The ITO, Ward-9(2),, Surat v. Shri Ilyas Ibrahim Kapadia, Surat

ITA 1968/AHD/2006 | 2003-2004
Pronouncement Date: 26-02-2010 | Result: Dismissed

Appeal Details

RSA Number 196820514 RSA 2006
Assessee PAN AFOPK3540A
Bench Ahmedabad
Appeal Number ITA 1968/AHD/2006
Duration Of Justice 3 year(s) 5 month(s) 15 day(s)
Appellant The ITO, Ward-9(2),, Surat
Respondent Shri Ilyas Ibrahim Kapadia, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 26-02-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 26-02-2010
Date Of Final Hearing 17-02-2010
Next Hearing Date 17-02-2010
Assessment Year 2003-2004
Appeal Filed On 11-09-2006
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI JM AND N. S. SAINI AM) ITA NO.1968/AHD/2006 A. Y.: 2003-04 THE INCOME TAX OFFICER WARD 9(1) ROOM NO.416 AAYAKAR BHAVAN MAJURA GATE SURAT VS SHRI ILYAS IBRAHIM KAPADIA PROP. TABREZ EXPORT 11/223 TABREZ COMPLEX PRATAP PRESS LANE BHAGATALAO SURAT PA NO. AFOPK 3540A (APPELLANT) (RESPONDENT) APPELLANT BY SHRI GOVIND SINGHAL DR RESPONDENT BY NONE O R D E R PER BHAVNESH SAINI: THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-V SURAT DATED 04-0 7-2006 FOR ASSESSMENT YEAR 2003-04 ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN DELETING AN AD DITION OF RS.26 28 750/- MADE BY THE ASSESSING OFFICER ON ACC OUNT OF VALUE OF CLOSING STOCK. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED CIT(A) HAS DELETED THE SAID ADDITI ON WITHOUT CONSIDERING THE RATE OF STOCK VALUE DECLARED BY THE ASSESSEE IN TERMS OF RUPEES BEFORE THE CENTRAL EXCISE & INCO ME-TAX DEPARTMENT AS WELL AS REASONS FOR DIFFERENCE IN RA TE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED CIT(A) OUGHT TO HAVE UPHELD THE AD DITION MADE BY THE ASSESSING OFFICER ON THE BASIS OF FACT BROUGHT ON RECORD. ITA NO.1968/AHD/2006 SHRI ILAYAS IBRAHIM KAPADIA 2 2. WE HAVE HEARD THE LEARNED DR AND PERUSED THE FIN DINGS OF THE AUTHORITIES BELOW. NONE APPEARED ON BEHALF OF THE A SSESSEE DESPITE SERVICE OF NOTICE. THE ASSESSEE IS THEREFORE PROC EEDED EX-PARTE. 3. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSEE IS DERIVING INCOME FROM MANUFACTURE OF GREY CLOTHES. IT HAS BEEN GATHE RED FROM CENTRAL EXCISE DEPARTMENT THAT THE ASSESSEE HAS DISCLOSED S TOCK WHICH IS NOT SAME AS SHOWN TO THE REVENUE DEPARTMENT. THE ASSESS EE EXPLAINED THAT BEING THE FIRST TIME FORMER GOVERNMENT HAD MADE LEV IABLE EXCISE DUTY ON GREY CLOTHES AND VARIOUS REPRESENTATIONS AND AGITAT IONS WERE MADE FOR WITHDRAWAL OF THE SAME AND LATER ON THE MATTER WAS CLARIFIED THROUGH THE NOTIFICATION AND CIRCULAR. THE ASSESSEE IN ORDER T O COMPLY WITH THE SAME HAD DECLARED THE STOCK IN HAND WRITING WITH THE CEN TRAL EXCISE DEPARTMENT SPECIFYING THE QUANTITY AND RATE OF THE GOODS. DUE TO LACK OF KNOWLEDGE AND SHORTAGE OF TIME IT WAS CALCULATED WI TH APPROXIMATE RATE PER METER IN WHICH THERE WAS ALSO MISTAKE. IT WAS A LSO EXPLAINED THAT THERE WAS NO DIFFERENCE IN THE QUANTITY OF STOCK AS SUBMITTED TO THE CENTRAL EXCISE DEPARTMENT AND AS PER THE BOOKS OF A CCOUNT. IT WAS ALSO EXPLAINED THAT THERE WAS A DIFFERENCE ON ACCOUNT OF METHOD OF ACCOUNTING ADOPTED AT THE TIME OF