The ACIT, 5 (1), v. M/s Narayan Ginning & Oil Mills P.Ltd,

ITA 314/IND/2008 | misc
Pronouncement Date: 04-05-2010 | Result: Dismissed

Appeal Details

RSA Number 31422714 RSA 2008
Bench Indore
Appeal Number ITA 314/IND/2008
Duration Of Justice 1 year(s) 9 month(s) 27 day(s)
Appellant The ACIT, 5 (1),
Respondent M/s Narayan Ginning & Oil Mills P.Ltd,
Appeal Type Income Tax Appeal
Pronouncement Date 04-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 04-05-2010
Date Of Final Hearing 27-04-2010
Next Hearing Date 27-04-2010
Assessment Year misc
Appeal Filed On 08-07-2008
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER ITA NO.314/IND/2008 A.YS. 2004-05 ASSTT. COMMISSIONER OF INCOME TAX 5(1) INDORE APPELLANT VS M/S NARAYAN GINNING & OIL MILLS PVT. LTD. INDORE PAN AAACN-5978M RESPONDENT APPELLANT BY : SHRI RAJIV VASHNEY CIT DR RESPONDENT BY : SANJAY SODANI CA O R D E R PER JOGINDER SINGH JM THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 20.3.2008. THERE IS A DELAY OF TWO DA YS IN FILING THE APPEAL BY THE REVENUE FOR WHICH CONDONATION PETITION HAS B EEN FILED. AFTER HEARING THE RIVAL SUBMISSIONS THE DELAY IS CONDONE D. 2. THE FIRST GROUND TAKEN BY THE REVENUE IN THIS A PPEAL IS THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN DELETING 2 THE ADDITION OF RS.23 16 890/- MADE BY THE ASSESSIN G OFFICER ON ACCOUNT OF COTTON (RUI) YIELD. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON THE FILE. TH E CRUX OF ARGUMENTS ON BEHALF OF THE REVENUE IS THAT THE LD. FIRST APPELLA TE AUTHORITY HAS NOT DISPOSED OF THE APPEAL IN THE REQUIRED MANNER AND P LACED RELIANCE ON THE ASSESSMENT ORDER. BRIEF FACTS ARE THAT THE ASSESSEE SHOWED THE PURCHA SES OF RAW COTTON TO THE TUNE OF 23 535.40 QUINTALS WHICH WAS SENT FOR GINNING. THE ASSESSEE SHOWED 15399.20 QUINTALS (65.43%) OF KAPAS YA AND 8136.20 QUINTALS AS RUI (34.57%) AND NO SHORTAGE WAS SHOWN. THE ASSESSING OFFICER WAS OF THE VIEW THAT SINCE NO SHORTAGE DURI NG GINNING PROCESS WAS CLAIMED THEREFORE 23 16 890 WAS ADDED TO THE TOTAL INCOME ON ACCOUNT OF SUPPRESSION OF RUI YIELD. ON APPEAL BEFO RE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IT WAS CLAIMED BY THE ASSESSEE THAT AS PER THERE BOOKS OF ACCOUNTS AND YIELD CHARG ED A YIELD OF 34.57% OF RUI WAS ACCEPTED BY THE ASSESSING OFFICER BUT HE ADDED ADDITIONAL RUI PRODUCTION OF 369.52 QUINTALS IN THE CLOSING ST OCK. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) SOUGHT THE REM AND REPORT FROM THE ASSESSING OFFICER AS HAS BEEN DISCUSSED IN PARA 4.3 AND 4.4 OF THE IMPUGNED ORDER. IF THE TOTALITY OF FACTS IS ANALYS ED THE ASSESSEE SHOWED 100% OF THE YIELD OUT OF PROCESS OF RAW COTTON WHIC H WAS INCREASED BY 3 1.57% WITHOUT MENTIONING ANY BASIS. IF THE ASSESSME NT ORDER IS BELIEVED THEN EITHER THE YIELD WAS SOLD OUT OR WAS SHOWN IN THE CLOSING STOCK WHEREAS THE FACT REMAINS THAT 100% OF YIELD WAS ACC OUNTED FOR IN THE FORM OF SALES OR IN THE CLOSING STOCK THEREFORE T HE ADOPTION OF YIELD AT 101.57% CANNOT BE SAID TO BE JUSTIFIED BECAUSE IT I S PRACTICALLY NOT POSSIBLE. IN VIEW OF THESE FACTS THERE IS NO INFIR MITY IN THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). 4. THE NEXT GROUND IS THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ADDITION OF RS. 22 51 158/- MADE ON ACCOUNT OF CASH SALES. THE CONTENTION RAISED ON BE HALF OF THE REVENUE IS THAT CERTAIN CASH WAS DEPOSITED OF THOSE DAYS WHEN THERE WAS NO SALE. THE ASSESSMENT ORDER WAS SUPPORTED. ON THE OTHER HA ND THE LD. COUNSEL FOR THE ASSESSEE DEFENDED THE IMPUGNED ORDE R. ON PERUSAL OF RECORD AND AFTER HEARING THE RIVAL SU BMISSIONS THE UNDISPUTED FACT IS THAT DURING THE ASSESSMENT PROCE EDINGS THE ASSESSEE PRODUCED THE BOOKS OF ACCOUNTS BILLS OF SALES AND PURCHASES AND THE SAME WERE TEST CHECKED BY THE ASSESSING OFFICER. T HE PRESUMPTION OF THE ASSESSING OFFICER IS THAT THE ASSESSEE COMPANY MADE CASH SALE OF RAW COTTON. THE IMPUGNED AMOUNTS HAVE BEEN REPRODU CED IN PARA 6.1 OF THE IMPUGNED ORDER THEREFORE WE ARE REFRAINING OURSELVES FROM REPEATING THE