Income Tax Appellate Tribunal - Agra
Sunil Kumar Agarwal, Agra vs Department Of Income Tax on 24 April, 2008
IN THE INCOME TAX APPELLATE TRIBUNAL
AGRA BENCH, AGRA
BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER AND
SHRI P.K. BANSAL, ACCOUNTANT MEMBER
IT(SS)A No.07/Agr/2008
Block Period: 01.04.1996 to 10.12.2002
Dy. C.I.T., Central Circle, Vs. Shri Suneel Kumar Agarwal,
Agra. Prop. Surya Traders,
R/o. B-9, Moon Light Apartment,
Plot No.70, I.P. Extension,
Patparganj, New Delhi.
(PAN : AFFPK 7559 E)
(Appellant) (Respondent)
Appellant by : Shri S.K. Mishra, Sr. D.R.
Respondent by : Shri Pankaj Gargh, Advocate
ORDER
PER P.K. BANSAL, A.M.:
This appeal has been filed by the Revenue against the order of the CIT(A) dated 24.04.2008 by taking the following effective grounds of appeal "1. The learned Commissioner of Income-tax (Appeals)-II, Agra has erred in law and on the facts of the case in deleting the addition of Rs.19,49,220/- made on account of unexplained stock found at the time of search ignoring the facts and circumstances of the case and findings and observations given by the A.O. in the assessment order.
1(i) That in doing so, Ld. CIT (Appeals)-II, Agra has erred in accepting the purchases shown by the assessee ignoring the fact that the purchase vouchers and challans were not found during the search.
2. That the ld. CIT (Appeals)-II, Agra has erred in law and on facts of the case in reducing the addition of Rs.21,034/-, made on account of shortage of stock found at the time of search to Rs.13,290/- ignoring the facts and circumstances of 2 the case and findings and observations given by the A.O. in the assessment order."
2. The facts relating to ground no.1 which relates to the deletion of addition of Rs.19,49,220/- are that there had been search in the case of the assessee on 10.12.2002. During the course of search stock of peppermint was found at 4785 kgs. whereas the seized stock register A-2 shows the stock at 144 kgs. Thus, there was a difference of 4641 kgs. The assessee explained that three consignments of 1750 kgs, 1250 kgs. and 1000 kgs. were received on 09.12.2002 from M/s. Pure Mint Products. Stock register was written upto 07.12.2002. Thus, all the three invoices dated 10.12.2002 and Challan dated 09.12.2002 were not written. Cash book was also found to have been written upto 05.12.2002. The A.O. did not agree with the assessee and, therefore, he treated the difference of 4641 kgs. as undisclosed purchase of peppermint by the assessee before the search and valuing the same @ Rs.420/-, made the addition of Rs.19,49,220/-. Before the CIT(A), the assessee contended that during the search there were 165 drums, weight of each drum was taken as 29 kgs. while the capacity of each drum was only 25 kgs. Thus, the actual content in the drums were only 4144 kgs. and not 4785 kgs. The stock register tallied with the accounts book if the purchases made from peppermint are incorporated. The CIT(A) agreed with the contentions of the assessee and accordingly deleted the addition.
3. Ld. D.R. relied on the Assessment Order while the ld. A.R. supported the order of the CIT(A).
4. We have carefully considered the rival submissions and perused the material on record. We noted that the CIT(A) has given a finding of fact that the assessee has duly filed the delivery challan dated 09.12.2002 by which the peppermint was received. It was clearly mentioned that 3 the bills will be issued on 10.12.2002 after confirmation of the quality of the material. The copies of purchase bills were also filed. The goods have been received against issue of ST-35 form. The seller is a registered dealer in Delhi. The assessee has also filed the voucher in support of the freight incurred. The audited copy of accounts in the books of M/s. Pure Mint Products were also filed. The payment was made by the assessee through account payee cheque. Thus, he came to the conclusion that the difference of 4000 kgs. of peppermint is proved. The CIT(A) also noted that when the inventory was inventorised at the time the person whose statement was recorded categorically stated that each drum contained only 25 kgs. of the material. Thus, the CIT(A) deleted the addition.
5. Ld. D.R. although vehemently relied on the order of the A.O. but no cogent material or evidence was brought to our knowledge which may compel us to take a different view as taken by the CIT(A). We accordingly confirm the order of the CIT(A) and accordingly ground no.1 stands dismissed.
6. Ground no.2 relates to the reduction on the addition of Rs.21,034/- to Rs.13,290/-.
7. The facts relating to this addition are that the assessee is engaged in the business and trading of supari, kattha, lime, peppermint and elaichi. Supari, lime and kattha are sold in processed form i.e. supari is sold in cut-form, lime and kattha are sold in powder form. On reconciliation of the stock register during search the following stock was found to be short:-
Supari 1683 kgs.
Kattha 331 kgs.
Elaichi 118 kgs.
Lime 605 kgs.
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8. When countered during the course of assessment proceedings, the assessee submitted the explanation that during the search the weight has been taken merely on estimate basis without weighing each and every single bag. So far the suparti and kattha is concerned, in respect to elaichi it was stated that elaichi has a tendency to lose eight while it is stored. In respect of lime, it was stated that the stock has been taken during search arbitrarily. The stock was sold subsequently as per the books and there was no difference. If the assessee was not having stock, how he could have sold it. The A.O. did not agree with the assessee and estimated the G.P. @ 8% and made the addition at Rs.21,034/-. When the matter went before the CIT(A), the CIT(A) reduced the addition to Rs.13,290/- accepting the explanation of the assessee so far it relates to lime and supari.
9. We have heard the rival submissions and carefully considered the same along with the orders of the authorities below. In our opinion, no interference is called for in the order of the CIT(A). The CIT(A) was justified in accepting the explanation of the assessee so far it relates to supari and kattha is concerned. We, accordingly, are of the view that it is not a fit case which warrants our interference and, therefore, confirm the order of CIT(A) .
10. In the result, appeal filed by the Revenue is dismissed.
(Order pronounced in the open Court on 25.05.2010).
Sd/- Sd/-
(R.K. GUPTA) (P.K. BANSAL)
Judicial Member Accountant Member
Place: Agra
Date: 25th May, 2010.
PBN/*
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Copy of the order forwarded to:
1. Appellant
2. Respondent By Order
3. CIT concerned
4. CIT (Appeals) concerned
5. DR, ITAT, Agra Bench, Agra
6. Guard File Assistant Registrar
Income-tax Appellate Tribunal, Agra
True Copy