TaxTMI 
TaxTMI 
TaxTMI 
2015 (6) TMI 6
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....inst the assessee or his counsel, his MA was properly heard and expeditiously disposed of by an oral order fixing 4-3-15 as next date of final hearing . 2.1 As scheduled the appeal came up for hearing on 4-03-2015. During the course of hearing, ld. Counsel for the assessee Shri K.C. Moondra advanced a seemingly improbable proposition that an anonymous letter was received by him from benami employee of the Income Tax Department mentioning that some conspiracy was hatched by some income tax officers against the assessee. During the course of hearing of appeal bench found that these facts were not emerging from the record, consequently his contentions based thereon were not permissible u/r 10 of ITAT rules . Unaware of this rule Ld. Counsel's attention was drawn to Rule 10 of Income Tax Rules which reads as under:- Filing of affidavit ''1-. Where a fact which cannot be borne out by, or his contrary to, the record is alleged, it shall be stated clearly and concisely and supported by a duly sworn affidavit.'' 2.3 It was pointed out to him that his contentions and allegations against income tax department are not emerging from record in a verifiable manner. They being in his personal....
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....ich was not in conformity with canons of judicial discipline. Shri Mukul Moondra was intimated that earlier hearing was ordered as final chance, therefore, his request for adjournment cannot be acceded. Consequently the adjournment application was rejected by following judicial order: ''Assessee had taken this date voluntarily. Now a prefixed marriage is pleaded to avoid final chance. Rejected. Sd/- Sd/- (T.R, Meena) AM (R.P. Tolani) JM 2.7 Since adjournment application was rejected, bench proceeded with the hearing, Shri Mukul Moondra neither filed the requisite affidavit nor advanced any arguments, consequently ld. DR Shri Rajesh Ojha was heard and record was perused, accordingly the appeal was taken as heard and reserved for orders. 2.8 When the Bench rose after finishing the board, Shri Mukul Mundra endeavored to raise an altercation with bench about giving adjournments to others and rejecting his application. He was politely told this being final chance in his appeal, adjournment request could not be acceded which was dismissed, the appeal was heard and will be decided on merits, they should wait for the bench order. Shri Mukul Mudra then wanted to know that what will hap....
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....28-4-15 these professionals had no objection with the bench as no grievance whatsoever was raised. The casual way of adjournment against final chance shows their casual attitude of taking the judicial process for granted. The emphatic demand that - if other matters were adjourned, our appeal should also have been adjourned; amounts to dictating the terms to the court. It reflects their inaptitude in failing to appreciate the vital fact that thus adjournment was granted as a final chance which was agreed by them. "They keep 'holier than thou attitude'; if I commit wrong or disobey there is nothing wrong in it but if the bench doesn't conduct itself in my desired way then bench is by default wrong and I raise scandalous tirade against bench." To show their might they shoot frivolous complaints, file litany of motivated RTIs proclaiming to be RTI activist. These brazenly scandalous acts have been unleashed by them with swagger of impunity and recklessness without realizing that when the appeal is pending orders such threats construe contempt of court. 3.2 The bench has no objection on sending any complaint to higher authorities; it's the right of every person in free and democratic I....
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....mber of personal details about the judicial officers including their leave, HQ leaving permission, use of car, attendance in office, timings of holding courts, in whose case adjournments were granted or not granted, when officers go to Delhi, whom do they meet etc. etc. The above facts prove that RTI attack is not for any public purposes but to intimidate judicial officers, seized with his judicial matter. A trick to masquerade his blackmailing tactics for mean professional interest, to extract desired result in a sub-judice appeal. The RTI fiat unfolded by Mr. Moondra is an apparent colorable device, an attempt to influence/obstruct independent judicial process. The attempt amounts to a total misuse of professional position for dubious gains. 3.7 These acts amount to interfering and obstructing judicial process which apart from awarding of cost u/r 32A of ITAT rules is liable for appropriate contempt of court proceedings as well. Such attempts need to be seriously deplored, firmly tackled and suitably dealt with to send a message in professionals fraternity to behave properly and conduct themselves as ordained by ITAT rules and standing orders; court rules, ICAI instructions, pro....
