Lalit Murarka, Cuttack v. CIT, Cuttack

ITA 188/CTK/2015 | 2010-2011
Pronouncement Date: 11-03-2021 | Result: Dismissed

Appeal Details

RSA Number 18822114 RSA 2015
Assessee PAN APMPM9441C
Bench Cuttack
Appeal Number ITA 188/CTK/2015
Duration Of Justice 5 year(s) 10 month(s) 19 day(s)
Appellant Lalit Murarka, Cuttack
Respondent CIT, Cuttack
Appeal Type Income Tax Appeal
Pronouncement Date 11-03-2021
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 11-03-2021
Last Hearing Date 08-08-2019
First Hearing Date 08-03-2021
Assessment Year 2010-2011
Appeal Filed On 21-04-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI C.M. GARG JM & SHRI L.P. SAHU AM . / ITA NO. 188 & 409 /CTK/20 1 5 ( / A SSESSMENT Y EAR : 20 1 0 - 201 1 ) S RI LALIT MURARKA PROP - M/S SUBHAM KANIKA CHHAK CUTTACK VS. CIT CUTTACK PAN NO. : A PMPM 9441 C ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI S.N.SAHU/SOMNATH SAHOO ADVS /REVENUE BY : SHRI M.K.GAUTAM CIT DR / DATE OF HEARING : 0 8 / 0 3 /20 2 1 / DATE OF PRONOUNCEMENT : 09 / 0 3 /20 2 1 / O R D E R PER BENCH : TH E ASSESSEE HAS FILED THESE TWO APPEALS I.E. ITA NO.188/CTK/2015 IS AGAINST THE ORDER DATED 19 .03.2015 PASSED BY THE L D. PR. CIT CUTTACK FOR THE ASSESSMENT YEAR 20 1 0 - 20 1 1 AND ITA NO.409/CTK/2015 IS FILED AGAINST THE ORDER DATED 30.04.2015 PASSED BY THE CIT(A) CUTTACK. 2. SINCE THE FACTS INVOLVED IN BOTH THE APPEALS ARE IDENTICAL THEREFORE WITH THE CONSENT OF BOTH THE PARTIES WE SHALL DECIDE THE APPEAL OF THE ASSESSEE I.E. ITA NO188/CTK/2015 WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : - 1. THAT THE ORDER U/S. 263 MADE BY THE CIT NOT CONSIDERING THE LATEST JUDGEMENT OF THE HONOURABLE SUPREME COURT OF INDI A WHICH IS BINDING ON HIM AND CITING CERTAIN OLD JUDGEMENTS OF SUPREME COURT AND HIGH COURTS IS ARBITRARY ILLEGAL EXCESSIVE UNCALLED FOR ITA NO. 188 &409 /CTK/201 5 2 AND AGAINST THE FACTS ON RECORD AND THEREFORE IS LIABLE TO BE QUASHED. 2. THAT THE LEARNED CIT IS NOT JUSTIFIED IN LAW TO DIRECT THE ASSESSING OFFICER TO REEXAMINE THE GENUINENESS OF LIABILITIES SHOWN IN THE BALANCE SHEET AS ON 31.03.2010 INCLUDING UNSECURED LOAN OF RS. 1 50 000/ - AND ALSO VERIFY THE CORRECTNESS OF SUNDRY DEBTORS OF RS. 4 90 177/ - SHOWN UNDER CURRENT ASSETS AND CASH IN HAND OF RS. 12 34 092/ - BECAUSE THE SAID ITEMS WERE ALREADY THERE BEFORE THE AO AND HAS TAKEN A POSSIBLE VIEW WHICH THE CIT DOES NOT AGREE. UNDER SUCH SITUATION THE ORDER PASSED BY THE CIT U/S. 263 IS ILLEGAL ARBITRARY AS PER THE DECISI ON OF SUPREME COURT OF INDIA IN THE CASE OF MALBAR INDUSTRIES VS. CIT 243 ITR 83 (SC). 3. THAT SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE IN COURSE OF HEARING U/S. 263 OF THE I.T. ACT SHOULD HAVE BEEN CONSIDERED IN ITS PROPER PROSPECT AND NOT DOING SO THE CIT HAS COMMITTED AN ERROR OF LAW AND THEREFORE HIS ORDER IS LIABLE TO BE QUASHED. 4. THAT IN THE GARB OF POWER U/S. 263 THE CIT CANNOT INITIATE PROCEEDING WITH A VIEW TO START SECOND INVESTIGATION FOR STARTING FISHING AND ROVING ENQUIRIES IN VIEW OF THE FOLLOWING JUDGEMENTS WHICH IS BINDING ON HIM. A) CIT VS. SAKHI CHARITIES 60 ITR 107 (MAD) B) CIT VS. GARBIEL INDIA LTD 203 ITR 108 5. THAT OTHER GROUNDS IF ANY WILL BE URGED AT THE TIME OF HEARING OF APPEAL. 3 . BRIEF FACTS OF THE CAS E ARE THAT THE ASSESSEE DERIVES INCOME FROM SALE OF ZUARI MAKE FURNITURE UNDER THE NAME & STYLE M/S SUBHAM AS WELL AS SALARY INCOME AND FILED HIS RETURN OF INCOME ELECTRONICALLY ON 30.03.2011 DISCLOSING TOTAL INCOME AT RS.1 78 320/ - . THE ASSESSMENT WAS COMPLETED U/S.143(3) OF THE ACT ON 13.12.2012 BY THE ITO WARD - 2(1) CUTTACK DETERMINING THE TOTAL INCOME AT RS. 23 80 130 / - . LATER ON BY VIRTUE OF POWER VESTED U/S.263(1) OF THE ACT THE PR.CIT CALLED THE ASSESSMENT RECORDS AND AFTER VERIFICATION OF THE REC ORDS IT WAS NOTICED BY HIM THAT THE AO HAS NOT DONE PROPER ENQUIRY WHICH OUGHT TO HAVE BEEN DONE DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON THE DIFFERENT ISSUES. FURTHER IT HAS BEEN OBSERVED BY HIM THAT THE ASSESSEE ITA NO. 188 &409 /CTK/201 5 3 FAILED TO PROOF THE GENUINENESS OF TRANSACTION AND ALSO FAILED TO SUBSTANTIATE THE CORRECT LIABILITIES AND OTHER ITEMS AS SHOWN IN THE BALANCE