FINALIZATION OF THE ACCOUNT. IT WAS ALSO SUBMITTED THAT INCASE CLOSING STOCK IS ENHANCED IT WOULD BE O PENING STOCK NEXT YEAR AND THERE WOULD BE NO SUPPRESSION OF THE PROFIT. TH E AO HOWEVER DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND MADE ADDI TION OF RS.26 28 750/- ON ACCOUNT OF DIFFERENCE IN THE STOC K REPORTED TO THE CENTRAL EXCISE DEPARTMENT AS WELL AS TO THE REVENUE DEPARTMENT. IT WAS ALSO NOTED THAT THE ASSESSEE HAS NOT MAINTAINED ANY DAY TO DAY STOCK REGISTER. THE ADDITION WAS CHALLENGED BEFORE THE LE ARNED CIT(A) AND THE SAME SUBMISSIONS WERE REITERATED. IT WAS ALSO SUBMI TTED THAT DUE TO LEVY OF EXCISE DUTY ON GREY CLOTHES THERE WAS AGITATION ALL OVER THE COUNTRY AND THE ENTIRE TEXTILE INDUSTRIES REMAINED CLOSED I N THE MONTH OF APRIL/MAY 2003 AND DUE TO THIS STRIKE THERE WAS REL AXATION IN THE EXCISE ITA NO.1968/AHD/2006 SHRI ILAYAS IBRAHIM KAPADIA 3 DUTY AND THE MATTER WAS ALSO CLARIFIED THROUGH NOTI FICATIONS AND CIRCULARS. THEREFORE THERE WAS NO INTENTION ON THE PART OF THE ASSESSEE NOT TO DISCLOSE CORRECT CLOSING STOCK. THE LEARNED CIT(A) NOTED THE SUBMISSIONS OF THE ASSESSEE IN DETAIL ALONG WITH SE VERAL CASE LAWS IN SUPPORT OF THE CONTENTIONS OF THE ASSESSEE IN WHICH ON IDENTICAL FACTS THE ADDITIONS HAVE BEEN DELETED. THE LEARNED CIT(A) CON SIDERING THE EXPLANATION OF THE ASSESSEE DELETED THE ADDITION BE CAUSE THERE CANNOT BE ANY ADDITION ON ACCOUNT OF DIFFERENCE IN CLOSING ST OCK SHOWN TO THE CENTRAL EXCISE DEPARTMENT AND TO THE REVENUE DEPART MENT. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNE D DR AND CONSIDERED THE FINDINGS OF THE AUTHORITIES BELOW. W E DO NOT FIND ANY MERIT IN THE DEPARTMENTAL APPEAL. THE AO EXCEPT NOTING TH E DIFFERENCE BETWEEN THE CLOSING STOCKS REPORTED TO THE REVENUE DEPARTME NT AND THE CENTRAL EXCISE DEPARTMENT DID NOT FIND ANY SPECIFIC DEFECTS IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE DETAILS SUBMITTED BY T HE ASSESSEE WERE ALSO NOT SUBJECTED TO VERIFICATION. THE ASSESSEE SPECIFI CALLY SUBMITTED THAT DUE TO ON GOING STRIKE IN THE TEXTILE INDUSTRIES THE E STIMATED DETAILS OF CLOSING STOCK WAS FILED WITH THE CENTRAL EXCISE DEPARTMENT OTHERWISE THERE WAS NO DIFFERENCE IN THE QUANTITY. THE LEARNED CIT(A) O N PROPER APPRECIATION OF THE FACTS AND EXPLANATION OF THE ASSESSEE RIGHTL Y DELETED THE ADDITION. THE LEARNED CIT(A) ALSO CONSIDERED SEVERAL DECISION S OF DIFFERENT BENCHES OF THE TRIBUNAL AND OF HIGH COURTS RELIED UPON BY T HE LEARNED CIT(A) FOR THE PURPOSE OF DELETING THE ADDITION WHICH ARE DIRE CTLY ON THE POINT IN FAVOUR OF THE ASSESSEE. CONSIDERING THE FACTS AND C IRCUMSTANCES WE ARE OF THE VIEW THAT THE LEARNED CIT(A) ON PROPER APPRE CIATION OF THE FACTS AND MATERIAL ON RECORD RIGHTLY DELETED THE ADDITION . WE DO NOT FIND ANY MERIT IN THE DEPARTMENTAL APPEAL. THE SAME IS ACCOR DINGLY DISMISSED. ITA NO.1968/AHD/2006 SHRI ILAYAS IBRAHIM KAPADIA 4 5. AS A RESULT DEPARTMENTAL APPEAL STANDS DISMISSE D. ORDER PRONOUNCED ON 26-02-2010 SD/- SD/- (N. S. SAINI) ACOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 26-02-2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR ITAT AHMEDABAD