Shri Arvind Kantilal Shah,, JAMNAGAR v. The Assistant Commissioner of Income Tax, Circle-3,, JAMNAGAR

ITA 302/RJT/2008 | 2002-2003
Pronouncement Date: 23-12-2010 | Result: Dismissed

Appeal Details

RSA Number 30224914 RSA 2008
Assessee PAN ABJPS1321J
Bench Rajkot
Appeal Number ITA 302/RJT/2008
Duration Of Justice 2 year(s) 7 month(s) 1 day(s)
Appellant Shri Arvind Kantilal Shah,, JAMNAGAR
Respondent The Assistant Commissioner of Income Tax, Circle-3,, JAMNAGAR
Appeal Type Income Tax Appeal
Pronouncement Date 23-12-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 23-12-2010
Date Of Final Hearing 24-09-2013
Next Hearing Date 24-09-2013
Assessment Year 2002-2003
Appeal Filed On 22-05-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH RAJKOT BEFORE SHRI A.L. GEHLOT (AM) AND SHRI D.T. GARASIA (JM) I.T.A. NO. 302/RJT/2008 (ASSESSMENT YEAR 2002-03) ARVIND KANTILAL SHAH VS ACIT CIR.3 5 TH FLOOR CITY POINT JAMNAGAR OPP TOWN HALL JAMNAGAR PAN : ABJPS1321J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DS VARIA RESPONDENT BY: SHRI AVINASH KUMAR O R D E R A.L. GEHLOT : THIS IS AN APPEAL FILED BY THE ASSESS EE AND IS DIRECTED AGAINST THE ORDER OF THE CIT(A) JAMNAGAR DATED 14-03-2008 FOR THE ASSES SMENT YEAR 2002-03. THE FOLLOWING ARE THE EFFECTIVE GROUNDS OF APPEAL TAKEN BY THE REVENUE: 01. THE HON.COMMISSIONER OF INCOME TAX (APPEALS) JAMNAGAR AS WELL AS THE LEARNED ACIT CIRCLE-3 JAMNAGAR HAVE ERRED IN LAW AS WELL AS ON FACT IN MAKING ADDITION OF RS.24 71 197/- ON ACCOUNT OF ALLEGED CONCEALED PROFIT BY WAY OF SUPPRESSION OF PROFIT IN THE FORM OF UNDERSTATED DEBIT OF THE ASSESSEE. THE HON.CIT (APPEALS) AS WE LL AS THE LEARNED ACIT HAVE FAILED TO APPRECIATE THE FACTS PROPERLY A ND ARBITRARILY MADE ADDITION IN TOTAL INCOME WITHOUT HAVING ANY BASIS O F SUCH ADDITION. 2. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT THE ASSESSMENT OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION WAS REOPENED U/S 147 O F THE I.T. ACT. IT WAS NOTICED DURING THE ASSESSMENT PROCEEDINGS THAT BUSINESS TRANSACTIO N OF THE ASSESSEE WITH ONE M/S BOMBAY MINERALS LTD IS UNCOMMON. AT THE END OF THE YEAR THE ASSESSEES COPY OF ACCOUNT WAS SHOWING A DEBIT BALANCE OF RS.24 93 916 . THE COPIES OF ACCOUNTS OF M/S BOMBAY MINERALS LTD FOR THE F.Y. 2001-02 & 2002-03 WERE CALLED. IT IS SEEN THAT AT THE END OF THE YEAR M/S BOMBAY MINERALS LTD IS SHOWING A CREDIT BALANCE OF RS.49 65 113. IN THE LIGHT OF THE ABOVE DISCREPANCY THE ASSESSEE WAS ASKED TO RECONCILE ITS ACCOUNT WITH THAT OF M/S BOMBAY MINERALS LTD. AFTER CONSID ERING THE SUBMISSIONS OF THE ASSESSEE THE ASSESSING OFFICER HELD AS UNDER: ITA NO.302/RJT/2008 2 5. I HAVE CONSIDERED THE SUBMISSIONS OF THE ASSESS EE AND HAVE FOUND IT INSUFFICIENT. IT