Kabra Plastics Ltd.,, Surat v. The Income tax Officer, Ward-1(3),, Surat

ITA 3039/AHD/2009 | 2004-2005
Pronouncement Date: 30-03-2012 | Result: Allowed

Appeal Details

RSA Number 303920514 RSA 2009
Assessee PAN AAACK9739P
Bench Ahmedabad
Appeal Number ITA 3039/AHD/2009
Duration Of Justice 2 year(s) 4 month(s) 19 day(s)
Appellant Kabra Plastics Ltd.,, Surat
Respondent The Income tax Officer, Ward-1(3),, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 30-03-2012
Date Of Final Hearing 05-03-2012
Next Hearing Date 05-03-2012
Assessment Year 2004-2005
Appeal Filed On 11-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD BEFORE SHRI A. K. GARODIA ACCOUNTANT MEMBER AND SHRI KUL BHARAT JUDICIAL MEMBER I.T.A. NO. 3039/ AHD/2009 (ASSESSMENT YEAR 2004-05) KABRA PLASTSICS LTD. 352-B PATEL COLONY ASHWNIKUMAR ROAD SURAT VS. ITO WARD 1(3) SURAT PAN/GIR NO. : AAACK9739P (APPELLANT) .. (RESPONDENT) APPELLANT BY: NONE (WRITTEN SUBMISISON) RESPONDENT BY: SHRI VINOD TANWANI SR. DR DATE OF HEARING: 05.03.2012 DATE OF PRONOUNCEMENT: 30.03.2012 O R D E R PER SHRI A. K. GARODIA AM:- THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORD ER OF LD. CIT(A) I SURAT DATE 10.09.2009 FOR THE ASSESSMENT YEAR 2004- 05. THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESSEE IS REGARDIN G PENALTY OF RS.1 41 598/- U/S 271(1)(C) OF THE ACT IN RESPECT O F THE ADDITION FOR ALLEGED UNDER STATEMENT OF WIP STOCK OF RS.9 52 188 /-. NONE APPEARED ON BEHALF OF THE ASSESSEE ON THE DATE OF HEARING. HOWEVER WRITTEN SUBMISSIONS OF THE ASSESSEE ARE AVAILABLE ON RECORD AND HENCE WE PROCEED TO DECIDE THE APPEAL OF THE ASSESSEE AFTER CONSIDERING THE WRITTEN SUBMISSIONS OF THE APPEAL WHICH IS AVAILABLE ON REC ORD AND AFTER HEARING THE LD. D.R. OF THE REVENUE. I.T.A.NO. 3039 /AHD/2007 2 2. THE LD. D.R. OF THE REVENUE SUPPORTED THE ORDERS OF AUTHORITIES BELOW. HE ALSO SUBMITTED THAT THERE IS QUANTITATIV E DIFFERENCE ALSO AND HENCE PENALTY SHOULD BE CONFIRMED. 3. WE HAVE CONSIDERED THE SUBMISSIONS OF LD. D.R. A ND THE WRITTEN SUBMISSIONS OF THE ASSESSEE WHICH ARE AVAILABLE ON RECORD. IT WAS EXPLAINED BY THE ASSESSEE BEFORE LD. CIT(A) THAT PR OCESS LOSS WAS NOT TAKEN INTO ACCOUNT WHILE SUBMITTING THE STATEMENT T O THE BANK. THIS ARGUMENT OF THE ASSESSEE WAS NOT ACCEPTED BY LD. CI T(A) ON THIS BASIS THAT THE ASSESSEE IS CONTENDING THAT IT HAS GIVEN E STIMATED FIGURES OF STOCK TO THE BANK BUT NORMALLY AN ESTIMATED FIGURE WOULD BE A ROUND OFF FIGURE BUT THE STOCK QUANTITY GIVEN BY THE ASSESSEE TO THE BANK IS 57 162.460 KG. WHICH IS NOT A ROUNDED OFF QUANTITY AND THERE FORE THIS EXPLANATION IS NOT ACCEPTABLE. WE FIND THAT IT IS NOTED BY THE A. O. IN THE ASSESSMENT ORDER THAT PROCESS LOSS OF 9861 KG. IS REFLECTED IN THE AUDIT REPORT AND THE A.O. HAS NOT DISPUTED REGARDING PROCESS LOSS