TaxTMI 
TaxTMI 
2020 (10) TMI 622
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....e circumstances of the case, the ITAT was right in reversing the order of CIT(A) without giving any cogent reasons whatsoever and without giving any finding for deciding the appeal against the appellant? (c) Whether in the facts and under the circumstances of the case, the decision of the ITAT was not perverse inasmuch as: (i) all the details were filed before the Tribunal and the same ought to have been looked into and decided the appeal; (ii) while deciding the appeal extracts of assessment order and finding of CIT(A) has been reproduced; (iii) only stating that CIT(A) has not given finding for holding in favour of appellant; (iv) detailed paper book ought to have been looked into which has not been done." 3. The appellant assessee is a HUF having a proprietary concern by the name Nirav Industries. It is engaged in the business of trading in non-traders metal working as commission agent. A survey under Section 133A of the Act, 1961 was carried out on 13th September 2000 at the business premises of the appellant assessee. During the course of survey, discrepancy of 25115 kg. of stock was worked-out. The appellant assessee submitte....
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....o.6 were found at the business premises of the assessee at 424/2, GIDC, Udyognagar and Naghedi Godown. 2. The assessee says that the goods belongs to Shubam Enterprise, which is the concern situated at Bhavnagar whereas the goods are found at Jamnagar. Why the firm situated at Bhavnagar would send the goods for cutting to Jamnagar. If the goods are send from Bhavnagar to Jamnagar for cutting job work there must be fixed rate/charges of cutting otherwise how huge stock more than 10,000 Kg would have been sent to Jamnagar. 3. On verification of the copies of the bill it is clearly mentioned in the Bill "Sold to M/s. Nirav Industries, Post Khodiyar Colony, Village - Naghedi, Jamnagar". 4. The assessee could not produce transporter receipt at the time of survey as well as during the course of assessment proceedings. 5. At Bhavnagar no godown was found only open plot of land was found where no goods of brass can be stored. 6. These bills were not found at the time of survey. 7. There is no proof for any payment of octroi or any cartage charges paid for bringing the goods to Naghedi. 8. The assessee has denied the identity of....
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.... 14,83,420/found during the course of survey, the Assessing Officer while framing the assessment has given one more opportunity to the assessee to give reason as to why the excess stock found, which could not be satisfactorily explained at the time of survey, be added as assessee's income. We do not find anything wrong in AO's asking the assessee to explain the excess stock and rather it was in the interest of natural justice in giving one more opportunity to the assessee to explain at the time of framing the final assessment. No material has been brought on record by the CIT (A) for holding that excess stock was anyhow explained by the assessee either neither during the course of survey nor during the course of assessment proceedings nor during the course of appellate proceedings before him. There is no discussion in the order of the CIT (A) as to how he reached to the conclusion that statement given during the course of survey was verified and found to be correct. 9. As per provisions of subsection 6 of section 250, the order of the CIT (A) disposing of the appeal should mandatorily state the points of determinations and decision thereon and the reasons for the decis....
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....ubmissions made by the appellant assessee with regard to the issues raised by the Assessing Officer allowed the appeal by deleting the addition on account of the difference in stock and held as under :" 7. On the basis of above submissions and documents, statements placed on record, it emerges that : a) On 13/9/2000, statement of the appellant's brother Shri Satyanarayan Khatod was recorded u/s 133A and in response to that statement he stated that the goods of Pankajbhai was received for cutting and was lying at the godown. He further stated that the goods for job work were received before four days of survey and further goods were received in the morning of the date of survey. b) On the same day statement of Shri Pankajbhai was also recorded by survey party and Shri Pankajbhai confirmed the above facts. c) Shri Pankajbhai also gave the copies of bills of shubham enterprises whose goods were sent for job work. d) Statement of appellant was also recorded wherein he stated that goods of bill no 5 were lying at shed non 424/2 and goods of bill No 6 were lying at Naghedi Godown. He further stated that these goods were received for job wo....
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.... Rs. 14,83,420/found during the course of survey, the AO while framing the assessment had given one more opportunity to the assessee to give reason as to why the excess stock found, which could not be satisfactorily explained at the time of survey, be added as assessee's income. No material has been brought on record by the CIT(A) for holding that excess stock was explained by the assessee during the course of survey or during the course of assessment proceedings nor during the course of appellate proceedings. The onus is clearly on the assessee to prove that the goods in question belonged to M/s Shubham Enterprises and, not the assessee, which has been discharged by the assessee. The onus is on the assessee to prove the actual transportation of goods in question and also payment of octroi, etc., paid, if any for such transportation and ownership of such goods by the third party. There is no discussion in the order of the CIT(A) as to how he reached to the conclusion that the statements given during the course of survey were verified and found to be correct. No such finding was recorded by the CIT(A) regarding assessee's ownership of such goods and transportation thereof. W....
