Om Prakash Bansal & Sons, New Delhi v. ACIT, New Delhi

ITA 1343/DEL/2010 | 2006-2007
Pronouncement Date: 26-05-2010 | Result: Allowed

Appeal Details

RSA Number 134320114 RSA 2010
Bench Delhi
Appeal Number ITA 1343/DEL/2010
Duration Of Justice 2 month(s)
Appellant Om Prakash Bansal & Sons, New Delhi
Respondent ACIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 26-05-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted F
Tribunal Order Date 26-05-2010
Date Of Final Hearing 26-05-2010
Next Hearing Date 26-05-2010
Assessment Year 2006-2007
Appeal Filed On 26-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F NEW DELHI) BEFORE SHRI A.D. JAIN JUDICIAL MEMBER AND SHRI K.G . BANSAL ACCOUNTANT MEMBER ITA. NO.1343/D/2010 ASSESSMENT YEAR : 2006-07 OM PRAKASH BANSAL & SONS VS. A.C.I.T. 1/32 SHS KIRTI NAGAR CIRCLE-27(1) NEW DELHI NEW DELHI PAN NO.AABFO 0584C (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI VED JAIN MISS RANO JA IN & VENKETESH CHAURASIA CA RESPONDENT BY : SMT. MEENAKASHI J. GOSWAMI SR. D R ORDER PER K.G. BANSAL: AM: THIS APPEAL OF THE ASSESSEE EMANATES FROM THE ORDER OF CIT(A)-XXIV NEW DELHI PASSED ON 12.01.2010 IN APP EAL NO.419/2008-09 PERTAINING TO ASSESSMENT YEAR 2006 -07. THE ASSESSEE HAS TAKEN UP FOUR GROUNDS IN THE APPEAL. IN THE COURSE OF HEARING BEFORE US THE LEARNED COUNSEL FO R THE ASSESSEE EXPLAINED THAT ONLY GROUND NO.3(I) REQUIRE S ADJUDICATION AND OTHER GROUNDS ARE IN SUPPORT OF TH IS GROUND. THE AFORESAID GROUND IS THAT ON THE FACTS AND IN TH E CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.32 01 000/- MADE BY THE 2 ASSESSING OFFICER ON ACCOUNT OF VALUATION OF STOCK BY TREATING IT AS UNEXPLAINED INVESTMENT U/S 69 OF THE I.T. ACT 1 961. 2. THE FACTS OF THE CASE ARE THAT THE RETURN OF INC OME WAS FILED ON 30.10.2006 DECLARING TOTAL INCOME OF RS.9 38 210/- . THIS RETURN WAS PROCESSED ON 31-03-2008. THEREAFTER NOT ICE U/S 143(2) WAS ISSUED ON 02.03.2007 AND THE ASSESSMENT WAS COMPLETED ON 30.12.2008 AT TOTAL INCOME OF RS.41 39 210/-. 3. IT HAS BEEN NOTED IN THE ASSESSMENT ORDER THAT A SURVEY WAS CONDUCTED U/S 133A OF THE ACT ON 07.03.2006 IN WHI CH STOCK WAS TAKEN AND VALUED AT RS.1 50 84 060/-. THE BOOK STOCK ON THAT DATE WAS WORKED OUT AT RS.1 18 83 060/-. STAT EMENT OF ONE PARTNER SHRI NARESH KUMAR BANSAL WAS ALSO RECO RDED ON 07.03.2006. IN RESPECT OF THE STOCK IT WAS DEPOSE D THAT HE IS UNABLE TO EXPLAIN THE DISCREPANCY IN THE STOCK AMOU NTING TO RS.32 01 000/- AND SURRENDERS THIS AMOUNT FOR TAXAT ION AS ADDITIONAL INCOME OF ASSESSMENT YEAR 2006-07. TWO CHEQUES OF RS.7.00 LAC AND RS.6 46 400/- DATED 14.03.2006 A ND 24.03.2006 RESPECTIVELY WERE ALSO HANDED OVER TO TH E SURVEY OFFICER TOWARDS PAYMENT OF ADVANCE TAX ARISING ON A CCOUNT OF THE ADDITIONAL LIABILITY. HOWEVER INSTEAD OF DECL