Shri Suresh Kumar Jain, Indore v. The Asst. Comm. Of Income Tax Circle 5(1), Indore

ITA 464/IND/2010 | 2007-2008
Pronouncement Date: 08-11-2011 | Result: Partly Allowed

Appeal Details

RSA Number 46422714 RSA 2010
Bench Indore
Appeal Number ITA 464/IND/2010
Duration Of Justice 1 year(s) 3 month(s) 29 day(s)
Appellant Shri Suresh Kumar Jain, Indore
Respondent The Asst. Comm. Of Income Tax Circle 5(1), Indore
Appeal Type Income Tax Appeal
Pronouncement Date 08-11-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 08-11-2011
Date Of Final Hearing 17-08-2011
Next Hearing Date 17-08-2011
Assessment Year 2007-2008
Appeal Filed On 09-07-2010
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER ITA NO.464/IND/2010 A.Y. 2007-08 SHRI SURESH KUMAR JAIN INDORE PAN ABGPJ-2799E :: APPELLANT VS ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 5(1) INDORE :: RESPONDENT APPELLANT BY : SHRI P.N. DIXIT RESPONDENT BY : SHRI ARUN DEWAN DATE OF HEARING : 8.11.2011 DATE OF PRONOUNCEMENT : 8.11.2011 O R D E R PER JOGINDER SINGH THIS IS AN APPEAL BY THE ASSESSEE CHALLENGING THE O RDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) DA TED 2 28.4.2010. THE FIRST GROUND 1 RAISED BY THE ASSESS EE PERTAINS TO ADOPTING THE RATE OF RS. 1691/- PER QUINTAL FOR 611 QUINTALS OF CHANA DAL VALUING THE SAME AT RS. 10 33 201/- ADOP TING THE RATE OF RS. 1175/- PER QUINTAL FOR 2277.50 QUINTALS THUS VALUING THE SAME AT RS. 26 76 062/- AND FURTHER ADOPTING TH E RAT OF RS. 1950/- PER QUINTAL FOR 2101.50 QUINTALS OF CHANA DA L VALUING THE SAME AT RS.40 97 925/- AND ALSO MAKING SEPARATE ADD ITION OF RS.5 LACS CONSIDERING IT AS VALUE OF CLOSING STOCK OF WORK IN PROGRESS. 2. DURING HEARING THE LEARNED COUNSEL FOR THE ASSE SSEE CONTENDED THAT THE ASSESSEE HAD BEEN FOLLOWING THE SAME METHOD OF VALUATION CONSISTENTLY OF CLOSING STOCK A T MARKET OR NET REALISABLE VALUE FOR WHICH OUR ATTENTION WAS IN VITED TO TAX AUDIT REPORT. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE DECISION IN D. SUBHASHCHANDRA & COMPANY VS. ACI T; 123 ITD 635 (AHD). A PLEA WAS ALSO RAISED THAT THE NET REALISABLE VALUE IS NOT CAPABLE OF BEING DETERMINED BY THE ASS ESSEE AS IT DEPENDS ON PREVALENT MARKET RATES WHEREAS THE DETER MINATION OF MARKET RATES DEPENDS ON SO MANY FACTORS INCLUDIN G DEMAND 3 AND SUPPLY. A PLEA WAS RAISED THAT NECESSARY DETAIL S WERE FILED BY THE ASSESSEE BEFORE THE LD. ASSESSING OFFICER I N SUPPORT OF HIS CLAIM THEREFORE THERE WAS NO SCOPE FOR MAKING ADDITION ON ACCOUNT OF VALUATION. IT WAS ALSO SUBMITTED THAT TH E BENEFIT OF REVALUATION OF CLOSING STOCK IN SUBSEQUENT YEAR BY INCREASING THE VALUE OF OPENING STOCK AND REDUCING THE PROFIT WAS ALSO NOT ALLOWED. ON THE OTHER HAND THE LEARNED SR. DR S HRI ARUN DEWAN STRONGLY DEFENDED THE IMPUGNED ORDER. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON FILE. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PROPRIETOR OF M/S SIDDHARTH AGRO INDU STRIES ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADIN G OF PULSES. THE ASSESSEE SHOWED INCOME FROM CAPITAL GA INS AND OTHER SOURCES BESIDES BUSINESS INCOME IN ITS RETURN FILED ON 31 ST MARCH 2008 DECLARING TOTAL INCOME OF RS. 24 52 680 /- ALONG WITH TAX AUDIT REPORT. IN COMPLIANCE WITH THE NOTI CES AND DETAILED QUESTIONNAIRE THE ASSESSEE PRODUCED BOOKS OF ACCOUNT VOUCHERS ETC. DURING THE ASSESSMENT PROCE EDINGS. ULTIMATELY THE ADDITION OF RS.1 06 23 707/- WAS MA DE FOR 4 UNDER-VALUATION OF STOCK. THE ASSESSEE ON APPEAL C HALLENGED THE ADDITION BEFORE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WHO HAS MADE DETAILED DISCUSSION IN THE I MPUGNED ORDER. THE QUALITY WISE/QUANTITY WISE DETAILS OF C LOSING STOCK ARE REPRODUCED HEREUNDER:- PARTICULARS RATE WEIGHT AMOUNT ROLAX 2951 100 295100 JOKER KORA 3111 100 311100 FLYING HORSE 2911 