BHAWANI SHANKAR ,SUMERPUR, PALI vs. ACIT,CIRCLE, PALI

आदेश / O R D E R

Manoj Kumar Aggarwal (Accountant Member): - 1. Aforesaid appeal by assessee for Assessment Year [in short referred to as ‘AY’] 2015-16 contest the order of Ld. Commissioner of Income-Tax (Appeals)-1, Jodhpur, [in short referred to as

ITA No.137/Jodh/2019 Shri Bhawani Shankar Assessment Year: 2015-16 ‘CIT(A)’], vide Appeal No.204/2017-18, dated 06/02/2019 on following effective grounds:- 1. That on the facts and in the circumstances of the case, the Id CIT (A) erred in confirming addition of Rs.13,56,321/- in respect of excess stock . 2. That on the facts and in the circumstances of the case, the Id CIT (A) erred in sustaining addition of excess stock on the basis of statement of assessee recorded at the time of survey without considering the facts that there was mistake on the part of survey while worked out excess stock. 3. That on the facts and in the circumstances of the case, the Id CIT (A) grossly erred in ignoring the explanation furnished by the assessees which were supported from documentary evidences. 4. That on the facts and in the circumstances of the case, the Id CIT (A) grossly erred in upholding various observation made by the ld. AO in the assessment order which is contrary to facts and material available on records. As evident, the assessee is aggrieved by confirmation of certain addition of excess stock. 2. We have carefully heard the rival submissions and perused relevant material on record including submissions made during the course of hearing. The case laws as cited during the course of hearing have duly been deliberated upon. Our adjudication to the subject matter would be as given in succeeding paragraphs. 3. Facts on record would reveal that assessee being resident individual is stated to be engaged in trading of handicraft religious goods related to temples and suthari work of timber. It was assessed u/s. 143(3) on 15/12/2017 wherein it was saddled with an addition of Rs.13.56 Lacs on account of excess stock. The assessee was subjected to survey proceedings on 08/01/2015 during which it surrendered excess cash for Rs.3.01 Lacs and excess stock for Rs.32.02 Lacs. However, around after one month i.e. on 16/02/2015,the assessee submitted that due to mistake in measuring the wood and its valuation, the stock was overvalued by

3 ITA No.137/Jodh/2019 Shri Bhawani Shankar Assessment Year: 2015-16 Rs.13.56 Lacs by the survey team present at the business premises of the assessee. During the course of assessment proceedings, the assessee reiterated that there was calculation mistake in the stock inventory taken by the survey team which came to knowledge of the assessee after completion of survey. However, going by the replies given by assessee before survey team, Ld. AO noted that the valuation of stock was done as per his directions only and the assessee totally agreed with the valuation so done. Therefore, not convinced, the amount of Rs.13.56 Lacs was added to the income of the assessee. 4. Before Ld. CIT(A), the assessee, inter-alia, submitted that valuation was made and statements were finalized in late night and therefore the valuation as accepted under undue pressure. It was submitted that additions were made wholly on the basis of statement of the assessee and statement recorded u/s 133A would not have much evidentiary value. Pointing to the mistake, it was submitted that the volume of solid timber was to be measured in cubic feet and the same was to be arrived at after multiplying all the three dimensions viz. length, breadth & height whereas the survey team only multiplied two items which was wrong and the same led to calculation errors. Similar other errors that crept into the calculations were also pointed out. However, Ld. CIT(A) opined that the retraction was not supported with any concrete evidence and the submissions were mere afterthought. Therefore, the additions were confirmed. Aggrieved, the assessee is in further appeal before us.

4 ITA No.137/Jodh/2019 Shri Bhawani Shankar Assessment Year: 2015-16 5. It is settled law that statements recorded u/s 133A during survey operations would not carry much evidentiary value unless the same is corroborated with material evidences. The assessee would be within his right to retract the same in the light of evidences as well as fresh facts emerging out subsequent to conclusion of survey proceedings. Upon perusal of assessee’s submissions before Ld. first appellate authority, we find that there were calculations errors which were sought to be rectified by way of retraction. The assessee was dealing in solid wood which was to be measured in cubic feet only and the same was to be arrived at after multiplying all the three dimensions viz. length, breadth & height. As against this survey team only multiplied two items which was patently wrong and would certainly give wrong computations. Similar other mistakes have also been pointed out which are already extracted in the impugned order. It is also noticeable that the assessee has not denied the factum of excess stock but merely seek rectification of computational errors. The item-wise details of the mistake were placed on record and the same has also been placed before us also. We find that the assessee has computed computational errors for each of the item specifically and arrived at correct valuation thereof. Therefore, the retraction could not be brushed aside simply. In fact, no error has been pointed out in the computation so made by the assessee. Our view is duly supported by another decision of coordinate bench of this Tribunal in M/s Shrinath Gum & Chemicals V/s ITO (ITA No.527/Ju/2009 dated 09/12/2011) which has taken a view that the additions could not be

5 ITA No.137/Jodh/2019 Shri Bhawani Shankar Assessment Year: 2015-16 made merely on the basis of the survey statement. Similar is the view of Jaipur Tribunal in Satish Chand Agarwal V/s ITO (ITA No.311/JP/2015 dated 12/04/2018) which has also taken similar view. Deriving strength from the same, we delete the addition of Rs.13.56 Lacs and allow the appeal. 6. In nutshell, the appeal stands allowed. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963.

Sd/- Sd/- (Sandeep Gosain) (Manoj Kumar Aggarwal) �ाियक सद� / Judicial Member लेखा सद� / Accountant Member

मुंबई Mumbai; िदनांकDated : 21/12/2020 Sr.PS:-Jaisy Varghese आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : अपीलाथ�/ The Appellant 1. ��थ�/ The Respondent 2. आयकरआयु�(अपील) / The CIT(A) 3. आयकरआयु�/ CIT– concerned 4. िवभागीय�ितिनिध, आयकरअपीलीयअिधकरण, मुंबई/ DR, ITAT, Jodhpur 5. गाड�फाईल / Guard File 6.

आदेशानुसार/ BY ORDER,

उप/सहायकपंजीकार (Dy./Asstt.Registrar) आयकरअपीलीयअिधकरण, जोधपुर / ITAT, Jodhpur.