IS SEEN THAT THE CLOSING BALANCE AS PER ASSESSEES BOOKS AT THE END OF THE F.Y. 2001-02 STANDS AT RS.2 493916/- (DEBIT) WHEREAS IN THE BOOKS OF M/S BOMBAY MINERALS LTD AT THE END OF THE YEAR I.E. 31/3/2002 IT IS 4965113/- (CREDIT). IT MEANS THE ASSESSEE CLAIMS THAT HE HA TO RECEIVE RS.2493916/- FROM M/S BOMBAY MINER ALS LTD WHEREAS M/S BOMBAY MINERALS LTD SAYS THAT ASSESSEE HAS TO R ECEIVE RS.4965113/-. IF WE LOOK AT THE LATER YEARS TRANS ACTION IT FOLLOWS THAT M/S BOMBAY MINERALS LTD HAS IN FACT PAID RS.4965000/- TO THE ASSESSEE WHICH EVEN THE ASSESSEE IS REFLECTING IN HIS BOOKS OF ACCOUNT IN THE FOLLOWING YEAR. AFTER PAYING RS.4965000/- TO THE A SSESSEE AND WRITING OFF SUNDRY BALANCE OF RS.113/- M/S BOMBAY MINERALS LTD HAVE CLOSED ITS ACCOUNT IN THE NEXT YEAR I.E. FY 2002-03. IT IMPLI ES THAT THE RECEIVABLES SHOWN BY THE ASSESSEE AS ON 31/3/2002 OF RS.2493916 /- IS WRONG BECAUSE THE ASSESSEE HAS RECEIVED MORE THAN WHAT HE WAS CLAIMING TO BE RECEIVABLE FROM M/S BOMBAY MINERALS LTD. IT ONL Y GOES TO PROVE THAT THE ASSESSEE HAS UNDERSTATED ITS RECEIVABLES FROM M /S BOMBAY MINERALS LTD AS ON 31/3/2002. 6. LOOKING AT THE TRANSACTIONS REFLECTED IN THE ACC OUNTS OF BOTH THE PARTIES IT IS CLEAR THAT THE ASSESSEE HAS UNDERSTAT ED IT RECEIVABLES TO SUPPRESS ITS PROFIT FOR THE YEAR UNDER ASSESSMENT. THIS IS FURTHER CORROBORATED BY THE FACT THAT THE ASSESSEE IS SHOWI NG M/S BOMBAY MINERALS LTD AS CREDITORS FROM 1/4/2003 ONWARDS YE AR AFTER YEAR EVEN THOUGH M/S BOMBAY MINERALS LTD HAS SQUARED OFF ITS ACCOUNTS WITH THE ASSESSEE ON 31/3/2003. IT IS ALSO TO BE NOTED THAT THE ASSESSEE HAS NOT PAID THE OUTSTANDING CREDIT TO M/S BOMBAY MINERALS LTD IN SUBSEQUENT YEARS AND IS STILL SHOWING AS OUTSTANDING CREDIT E VERN AFTER 4-5 YEARS. 7. BASED ON THE ABOVE DISCUSSIONS IT IS HELD THAT T HE ASSESSEE HAS UNDERSTATED ITS RECEIVABLES FOR THE YEAR UNDER CONS IDERATION. THEREFORE RS.24 71 197/- (DIFFERENCE OF RS.4965113-2493916) I S HELD TO BE THE SUPPRESSED PROFIT IN THE FORM OF UNDERSTATED DEBIT OF THE ASSESSEE AND IS ADDED BACK TO THE TOTAL INCOME. 3. THE CIT(A) CONFIRMED THE ORDER OF CIT(A). AGGRI EVED THE ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND RECORD PERUSED. THE ASSESSEE IS AN INDIVIDUAL CARRYING ON BUSINESS ACTIVITIES IN THE PROPRIETORY NAME M/S ARCADIA SHIPPING & TRADING CO. DURING THE YEAR THE ASSESSEE HAD SOME BUSINESS TRANSACTIONS WITH M/S BOMBAY MINERALS LTD JAMNAGAR . A COPY OF ACCOUNT FOR THE YEAR ENDED 31-03-2002 SHOWING DAY TO DAY TRANSACTION WIT H SAID PARTY FILED BY THE ASSESSEE HAS BEEN PLACED AT PAGES 16 & 17 OF THE PAPER BOOK. SAME IS REPRODUCED BELOW: ARCADIA SHIPPING & TRADING CO ITA NO.302/RJT/2008 3 BOMBAY MINARALS LTD JAMNAGAR LEDGER ACCOUNT: 1-APR -1999 TO 31- M