Delhi Agro Milk Food India P. Ltd., v. DCIT, CC 18,

ITSSA 46/DEL/2007 | misc
Pronouncement Date: 19-03-2010 | Result: Dismissed

Appeal Details

RSA Number 4620116 RSA 2007
Bench Delhi
Appeal Number ITSSA 46/DEL/2007
Duration Of Justice 3 year(s) 1 month(s) 14 day(s)
Appellant Delhi Agro Milk Food India P. Ltd.,
Respondent DCIT, CC 18,
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 19-03-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 19-03-2010
Date Of Final Hearing 24-02-2010
Next Hearing Date 24-02-2010
Assessment Year misc
Appeal Filed On 05-02-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI R.C. SHARMA I.T.(SS)A. NO.46/DEL/2007 BLOCK PERIOD: 1.6.96 TO 18.12.2002 M/S. DAILY AGRO MILK FOODS INDIA PVT. LTD. VS. DEPU TY CIT 16/217 JOSHI ROAD KAROL BAGH CENTRAL CIR.18 NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI ANIL SHARMA ADV. RESPONDENT BY: SHRI STEPHEN GEORGE CIT (DR) ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LEARNED CIT(APPEALS) DATED 30.11.2006 PASSED FOR BLOCK PERI OD STARTING FROM IST APRIL 1996 AND ENDING ON 18.12.2002. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT LEARNED CIT(APPEALS) HAS ERRED IN CONFIRMIN G THE ADDITION OF RS.9 06 552 ON ACCOUNT OF ALLEGED DIFFERENCE IN THE VALUE OF CLOSING STOCK AS PER RETURN AND AS PER SEIZED COMPUTERS MARKED A-16 . 2. THE BRIEF FACTS OF THE CASE ARE THAT THE A SEAR CH AND SEIZURE OPERATION WAS CARRIED OUT UNDER SEC. 132 OF THE ACT ON THE BU SINESS PREMISES OF THE ASSESSEE AND RESIDENTIAL PREMISES OF THE DIRECTOR O N 18.12.2000. DURING THE 2 COURSE OF SEARCH A COMPUTER MARK AS A-116 WAS SE IZED FROM THE PREMISES 9-PARK AREA KAROL BAGH NEW DELHI. ON INSPECTION O F THE COMPUTER IT REVEALS THAT TRADING AND MANUFACTURING ACCOUNT AND BALANCE SHEET IN RESPECT OF FINANCIAL YEAR 2001-02 WAS STORED. THE PRINT OUT OF THOSE ACCOUNTS WERE TAKEN BY THE ASSESSING OFFICER. WHEN THIS PRINT OUT WAS COMPARED WITH THE TRADING AND MANUFACTURING ACCOUNT FILED BY THE COMP ANY ALONG WITH RETURN OF INCOME FOR ASSESSMENT YEAR 2002-03 THE ASSESSIN G OFFICER HAS NOTED THAT CLOSING STOCK VALUE AS PER COMPUTER PRINT OUT WAS A T RS.24 39 563. WHILE IN THE TRADING-CUM-MANUFACTURING ACCOUNT FILED WITH TH E RETURN OF INCOME IT WAS SHOWN AT RS.15 33 011 AND THUS ACCORDING TO THE ASSESSING OFFICER AN UNDERSTATEMENT OF CLOSING STOCK OF RS.9 06 552 HAS BEEN MADE BY THE ASSESSEE. ASSESSING OFFICER PUTTING RELIANCE UPON T HIS SEIZED MATERIAL HAS MADE AN ADDITION OF RS.9 06 552 ON ACCOUNT OF UNDIS CLOSED STOCK. 3. APPEAL TO THE LEARNED CIT(APPEALS) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 4. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE IMPUG NING THE ORDERS OF REVENUE AUTHORITIES BELOW RAISED TWO FOLD SUBMISSI ONS. ON THE STRENGTH OF HON'BLE DELHI HIGH COURTS DECISION RENDERED IN THE CASE OF CIT VS. RAVIKANT JAIN 250 ITR 141 AND THE DECISION OF OTHER HON'BLE HIGH COURTS 3 REPORTED IN 257 ITR 78 (MP) CIT VS. GOM INDUSTRIES 234 ITR 733 (GUJ.) NR PAPER & BOARD LTD. CONTENDED THAT INCOME IN THE BLOCK ASSESSMENT HAS TO BE DETERMINED ON THE BASIS OF SEIZED MATERIAL. H E POINTED OUT THAT BUSINESS PREMISES OF THE ASSESSEE IS 16/217 JOSHI ROAD KAROL BAGH NEW DELHI. THE PREMISES AT 9-PARK AREA KAROL BAGH DOES NOT BELONG TO IT HENCE COMPUTER PRINT OUT TAKEN OUT FROM A COMPUTER SEIZED FROM THIS PREMISES CANNOT BE USED AGAINST THE ASSESSEE FOR DETERMINING THE INCOME OF THE BLOCK PERIOD. FOR THE PURPOSE OF HIS SECOND FOLD OF SUBMI SSIONS HE TOOK US THROUGH PAGE NOS. 1 AND 2 OF THE PAPER BOOK WHEREIN THE BALANCE SHEET AS PER BOOKS OF ACCOUNT PREPARED BY IT AND SUBMITTED TO TH E DEPARTMENT AS WELL AS THE COPY OF THE PRINT OUT TAKEN FROM THE COMPUTER A RE AVAILABLE. HE POINTED OUT THAT THE TRADING-CUM-MANUFACTURING ACCOUNT ALLE GED TO HAVE BEEN AVAILABLE IN THE COMPUTER IS NOT A COMPLETE ACCOUNT . IT SUFFERS FROM MANY DISCREPANCIES SUCH AS : I) IT DOES NOT CONTAIN THE FIGURE OF CST LST AND LAB EXPENSES WHICH HAVE BEEN INCURRED BY THE ASSESSEE AND WITHOU T WHICH THE CORRECT RESULT COULD NOT HAVE BEEN OBTAINED. II) IT DOES NOT BEAR SIGNATURE EITHER OF THE AUDITOR OR THE DIRECTOR OF THE ASSESSEE COMPANY. 4 III) THE FIGURE OF SALES DOES NOT TALLY. THE REGULAR BOO KS REFLECT HIGHER SALES WHERE AS THE SALES NOTED IN THE SEIZED DOCUMENT OR LOWER. IV) THE BALANCE SHEET AS PER CPU A-116 IS ALSO NOT CORR ECT AS THE SAME DOES NOT REFLECT THE RELEVANT FIGURES UNDER TH E HEAD CURRENT ASSETS CURRENT LIABILITIES AND THE TOTAL OF CURREN T YEARS TOTAL OF CAPITAL AND LIABILITIES AND ASSETS. V) THE BALANCE SHEET REFLECTS LOSS OF RS.40 528 AGAINS T PROFIT OF RS.2 20 090.49 AS PER MANUFACTURING & TRADING ACCOU NT. VI) THE BALANCE SHEET IS ALSO NOT SIGNED BY ANY AUTHORI ZED PERSON. SHRI SHARMA FURTHER CONTENDED THAT ON THE BASIS OF THIS PRINT OUT THE ASSESSEE CANNOT BE FASTENED WITH THE TAX LIABILITY BECAUSE I T APPEARS THAT THESE DETAILS WERE FED BY SOME ARTICLE CLERK OF THE C.A. FOR THE PURPOSE OF PRACTICE. THEY ARE NOT COMPLETE. THE DEPARTMENT INSPITE OF SEARCH CANNOT RECOVER ANY INCRIMINATING MATERIAL INDICATING THE SALES OUTSIDE THE BOOKS ETC. LEARNED DR ON THE OTHER HAND RELIED UPON THE ORDER OF THE L EARNED CIT(APPEALS) AS WELL AS TOOK US THROUGH THE STATEMENT OF SHRI RAJES H KUMAR WHO IS MANAGING THE AFFAIRS OF THE ASSESSEE. 5. