M/S. SAYAJI STEEL,AHMEDABAD vs. ASSTT. COMMISSIONER OF INCOME TAX,CIRCLE-5, VADODARA

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ITA 923/AHD/2016Status: DisposedITAT Ahmedabad17 September 2019AY 2008-093 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that since the assessee demonstrated that purchases were through banking channels and recorded in books, and the revenue provided no contrary material, the addition of Rs. 16,80,000/- (related to excess stock) should be deleted.

What were the facts?

During a survey, excess stock was found, leading to an addition of Rs. 16,48,776/-. The assessee contended that purchases were made through banking channels and accounts were reconciled.

What were the issues?

Whether the addition made on account of excess stock found during survey is sustainable when the assessee demonstrates purchases through banking channels and reconciliation of accounts.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD BENCHES (SMC

Before: SHRI KUL BHARAT

For Appellant: Shri M.K. Patel, A.R
For Respondent: Shri N.K. Goel, Sr.D.R
Hearing: 16.09.2019Pronounced: 17.09.2019

O R D E R PER KUL BHARAT, J.M: This appeal by the assessee is directed against order of the CIT(A)-1, Vadodara dated 25.1.2016 for the assessment year 2008-09.

1.

M/s. Sayaji Steel, Ahmedabad 2. The only effective ground in this appeal is against sustaining addition of Rs.16,48,776/- made in respect of the excess stock found during the course of survey.

3.

The assessee is a partnership firm engaged in the business of retail and wholesale in iron sheets. The facts are identical as were in the case of the partner of the assessee firm in ITA No.2177/Ahd/2014. The respective representatives have adopted the same argument as were in for the A.Y 2008-09. In the said appeal, I have partly allowed the appeal of the partner of the firm by observing as under:

4. I have considered the rival submissions and perused the materials available on record. The basis of making addition is the statement recorded during the course of survey. Ld. Counsel for the assessee has taken me through the statement so recorded. It is stated that the whole purchases have been through banking channels. In support of this, he has drew my attention to the paper book where stock summary is enclosed. The assessee has also drew our attention to the paper book pages 155 and 156 to 184 to contend that sale and purchases are duly reconciled. There is no anomaly in the accounts so placed. Considering the fact that the assesse has demonstrated that purchases were made through banking channels and have been recorded in the books of accounts, the revenue has not brought any contrary material on record. Under these undisputed facts, the A.O. is hereby directed to delete the addition of Rs.16,80,000/- as made

M/s. Sayaji Steel, Ahmedabad in respect of the excess stock. However, the addition in respect of net profit @ 2% is sustained on this addition. 5. In the result, the appeal filed by the assessee in for the A.Y. 2008-09 is partly allowed.

4.

Taking a consistent view, the appeal filed by the assessee in this appeal is also partly allowed.

5.

In the result, the appeal filed by the assessee in A.Y. 2008-09 is partly allowed.

Order was pronounced in the open court on 17 .09.2019.

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