M/S JAIKISAN ENTERPRISES,DHANBAD vs. ITO WARD-1(3), DHANBAD

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ITA 283/RAN/2017Status: DisposedITAT Ranchi03 March 20202 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that only the profit element of the excess stock addition should be made, directing the AO to add an estimated profit of Rs. 50,000/-. The addition of Rs. 33,000/- was affirmed.

What were the facts?

The assessee's appeal for AY 2006-07 concerned an excess stock addition of Rs. 5,66,590/-. The assessee did not dispute the addition in principle but argued it should only be on the profit element. The assessee also did not press a ground seeking deletion of a Rs. 33,000/- addition due to its small amount.

What were the issues?

Whether excess stock addition should be on the entire amount or only the profit element, and whether a small addition should be deleted.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, : RANCHI BENCH, RANCHI

Before: SHRI S.S.GODARA

For Appellant: Shri Devesh Poddar, Advocate
For Respondent: Smt. Nisha Singhmarr, JCIT(DR)
Hearing: 03.03.2020Pronounced: 03.03.2020

Date of hearing 03.03.2020 Date of pronouncement 03.03.2020 O R D E R S. S. Godara(Oral): This assessee’s appeal for assessment year 2006-07 arises against the Commissioner of Income Tax (Appeals), Dhanbad, Jharkhand dated 08.06.2017 passed in case no.102/DHN/2008-09 involving proceedings u/s 143(3) of the Income Tax Act, 1961 (in short ‘the Act’). Heard Shri Poddar, learned authorised representative and Smt. Nisha Singhmarr, JCIT-DR appearing at the Revenue’s behest.

2.

Coming to the former issue of excess stock addition amounting to Rs.5,66,590/-, learned counsel is fair enough in not disputing the same in principle since based on incriminating material found during the course of survey. His only case is that the impugned addition ought to have only qua profit element embedded therein. I find merit in assessee’s instant argument by hon’ble Calcutta high court in PCIT vs. Subarna Rice Mill ITAT 196 of 2015 GA 4047 of 2015 dated 20.07.18 holds that only profit element in case of excess stock addition has to be made. I thus decline the Revenue’s arguments to this limited extent. The Assessing Officer is directed to add a lumpsum amount of Rs.50,000/- as estimated profit addition. It is made clear that instant estimation shall not be treated a precedent. Section 234A and 234B interest shall be computed as per law. M/s Jai Kishan Enterprises 3. Learned counsel is fair enough in not pressing for assessee’s latter substantive ground seeking to delete addition of Rs.33,000/- keeping in mind the smallness of the amount. The same stands affirmed therefore.

4.

This assessee’s appeal is partly allowed in above terms.

Order is pronounced in the open court on 03.03.2020.

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