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. BEFORE JUDGING THE VERSION PUT BY THE LEARNED COUNSEL FOR THE ASSESSEE IT IS WORTH TO TAKE NOTE OF SOME OF R EPLY GIVEN BY SHRI RAJESH 5 KUMAR IN RESPONSE TO THE QUESTIONS ASKED FROM HIM W HILE RECORDING HIS STATEMENT ON THE DATE OF SEARCH. QUESTION NOS.50 AN D 56 ALONG WITH THE REPLY READ AS UNDER: Q.50. OUR TEAM FROM THE I.T. DEPTT. AT YOUR OFFICES AT 217-218 JOSHI ROAD DELHI AND AT 9A PARK AREA KAROL BAGH NEW DE LHI HAVE CONFIRMED THAT NO REGULAR BOOKS OF ACCOUNT HAVE BEE N FOUND RELATING TO ALL YOUR CONCERNS. KINDLY EXPLAIN HOW DO YOU MAI NTAIN YOUR ACCOUNTS ON A DAY TO DAY BASIS AND KEEP A RECORD OF ALL YOUR TRANSACTIONS BOTH FOR I.T. PURPOSES AS WELL AS FOR YOUR BUSINESS PURPOSES? WE HAVE ALSO BEEN INFORMED BY THE SUSPEC TORS REPORT GIVEN BY INSPECTORS OF I.T. DEPTT. WHO VISITED THE RESIDE NCE OF SH. JAI RAM YOUR ACCOUNTANT EARLIER IN THE DAY THAT NO BOOKS O F ACCOUNT OF ANY OF YOUR CONCERNS ARE LYING WITH HIM. THIS CLEARLY PROV ES THAT YOU HAVE BEEN LYING/GIVING FALSE STATEMENT THAT ALL YOUR REP LY ALL ACCOUNTS ARE WITH SH. JAI RAM. MAY I REMIND YOU ONCE AGAIN THAT YOU ARE STILL ON THE OATH AND THE CONSEQUENCES OF GIVING FALSE STATE MENT CAN LEAD TO YOUR IMPRISONMENT BY PROSECUTION. WHAT YOU HAVE TO SAY? ALSO STATE HAVE YOU EVER SEEN THE BOOKS OF ACCOUNT OF ANY OF Y OUR CONCERNS ? IF NOT HOW CAN YOU BE SURE THAT BOOKS OF ACCOUNT OF A NY OF YOUR CONCERN ARE BEING MAINTAINED AT ALL. NO. I HAVE PERSONALLY NEVER SEEN THE REGULAR BOOKS OF ACCOUNT EITHER FOR THIS YEAR OR ANY PREVIOUS YEAR FOR ANY OF MY CO NCERNS. 6 I ASK THE ACCOUNTANT FROM TIME TO TIME IF HE IS MAI NTAINING THE BOOKS OF ACCOUNT AND HE STATES THAT HE DOES. HOWEVE R I HAVE NEVER SEEN ANY REGULAR BOOKS OF ACCOUNT. FOR THE SALES MA DE BILLS ARE BEING ISSUED AND FOR PURCHASES MADE VOUCHERS ARE BEING I SSUED ALL THE VOUCHERS OF CURRENT YEAR ARE LYING AT MY OFFICE AT 9-A PARK AREA KAROL BAGH NEW DELHI. NO VOUCHERS FOR CURRENT YEAR ARE LYING AT MY RESIDENCE. I DO NOT KNOW HOW SH. JAI RAM ACCTT. CAN DENY THAT HE HAS NO BOOKS OF A/C. OF OUR CONCERN. HOWEVER AS FAR AS I KNOW AND BELIEVE THAT HE IS MAINTAINING MY BOOKS OF ACCOUNT THOUGH I HAVE NEVER SEEN THE BOOKS OF ACCOUNT. REGARDING THE QUESTION RELATING TO HOW WE MAINTAIN ACCOUNTS ON A DAY TO DAY BAIS I ONCE AGAIN STATE THAT THE S ALES & PURCHASE VOUCHERS AS AND WHEN SUCH TRANSACTIONS TAKE PLACE ARE GIVEN TO MY ACCTT. SHRI JAI RAM WHO MAINTAINS THE RECORDS. I PE RSONALLY DUE TO LACK OF TIME AND MY BUSY SCHEDULE DO NOT MAINTAIN A NY RECORDS OF DAY TO DAY TRANSACTIONS. Q. 56. WE HAVE BEEN REQUESTING YOU TO PRODUCE CURR ENT ACCOUNT BOOKS OF ACCOUNT OF ALL YOUR CONCERNS AND INDIVIDUAL ENTI TIES SINCE MORNING AND THESE ARE YET TO BE PRODUCED. PLEASE NOW GIVE