SHRI BAJRANG LAL GUPTA, Jaipur v. ITO, Jaipur

ITA 498/JPR/2010 | 2005-2006
Pronouncement Date: 21-11-2014 | Result: Partly Allowed

Appeal Details

RSA Number 49823114 RSA 2010
Assessee PAN AENPG0397R
Bench Jaipur
Appeal Number ITA 498/JPR/2010
Duration Of Justice 4 year(s) 6 month(s) 7 day(s)
Appellant SHRI BAJRANG LAL GUPTA, Jaipur
Respondent ITO, Jaipur
Appeal Type Income Tax Appeal
Pronouncement Date 21-11-2014
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 21-11-2014
Assessment Year 2005-2006
Appeal Filed On 14-05-2010
Judgment Text
ITA NO. 498/JP/2010 BAJRANG LAL GUPTA VS. ITO JAIPUR 1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. ME ENA) ITA NO. 498/JP/2010 ASSESSMENT YEAR: 2005-06 PAN : AENPG 0397 R SHRI BAJRANG LAL GUPTA VS. THE ITO PROP. M/S. VIJAY AUTOMOBILES WARD- BEHROR NH-8 KOTPUTLI ALWAR JAIPUR (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.L. PODDAR DEPARTMENT BY: MRS. NEENA JEEPH DATE OF HEARING: 17-10-2014 DATE OF PRONOUNCEMENT: 21 -11-2014 ORDER PER R.P. TOLANI JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE LD. CIT(A) ALWAR DATED 02-02-2010 WHEREIN THE ASSESS EE HAS RAISED FOLLOWING GROUNDS IN HIS APPEAL. 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 3 02 928/- ON ACCOUNT OF EXCESS STOCK FOUND DURING THE COURSE OF SURVEY. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 2 656/- BY APPLYING GROSS PROFIT RATE OF 12.03% BY ESTIMATING THE TURNOVER AT RS. 18 00 000/-. ITA NO. 498/JP/2010 BAJRANG LAL GUPTA VS. ITO JAIPUR 2 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.5 301/- ON ACCOUNT OF POLLUTING TESTING INCOME MADE BY AO. 4. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF FOLL OWING DISALLOWANCE OF EXPENSES:- A. MESS EXPENSES RS. 3720/- B. TELEPHONE EXPENSES RS. 1322/- C. TRAVELLING & CONV. EXPENSES RS. 4920/- D. STAFF WELFARE EXPENSES RS. 1767/- E. GENERAL EXPENSES RS. 1397/- F. MOTOR CYCLE EXPENSES RS. 3355/- TOTAL RS. 16481/- 2.1 THE ASSESSEE IS PROPRIETOR OF ONE M/S. VIJAY AU TOMOBILES WHICH IS ENGAGED IN THE BUSINESS OF RUNNING OF SERVICE STATI ON OF ASHOK LEYLAND TRUCKS AND SALE OF MOTOR PARTS. A SURVEY WAS CONDUC TED IN THE BUSINESS PREMISES OF THE ASSESSEE ON 12-05-2004 AND DURING THE COURSE OF WHICH STOCK INVENTORY WAS PREPARED SHOWING EXCESS STOCK O F RS. 3 83 878/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO MADE ADDITIONS IN THIS BEHALF BESIDES ESTIMATED THE GROSS PROFIT @ 12.03% AND ALSO ESTIMATED THE TURNOVER AT RS. 18.00 LACS AS AGAINST ASSESSEE BOO K TURNOVER OF RS. 16 12 192/-. BESIDES MAKING OTHER SMALL DISALLOWANC ES WHICH ARE AGITATED IN THE GROUNDS OF APPEAL THE ADDITIONS HAVE BEEN CONF IRMED BY THE LD. CIT(A). 