SHEET. ACCORDINGLY T HE LD. PR.CIT PASSED ORDER U/S.263 OF THE ACT AFTER RELYING MANY JUDGMENTS WHICH HAS BEEN QUOTED IN THE REVISONARY ORDER AND SE T ASIDE THE ORDER PASSED BY THE AO U/S.143(3) OF THE ACT FOR FRESH ASSESSMENT PROCEEDINGS. THE RELEVANT OBSERVATIONS OF THE LD. PR.CIT READ AS UNDER : - 2. FOR SUCH ACTION OF THE A.O. IN NOT PROPERLY EXAMINING THE AFORESAID ISSUES IN THE ASSESSMENT PROCEEDIN GS THE ASSESSMENT ORDER PASSED U/S. 144 DATED 13.12.2012 FOR THE A/Y:2010 - LL HAS BECOME ERRONEOUS UNDER LAW AND FACTS AND IT HAS CAUSED PRIMA - FACIE PREJUDICE IN THE FORM OF UNDER CHARGE OF TAX PAYABLE DUE TO UNDER ASSESSMENT OF TOTAL INCOME. IN VIEW OF THE ABOVE A SHOW CAUSE NOTICE LETTER DATED 15.01.2015 WAS ISSUED TO THE ASSESSEE TO EXPLAIN AS TO WHY THE ASSESSMENT ORDER PASSED ON 13.12.2012 FOR THE A/Y:2010 - LL SHALL NOT BE SUITABLY MODIFIED U/S.263 OF THE ACT. IN RESPONSE TO THE SHOW CAUSE LETTER ASSESSEE'S AUTHORIZED REPRESENTATIVE SRI S.N.SAHU ADVOCATE APPEARED AND EXPLAINED THE ISSUES MENTIONED IN THE SHOW CAUSE LETTER AND FILED WRITTEN SUBMISSIONS WHICH IS SUMMARIZED AS UNDER: I) ASSESSING OFFICER SPECIFICALLY ASKED TO PRODUCE DOCUMENTARY EVID ENCE IN RESPECT OF SUNDRY DEBTORS SUNDRY CREDITORS UNSECURED LOAN AND CASH IN HAND AND AFTER DUE APPLICATION OF MIND COMPLETED THE ASSESSMENT U/S. 144. THEREFORE ALLEGATION MADE IN THE 263 SHOW CAUSE NOTICE HAS BEEN DULY CONSIDERED BY THE AO. THE PRESE NT PROCEEDINGS U/S.263 AMOUNT TO MERE CHANGE OF OPINION WHICH IS NOT PERMISSIBLE UNDER LAW. WHEN TWO VIEWS ARE POSSIBLE AND THE AO HAS TAKEN ONE VIEW IN WHICH THE ID CIT DOES NOT AGREE IT CAN NOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERE STS OF REVENUE AS DECIDED BY THE APEX COURT IN THE CASE OF MALABAR INDUSTRIES CO LTD. VS. CIT (243 ITR 83 SC). THE SUBMISSIONS PUT FORTH BY THE A/R OF THE ASSESSEE HAVE BEEN CAREFULLY CONSIDERED VIS - A - VIS THE MATERIALS AVAILABLE ON THE RECORD. AT THE OU T SET IT MAY BE POINTED OUT HERE THAT THE CONTENTION OF THE ASSESSEE CHAT INVOKING THE PROCEEDING U/S.263 IS NOT CORRECT IS NOT ACCEPTABLE BECAUSE AN INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDE R BEING ERRONEOUS. REFERENCE IS MADE TO THE RULINGS GIVEN BY THE HON'BLE SUPREME COURT IN THE CASE OF RAMAPYARI DEVI SAROGI VRS. CIT (1968) 67 ITR 84 (SC) AND SMT. TARA DEVI AGGARWAL VRS. CIT REPORTED IN 88 ITR 323 (SC) (1973) IN WHICH THE HON'BLE APEX CO URT HAS HELD THAT LACK OF ENQUIRY OR ITA NO. 188 &409 /CTK/201 5 4 VERIFICATION AT THE RELEVANT TIME BY THE ASSESSING OFFICER WOULD CONSTITUTE PREJUDICE TO THE INTEREST OF REVENUE AND WOULD INVOLVE ERROR OF FACTS AND LAW. IT WAS HELD BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF UMAS HANKAR RICE MILLS VS. CIT REPORTED IN 187 ITR 638(ORI)THAT WHERE THE COMMISSIONER FELT THAT PROPER ENQUIRY WAS NOT MADE BY THE AO DURING ASSESSMENT PROCEEDINGS HE WAS JUSTIFIED IN INVOKING PROVISIONS OF SECTION 263 IN RESPECT OF THE ORDER PASSED BY THE A O. SIMILARLY IN THE CASE OF GEE VEE ENTERPRISES VS. ADD!. CIT REPORT IN 99 ITR 375(DEL) THE HON'BLE COURT HAS HELD THAT THE COMMISSIONER CAN REGARD THE ORDER OF THE AO AS ERRONEOUS ON THE GROUND THAT IN THE CIRCUMSTANCES OF THE CASE THE AO SHOULD HAVE MADE FURTHER ENQUIRIES BEFORE ACCEPTING THE STATEMENT FILED BY THE ASSESSEE. THE ONUS OF PROOF OF GENUINENESS OF TRANSACTION LIES WITH THE ASSESSEE FAILURE OF WHICH LEADS TO THE CONCLUSION THAT ASSESSEE FAILED TO SUBSTANTIATE THE CORRECT LIABILITIES AND OT HER ITEMS AS SHOWN IN THE BALANCE SHEET. IN THE INSTANT CASE ON THE ISSUE POINTED OUT IN SHOW CAUSE NOTICE PROPER ENQUIRIES AND VERIFICATIONS WERE NOT MADE BY THE AO DURING THE COURSE OF SCRUTINY PROCEEDINGS ASSESSEE EXPRESSED HIS INABILITY TO PRODUCE THE BOOKS OF ACCOUNT AND DOCUMENTS AS CALLED FOR BY THE AO FOR WHICH AO HAS IMPOSED PENALTY U/S.271(L)(B). BECAUSE OF SUCH FAILURE ON THE PART OF THE AO THE ORDER PASSED BY HIM IS CONSIDERED TO BE ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTERESTS OF REVEN UE. AS HELD BY VARIOUS COURTS IN THE CASES MENTIONED ABOVE THE PR.COMMISSIONER CAN REGARD AN ORDER AS ERRONEOUS ON THE GROUND THAT IN THE CIRCUMSTANCES OF THE CASE THE AO SHOULD HAVE MADE FURTHER ENQUIRES