ARING ADDITIONAL STOCK OF ABOUT RS.32 00 000/- IN THE RETURN OF INCO ME IT DECLARED ADDITIONAL STOCK ONLY OF RS.8.00 LAC. IT WAS SUBMITTED THAT THE INVENTORY DRAWN BY THE SURVEY OFFICER WAS CORRECT IN QUANTITATIVE TERMS BUT THE VALUATION PLACED ON VARI OUS ITEMS WAS INCORRECT. THE ASSESEE HAS NOW PLACED CORRECT VALUATION 3 OF EACH ITEM BECAUSE OF WHICH THE UNEXPLAINED STOCK WORKS OUT TO RS.8.00 LAC ONLY. THE ASSESSING OFFICER DID NOT ACCEPT THIS POSITION AS THE PARTNER HAD ADMITTED ON THE DATE OF SURVEY THAT THERE WAS EXCESS STOCK OF ABOUT RS.32.00 LAC. THERE FORE THE INCOME OF THE ASSESSEE WAS ENHANCED ACCORDINGLY ON THIS ISSUE. 4. THE MATTER WAS AGITATED BEFORE THE LEARNED CIT(A ) IN APPEAL. HE FURNISHED A NUMBER OF OPPORTUNITIES TO THE ASSES SEE MENTIONED IN PARAGRAPH 3 OF HIS ORDER. HOWEVER NO NE ATTENDED BEFORE THE LEARNED CIT(A) ON VARIOUS DATES OF HEARING THEREFORE HE PROCEED TO DISPOSE OF THE APPEAL ON T HE BASIS OF THE FACTS ON RECORD. IN THE APPELLATE ORDER IT IS INTER ALIA MENTIONED THAT THE ASSESSEE HAS NOT MAINTAINED STOC K REGISTER AS MENTIONED IN TAX-AUDIT REPORT. IT IS FURTHER ME NTIONED THAT THE ASSESSEE HAS ACCEPTED THE QUANTITATIVE DETAILS OF T HE STOCK ON THE DATE OF SURVEY BUT HAS ONLY CHALLENGED ITS VAL UATION. THE INVENTORY IS SO DRAWN THAT THE QUANTITY IS ASCERTAI NABLE BUT THE QUALITY I.E. THE VALUE IS NOT ASCERTAINABLE THEREB Y LEAVING SCOPE TO PUT THE VALUE OF INFERIOR GOODS ON THE BASIS OF PURCHASE BILLS OF SUCH INFERIOR GOODS. THE VALUATION MADE BY THE SURVEY PARTY WAS BASED ON THE RATES SUPPLIED BY SHRI NARESH KUMA R BANSAL THEREFORE IT WAS HELD THAT THE VALUE ARRIVED AT BY THE SURVEY PARTY WAS CORRECT. THUS THE APPEAL OF THE ASSESSE E WAS DISMISSED ON THIS POINT. 4 5. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE VEHEMENTLY ASSERTED THAT THE CASE INVOLVED ONLY THE VALUATION OF THE INVENTORY AS THERE IS NO DISPUTE ABOUT THE QUANTIT Y OF GOODS IN THE INVENTORY. THUS THERE WAS NO RETRACTION OF ST ATEMENT MADE BY SHRI NARESH KUMAR BANSAL AT THE TIME OF SURVEY. IT IS MERELY A CASE OF THE CORRECTION OF THE STATEMENT BASED UPO N THE BILLS OF THE PURCHASE. IN SUCH CIRCUMSTANCES EVEN THE LEAR NED CIT(A) COULD NOT HAVE DECIDED THE MATTER AGAINST THE ASSES SEE FOR THE REASONS THAT EVEN IN EXPARTE ASSESSMENT HE IS BOUND TO MAKE A REASONABLE ESTIMATE ABOUT THE INCOME OF THE ASSES SEE. THE LEARNED COUNSEL HOWEVER FAIRLY SUBMITTED THAT THE RE WAS NO COMPLIANCE BEFORE THE LEARNED CIT(A) ALTHOUGH A NUM BER OF OPPORTUNITIES WERE AFFORDED BY HIM. THIS HAPPENED BECAUSE OF PRE-OCCUPATION OF THE AR OF THE ASSESSEE ELSEWHERE. THEREFORE IT WAS ARGUED THAT THE TRIBUNAL MAY LOOK INTO THE VALUATION AND GRANT APPROPRIATE RELIEF TO THE ASSES SEE. IN THE ALTERNATIVE IT WAS AGITATED THAT THE MATTER MAY BE RESTORED TO THE FILE OF THE LEARNED CIT(A). 