SAME. IT IS ALSO AN ADMITTED FACT THA T THE PURCHASE DETAILS OF ALL KISANS WERE FURNISHED DURING THE ASSESSMENT PROCEEDINGS AND THE 4 ASSESSING OFFICER ADDED THE GENERAL ENTRY IN THE SA LES ACCOUNT AS BOGUS SALES. THE CLAIM OF THE ASSESSEE IS THAT THESE ENTR IES ARE NOT ENTRIES OF SALES BUT ARE OF PURCHASES. EVEN IN THE REMAND REP ORT IT WAS ADMITTED BY THE ASSESSING OFFICER THAT THE BOOKS OF ACCOUNTS WERE PRODUCED BY THE ASSESSEE AND THE ENTRIES RELATED TO PURCHASE AN D NO ADVERSE COMMENT WAS MADE. SINCE THE CLAIM OF THE ASSESSEE W AS NOT REBUTTED IN THE REMAND REPORT CONSEQUENTLY WE HAVE NO HESI TATION TO SAY THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS JUSTIFIED IN DELETING THE PRESUMPTIVE ADDITION WHICH WAS NOT BAS ED UPON ANY EVIDENCE. EVEN OTHERWISE PRESUMPTION CANNOT TAKE T HE SHAPE OF EVIDENCE HOWEVER STRONG IT MAY BE. THE STAND OF T HE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS THEREFORE AFFIRMED. 5. THE LAST GROUND RAISED BY THE REVENUE IS THAT TH E LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELET ING THE ADDITION OF RS.28 52 760/- MADE ON ACCOUNT OF SUNDRY CREDITORS. THE CRUX OF ARGUMENTS ON BEHALF OF THE REVENUE IS THAT THE KISA NS WERE SHOWN AS CREDITORS WHO WERE NOT PRODUCED BY THE ASSESSEE DUR ING THE ASSESSMENT PROCEEDINGS WHEREAS THE LD. COUNSEL FOR THE ASSESSEE DEFENDED THE IMPUGNED ORDER. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REP RESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RE CORD. THE ASSESSING OFFICER HAS DEALT WITH THE ISSUE IN PARA 6 OF THE A SSESSMENT ORDER. THE 5 ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE THE MANDI BIKRI PAYMENTS IN RESPECT OF KAPAS PURCHASES AS PER THE REVENUE COULD NOT BE PRODUCED. THE CRUX OF ARGUMENTS ON BEHALF OF TH E REVENUE IS THAT SHOWING OF CREDITS BY THE ASSESSEE IS NOT PERMITTED AND THE PURCHASE RECORD WAS ALSO NOT PRODUCED EVIDENCING THAT THE FA RMERS ACTUALLY RECEIVED THE PAYMENT AT THE TIME OF SALE ITSELF. T HE ASSESSING OFFICER PRESUMED THESE ENTRIES AS BOGUS CASH ESPECIALLY WHE N NO CONFIRMATION FROM THE FARMERS WAS FILED BY THE ASSESSEE. BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IT WAS CLAIME D THAT ON 22.12.2006 THE ASSESSEE WAS ASKED TO PRODUCE THE CR EDITORS FOR VERIFICATION AND ON 26.12.2006 THE ASSESSMENT ORDER WAS FRAMED. IT WAS FURTHER CLAIMED THAT THE FACTORY WAS SITUATED ABOUT 150 KM FAR FROM INDORE THEREFORE IT WAS PRACTICALLY NOT POSSIBLE TO PRODUCE ALL THE CREDITORS FOR VERIFICATION AND THE REQUEST FOR EXTE NSION OF TIME WAS ALSO DECLINED. IT IS SEEN THAT CONFIRMATION LETTERS WER E FILED BY THE ASSESSEE. EVEN REMAND REPORT WAS SOUGHT FROM THE ASSESSING OF FICER AND THE COMMENTS WERE CONSIDERED ALONG WITH THE COMMENTS OF THE ASSESSEE AS HAS BEEN REPRODUCED IN PARAS 7.3 AND 7.4 OF THE IMP UGNED ORDER (PAGE 13). EVEN BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IT WAS CLAIMED THAT IT WAS A GENERAL PRACTICE IN THE T RADE AND PROPER OPPORTUNITY WAS NOT PROVIDED TO THE ASSESSEE TO PRO DUCE THE CREDITORS. SINCE THE CONFIRMATION FROM THE CREDITORS WERE FILE D AND NO DEFECT WAS 6 POINTED OUT IN THE SAME AND ALSO THE CLAIM OF THE A SSESSEE WAS NOT REBUTTED IN THE REMAND REPORT THEREFORE NO ADDITI ON CAN BE MADE U/S 68 OF THE ACT. THE IDENTITY OF CREDITORS AND GENUINENE SS OF TRANSACTION IS NOT IN DISPUTE. EVEN NO STATEMENT WAS RECORDED BY THE A SSESSING OFFICER TO THE EFFECT THAT THE CREDITS ARE BOGUS THEREFORE M ERE PRESUMPTION THAT THESE ARE BOGUS IS NOT SUFFICIENT TO MAKE THE ADDIT ION U/S 68 OF THE ACT ESPECIALLY WHEN THE REMAND REPORT WAS SOUGHT FROM T HE ASSESSING OFFICER WHEREIN NO ADVERSE COMMENTS/MATERIAL WAS ME NTIONED. THIS GROUND OF THE REVENUE IS THEREFORE HAVING NO MERIT AND DISMISSED. FINALLY THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF LEARNED REPRESENTATIVES FROM BOTH THE SIDES AT THE CONCLUSI ON OF THE HEARING ON 27 TH APRIL 2010. (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MAY 4 2010 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR G UARD FILE *DBN/