BEFORE ACCEPTING THE STATEMENTS GIVEN BY THE ASSE SSEE IN HER RETURN. IN VIEW OF THE ABOVE THE ASSESSMENT ORDER FRAMED U/S. 143(3) OF THE I.T.ACT 1961 ON 13.12.2012 IS HEREBY SET ASIDE TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION OF FACTS AND PROPER APPLICATION OF LAW IN FRESH ASSESSMENT PROCEEDING A FTER GIVING PROPER OPPORTUNITY TO THE ASSESSEE. THE ASSESSING OFFICER HAS TO CALL FOR AUDITED BOOKS OF ACCOUNT RELATING TO THE FINANCIAL YEAR:2009 - 10 AND EXAMINE THE GENUINENESS OF LIABILITIES SHOWN IN THE BALANCE SHEET AS ON 31.03.2010 INCLUDING UNSECURE D LOAN OF RS.1 50 000 AND ALSO VERIFY THE CORRECTNESS OF SUNDRY DEBTORS OF RS.4 90 177 SHOWN UNDER 'CURRENT ASSETS' AND CASH IN HAND OF RS.12 34 092. ON THE BASIS OF SUCH EXAMINATION OF FACTS FRESH FINDINGS HAVE TO BE RECORDED ON ACCOUNT OF THE ABOVE ISS UES WHETHER ADDITIONS CAN BE MADE IN COMPUTATION OF TAXABLE INCOME OF THE ASSESSEE FOR THE A/Y:2010 - LL. ISSUE COPY OF THIS ORDER TO THE ASSESSING OFFICER TO THE RANGE OFFICER TO THE ASSESEE AND MARK FOR DISPOSAL IN 263 PROCEEDING REGISTER. 4 . FEELING A GGRIEVED FROM THE ORDER OF THE LD. PR.CIT THE ASSESSEE FILED APPEAL BEFORE THE INCOME TAX APPELLATE TRIBUNAL. ITA NO. 188 &409 /CTK/201 5 5 5 . LD. AR BEFORE US FILED TWO PAPER BOOK S CONTAINING ONE IS CONTAINING FROM PAGES 1 TO 28 AND ANOTHER IS FROM PAGES 1 TO 28 . IN THE PAPER BOOK TH E ASSESSEE HAS FILED WRITTEN SUBMISSIONS CONTAINING PAGES 1 TO 4 . WHICH READ AS UNDER : - 1 .THE LEARNED C.I.T. HAS INVOKED SECTION 263 OF THE I.T. ACT BASICALLY AS OBSERVED IN PARAGRAPH - 1 OF HIS ORDER DATED 19.03.2015 FOR FAILURE OF THE ASSESSING OFFICER IN NOT ENQUIRING AND VERIFYING THE DETAILS OF THE SUNDRY DEBTORS UNSECURED LOAN AND CASH - IN - HAND AS SHOWN BY THE ASSESSEE IN HIS AUDITED BALANCE SHEET AS ON 31.03.2010. 2.IT MAY KINDLY BE NOTED THAT THE LEARNED A.O. AFTER CONSIDERING THE ABOVE AUDITED BA LANCE SHEET AS ADMITTED IN THE ASSESSMENT ORDER IN PARAGRAPH - D PAGE - 5 THAT HE HAS CONSIDERED THE BALANCE SHEET AS ON 31.03.2010 AND AFTER DUE APPLICATION OF MIND HAS MADE ADDITION OF RS. 4 21 754/ - SHOWN UNDER THE HEAD 'SUNDRY CREDITORS'. THAT MEANS HE HA S CONSIDERED BOTH THE ASSETS AS WELL AS LIABILITIES SIDE OF THE BALANCE SHEET AND HAS TAKEN A POSSIBLE VIEW AS ADMISSIBLE UNDER LAW WHICH THE COMMISSIONER DOES NOT AGREE. 3.BESIDES THE A.O. HAS COMPLETED THE ASSESSMENT MAKING SEVERAL OTHER ADDITIONS AS UN DER AFTER EXAMINATION OF THE FACTS OF THE CASE AGAINST WHICH THE ASSESSEE WAS IN 1 ST APPEAL AND THE SAME HAS BEEN DISPOSED OF VIDE APPEAL NO. 274/2012 - 13 DATED. 30.04.2015 AND SECOND APPEAL HAS ALSO BEEN FILED AGAINST THE SAID ORDER AND THE SAME IS PENDING DISPOSAL BEFORE I.T.A.T. ADDITIONS BY THE AO : I) UNEXPLAINED STOCK - RS. 10 61 872/ - II) UNEXPLAINED RENTAL INCOME - RS. 2 20 800/ - III) SUNDRY CREDITOR - RS. 4 21 754/ - IV) LAW DRAWING TO - WARDS HOUSE HOLD EXPENSES - RS. 97 381/ - V) UNEXPLAINED INVESTMENT TO - WARD FITTINGS - RS. 4 00 000/ - IN APPEAL THE CIT(A) HAS DELETED THE ADDITIONS UNDER THE FOLLOWING HEADS : II) UNEXPLAINED RENTAL INCOME - RS. 2 20 800/ - IV) LAW DRAWING TO - WARDS HOUSE HOLD EXPENSES - RS. 97 381/ - V) UNEXPLAINED INVESTMENT TO - WARD FITTI NGS - RS. 4 00 000/ - FOR THE REST OF THE ADDITION THE ASSESSEE IS IN APPEAL BEFORE YOUR HONOUR IN SECOND APPEAL. THEREFORE THIS IS A CASE SQUARELY COVERED BY THE DECISION OF MALBAR INDUSTRIES CO. LTD. 243 I.T.R. 108 114 (SC) AND THE REFORE THE ORDER U/S 263 IS NOT SUSTAINABLE UNDER LAW. 4. THE CIT IS OF THE VIEW THAT THE AO HAS FAILED TO APPLY HIS MIND WITH REGARD TO ITEMS LIKE SUNDRY DEBTORS OF RS. 4 90 177/ - UN SECURED LOAN OF RS. 1 50 000/ - AND CASH IN HAND OF RS. 12 3 4 092/ - . IT IS HUMBLY SUBMITTED THAT THE AO ALL FAIRNESS HAS ACCEPTED THE ABOVE ITEMS TAKING A REASONABLE VIEW. ITA NO. 188 &409 /CTK/201 5 6 I) UNSECURED LOAN OF RS. 1 50 000/ - IS NOTHING BUT CARRIED FORWARD OF THE EARLIER YEAR. IT IS NOT A LOAN INCURRED DURING THE YEAR FOR REQUI RING FRESH CONSIDERATION. II) SUNDRY DEBTORS OF RS. 4 90 177/ - AND CASH IN HAND OF RS. 12 34 092/ - IS SUFFICIENTLY EXPLAINED OUT OF SECURED LOAN OF RS. 19 56 020/ - FROM PUNJAB NATIONAL BANK DULY SHOWN IN THE LIABILITIES SIDE OF THE BALANCE SHEET AND THERE WAS NO REASON FOR TAKING AN ADVERSE VIEW BY THE CIT U/S. 263. HENCE THE LEARNED CIT IS NOT JUSTIFIED IN OBSERVING IN HIS ORDER U/S. 263 THAT THERE HAS BEEN INCORRECT ASSUMPTION OF FACT OR INCORRECT APPLICATION OF LAW FOR W HICH HE HAS ASSUMED JURISDICTION U/S 263 AND HAS SET - A - SIDE ORDER OF THE LEARNED ASSESSING OFFICER LEGALLY FRAMED U/S 144 OF THE IT. ACT. RATHER THE LEARNED ASSESSING OFFICER BY MAKING ADDITION OF RS. 4 21 754/ - SHOWN UNDER THE HEAD SUNDRY CREDITORS HAS CO MMITTED AN ERROR BOTH ON FACT AS WELL AS ON LAW. AND THEREFORE THE ASSESSEE CAME UP IN APPEAL BEFORE THE 1 ST APPELLATE AUTHORITY. THE ASSESSEE DEALS IN ONLY ONE PRODUCT I.E. FURNITURE UNDER THE ORAND NAME OF 'ZUARI MADE PRODUCT' AND FOR THAT M/S. PARIVAR TAN IS THE ONLY SOLE DISTRIBUTOR IN THE STATE OF ODISHA FROM WHOM THE ASSESSEE BRINGS GOODS. THEREFORE M/S. PARIVARTAN IS THE ONLY CREDITOR RIGHTLY SHOWN IN THE BALANCE SHEET DULY AUDITED. THE CREDITOR M/S. PARIVARTAN HAS ALSO REFLECTED THE SAME AMOUNT IN THEIR LIST OF 'SUNDRY DEBTORS' DULY AUDITED SUBMITTED HEREWITH. THEREFORE THERE WAS ABSOLUTELY NO LOGIC FOR MAKING SUCH ADDITION. 5. THE ABOVE FACTS WERE BROUGHT TO THE NOTICE OF THE LEARNED CIT IN LETTER DATED 12.02.2015 IN COMPLIANCE TO THE SHOW CAUS E NOTICE U/S 263 (SUBMITTED HEREWITH) WHICH MAY KINDLY BE CONSIDERED AS A PART OF THE WRITTEN NOTES OF SUBMISSION. IT IS SETTLED LAW DECIDED BY SUPREME COURT OF INDIA IN THE CASE OF MALBAR INDUSTRIES CO. LTD. VS. CIT 243 ITR 83 (SC) THAT IF A.O. ADOPTED O NE OF THE COURSES PERMISSIBLE UNDER LAW WHICH THE COMMISSIONER DOES NOT AGREE IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTEREST OF REVENUE. 3 6. IT HAS BEEN DECIDED BY THE HONORABLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. GABRIE L INDIA LTD. 203 ITR (108 114) (BOM) THAT IN THE GARB OF EXERCISING POWER U/S 263 OF THE IT ACT. CIT CANNOT INITIATE PROCEEDING OR ROVING ENQUIRY WHICH HAS ALREADY BEEN COMPLETED BECAUSE SUCH ACTION WILL BE AGAINST THE WELL ACCEPTED PRINCIPLE OF LAW THAT THERE MUST BE A POINT OF FINALITY IN ALL LEGAL PROCEEDINGS. 7. IT IS HUMBLY SUBMITTED THAT THE CASE LAWS CITED BY LEARNED CIT ARE MISCONCEIVED AND ARE DISTINGUISHABLE ON FACTS. THE DETAILS OF CASE LAWS AND RATIO DECIDED ARE FURNISHED HEREWITH FOR KIND P ERUSAL WILL SPEAK FOR ITSELF. THE CASE LAWS CITED IN FAVOUR OF THE APPELLANT AS STATED ABOVE ARE ALSO SUBMITTED HEREWITH WHICH MAY KINDLY BE PERUSED AND CONSIDERED IN FAVOUR OF THE APPELLANT. THE LEARNED CIT WHILE PASSING THE ORDER U/S. 263 HAS UTILIZED T HE RATIO OF THE CASE LAW ON THE BASIS OF WHICH HE HAS PASSED ORDER AGAINST THE ITA NO. 188 &409 /CTK/201 5 7 ASSESSEE WITHOUT GIVING AN OPPORTUNITY TO THE ASSESSEE TO HAVE HIS SAY IN THE MATTER. IT IS SETTLED LAW THAT NO MATERIAL SHOULD BE ACCEPTED WITHOUT BEING TESTED AND GIVING AN OP PORTUNITY TO THE ASSESSEE TO HAVE HIS SAY IN THE MATTER THEREFORE THE ORDER IS VITIATED IN LAW AS IT IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE. [MURALI MANOHAR PRABHU DAYAL VS. STATE OF ORISSA 26 STC PAGE 22 AT 25]. 8. IT IS ALSO DECIDED BY HON'BIE ORI SSA HIGH COURT THAT AN ORDER WITHOUT FOLLOWING THE PRINCIPLE OF NATURAL JUSTICE IS AN NULLITY [CIT VS. GANGARAM CHHAPOLIA 187 ITR 594]. IT HAS ALSO BEEN DECIDED BY HON'BIE JURISDICTIONAL HIGH COURT IN THE CASE OF BANAWARILAL VS. STATE OF ORISSA 37 STC 595 THAT THE AUTHORITIES ARE BOUND TO DISCLOSE TO THE ASSESSEE ANY MATERIALS ADVERSE TO THE ASSESSEE IN HIS POSSESSION WHICH HE IS GOING TO UTILIZE AGAINST THE ASSESSEE. THEREFORE ORDER PASSED BY THE CIT IS A NULLITY AND IN AB INITIO VOI D AND NOT SUSTAINABLE UNDER LAW. PRAYER IN VIEW OF THE FACTS AND THE POSITION OF LAW STATED ABOVE IT IS RESPECTFULLY SUBMITTED THAT THE APPEAL OF THE APPELLANT MAY KINDLY BE ALLOWED AND FOR THIS ACT OF YOUR KINDNESS THE APPELLANT IS IN DUTY BOUND SHALL EVE R PRAY. TO SUPPORT HIS CONTENTIONS LD. AR OF THE ASSESSEE RELIED ON THE JUDICIAL DECISIONS WHICH ARE PLACED IN THE PAPER BOOK NO.2 . 