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....elines. The progress may be communicated to bench through registry. Now we proceed to decide the main appeal No 401/JP/12 5. Assessee has raised following grounds of appeal: "1. Entire alleged survey proceedings against the appellant was totally unlawful, arbitrary, hypothetical, fabricated, unfair, unreliable and with full of pressure & harassment tactics and therefore, entire survey proceedings, assessment and additions based on alleged survey proceedings are unlawful, arbitrary, hypothetical, fabricated, unfair and unreliable and therefore, liable to be quashed. 2. Ld. Commissioner of Income Tax (Appeals) erred in law in confirming following incorrect facts as mentioned by ITO in order U/s 143(3):- A. Para (a) at page No. 5-'total amount of the stock found on the date of survey was 226167 kgs amounting to Rs. 1`,41,16,603/- (value calculated by the assessee)' B. Para (b) at page No. 5-'calculated at the rate of Rs. 50.66 (average) declared by the assessee during submission'. C. Page No. 10- 'Stock as per computer books generated have been changed without no change in value of purchase and sales which is not possible'. D. Page No. 10- 'The figure of stock found on 17.09.20....
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....se but it was just for sake of convenience of production section of appellant' factory. Each and every transaction recorded in this register in this register was verified with the computerized stock records by the inspector as well as by A.O. himself. 7. Ld. Commissioner of Income Tax (Appeals) erred in law in confirming the validity of the order passed u/s 143(3) of the Income tax Act, 1961 even without confirming the service of any notice u/s 143(2) for initiating the proceeding for assessment and therefore, order so passed u/s 143(3) is unlawful and invalid. 8. The appellant requests to add, alter, amend, delete, substitute, withdraw or modify any of the grounds of appeal on or before hearing of the appeal." 5.1 All the grounds raised by the assessee are against the survey proceedings conducted U/s 133A by the Assessing Officer and making addition on the basis of survey material, confirming rejection of books of account U/s 145(3) and confirming the trading addition of Rs. 16,53,869/- . The ld Assessing Officer observed that the assessee company had filed return through e-filing on 30/09/2008 declaring total income of Rs. 7,16,770/-. The case was processed U/s 143(1) of the I....
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....nt register 2006-07 Not pertain to relevant F.Y. 12. L.C. Payment Register 2007-08 Checked and Verified 13. Consignment Register 2007-08 Checked and Verified 14. Nakal Bahi 2006-07 Not pertain to relevant F.Y. 15. File to M/s Live House 2007-08 Checked and verified 16. File of M/s Khifaf trading Co. Damman 2007-08 Checked and verified 17. File to M/s Maher Daliwati, Syria 2006-07 Not pertain to relevant F.Y. 18. File of M/s Al Hezam Intl trading & Contracting, Shuwaikh 2007-08 Checked and verified 19. File of M/s Al-Tayyor Establishment for trading & contracting, Saudi Arabia 2007-08 Checked and verified 20. File of M/s New Zealand Wool Service International Ltd., New Zealand 2007-08 Checked and verified 21. File of M/s Friendrich Sturm GMBH & Co. Kg Germany 2007-08 Checked and verified 22. File of M/s Altayyar Est. for trading and contracting, Saudi Arabia 2007-08 Checked and verified 23. File of M/s Altayyor Est. for trading & contracting, Saudi Arabia 2007-08 Checked and verified 24. File of M/s New Zealand Wool service Int. Ltd. New Zealand. 2007-08 Checked and verified 25. File of M/s Al Habbal Trading Syria 2007-08 Checked and verified 26. File o....
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....sing Officer further observed that the above register/loose papers and files had been verified from books of accounts of the assessee, no discrepancy has been found except stock register mentioned at S.No. 2 pertaining to F.Y. 2007-08. The Assessing Officer further observed as under:- (a) During the survey operation stock was also physically taken having inventory of S.No. 1 to 97 out of which inventory of S.No. 10,12,13,17,19,22 and 23 of items pertain to M/s Mundra & Co. as reported by survey team (on record). The photocopy of above inventory had already been taken by the assessee and during the course of assessment proceedings after applying the rate and calculating the value of the items the value of total inventory produced before the undersigned having the total amount of the stock found on the date of survey was 2,26,167 kg. amounting to Rs. 1,41,16,603/- (Value calculated by the assessee). (b) The stock found in stock register impounded at the time of survey having the stock of total weight 2,23,274 kg. calculated at the rate of 50.66 (Average) declared by the assessee during submission calculated and value of stock comes to Rs. 1,13,11,060/-. The details of quantity of s....
