COMMISSIONER OF INCOME TAX RANGE-1 BATHINDA vs. MUNISH KUMAR BANSAL

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ITA/247/2014HC Punjab & HaryanaPHHC01109383201413 July 2015Bench: MR. JUSTICE A.B. CHAUDHARI,MR. JUSTICE M.M. AGGARWAL3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the ITAT's finding was not perverse or unsustainable. The court noted that the stock statement provided to the bank for a loan of ₹100 lacs on March 30, 2009, indicated closing stock of ₹169.17 lacs as of that date. The bank officer confirmed physical verification of this inventory. Furthermore, the ITAT had expressly noted that the sales of ₹166 lacs on March 31, 2009, were not doubted by the revenue authorities and were accepted. The court reasoned that if these sales had not occurred, the assessee's income would have been reduced accordingly, implying the stock was indeed available for sale. Therefore, the court found no basis to interfere with the ITAT's conclusion that the assessee had sufficiently rebutted the AO's finding of suppressed stock. The appeal was dismissed.

What were the facts?

The Revenue, Commissioner of Income Tax Range-I, Bathinda, appealed against an order of the Income Tax Appellate Tribunal (ITAT) which had allowed the respondent assessee's appeal. The ITAT's decision overturned an order by the Commissioner of Income Tax (Appeals), which had upheld an addition of approximately ₹1.51 crores to the assessee's income. The core of the dispute concerned the valuation of the assessee's closing stock as of March 31, 2009. The Assessing Officer (AO) determined the closing stock to be ₹169.17 lacs based on documents provided by the assessee to a bank for a loan, contradicting the assessee's declared closing stock of ₹17,50,000/-.

What were the issues?

1. Whether, in the facts and circumstances, the ITAT was correct in holding that the assessee sufficiently rebutted the AO's finding of suppressed stock worth ₹1,51,67,000/- from the books of account, thereby reducing income by that amount? (Question of mixed law and fact, concerning Section 69 of the Income Tax Act, 1961). 2. Whether a reconciliation chart not furnished before the AO can be produced at the appellate stage? (Procedural question). 3. Whether the ITAT erred in relying upon additional documents? (Question of mixed law and fact). Assessee's Contentions: The stock declared before the bank of ₹169.17 lacs was as on March 30, 2009, and was for the purpose of raising a loan. The bank officer confirmed the loan disbursement on March 30, 2009, based on the inventory as of that day, which was physically verified. The ITAT also noted that sales on March 31, 2009, amounting to ₹166 lacs were not doubted and were accepted by the authorities. Revenue's Contentions: The revenue's arguments are not explicitly recorded in the provided text, beyond the fact that they are the appellant challenging the ITAT's order.

Which sections of the Income-tax Act were involved?

Section 69

AI-generated summary — verify with the full judgment below

ITA No. 247 of 2014 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 247 of 2014 Date of Decision:- 13.07.2015 Commissiner of Income Tax Range-I, Bathinda ......Petitioner(s) vs. Shri Munish Kumar Bansal ......Respondent(s) CORAM:- HON'BLE MR. JUSTICE S.J. VAZIFDAR, ACTING CHIEF JUSTICE HON'BLE MR. JUSTICE G.S.SANDHAWALIA Present:- Mr. G.S. Hooda, Advocate, for the appellant. Mr. Ravi Shankar, Advocate, for the respondent. S.J. VAZIFDAR, A.C.J. (Oral) This is an appeal against the order of the Tribunal allowing the respondent's appeal against the order of the Commissioner of Income Tax (Appeals) upholding the addition of about `1.51 crores to the respondent's income. The following questions are sought to be raised:- “i) Whether in the facts and circumstances of the case, is the Hon'ble ITAT correct in holding that the asseessee has sufficiently rebutted the finding of the Assessing Officer that the assessee has suppressed its stock worth Rs.1,51,67,000/- from appearing in his books of account and thereby his income by that much amount? ii) Whether the reconcillation chart not furnished before the AO can be produced at the appellate stage? SHIVANI GUPTA 2015.07.15 11:00 I attest to the accuracy and integrity of this document Chandigarh

ITA No. 247 of 2014 2 iii) Whether the Hon'ble ITAT Amritsar has erred in relying upon the additional document?” The respondents contended that the closing stock as on 31.03.2009 was only `17,50,000/-. The assessing officer, however, upon taking up the matter for scrutiny, found that the closing stock as on 31.03.2009 was actually `169.17 lacs and not `17,50,000/-. This was on the basis of the documents furnished by the respondent to avail a loan from the bank. According to the Assessing Officer, the documents disclosed the closing stock as on 31.03.2009 to be about `169 lacs. The question, therefore, is whether the closing stock as on 31.03.2009 was `17.50 lacs or `169 lacs. This is essentially a question of fact. It involves an appreciation of the evidence on record. The question is whether the finding of the Tribunal is perverse or not. The assessee's case is that the stock declared before the bank of `169.17 lacs was as on 30.03.2009 and that was for the purpose of rasing a loan. The Tribunal also found that the assessee had submitted a stock statement to the bank as on 30.03.2009. The bank officer who was questioned by the Assessing Officer stated that the loan of `100 lacs was disbursed on 30.03.2009 on the basis of the inventory as on that day. He further stated that the inventory of stock was physically verified. On 31.03.2009, `166 lacs was booked as sales. The Tribunal has expressly noted that the sales were not doubted by the authorities and in fact had been accepted. As rightly pointed out by the respondents, had it not been so, the respondent's income itself would have reduced to that extent. In the circumstances, we are unable to say that the finding of SHIVANI GUPTA 2015.07.15 11:00 I attest to the accuracy and integrity of this document Chandigarh

ITA No. 247 of 2014 3 the Tribunal is perverse or totally unsustainable. The appeal is, therefore, dismissed. (S.J. VAZIFDAR) ACTING CHIEF JUSTICE (G.S. SANDHAWALIA) JUDGE 13.07.2015 shivani SHIVANI GUPTA 2015.07.15 11:00 I attest to the accuracy and integrity of this document Chandigarh

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