6. LD. AR ALSO FILED HIS WRITTEN SUBMISSIONS IN ADDITION TO THE ABOVE WRITTEN SUBMISSIONS WHICH READ AS UNDER : - THIS WR ITTEN SUBMISSION IS IN ADDITION TO WRITTEN SUBMISSION DATED 25.04.2017 ENCLOSED AS PAGE - 1 TO 4 IN THE PAPER BOOK DATED 06.08.2019 THE LEARNED COMMISSIONER HAS SET - A - SIDE THE ASSESSMENT ORDER DATED 13.12.2013 TO THE A.O FURTHER FOR ENQUIRY U/S 263 AND FR ESH ADJUDICATION OF FACTS AND PROPER APPLICATION OF LAW WITH REGARD TO GENUNESS OF LIABILITIES UNSECURED LOAN OF RS.1 50 000/ - SUNDRY DEBTORS OF RS. 4 90 177/ - AND CASH IN HAND OF RS.12.34.092/ - CONSEQUENT UPON THE ORDER U/S .263/THE ASSESSING OFFICER I N HIS ORDER OF ASSESSMENT U/S.263/144 DATED 08.09.2015 HAS ACCEPTED ALL THE FIGURES UNDER ALL THE HEADS OF ACCOUNTS THAT THE LEARNED COMMISSIONER REQUIRED THE A.O. TO MAKE FURTHER ENQUIRY AND FRESH ASSESSMENT EXCEPT UNSECURED LOAN OF RS 1 50 000 / - WHICH IS NOTHING BUT THE CARRIED FORWARD FIGURE FROM THE PREVIOUS YEAR I.E FROM THE BALANCE SHEET AS ON FROM 31.03.2009 AND THE SAME IS NOT A FRESH TRANSACTION DURING THE YEAR UNDER CONSIDERATION I.E ASST YEAR 2010 - 11. THEREFORE THE LEARNED COMMISSIONER IS NO T JUSTIFIED TO INVOKE SEC 263 AND SET - A - SIDE THE ASSESSMENT ORDER OF THE ASSESSING OFFICER AS ERRONEOUS AND PRE JUDICIAL TO THE INTEREST OF THE REVENUE .BECAUSE AFTER DUE ITA NO. 188 &409 /CTK/201 5 8 VERIFICATION OF ACCOUNTS INCLUDING THE BALANCE SHEET THE ASSESSING OFFICER HAD MADE THE ASSESSMENT IN ACCORDANCE WITH LAW WHICH THE CIT DID NOT AGREE. IN COMPLIANCE TO THE SHOW CAUSE NOTICE U/S .263 THE APPELLANT CITING THE JUDGEMENT OF THE SUPREME COURT IN THE CASE OF MALBAR INDUSTRIES LTD VS CIT 243 ITR 83 (SC) AND THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF CIT VS GABRIEL INDIA LTD 203 ITR 108 114 (BOM) THE APPELLANT HAD SUBMITTED THAT IN THE GARB OF EXERCISING POWER U/S .263 THE COMMISSIONER CANNOT INITIATE PROCEEDING WITH A VIEW TO START 'FISHING AND ROVING ENQUIRIES' IN M ATTERS AND ORDERS WHICH IS ALREADY CONCLUDED. SUCH ACTION WILL BE AGAINST THE WELL ACCEPTED POLICY OF LAW THAT THERE MUST BE A POINT OF FINALITY IN ALL LEGAL PROCEEDINGS THAT STALE ISSUES SHOULD NOT BE REACTIVATED BEYOND A PARTICULAR STAGE AND THAT LAPSE OF TIME MUST INDUCE REPOSE IN AND SET AT REST JUDICIAL AND QUASI JUDICIAL CONTROVERSIES AS IT IS IN OTHER SPHERES OF HUMAN ACTIVITY. (CIT VS GABRIEL INDIA LTD 203 ITR 108 114 (BOM). IF AN INCOME TAX OFFICER IS ACTING IN ACCORDANCE WITH LAW MAKES SUCH ASSE SSMENT THE SAME CANNOT BE - BRANDED AS ERRONEOUS BY THE COMMISSIONER. WHEN THE ITO ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE OR WHERE TWO VIEWS ARE POSSIBLE AND THE ITO HAS TAKEN ONE VIEW WHICH THE CIT DOES NOT A GREE IT CANNOT BE TREATED AS ERRONEOUS ORDER. IN THE CASE OF CIT VS CHAWLA TRUNK HOUSE 139 ITR 183 (PUNJ) IT HAS BEEN DECIDED THAT A DEFINITE FINDING OF ERROR AND PRE JUDICIAL TO INTEREST OF REVENUE IS ESSENTIAL FOR MAKING A VALID ORDER VU/S.263 (1). I T IS ESSENTIAL THAT COMMISSIONER HAS TO RECORD AN EXPRESS FINDING TO THE EFFECT THAT ORDER SOUGHT TO REVISED IS ERRONEOUS AS WELL AS PRE - JUDICIAL TO THE INTEREST OF REVENUE. PRAYER THEREFORE IT IS RESPECTFULLY SUBMITTED THAT THE ORDER U/S .263 NOT BEING IN ACCORDANCE WITH THE PRINCIPLE DECIDED IN CASE LAWS CITED ABOVE THE SAME MAY BE TREATED AS JN - VALID AND THE APPEAL OF THE APPELLANT MAY KINDLY BE ALLOWED FOR WHICH ACT OF YOUR KINDNESS THE APPELLANT AS IN DUTY BOUND SHALL EVER PRAY. 7 . ON THE OTHER HAND LD. DR RELIED ON THE ORDER OF LD. PR.CIT AND HE SUBMITTED THAT THE LD. PR.CIT IS JUSTIFIED TO EXERCISE HIS POWERS AS PER SECTION 263 OF THE ACT. HE ALSO FILED HIS WRITTEN SUBMISSIONS WHICH READ AS UNDER : - I.) THIS IS AN ASSESSEE'S APPEAL AGAINST THE ADDITIONS ON ACCOUNT OF EXCESS STOCK AND UNEXPLAINED SUNDRY CREDITORS CONFIRMED BY THE CIT(A) ITA NO. 188 &409 /CTK/201 5 9 CUUTACK VIDE APPELLATE ORDER DATED 30.04.2015 U/S. 250 OF THE INCOME TAX ACT. THE ASSESSEE IS PROPRIETOR OF M/S. SHUBAM WHICH IS ENGAGED IN THE SALE OF ZUARI FU RNITURE. A SURVEY ACTION U / S .133A WAS CARRIED OUT AT PREMISES OF THE ASSESSEE ON 09.03.2010. II.) THE FIRST GROUND OF APPEAL RELATES TO THE ADDITION OF RS. 10 61 872/ - MADE BY THE A.O. ON ACCOUNT OF EXCESS STOCK FOUND DURING THE COURSE OF SURVEY. THIS ISS UE HAS BEEN DISCUSSED BY THE A.O. IN PARA - B ON PAGE - 3 OF THE ASSESSMENT ORDER. THE CIT(A) HAS CONFIRMED SAID ADDITION AND HIS FINDINGS ARE CONTAINED IN PARA - 4 ON PAGE - 3 OF THE APPELLATE ORDER. THE FOLLOWING FACTS ARE PERTINENT FOR THE ISSUE UNDER REFERENCE : A) DURING THE COURSE OF SURVEY U/S.L33A OF THE ACT THE PHYSICAL INVENTORY OF STOCK WAS TAKEN BY THE SURVEY PARTY IN THE PRESENCE OF THE ASSESSEE. THE SAME WAS ALSO WITNESSED BY THE PANCHAS. B) DURING THE COURSE OF SURVEY THE ASSESSEE I.E. SHRI LALIT MURARKA FAILED TO GIVE ANY REPLY REGARDING THE STOCK DIFFERENCE OF RS. 10 61 872/ - . NEITHER AT THE STAGE OF ASSESSMENT PROCEEDINGS NOR AT THE STAGE OF APPELLATE PROCEEDINGS THE ASSESSEE MADE AN ATTEMPT TO RECONCILE THE DISCREPANCY. MERE STATEMENT THAT HE HAD MADE ALL HIS PURCHASES OF ZUARI MAKE FURNITURE FROM M/S. PARIVARTAN AND NO OTHER FURNITURE WAS FOUND IS NOT SUFFICIENT. SIMILARLY THERE IS NO EVIDENCE THAT THE ASSESSEE HAD RECEIVED FURNITURE FROM CLIENTS FOR REPAIRS OR AFTER SALE SERVICES. THE CIT ( A) HAS GIVEN A CATEGORICAL FINDING THAT THE ASSESSEE HAD FAILED TO FURNISH BOOKS OF ACCOUNT BEFORE THE A.O. THERE IS NO BASIS TO HOLD THAT THE STOCK DIFFERENCE AT THE MAXIMUM COULD BE TO THE EXTENT OF RS.2 45 645/ - AS ALLEGED BY THE ASSESSEE. THE ID. AR OF THE ASSESSEE HAS NOT FILED ANY WORKING IN THIS REGARD. IN THIS REGARD RELIANCE IS PLACED ON FOLLOWING DECISIONS: 1) HON'BLE DELHI ITAT IN THE CASE OF K. G. SHARMA VS. DCIT (55 DTR (A.T.) 358)(PARA - 5) 2) HON'BLE AHMEDABAD ITAT IN THE CASE OF RADHAKRISHN A GOLD JEWELLERY (P.) LTD. VS. JCIT (62 TAXMANN.COM 182) (PARA - 11) 3) HON'BLE BANGALORE ITAT IN THE CASE OF ISHWARADHYA TRADERS VS. ITO (76 TTJ 463) (PARA - 6) 4) HON'BLE GUJARAT HIGH COURT IN THE CASE OF VIPUL KUMAR KIRTI LAL SHAH VS. ; ITO (33 TAXMANN.COM 370) (PARA - 11) E) IF THERE WAS NO DIFFERENCE IN THE STOCK THEN WHAT PREVENTED THE ASSESSEE FROM FILING AN AFFIDAVIT IN THIS REGARD. THE AFFIDAVIT IF ANY WAS REQUIRED TO BE FILED IMMED IATELY AFTER THE SURVEY OPERATION. ON THE OTHER HAND THE ASSESSEE HAD NEITHER RECONCILED THE STOCK DIFFERENCE NOR SHOWN THE SAME IN THE ITR FILED ON 30.03.2011 I.E. AFTER A LAPSE OF ONE YEAR. F) IN THE CASE OF HOTEL KIRAN (82 ITD 453) (PUNE ITAT) AND HIR ALAL MAGANLAL (96 ITD 113) (MUMBAI ITAT) THE HON'BLE TRIBUNALS HAVE HELD THAT WHERE DURING THE COURSE OF SEARCH THE ASSESSEE HAS MADE SOME ADMISSION THEN HE DEBARS THE AUTHORIZED OFFICERS FROM MAKING FURTHER INVESTIGATION. THEREFORE IN THEIR WISDOM THE LEGISLATURE HAS PROVIDED THAT SUCH STATEMENT CAN BE USED AS EVIDENCE AND THE ASSESSMENT CAN BE ITA NO. 188 &409 /CTK/201 5 10 MADE ON THAT BASIS. RELIANCE IS ALSO PLACED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF SURJEET SINGH CHHAB RA VS. UNION OF INDIA [19971 1 SCC 508 'W HEREIN IT WAS HELD THAT THE REVENU E OFFICIALS ARE NOT POLICE OFFICERS AND THE CONFESSION THOUGH RETRACTED IS AN ADMISSION AND WOULD BIND THE PETITI ONER. IN VI EW OF ABOVE FACTS IT IS REQUESTED THAT THE ADDITION MADE BY THE A.O. ON ACCOUNT OF EXCESS STOC K AND CONFIRMED BY THE CIT(A) SHOULD BE SUSTAINED. HI.) AS REGARDS THE SECOND ADDITION OF RS.4 21 754/ - ON ACCOUNT OF UNEXPLAINED SUNDRY CREDITOR MADE BY THE A.O. THERE IS NO DISPUTE THAT BEFORE THE AO THE ID. AR OF THE ASSESSEE DID NOT FILE ANY CONFIRMA TION FROM SAID CREDITOR OR PAN OR COPY OF ITR. EVEN THE WHEREABOUTS OF SAID CREDITOR WERE NOT DISCLOSED BY THE ID. AR OF THE ASSESSEE. THIS ISSUE HAS BEEN DISCUSSED BY THE A.O. IN PARA - D ON PAGE - 5 OF THE ASSESSMENT ORDER. A) THIS ISSUE HAS BEEN DISCUSSED BY THE CIT(A) IN PARA - 6 7 & 8 ON PAGE - 4 OF THE APPELLATE ORDER. BEFORE THE CIT(A) THE ID. AR OF THE ASSESSEE SUBMITTED BALANCE SHEET OF THE CREDITOR NAMELY SMT. DIMPLE MURARKA AS ON 31.03.2010. HOWEVER SHE HAD SHOWN SUNDRY DEBTOR TO THE EXTENT OF RS.2 32 495/ - ONLY. THE CIT(A) HAS HELD THAT IN THE BALANCE SHEET OF SAID CREDITOR THE TOTAL SUNDRY DEBTORS STOOD AT RS.2 32 495/ - AS PER SCHEDULE - IV. THEREFORE THERE COULD NOT BE ANY LIABILITY OF RS.4 21 754/ - AS ALLEGED BY THE ASSESSEE. B) IN THE FOURTH GROUN D OF APPEAL BEFORE THE HON'BLE ITAT THE ID. AR HAS REQUESTED THAT HE BE ALLOWED TO FURNISH CONFIRMATION FROM SAID CREDITOR. HOWEVER THERE IS NO AVERMENT AS TO WHY THESE DOCUMENTS/DETAILS COULD NOT BE FURNISHED BEFORE THE A.O. OR CIT(A). AS PER RULE - 25(1) OF ITAT RULES 2017 THE PARTIES TO THE APPEAL SHALL NOT BE ENTITLED TO PRODUCE ANY ADDITIONAL EVIDENCE EITHER ORAL OR DOCUMENTARY BEFORE THE TRIBUNAL UNLESS THE TRIBUNAL IS SATISFIED WITH THE EXPLANATION OF THE APPLICANT FOR NOT PRODUCING THE SAME BEFO RE THE LOWER AUTHORITIES. 