The ACIT, 3 (1), v. M/s Rupesh Ajmera,

ITA 257/IND/2008 | misc
Pronouncement Date: 22-01-2010 | Result: Dismissed

Appeal Details

RSA Number 25722714 RSA 2008
Assessee PAN AEIPJ3452J
Bench Indore
Appeal Number ITA 257/IND/2008
Duration Of Justice 1 year(s) 7 month(s) 19 day(s)
Appellant The ACIT, 3 (1),
Respondent M/s Rupesh Ajmera,
Appeal Type Income Tax Appeal
Pronouncement Date 22-01-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 22-01-2010
Date Of Final Hearing 22-02-2010
Next Hearing Date 22-02-2010
Assessment Year misc
Appeal Filed On 02-06-2008
Judgment Text
PAGE 1 OF 6 I.T.A.NO. 257/IND/2008 SHRI RUPESH AJMERA BHOPAL IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER PAN NO. : AEIPJ3452J I.T.A.NO.257/IND/2008 A.Y. : 2005-06 ACIT SHRI RUPESH AJMERA 3(1) VS PROP. M/S. BASANTILAL JAIN & CO. BHOPAL 17 HANUMAMNGANJ BHOPAL. APPELLANT RESPONDENT APPELLANT BY : SMT. APARNA KARAN SR.DR RESPONDENT BY : SHRI SANJAY SODANI CA DATE OF HEARING : 13/01/2010 O R D E R PER V.K. GUPTA A.M. THIS APPEAL FILED BY THE REVENUE ARISES OUT OF ORDE R OF THE LD. CIT(A) DATED 21.02.2008 FOR THE ASSESSMENT YEAR 20 05-06. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. IN THIS APPEAL THE REVENUE IS AGGRIEVED BY THE DE CISION OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS. 10 22 15 9/- OUT OF THE ADDITION OF RS. 10 36 024/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF EXCESS STOCK. PAGE 2 OF 6 I.T.A.NO. 257/IND/2008 SHRI RUPESH AJMERA BHOPAL 4. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN IN DIVIDUAL DEALING IN KIRANA ITEMS AND FOODGRAINS. THERE WAS A SURVEY ACTION AT THE BUSINESS PREMISES OF THE ASSESSEE U/S 133A ON 8.11.2004. IN THE COURSE OF SURVEY PROCEEDINGS A CASH OF RS. 2 72 932/- WAS FOUND WH ICH WAS NOT SEIZED. IN THE COURSE OF SURVEY PROCEEDINGS CASH BOOK LEDGER STOCK REGISTER NAKAL BAHI CASH MEMO AND OTHER LOOSE PAPERS WERE LISTED AND SEIZED. IN THE COURSE OF SURVEY PROCEEDINGS THE PHYSICAL INVENTOR Y OF STOCK WAS PREPARED WHICH WAS VALUED AT RS. 6 54 125/-. THE S AME INVENTORY IN THE COURSE OF ASSESSMENT PROCEEDINGS WAS VALUED AT RS. 9 80 384/- AS PER THE AVAILABLE BILLS/VOUCHERS AND REMAINING ITEMS AT RS. 55 640/-. THE A.O. FURTHER OBSERVED THAT DUE TO NON-AVAILABILITY OF BO OKS/RECORDS AT THE TIME OF SURVEY TRADING ACCOUNT COULD NOT BE PREPARED. H E FURTHER HELD THAT AS PER THE TRADING ACCOUNT FOR THE DATE OF SURVEY SUB MITTED BY THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS STOCK STOO D AT RS. 8 61 700/- WHICH WAS MORE BY RS. 1 74 324/- FROM THE INITIAL VALUATION OF PHYSICAL INVENTORY DONE AT THE TIME OF SURVEY. THE A.O. ALSO