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....urse of survey, statement of Shri Shivratan Mundra was recorded and signed by him. Copy of statement was provided vide ordersheet entry dated 22/10/2007 and 25/10/2007. The ordersheet entry was as under:- 22/10/2007 Sh. Shivratan Mundra Director of the company alongwith Sh. K.C. Mundra FCA/AR present inspection of the documents allowed and copy of documents/statements given as desire. Inspection done and Sd/- Copies as stated above (Ramesh Singhal) Received Signature of ITO Sd/- Signature of assessee Sh. Shivratan Mundra 25/10/2007 Photocopy of all impounded registers/files/books as in order of impounding dated 20/10/2007 has been provided/supplied. Sd/- (Ramesh Singhal) Signature of ITO Sd/- Aashutosh 25-10-2007 5.4 The assessee through his AR vide letter dated 06/12/2010 had explained the discrepancy in stock at the time of survey that all books of accounts are being produced for verification with impounded material and so far as reconciliation of stock as on 17/09/2007, 18/09/2007 as per department and as per the assessee the reconciliation as under:- Actual Stock as per latest books Rs. 2,54,98,772.93 (A) Italy Container 12,06,549.34 (B) Sody 1320.00 Rs. 12....
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.... Sales 70468340 85479801 76823116 Gross profit 11388197 13871684 10806840 % of G.P. 16.16% 16.22% 14.08% There was decline in G.P. rate, the assessee's explanation was not found tenable to the Assessing Officer, accordingly, he rejected the books U/s 145(3) of the Act. The Assessing Officer applied the G.P. rate of preceding year i.e. 16.22% on declared sale at Rs. 7,68,23,116/-, which gives G.P. at Rs. 1,24,60,709/- after reducing the gross profit declared by the assessee in return at Rs. 1,08,06,840/-. The net difference of Rs. 16,53,869/- had been added to the total income declared by the assessee for which Section 271(1)(c) penalty were also initiated for non disclosing of correct particulars of income 6. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(A), who had confirmed the addition by observing as under:- "5.4 I have carefully examined the stock inventory prepared by survey team and found that: a. Perusal of inventory of stock found at the time of survey reveals that the same has been prepared in an elaborate manner. The inventory runs into 5 pages and alongwith description of each item, it also ment....
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....nt was concluded without his signature. If survey team had to obtain his signature on stock inventory in semi conscious state, there is no reason as to why his signature on statement was also not obtained. Moreover medically it is not possible for a person to put his signature in semi conscious state. f. I, therefore, hold that stock inventory was prepared by the survey team in a systematic and elaborate manner and the same was duly signed by Shri Shiv Ratan Mundra. The wild allegations leveled by appellant against the survey team are absurd. Similarly, his allegation that the A.O. prepared stock inventory on his own deserves rejection on the face of it. 5.5 As mentioned earlier, appellant has disputed the entire addition. However, the fact remains that: a. Books of accounts of appellant were found incomplete at the time of survey. b. Appellant did not cooperate with survey team in the preparation of stock inventory. Under the circumstances the stock inventory was prepared on basis of physical verification. c. Valuation of stock was determined at Rs. 1,41,16,603/- on the basis of figures given by appellant only. d. Despite being given repeated opportunities by A.O., no reconc....
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....tion of Rs. 16,53,869/- is confirmed. Ground No. 4 and 5 of the appeal are thus dismissed." For service of notice U/s 143(2) of the Act, the ld CIT(A) has held as under:- "8.2 From the perusal of records it is found that notice U/s 143(2) was duly issued in this case by the A.O. on 13.08.2009 and the same was dispatched by speed post on 18.08.2009. Therefore, allegation of appellant that notice U/s 143(2) was fabricated by A.O. is baseless and not acceptable. 8.3 When two versions of an instance are given, one of them is by a responsible Government officer and other is by an anonymous person who refuses to identify himself and in his own words admits that:- In such a situation obviously no cognizance can be taken of the claim of anonymous person, who does not have even the guts to disclose his identity. Such wild allegations can be made against anybody and in the absence of any evidence brought on record by appellant in this regard, the same cannot be accepted. 8.4 I, therefore, hold that notice U/s 143(2) was duly served in this case and the assessment order passed U/s 143(3) is valid and lawful. Ground No. 7 of the appeal is thus dismissed." 7. Now the assessee is in appeal....