8 . AFTER HEARING BOTH THE SIDES AND PERUSING THE ENTIRE MATERIAL AVAILABLE ON RECORD ALONG WITH THE ORDERS OF AUTHORITIES BELOW WE FIND THAT THE AO PROCEEDED THE CASE EX - PARTE U/S.144 OF THE I.T.ACT 1961 BECAUSE THE ASSESSEE DI D NOT APPEAR BEFORE THE AO. THEREFORE THERE IS NO ANY PLAUSIBLE VIEW TAKEN BY THE AO WHILE FRAMING THE ASSESSMENT ORDER. THE LD. AR OF THE ASSESSEE HAS RELIED ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF MALBAR INDUSTRIAL CO. LTD. (2000) 24 3 ITR 83 (SC) IS NOT APPLICABLE IN THE PRESENT FACTS OF THE CASE. DURING ITA NO. 188 &409 /CTK/201 5 11 THE COURSE OF ASSESSMENT PROCEEDINGS THE AO HAD NOT EXAMINED AND NOT MADE ANY OPINION IN REGARD TO SUNDRY DEBTORS CASH IN HAND ETC. AS APPEARED IN THE BALANCE SHEET FILED BY THE ASS ESSEE. THE AO HIMSELF SHOULD HAVE DONE ENQUIRY WHICH HAS BEEN OBSERVED BY THE LD. PR.CIT. THE AO IS NOT ONLY AN ADJUDICATOR HE IS ALSO AN INVESTIGATOR BEFORE COMING TO ANY CONCLUSION WITH REGARD TO THE GENUINENESS OF THE LIABILITIES SHOWN BY THE ASSESSEE IN THE BALANCE SHEET INCLUDING UNSECURED LOAN WHICH IS LACK IN THIS CASE. FURTHER IN RESPECT OF SUNDRY CREDITORS OF RS.4 21 754/ - THE AO HAS DISALLOWED THE SAME AND AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE THE CIT(A) AND THE CIT(A) HAS ALSO CONFIR MED VIDE HIS ORDER DATED 30.04.2015 WHICH TO BE DECIDED BY US SEPARATE WHILE CONSIDERING THE GROUNDS TAKEN BY THE ASSESSEE IN ITS APPEAL AGAINST THE CONFIRMATION OF THE DISALLOWANCE MADE BY THE AO . ACCORDINGLY WE ARE OF THE OPINION THAT THE REVISION PRO CEEDINGS INVOKED BY THE CIT IS JUSTIFIED INVOKING THE REVISONARY POWER AS PER SECTION 263 OF THE ACT. 9 . NOW WE SHALL TAKE UP THE APPEAL OF THE ASSESSEE IN ITA NO.409/CTK/2015 FOR THE ASSESSMENT YEAR 2010 - 2011 WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWI NG GROUNDS : - 1) THAT THE ADDITION OF RS.10 61 872/ - AS UNEXPLAINED INVESTMENT IN S TOCK ON MERE SUSPICIOUS AND SURMISES MADE BY THE LEARNED A.O. WITHOUT MENTIONING AS TO UNDER WHICH PROVISION OF LAW IS ILLEGAL AND THE LEARNED CIT(APPEALS) IS NOT JUSTIFIED IN CONFIRMING THE SAID ADDITION AS SUPPRESSION OF STOCK. ITA NO. 188 &409 /CTK/201 5 12 2) THAT THE CIT(APPEALS) IS NOT JUSTIFIED IN NOT CONSIDERING THE EXPLANATIONS AND THE POINTS RAISED BEFORE HIM IN THE APPELLATE PROCEEDING THOUGH RECORDED IN PARA - 3 OF HIS ORDER AS HE IS DUTY BOUN D TO EXAMINE THE POINTS RAISED BY THE PARTIES AND RECORD DEFINITE CONCLUSIONS IN RESPECT OF EACH AND EVERY ONE OF THEM. [A. VENKAT RAO VS. CIT 203 ITR 64 (ORISSA)]. NOT DOING SO HIS ORDER HAS BEEN VITIATED IN LAW. 3) THAT THE LEARNED CIT(APPEALS) IS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.4 21 754/ - UNDER THE HEAD 'SUNDRY CREDITORS' EVEN AFTER VERIFIING THE BALANCE SHEET BECAUSE THE QUESTION OF FURNISHING DETAILS DOES NOT ARISE AS THE ASSESSEE HAD MADE ALL HIS PURCHASES OF ZUARI MADE FURNITURES FR OM M/S. PARIVARTAN AND IS THE ONLY SUNDRY CREDITORS WITH WHOM THERE WAS TRANSACTION. THE NAME AND ADDRESS COULD NOT BE STATED BEFORE THE AO AS THE ASSESSMENT WAS EXPARTE AND ORDER WAS PASSED U/S. 144 BUT IT WAS STATED AT THE APPEAL STAGE THAT M/S. PARIVART AN LINK ROAD CUTTACK - 753012 AS NOTED IN PARA - 3 OF THE CIT(APPEALS) ORDER UNDER THE HEAD 'CONTENTION OF THE APPELLANT' WHICH SHOULD HAVE BEEN TAKEN JUDICIAL NOTE OF. 4) THAT CONFIRMATION LETTER AND EVIDENCE THAT SHE IS AN INCOME TAX ASSESSEE HAVING PAN NO. AE A PM1555N WILL BE PRODUCED AT THE TIME OF HEARING OF APPEAL WHICH MAY KINDLY BE ADMITTED AS ADDITIONAL EVIDENCE AND APPEAL BE DECIDED ACCORDINGLY. 5) THAT THERE BEING NO DISPUTE REGARDING PURCHASE FIGURE AND SALES FIGURE THE ADDITION ON ACCOUNT OF INVESTMENT ON UNEXPLAINED STOCK IS UNCALLED FOR. 6) THAT OTHER GROUNDS IF ANY WILL BE URGED AT THE TIME OF HEARING OF APPEAL. 10 . FACTS IN THE PRESENT CASE ARE REMAINED SAME AS STATED IN ITA NO.188/ CTK/2015. THEREFORE TO AVOID THE REPETITION WE ARE NOT TAKING THE FACTS AGAIN. 