200 582200 MAYUR KORA 3011 100 301100 MEDIUM KORA 2951 300 885300 CHANA DAL HALKI 1075 4990 5364250 TOTAL 5790 7739050 7739050 CHANA BHOOSI 550 800 440000 785 300 235500 CHANA HALKI 410 900 369000 660 291 192060 TOTAL 2291 1236560 1236560 GRAND TOTAL 8975610 WE FURTHER FIND THAT BEFORE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) THE ASSESSEE TRIED TO EXPLAIN THE VAL UATION OF STOCK ON THE BASIS OF AUDIT REPORT AND ALSO REGARDI NG MANUFACTURING OF DAL OF INFERIOR QUALITY. ADMITTED LY THE STOCK WAS NOT PHYSICALLY EXAMINED BY THE AUDITOR AND ALSO THE QUANTITY WAS NOT CHECKED AS WELL AS VALUATION OF ST OCK. THE 5 DETAILS OF INFERIOR QUALITY OF DAL WERE ALSO CLAIME D TO BE PRODUCED BY THE ASSESSEE. THE ASSESSEE FURNISHED W RITTEN SUBMISSIONS BEFORE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) FOR WHICH REMAND REPORT WAS SOUGHT FROM T HE ASSESSING OFFICER. AT THE SAME TIME THE ASSESSEE W AS GIVEN ANOTHER OPPORTUNITY BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FOR VALUATION OF STOCK AS HAS BEEN DI SCUSSED IN PARA 4 OF THE IMPUGNED ORDER. THE DETAILS OF SALE S (SUBMITTED BY THE ASSESSEE AND CONSIDERED BY LEARNED COMMISSIO NER OF INCOME TAX (APPEALS) MADE DURING THE MONTH OF MARCH AND APRIL 2007 ARE AS UNDER :- ITEM MAR-07 APR-07 TOTAL WEIGHT ( IN QTL AVG RATE AMOUNT TOTAL WEIGHT (IN QTL.) AVG. RATE AMOUNT CHANA BHOOSI 1267.50 719 911214 952.20 609 579618 TOTAL 1267.50 719 911214 952.20 609 579618 FLYING HORSE PP 360.00 2693 969370 380.00 3070 1166720 FLYING HORSE WP 160.00 2890 462331 62.50 3048 190488 GOLD MEDAL PP 115.00 2793 321185 50.00 3051 152550 GOLD MEDAL WP 30.00 2851 85530 GOLD MEDAL 130.00 2828 367580 6 KORA GRAM DAL B ( OLD PP) 784.23 2930 2297653 31.50 3131 98627 JOKER BRAND SORTEX 61.00 3293 200865 LOTUS BAND PP 10.00 2975 29750 JOKER BRAND BOLD KORA 70.00 2777 194370 33.75 3127 105530 MAYUR BRAND KORA 360.70 2822 1017836 82.50 3132 258393 RELIANCE BOLD 0.50 3000 1500 ROLEX BRAND 340.50 3110 1059080 395.75 3226 127686 6 SILVER JET KORA 34.50 3027 104435 TIGER BRAND 211.00 2618 552345 32.50 3099 100718 TIGER BRAND PP 95.00 2498 237295 7.50 3025 22688 TIGER BRAND WP 30.00 2801 84030 TOTAL 2721.43 2849 7754539 1147.00 3141 3603195 CHANA DAL MEDIUM KORA 879.50 2600 2286881 212.90 2957 629560 HALKI TUKDI 212.50 1094 232438 TOTAL 879.50 2600 2286881 425.40 2026 861998 GRAND TOTAL 4868.43 2250 10952634 2524.60 1998 5044 811 THE AFORESAID DETAILS HAVE BEEN DULY EXAMINED IN TH E IMPUGNED ORDER AND WE DONT FIND ANY INFIRMITY IN T HE SAME AS THE ORDER HAS BEEN PASSED AFTER DUE EXAMINATION OF RECORD AND SUBMISSIONS OF THE ASSESSEE. EVEN OTHERWISE NO USE FUL PURPOSE WOULD BE SERVED IN REPEATING THE FINDING CO NTAINED IN THE IMPUGNED ORDER THEREFORE THE GROUND NOS.1(A)( B)(C) ARE AFFIRMED. 3.1 SO FAR AS A SEPARATE ADDITION OF RS.5 LACS CONS IDERING IT AS VALUE OF CLOSING STOCK OF WORK-IN-PROGRESS IS CONCE RNED FOR 7 CHANA DAL HALKI NO ADDITION IS REQUIRED ESPECIALLY WHEN NO BASIS HAS BEEN MENTIONED FOR FURTHER ADDING RS.5 LA CS THEREFORE SUB-GROUND (D) OF GROUND NO.1 IS ALLOWED CONSEQUENTLY GROUND NO.1 OF THE ASSESSEE IS PARTLY ALLOWED. 4. THE NEXT GROUND PERTAINS TO MAKING SEPARATE ADDI TION OF RS.34 710/- PAID ON ACCOUNT OF PURCHASE OF RAW CHAN A FROM TUSHAR TRADING CO. IN THE REGULAR COURSE OF BUSINE SS. DURING HEARING IT WAS CLAIMED THAT IT WAS DUE TO TYPING M ISTAKE IN AUDIT REPORT AND NO BASIS HAS BEEN MENTIONED FOR SUCH ADD ITION THEREFORE THIS GROUND OF THE ASSESSEE IS ALLOWED. FINALLY THE APPEAL OF THE ASSESSEE IS PARTLY ALLO WED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH SIDES AT TH E CONCLUSION OF THE HEARING ON 8.11.2011. SD SD (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 8.11.2011 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR GU ARD FILE !VYAS!