5.1 IN REPLY THE LEARNED DR VEHEMENTLY ARGUED THAT THE LEARNED CIT(A) WAS FORCED TO PASS AN EXPARTE ORDER AS A NUM BER OF OPPORTUNITY GRANTED BY HIM WERE NOT AVAILED OF BY T HE ASSESSEE. COMING TO THE MERITS SHE REFERRED TO TH E FINDING THAT THE RATES APPLIED BY THE SURVEY PARTY WERE ON THE B ASIS OF INFORMATION IN THIS REGARD FURNISHED BY SHRI NARESH KUMAR BANSAL. FURTHER SHE REFERRED TO THE FINDING OF TH E LEARNED CIT(A) THAT THE INVENTORY DOES NOT CONTAIN THE DESC RIPTION OF THE 5 GOODS THEREBY LEAVING HUGE SCOPE FOR THE ASSESSEE T O MANIPULATE ITS PRICE. IN THESE CIRCUMSTANCES IT W AS ARGUED THAT THE ORDER OF LEARNED CIT(A) WAS JUSTIFIED. 5.2 WE HAVE CONSIDERED THE FACTS OF THE CASE AND SU BMISSIONS MADE BEFORE US BY THE RIVAL PARTIES. IT IS AN ADMI TTED FACT THAT THE ASSESSEE WAS GRANTED NINE OPPORTUNITIES BY THE LEARNED CIT(A) WHICH WERE NOT AVAILED OF BY THE ASSESSEE. WE REALLY DO NOT APPRECIATE THE CONDUCT OF THE ASSESSEE BEFOR E THE LEARNED CIT(A). NONETHELESS WE ARE OF THE VIEW THA T EVEN IN CASE OF FAILURE ON THE PART OF THE ASSESSEE THE MA TTER SHOULD BE DECIDED BY PROPER APPRECIATION OF FACTS AND LAW. T HE APPREHENSION OF THE LEARNED CIT(A) THAT THE ASSESSE E HAD OPPORTUNITY TO UNDER VALUE THE INVENTORY BECAUSE OF LACK OF THE DESCRIPTION OF THE QUALITY OF GOODS BUT ASSESSMENT CANNOT BE MADE MERELY ON APPREHENSIONS. THE ASSESSEE HAD FUR NISHED THE INVENTORY AND ITS VALUATION. THIS HAS NOT BEEN EXAMINED BY THE LEARNED CIT(A) WITH REFERENCE TO ACTUAL FACTS O F THE CASE. THEREFORE IT WILL BE IN THE INTEREST OF JUSTICE TO RESTORE THE MATTER TO HIS FILE TO CONSIDER THE INVENTORY AND ITS VALUA TION AS SUBMITTED BY THE ASSESSEE. NEEDLESS TO SAY THAT TH E ASSESSEE SHALL PRODUCE ALL THE BILLS AND STOCK REGISTER IF ANY BEFORE THE LEARNED CIT(A) SO THAT HE MAY DECIDE THIS ISSUE ON MERITS AFTER HEARING THE ASSESSEE. FOR THIS PURPOSE THE ASSESS EE SHALL ATTEND BEFORE THE LEARNED CIT(A) WITHIN ONE MONTH O F THE RECEIPT OF THIS ORDER AND SEEK A DATE FOR HEARING O F THE APPEAL DE NOVO. THEREAFTER HE SHALL ATTEND BEFORE THE LEA RNED CIT(A) 6 ON THE DATE OR THE DATES GIVEN BY HIM SO THAT THE C ASE IS HEARD BY HIM ON A REGULAR BASIS. THUS THE MATTER IS RES TORED TO THE FILE OF THE LEARNED CIT(A) FOR RE-ADJUDICATION OF T HE ISSUE. 6. IN RESULT THE APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 7. THIS ORDER WAS PRONOUNCED IN OPEN COURT ON 26.05 .2010 SOON AFTER THE CONCLUSION OF THE HEARING. SD/- SD/- ( A.D. JAIN ) ( K.G. BANSAL ) JUDICIAL MEMBER ACCOUNTANT ME MBER DT.26.05.2010. NS COPY FORWARDED TO:- 1. OM PRAKASH BANSAL & SONS 1/32 WHS KIRTI NAGAR NEW DELHI. 2. ACIT CIRCLE 27(1) NEW DELHI. 3. THE CIT 4. THE CIT (A) NEW DELHI. 5. THE DR ITAT LOKNAYAK BHAWAN KHAN MARKET NEW DELHI. TRUE COPY BY ORDER (ITAT NEW DELHI).