11 . IN THE PRESENT APPEAL BOTH THE LD. AR OF THE ASSESSEE AS WELL AS THE LD. CIT DR OF THE ASSESSEE HAVE FILED THEIR WRITTEN SUBMISSIONS RESPECTIVELY WHICH HAVE BEEN REPRODUCED ABOVE WHILE CONSIDERING THE APPEAL OF THE ASSESS EE AGAINST THE ORDER PASSED BY THE PR.CIT U/S.263 OF THE ACT. IN ADDITION TO THE WRITTEN SUBMISSIONS BOTH THE PARTIES HAVE ALSO MADE ORAL ARGUMENTS WHICH HAVE BEEN CONSIDERED AND AFTER ITA NO. 188 &409 /CTK/201 5 13 PERUSING THE ENTIRE MATERIAL AVAILABLE ON RECORD WE OBSERVE THAT DURI NG THE COURSE OF SURVEY PROCEEDINGS THE SUBMISSIONS WERE RECORDED ON OATH ON 09.03.2010 AS PER QUESTION NO.3 THE ASSESSEE WAS ASKED TO EXPLAIN THE CLOSING STOCK OF RS.10 61 872/ - . IN RESPONSE TO WHICH THE ASSESSEE REPLIED THAT THE CHARTERED ACCOUNTANT IS OUT OF STATION AND UNABLE TO REPLY THE QUESTION AND WILL GIVE REPLY AFTER TWO OR THREE DAYS WHEN THE CHARTERED ACCOUNTANT WILL COME BACK. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO EXPLAIN THE DIFFERENTIAL FIGURES OF STOCK OF R S.10 61 872/ - BUT THE ASSESSEE DID NOT OFFER ANY EXPLANATION. ACCORDINGLY THE AO CALCULATED THE DIFFERENCE OF STOCK ON THE BASIS OF GP RATE AND STOCK FOUND DURING THE COURSE OF SURVEY PROCEEDINGS. DURING THE COURSE OF APPELLATE PROCEEDINGS THE ASSESSEE HA D SUBMITTED THAT MAXIMUM STOCK SHALL BE RS.9 87 110/ - WHEREAS IN THE RETURN OF INCOME THE CLOSING STOCK WAS SHOWN AT RS.7 41 465/ - BUT FOR THE DIFFERENCE OF RS.2 45 645/ - (RS.9 87 110 7 41 465/ - ) THE ASSESSEE EXPLAINED THAT THERE WAS GP RATE FOR THE FIR ST YEAR WAS 4.21%. ACCORDINGLY THE CIT(A) OBSERVED THAT THERE WAS A SUPPRESSION OF STOCK OF RS.2 45 645/ - MADE BY THE ASSESSEE HIMSELF. THE AO HAS CALCULATED ON THE BASIS OF MATHEMATICAL CALCULATION AFTER APPLYING THE GP RATE AND THE ASSESSEE HAS HIMSELF CALCULATED ON THE BASIS OF GP RATES WITHOUT REFERRING TO THE ACTUAL DOCUMENTS WHICH OUGHT TO HAVE BEEN DONE BY BOTH THE SIDES. WE THEREFORE APPLYING THE ITA NO. 188 &409 /CTK/201 5 14 MATHEMATICAL FORMULA ADOPTED BY THE ASSESSEE THAT THE STOCK SHOULD BE MAXIMUM AT RS.9 87 110/ - AND I GNORING THE STOCK SHOWN IN THE RETURN OF INCOME . THE AO HAS HIMSELF ACCEPTED THAT THE CLOSING STOCK SHOULD BE ON 09.03.2010 OF RS.5 24 690/ - . THEREFORE THE ASSESSEE WILL GET RELIEF OF RS.4 62 420/ - (RS.9 87 110 5 24 690/ - ). THE ASSESSEE HAS NOT PRODUCED THE BOOKS OF ACCOUNTS. LD. AR OF THE ASSESSEE COULD NOT SUBSTANTIATE THAT THE WHOSE FURNITURES LYING IN THE STOCK HAVE COME FOR REPAIRING. EVEN THOUGH THE ASSESSEE COULD NOT PRODUCE THE DETAILS IN THIS REGARD. IN THE WRITTEN SUBMISSIONS THE LD. AR OF THE ASSESSEE HAS RELIED ON THE JUDGMENTS WHICH ARE NOT APPLICABLE IN THE PRESENT CASE BECAUSE THERE WAS A DIFFERENCE ACCEPTED BY THE ASSESSEE HIMSELF. THEREFORE THE ASSESSEE GETS RELIEF OF RS.4 62 420/ - . 12 . WE FURTHER OBSERVE THAT THERE WAS AN ADDITION OF R S.4 21 754/ - UNDER THE HEAD SUNDRY CREDITORS AND THE NAME OF SUNDRY CREDITOR IS M/S PARIVARTAN. THE BALANCE SHEET OF M/S PARIVARTAN IS SHOWING AS SUNDRY DEBTORS AS ON 31.03.2010 OF RS.2 32 495.25 WHICH IS CROSS TALLIED FROM THE CREDITORS ACCOUNT WHICH HAS BEEN ACCEPTED BY THE REVENUE AUTHORITIES. IT IS A SISTER CONCERN OF THE ASSESSEE. THE ASSESSEE IS ALSO PURCHASING FURNITURE ONLY FROM THE M/S PARIVARTAN THEREFORE THE ASSESSEE MUST BE KNOWN TO THE BALANCE SHOWN BY HIS CREDITORS. THE ASSESSEE GETS RELIEF OF RS.1 89 758.75. THUS WE PARTLY ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. ITA NO. 188 &409 /CTK/201 5 15 13 . IN THE RESULT THE APPEAL OF THE ASSESSEE IN ITA NO.188/CTK/2015 IS DISMISSED AND APPEAL OF THE ASSESSEE IN ITA NO.409/CTK/2015 IS PARTLY ALLOWED . ORDER PRONOUNCED IN TH E OPEN COURT ON 09 / 0 3 / 20 2 1 . SD/ - ( C.M.GARG ) SD/ - (L.P.SAHU) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK ; DATED 09 / 0 3 /20 2 1 PRAKASH KUMAR MISHRA SR.P.S. / COPY OF THE ORDER FORWARDED TO : / BY ORDER ( SENIOR PRIVATE S ECRETARY ) /ITAT CUTTACK 1. / THE APPELLANT - SRI LALIT MURARKA PROP - M/S SUBHAM KANIKA CHHAK CUTTACK 2. / THE RESPONDENT - CIT CUTTACK 3. ( ) / THE CIT(A) 4. / CIT 5. / DR ITAT CUTTACK 6. / GUARD FILE. //TRUE COPY//