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.... & 38 of Paper Book filed with Hon. ITAT) and he has specifically mentioned that he has delivered the goods for Job Work as per his uncle's instructions. c) All contacts information including copy of Income Tax Return of Shri Sagarmal J. Shah was submitted to the learned AO at the time of assessment only. Please refer to page No.7 of Paper Book filed with Hon. ITAT. d) If all evidences draw attention to the fact that the Propeller was sent only for Job Work, ownership cannot be shifted merely on the basis that Job Work rate was not pre fixed. e) It was a business decision of a businessman and in business it happens many times. In addition, it is evident that afterwards Job Work rate has been decided and paid to the assessee. Copy of the bills were produced before the learned A. O. and the same is produced at Page No.20 & 21 of Paper Book filed with Hon. ITAT. 3. On verification of the copies of the bill it is clearly mentioned in the bill "Sold to M/s.Nirav Industries, Post Khodiyar Colony, VillageNaghedi, Jamnagar." a) Copies of the bills were produced at the time of Survey. Page No.16 & 17 of Paper Book filed with Hon. ITAT. If one refer the bills, it is clearly....
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....Hon. ITAT. 5. At Bhavnagar no godown was found only open plot of land was found where no goods of brass can be storage. a) Generally these types of goods are kept in open plot only. b) Please refer Para 2 at page No.11 of Paper Book filed with Hon. ITAT where copy of the letter filed with the learned AO during the assessment proceedings explaining in details that Propeller having weight of 20 Tons are of very big size and can block High Way. c) It can neither be loaded on a Truck nor can be kept in any closed godown. Open plots are used to keep these type of propellers. It can be loaded on a truck only after cutting. 6. These Bills were not found at the time of survey. a) Please refer Q 13 at page No.50 and Q 7 at Page 36 of Paper Book filed with Hon. ITAT. The bills were found/ produced at the time of Survey only. b) Please refer issue no.1 where AO has stated that bills were found at the time of survey. c) This contradicts the stand of AO. 7. The assessee has denied the identity of Shri Sagarmal J. Shah and the goods are claimed to be belonging to Sagarmal J. Shah. a) The assessee has in fact never denied the identity of Sagarmal Shah, howev....
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....y reason for not agreeing with the findings of fact arrived at by the CIT(A) has passed the impugned order without giving any reason whatsoever by holding that the assessee was unable to explain the excess stock found during the course of survey. 13. Learned advocate for the assessee submitted that the Tribunal did not look into the details filed by the assessee in form of bills and delivery challans issued by M/s. Shubham Enterprise, transportation details, copy of delivery challans received from Ms/. Shubham Enterprise by the assessee. It is, therefore, submitted that the impugned order passed by the Tribunal is a perverse order as the Tribunal failed to take into consideration the relevant factors and has taken into consideration irrelevant factors and documents in form of statements of Pankajbhai Jain and Shri Sagarmal J. Shah, proprietor of M/s. Shubham Enterprise and the Tribunal has arrived at the conclusion that the assessee was unable explain the excess stock found during the course of survey without discussing as to how on the basis of such statements, such conclusion could be arrived at by the Tribunal. Learned advocate also submitted that in the first round of litiga....
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....n behalf of the assessee, it emerges from the record that bill nos.5 and 6 issued by M/s. Shubham Enterprise were found during the course of survey conducted on 30th September 2000, which is corroborated by the statement of Shri Satyanarayan Khatod recorded under Section 133A of the Act, 1961, wherein he has stated that the goods of Pankajbhai were received for cutting and was lying at godown and the goods were received four days prior to the date of survey for job work and some of the goods received in the morning of the date of survey. Pankajbhai in his statement recorded by the Survey Party also confirmed the facts stated by Shri Satyanarayan Khatod. The statement of Sureshchandra Khatod was also recorded, wherein he stated that goods of bill no.5 were lying at Shed no.424/2 and goods of bill no.6 were lying at Naghedi godown. He also confirmed that the said goods were received for job work. By way of job work charges, the proof of goods lying at godown delivered after the job work was over were also produced in the form of bills for job work. M/s. Shubham Enterprise also issued confirmation with regard to return of the goods after the job work was over. The Assessing Officer ha....
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....on of its having relied upon conjectures, surmises and suspicions not supported by any evidence on record or party upon evidence and partly upon inadmissible material. 27. It was similarly observed by us in Dhakeswari Cotton Mills Ltd. v. Commissioner of Income tax, that the powers given to the income tax Officer under section 23(3) of the Income-tax Act, however wide, did not entitle him to base the assessment on pure guess without reference to any evidence or material. An assessment under section 23(3) of the Act could not be made only on bare suspicion. An assessment so made without disclosing to the assessee the information supplied by the departmental representative and without giving any opportunity to the assessee to rebut the information so supplied and declining to take into consideration all materials which the assessee wanted to produce in support of his case constituted a violation of the fundamental rules of justice and called for exercise of the powers under article 136 of the Constitution. 28. The last case to which reference need be made in this context is that of Sree Meenakshi Mills, Madurai V. Commissioner of Incometax, where this court observed....