A CONSIDERED REPLY AS YOU ARE THE MAIN MANAGING PERSON OF THE GROUP. ANS. ALL THE CURRENT BOOKS OF ACCOUNT OF ALL OUR CONCERNS ARE KEPT IN THE COMPUTERS WHICIH ARE INSTALLED AT 9-A PARK AREA KQROL BAGH NEW DELHI WHICH HAVE BEEN RESTRAINED BY YOUR DEPART MENT. NO 7 MANUAL BOOKS OF ACCOUNT ARE MAINTAINED. THESE ARE N O HARD BOUND PRINTED ACCOUNT BOOKS. IF THERE ARE THEN THESE AR E IN THE COMPUTERS ONLY. 6. IN THE LIGHT OF ABOVE REPLIES COUPLED WITH THE W ELL REASONED FINDING OF THE LEARNED CIT(APPEALS) IF WE EXAMINE THE ARGUMEN TS RAISED BY THE LEARNED COUNSEL FOR THE ASSESSEE THEN WE DO NOT FIN D ANY MERIT IN THESE ARGUMENTS. THE FIRST CONTENTIONS RAISED BY THE ASSE SSEE BEFORE THE LEARNED FIRST APPELLATE AUTHORITY IS THAT COMPUTER WAS NOT FOUND FROM ITS PREMISES AND IT DOES NOT BELONG TO IT. SHRI RAJESH KUMAR WHO IS MANAGING THE AFFAIRS OF THE ASSESSEE HAS CATEGORICALLY DISCLOSED THAT AL L THE CURRENT BOOKS OF THE ACCOUNT OF ALL CONCERNED ARE KEPT IN THE COMPUTER W HICH ARE INSTALLED AT 9- PARK AREA KAROL BAGH NEW DELHI. IT FALSIFY THE ST AND OF THE ASSESSEE. THE OTHER ARGUMENTS RAISED BY THE ASSESSEE IS THAT NO W EIGHTAGE BE GIVEN TO THESE PRINT OUT OVER AND ABOVE THE ACCOUNTS MAINTAINED BY IT REGULARLY. THE PERSONS WHO ARE MANAGING THE AFFAIRS OF THE ASSESSE E HAVE NO KNOWLEDGE WHAT TYPE OF BOOKS OF ACCOUNT ARE MAINTAINED AND HE HAS NEVER SEEN REGULAR BOOKS OF ACCOUNT EITHER FOR THIS YEAR OR ANY PREVIO US YEAR AS DISCERNIBLE FROM THE REPLY GIVEN TO QUESTION NO.50. IN REPLY TO QUES TION NO.56 HE DISCLOSED THAT ALL THE CURRENT BOOKS OF ACCOUNT ARE BEING MA INTAINED IN THE COMPUTER AT 8 9-PARK AREA KAROL BAGH NEW DELHI. THE REPLIES GIV EN AT THE TIME OF SEARCH DO INDICATE THE MODUS OPERANDI AND THE QUALITY OF A CCOUNT MAINTAINED BY THE ASSESSEE AS WELL AS THE OTHER CONCERNS CONTROLLED A ND MANAGED BY SHRI RAJESH AND RAKESH KUMAR. WE COULD UNDERSTAND THE CO NTENTION OF LEARNED COUNSEL FOR THE ASSESSEE IF REGULAR BOOKS ARE MAINT AINED PROPERLY AND WERE FOUND AT THE TIME OF SEARCH. THUS ASSESSEE FAILED TO EXPLAIN IT POSITION WITH HELP OF REGULAR BOOKS OF ACCOUNT AS TO HOW NO WEIGH TAGE CAN BE GIVEN TO THE COMPUTER POINT OUT. THE LEARNED CIT(APPEALS) HAS CO NSIDERED ALL THESE CONTENTIONS ELABORATELY IN HER FINDING RECORDED IN PARAGRAPH NOS. 12 AND 13. AFTER CONSIDERING THE WELL REASONED ORDER OF THE LE ARNED CIT(APPEALS) WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE ASSESSEE . IT IS DISMISSED. 8. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 19.03.201 0 ( R.C. SHARMA ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19/03/2010 MOHAN LAL 9 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR:ITAT ASSISTANT REGISTRAR