REFERRED TO THE STATEMENT OF SHRI DARSHANLAL RECORDED IN THE COURSE OF SURVEY WHEREIN IT WAS STATED THAT CASH MEMO/BILLS WERE WITH THE ACCOU NTANT HENCE UPDATE SALE COULD NOT BE ACCOUNTED FOR. THE A.O. HOWEVER HAVING REGARD TO THE FACT THAT BOOKS OF ACCOUNT WERE NOT AVAILABLE HELD THAT ALL THE STOCK WHICH WAS VALUED AT RS. 10 36 024/- IN THE COURSE O F ASSESSMENT PAGE 3 OF 6 I.T.A.NO. 257/IND/2008 SHRI RUPESH AJMERA BHOPAL PROCEEDINGS WAS TO BE TREATED AS UNDISCLOSED STOCK. THE A.O. ACCORDINGLY COMPUTED THE TOTAL INCOME OF THE ASSES SEE AT RS. 10 87 270/- AS AGAINST RS. 51 247/- DECLARED BY THE ASSESSEE. A GGRIEVED BY THIS THE ASSESSEE CARRIED THE MATTER INTO APPEAL BEFORE THE LD. CIT(A) WHEREIN IT WAS SUBMITTED THAT THE STOCK AS PER THE BOOKS OF AC COUNT COMPLETED BY THE ASSESSEE AFTER THE SURVEY INDICATED THAT STOCK AS O N THE DATE OF SURVEY SHOULD HAVE BEEN AT RS. 8 61 700/-. HENCE ACTUALLY THERE WAS A SHORTAGE OF STOCK WORTH RS. 2 07 575/- BECAUSE THE PHYSICAL INVENTORY WAS OF RS. 6 54 125/- ONLY. IT WAS ALSO CONTENDED THAT EVEN IF THE A.OS VALUATION OF THE SAME STOCK AT RS. 10 36 024/- WAS ACCEPTED THE N ALSO THE WHOLE OF AMOUNT COULD NOT BE ADDED AND ONLY DIFFERENCE COUL D BE ADDED. THE LD. CIT(A) OBSERVED THAT THE A.O. DID NOT OFFER AN OPPO RTUNITY TO THE ASSESSEE TO PUT-FORTH ITS VIEW. HENCE THE ACTION O F THE A.O. WAS TO BE CANCELLED FOR THE REASON THAT THE A.O. VIOLATED THE PRINCIPLES OF NATURAL JUSTICE. AFTER STATING SO THE LD. CIT(A) HELD THAT THERE WAS A SHORTAGE OF RS. 2 07 575/- I.E. DIFFERENCE BETWEEN THE VALUE O F STOCK AS PER THE BOOKS AT RS. 8 61 700/- AND PHYSICAL STOCK VALUED AT RS. 6 54 125/- AT THE TIME OF SURVEY. HENCE ON SUCH SHORTAGE ADDITION FOR GROSS PROFIT HAD TO BE MADE. THE LD. CIT(A) ARRIVED AT QUANTUM OF SUCH ADDITION AT RS. 13 865/- AND RETAINED THE SAME AS AGAINST THE ADDITION OF RS. 10 36 024/- MADE BY THE ASSESSING OFFICER. AGGRIEVED BY THIS THE REVENUE I S IN APPEAL BEFORE US. PAGE 4 OF 6 I.T.A.NO. 257/IND/2008 SHRI RUPESH AJMERA BHOPAL 5. THE LD. SENIOR AUTHORIZED REPRESENTATIVE SUBMITTED THAT NO BOOKS OF ACCOUNT WERE AVAILABLE AT THE TIME OF SURV EY NEITHER CASH MEMO/CREDIT BILLS WERE PRODUCED HENCE ALL THE STO CKS FOUND DURING THE COURSE OF SURVEY WAS TO BE TREATED AS UNACCOUNTED S TOCK ONLY. SHE FURTHER CONTENDED THAT LD. CIT(A) GAVE RELIED TO THE ASSESS EE MERELY BY AGREEING WITH THE CONTENTIONS OF THE ASSESSEE WHICH WAS OUT A CORRECT APPROACH. 6. THE LEARNED COUNSEL FOR THE ASSESSEE ON THE OTHER HAND NARRATED THE FACTS REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND PLACED STRONG RELIANCE ON THE FINDINGS OF THE L D. CIT(A). HE FURTHER CONTENDED THAT THE ASSESSEE HAD NO WHERE PROPOSED T O ADD THE ENTIRE STOCK. HENCE THE ORDER OF THE A.O. WAS NOT CORRECT IN LAW. 7. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 8. IT IS AN UNDISPUTED FACT THAT BOOKS OF ACCOUNT WERE NOT UP TO DATE AT THE TIME OF SURVEY AND SOME OF THE RECORDS WERE NOT FOUND AT THE BUSINESS PREMISES OF THE ASSESSEE. HOWEVER THE SUR VEY PARTY PREPARED THE PHYSICAL INVENTORY OF ITEMS STATED BY THE ASSESSEE AND VALUED THE SAME AT RS. 6 54 125/-. SUBSEQUENTLY THE ASSESSEE PREPARED A TRADING ACCOUNT AS ON THE DATE OF SURVEY SHOWING THE VALUE OF SUCH STO CK AT RS. 8 61 700/-. THE A.O. HOWEVER ARRIVED AT THE VALUE OF SUCH STO CK AGAIN IN THE COURSE OF ASSESSMENT PROCEEDINGS AT RS. 10 36 024/- AND TR EATED THE WHOLE OF PAGE 5 OF 6 I.T.A.NO. 257/IND/2008 SHRI RUPESH AJMERA BHOPAL STOCK AS UNACCOUNTED. THE MAIN PLANK OF THE A.O. IS THAT NO BOOKS OF ACCOUNT WERE FOUND. HOWEVER FROM THE FIRST PAGE OF THE ASSESSMENT ORDER ITSELF IT IS EVIDENT THAT CERTAIN BOOKS/RECORDS WE RE FOUND IN THE COURSE OF SURVEY WHICH WERE IMPOUNDED AS WELL. IT WAS FURTHE R NOTED THAT THE ASSESSEE ALSO PRODUCED BOOKS OF ACCOUNT IN THE COUR SE OF ASSESSMENT PROCEEDINGS AND THE A.O. ALSO VERIFIED BOOKS IMPOUN DED IN THE COURSE OF SURVEY AS WELL AS SUBMITTED BY THE ASSESSEE SUBSEQU ENTLY ON TEST CHECK BASIS. HENCE THE VERY BASIS OF A.OS ACTION IS FLA WED. EVEN OTHERWISE ONCE THE ASSESSEE SUBMITTED REVISED CLOSING STOCK THE A.O. SHOULD HAVE MAD SOME EXERCISE TO FIND OUT A CORRECT QUANTUM OF STOCK WHICH COULD BE AVAILABLE WITH THE ASSESSEE AND SHOULD HAVE BEEN AC CEPTED. HOWEVER THE A.O. HAS NOT DONE SO. IT IS ALSO NOTED THAT REASONS FOR DIFFERENCE IN VALUATION OF SUCH STOCK ARE ALSO NOT MENTIONED IN T HE ASSESSMENT ORDER. THUS THE VALUATION OF RS. 8 61 700/- SHOWN BY THE ASSESSEE SUBSEQUENTLY IN THE FACTS OF THE CASE CAN BE ACCEPTED. THUS TH ERE IS A SHORTAGE/DEFICIT OF STOCK AS ON THE DATE OF SURVEY AND ACCORDINGLY THE GROSS PROFIT THEREON HAS TO BE ADDED AS THE PURCHASES DULY ACCOUNTED FOR . ACCORDINGLY WE HOLD THAT THE FINDINGS OF THE LD. CIT(A) ARE CORREC T IN LAW. HENCE WE DISMISS GROUND NO.1 OF THE REVENUES APPEAL. PAGE 6 OF 6 I.T.A.NO. 257/IND/2008 SHRI RUPESH AJMERA BHOPAL 9. IN VIEW OF OUR DECISION ON GROUND NO.1 WE DO NOT F IND ANY NECESSITY TO EXPRESS OUR OPINION ON THE GROUND NO.2 OF THE REVENUES APPEAL. 10. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED IN TERMS INDICATED ABOVE. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 22 ND JANUARY 2010. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 22 ND JANUARY 2010. CPU* 1921