2.2 THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT THE AO WHILE WORKING OUT THE BOOK POSITION OF STOCK AS ON 12-05-2005 HAS NOT TAKEN INTO ITA NO. 498/JP/2010 BAJRANG LAL GUPTA VS. ITO JAIPUR 3 CONSIDERATION THE SUBMISSION OF THE ASSESSEE THAT T HE PURCHASES UPTO 12-05- 2005 WERE OF RS. 4 42 502/- AS AGAINST RS. 1 97 719 /- TAKEN BY THE AO AS MENTIONED AT PAGE 2 IN THE ASSESSMENT ORDER. IT IS BECAUSE OF THE VARIATION IN THE FIGURES OF PURCHASES THAT THE AO HAS MADE THE A DDITION OF RS. 3 02 928/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AS SESSEE HAS SUBMITTED THE FIGURES OF PURCHASES UNDER LETTERS DATED 21-01-2010 AND 27-12-2007. THESE LETTERS WERE SUPPORTED WITH A COPY OF TRADING ACCOU NT AS ON 12-05-2004 AND A COPY OF PURCHASE ACCOUNT AND SALES ACCOUNT. THE A O HAS NOT COMMENTED ON THESE PAPERS IN ANY MANNER. THUS THE ASSESSEE'S EXPLANATION IN THIS BEHALF REMAINS UNREBUTTED. IT IS PLEADED THAT THE ADDITION ON ACCOUNT OF EXCESS STOCK HAS BEEN CONFIRMED WITHOUT CONSIDERING THE ASSESSEE 'S EXPLANATION AT ALL. THEREFORE THE ADDITION MADE IS UNJUSTIFIED. NO INF IRMITY HAS BEEN FOUND IN THE SALE BOOK OF THE ASSESSEE AND TURNOVER HAS BEEN ESTIMATED WITHOUT ANY JUSTIFICATION. IT IS PLEADED THAT WHEN STOCK ADDITI ON IS MADE THEN THERE IS NO JUSTIFICATION TO MAKE GROSS PROFIT ADDITION. RELIAN CE IS PLACED ON THE JUDGEMENT OF ITAT JAIPUR BENCH DATED 23-01-2013 IN THE CASE OF ITO VS. MOHAN LAL AGARWAL (ITA NO. 563 & 564/JP/2012 ) WHER EIN ITAT DELETED VARIOUS ADDITIONS MADE BY THE AO IN THE TRADING ACC OUNT ON ACCOUNT OF UNDER VALUATION OF STOCK AND UNEXPLAINED INVESTMENT IN THE STOCK ON THE GROUND THAT GROSS PROFIT RATE APPLICATION TAKES CAR E OF ALL THESE AMOUNTS. THIS ITA NO. 498/JP/2010 BAJRANG LAL GUPTA VS. ITO JAIPUR 4 BENCH OF ITAT HAS ALSO REFERRED TO DECISION OF HON' BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. P. PRAVIN & CO. 274 ITR 5 34. 2.3 APROPOS POLLUTION TESTING EXPENSES AND OTHER EX PENSES THE LD. AR OF THE ASSESSEE SUBMITTED THAT THESE EXPENSES ARE INCU RRED IN REGULAR COURSE OF BUSINESS OF THE ASSESSEE. DURING THE COURSE OF SURV EY NO OTHER INCRIMINATING MATERIAL WAS FOUND. 2.4 THE LD. DR SUPPORTED THE ORDER OF THE LOWER AUT HORITIES. 2.5 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT APPEARS FROM THE RECORD THA T ASSESSEE'S EXPLANATION TOWARDS EXCESS STOCK HAS NOT BEEN CONSIDERED PROPER LY. BESIDES A SURVEY WAS CONDUCTED IN THE BUSINESS PREMISES OF THE ASSES SEE AND NO INCRIMINATING MATERIAL WAS FOUND. IN SUCH SITUATION THE ADDITION OF EXCESS STOCK GROSS PROFIT AND ESTIMATION OF SALES TURNOVER AMOUNTS TO MULTIPLE ADDITIONS WHICH IN OUR CONSIDERED VIEW IS NOT JUSTIFIABLE IN VIEW O F THE JUDGMENT OF COORDINATE BENCH IN THE CASE OF ITO VS. MOHAN LAL A GARWAL (SUPRA). SIMILARLY THE ASSESSEE HAS GIVEN REASONABLE EXPLAN ATION ABOUT THE POLLUTION TESTING INCOME OF RS. 5 301/- AND MISCELLANEOUS EXP ENSES OF RS. 16 481/-. IN OUR CONSIDERED VIEW AN ADDITION OF RS. 1.00 LAC IN RESPECT OF STOCK FOUND DURING THE COURSE OF SURVEY WILL MEET THE ENDS OF J USTICE AND ALL OTHER ADDITIONS ARE DELETED. ITA NO. 498/JP/2010 BAJRANG LAL GUPTA VS. ITO JAIPUR 5 3.0 IN THE RESULT THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 21-11 -2014 SD/- SD/- (T.R. MEENA) (R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR DATED: 21 ST NOV 2014 *MISHRA COPY FORWARDED TO:- 1. SHRI BAJRANG LAL GUPTA ALWAR 2. THE ITO WARD- BEHROR JAIPUR 3. THE LD. CIT(A) 4. THE LD. CIT BY ORDER 5..THE LD. DR 6.THE GUARD FILE (IT NO. 498/JP/2010) AR ITAT JAIPUR