AND HE HAS ACCEPTED THIS EXPLANATION OF THE ASSESSEE THAT DIFFERENCE IN CLOS ING STOCK SHOWN BY THE ASSESSEE IN THE BOOKS AND IN THE BANK STATEMENT MAY BE ON ACCOUNT OF PROCESS LOSS BECAUSE IT IS NOTED BY THE A.O. THAT E VEN AFTER CONSIDERING THIS PROCESS LOSS OF 9861 KG. THERE IS REMAINING FU RTHER DIFFERENCE OF 2831.60 KG. IT IS BY NOW A SETTLED POSITION OF LAW THAT ON THE BASIS OF EXCESS STOCK SHOWN IN THE BANK STATEMENT ADDITION IS NOT JUSTIFIED BUT IN THE PRESENT CASE WE ARE CONCERNED WITH THE PENALTY ON SUCH ADDITION. IN THE PRESENT CASE ALSO STOCK WAS HYPOTHECATED TO TH E BANK AND IT WAS NOT PLEDGED WITH THE BANK. ADMITTEDLY THERE IS DIFFER ENCE IN THE QUANTITY ALSO IN RESPECT OF W.I.P. QUANTITY AND NOT IN RAW M ATERIAL/FINISHED GOODS. THE QUANTITY OF W.I.P. CANNOT BE ACCURATELY MAINTAI NED ON DAY-TO-DAY BASIS BECAUSE THE PROCESS LOSS IS TO BE REDUCED ON ESTIMATED BASIS. OUT OF TOTAL DIFFERENCE OF 12 692.60 KG. DIFFERENCE OF 986 1 KG. IS CLAIMED TO BE I.T.A.NO. 3039 /AHD/2007 3 ON ACCOUNT OF PROCESS LOSS AND HENCE TO THIS EXTEN T IT HAS TO BE ACCEPTED THAT THE ASSESSEE HAS FURNISHED A BONA FIDE EXPLANA TION ALTHOUGH THE ASSESSEE COULD NOT SUBSTANTIATE THE SAME BUT THIS P ENALTY IS NOT JUSTIFIED WITH REGARD TO THIS ADDITION AS PER EXPLANATION (1) TO SECTION 271(1)(C) OF THE ACT. AS PER THIS EXPLANATION TO SECTION 271(1) (C) IF THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT FOUND TO BE FALSE AN D IF THE ASSESSEE CAN ESTABLISH THAT IT WAS A BONA FIDE EXPLANATION AND H E HAS FURNISHED ALL MATERIAL AND INFORMATION THEN IT CANNOT BE SAID TH AT THERE IS ANY CONCEALMENT OF INCOME. REGARDING THE REMAINING DIF FERENCE OF 2831.60 KG. IT WAS SUBMITTED BY THE ASSESSEE BEFORE THE A. O. THAT IT IS DUE TO GENUINE ERROR. THE A.O. HAS ALSO NOTED THAT THE AS SESSEE WAS HAVING THE TURNOVER OF RS.21.47 CRORES AND QUANTITY OF SEMI FI NISHED GOODS REFLECTED IN THE BOOKS WAS AT 94 470 KG. WHEN THE CLOSING STO CK IS SO HUGE A SMALL MISTAKE OF 2831 KG. I.E. AROUND 3% CAN BE A BONA FI DE MISTAKE AND HENCE AFTER CONSIDERING THE FACTS OF THE PRESENT CASE IN ITS TOTALITY WE FEEL THAT PENALTY IS NOT JUSTIFIED IN THE PRESENT CASE AND HE NCE WE DELETE THE SAME. 4. IN THE RESULT THE APPEAL OF THE ASSESSEE STANDS ALLOWED. 5. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED HEREINABOVE. SD./- SD./- (KUL BHARAT)) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR AHMEDABAD BY ORDER 6. THE GUARD FILE AR ITAT AHMEDABAD I.T.A.NO. 3039 /AHD/2007 4 1. DATE OF DICTATION 27/3 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 28/3.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 30/3 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.30/3 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 30/3/12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER.