE ASSESSING OFFICER . LD. COMMISSIONER OF INCOME TAX (APPEALS) AGREED WITH THE CONTENTION OF THE ASSESSEE AND HELD THAT THE ASSESSEE HAS FURNISHED THE REPLY TO THE ASSESSING OFFICER S QUE RY. HE OBSERVED THAT ASSESSING OFFICER VIDE LETTER 10.11.2006 CALLED FO R THE DETAILS OF THE ASSESSEE BUT THERE WAS NO MENTION TO PRODUCE THE BOOKS OF ACCOUN T. HE ACCORDINGLY HELD THAT THAT NON-PRODUCTION OF BOOKS OF ACCOUNT DID NOT JUS TIFY THE REJECTION OF THE BOOKS RESULTS. AS REGARDS THE PURCHASE AND SALE HE REF ERRED TO THE ASSESSEES DETAIL ITA NOS. 1704&1705/DEL/08 A.YRS. 2002-03 & 2004-05 4 SUBMITTED AND HELD THAT THE SAME CANNOT BE COMPARE D WITH THE INFORMATION OBTAINED FROM NESTLE INDIA. HE HELD THAT THERE SHO ULD BE SOMETHING MORE THAN MERE SUSPICION TO SUPPORT THE ASSESSMENT WHEN THE B OOKS OF ACCOUNTS WERE REJECTED. HE PROCEEDED TO DELETE THE ADDITION. 6. AGAINST THIS ORDER THE REVENUE IS IN APPEAL B EFORE US. 7. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. LD. DEPARTMENTAL REPRESENTATIVE CLAIMED THAT THE NECESSARY BOOKS OF ACCOUNTS WERE NOT SUBMITTED BEFORE THE ASSESSING OFFICER. HENCE HE CLAIMED THA T ASSESSING OFFICER WAS LEFT WITH NO OTHER ALTERNATIVE BUT TO ESTIMATE THE TRADI NG RESULTS ON THE BASIS OF PREVAILING MARKET RATES. 7.1 ON THE OTHER HAND LD. COUNSEL OF THE ASSESS EE REITERATED THAT THE NECESSARY BOOKS OF ACCOUNTS WERE PRODUCED BEFORE THE ASSESSIN G OFFICER WHO IGNORED THE SAME. LD. COUNSEL OF THE ASSESSEE CONTENDED THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS PASSED A VERY ELABORATE ORDER AND THE SAME SHOULD BE SUSTAINED. 8. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS. WE FIND THAT ASSESSING OFFICER HAS CATEGORICALLY STATED THAT THE ASSESSE E HAS NOT PRODUCED THE NECESSARY BOOKS OF ACCOUNTS BEFORE HIM. IN THESE CIRCUMSTA NCES ASSESSING OFFICER HAS PROCEEDED TO COMPARE THE SELLING RATE WITH THAT PR EVAILING IN THE MARKET. BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) ASSESSEE HAS SUBMITTED ITA NOS. 1704&1705/DEL/08 A.YRS. 2002-03 & 2004-05 5 THAT ALL THE NECESSARY RECORDS WERE SUBMITTED BEF ORE THE ASSESSING OFFICER. IT WAS ALSO CONTENDED BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) THAT ASSESSING OFFICER HAS NOT PROVIDED ANY OPPORTUNITY AS THE CASE WAS GETTING TIME BARRED BY LIMITATION 31.12.2006. IT HAS BEEN EVEN CLAIMED THAT NOTICE DATED 10.11.2006 WAS NEVER SERVED UPON THE ASSESSEE. HERE WE FIND THAT THERE IS CONTRADICTION IN THE ASSESSEES SUBMISSION. ON THE ONE HAND IT IS BEING CLAIMED THAT ALL THE NECESSARY DETAILS WERE SUBMITTED. SIM ULTANEOUSLY IT IS BEING CLAIMED THAT ASSESSING OFFICER HAS NOT PROVIDED ADEQUATE O PPORTUNITY. IT IS AGAIN BEING CLAIMED THAT NOTICE DATED 10.11.2006 WAS NEVER SERV ED UPON THE ASSESSEE. HENCE WE FIND THAT THERE IS CONTRADICTION IN THE CLAIM O F THE ASSESSEE. WE ALSO FIND IT IS ALSO NOT THE CASE THAT THE LD. COMMISSIONER OF INCO ME TAX (APPEALS) HAS HIMSELF ASKED FOR THOSE BOOKS OF ACCOUNT AND VERIFIED THE S AME. IT IS A SETTLED LAW THAT POWERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEA LS) ARE CO-TERMINUS WITH THAT OF ASSESSING OFFICER . 8.1 WE FIND THAT HONBLE APEX COURT IN THE CASE OF KAP URCHAND SHRIMAL VS. CIT 131 ITR 451 HAS HELD THAT THE APPELLATE AUTHORITY HAS JURISDICTION AS WELL AS THE DUTY TO CORRECT THE ERRORS IN THE PROCEEDINGS UNDER APPEAL. 8.2 IN THE LIGHT OF THE AFORESAID DISCUSSION AND P RECEDENT IN OUR CONSIDERED OPINION THE INTEREST OF JUSTICE WILL BE SERVED IF T HE MATTER IS REMITTED TO THE FILES OF THE ASSESSING OFFICER. ACCORDINGLY THE MATTER IS REMITTED TO THE FILES OF THE ITA NOS. 1704&1705/DEL/08 A.YRS. 2002-03 & 2004-05 6 ASSESSING OFFICER TO CONSIDER THE ISSUE AFRESH AFT ER GIVING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD. 9. IN THE RESULT BOTH THE REVENUES APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH APRIL 2010. SD/- SD/- (I.P. BANSAL) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30 TH APRIL 2010. *SRB* COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER DEPUTY REGISTRAR ITAT.