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....atan Mundra kept misbehaving with survey team. He used abusive and threatening language and also called his German Shepherd dog for harassment of survey team. At the time of survey books of accounts were incomplete and therefore stock as per books could not ascertained. However, physical inventory of stock was prepared and the same was signed by Shri Shiv Ratan Mundra. The statement of Shri Shiv Ratan Mundra could not be completed. The authorized officer asked question No. 19 regarding stock inventory of appellant company as on 31/3/2007. Thereafter it is mentioned by authorized officer that:- 9.1 The ld CIT(A) further observed that this is the statement of a responsible Government officer and there is no reason to disbelieve the same. No question was put to Shri Shiv Ratan Mundra by any officer of the survey team regarding surrender of additional income. Neither any surrender of additional income was made by him nor the survey team insisted for obtaining any surrender. However, appellant has alleged that Director of company was pressurized to surrender high amount of concealed income. Right from the time of survey and thereafter appellant and his CA Shri K.C. Mundra did not coope....
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....y the Assessing Officer. Only discrepancy was found in the stock position on the date of survey which has been calculated by both the authorities judiciously. Therefore, we do not find any reason to intervene in the order of the ld CIT(A). According we uphold the order of the ld CIT(A). This ground of assessee's appeal is dismissed. 10. Grounds No. 2,3,4, and 6 of the appeal are against discrepancies in stock valuation and making trading addition of Rs. 18,46,187/-. The ld CIT(A) held that this non-cooperative attitude of the appellant and his CA Shri K.C. Mundra continued during the assessment proceedings before the Assessing Officer. Even in the paper book filed before him showed his attitude and he filed following documents before him: a. Newspaper cuttings b. Objection against summons issued by ITO, Ward-2, Beawar c. Protest letter dated 24/09/2007 of appellant d. Letter of objections addressed to AC e. RTI applications filed by appellant f. Benami letter regarding issue of notice U/s 143(2) g. Complaint of CBDT h. Complaint of DG (Vigilance) 10.1 The ld CIT(A) held that appellant spared no efforts to obstruct inquiry in his case by the department. Assessee expected f....
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....was signed by Shri Ramesh Singhal, who received the copy of documents, which was also signed by Shri Shiv Ratan Mundra, director of the company. On 25/10/2007, photo copy of all impounded register/file/books as in order of impounding dated 20/10/2007 had been provided/supplied by the Assessing Officer, which has been signed by Shri Ramesh Singhal and Shri Aashutosh. The assessee vide reply dated 06/12/2010 submitted that regarding discrepancy found in the stock, the stock summary as on 17/09/2007 of Rs. 2,54,98,772.93 duly signed by the AR of the assessee during the assessment proceedings has duly been discussed in earlier paras of this order. The ld CIT(A) heard the issue in detail but no efforts were made by the assessee to reconcile the differences with no details/evidences. Three figures summary of stock generated from assessee book found on computer i.e. on 17/09/2007 of Rs. 2,43,03,171.34 and on 18/09/2007 of Rs. 2,38,40,266/- at the business premises. It is mentioned by the CIT(A) that figures of stock as per computer books generated had been changed without no change in value of purchase and sale, which is not possible. No reason was explained regarding these differences. A....
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.... the basis of stock inventory prepared physically as well as stock position on the basis of books of account. Therefore, the Assessing Officer rightly rejected the book result U/s 145(3) of the Act. We do not find any reason to interfere with the order of the ld CIT(A). Accordingly, grounds No. 2,3,4 and 6 of the appeal are dismissed. 11. Ground No. 5 of the assessee's appeal is against confirming the trading addition of Rs. 16,53,869/-. The Assessing Officer observed that during the year, the assessee's G.P. had gone down compared to immediate two preceding years. He gave reasonable opportunity of being heard to the assessee. The assessee had not explained the reasons for decline in G.P. during the year as there was a discrepancy in the stock position as on date of survey. Therefore, he rejected the book result U/s 145(3) of the Act and applied GP rate @ 16.22% on declared sale of Rs. 7,68,23,116/-. The ld CIT(A) also confirmed the addition made by the Assessing Officer on the basis of no satisfactory reasons were given either before the Assessing Officer or the CIT(A) for fall in GP during the year. Accordingly, he confirmed the addition. 12. We have perused the material on rec....