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Income Tax Appellate Tribunal, BANGALORE BENCHES “ C ” BENCH: BANGALORE
Before: SHRI A.K. GARODIA & SHRI PAVAN KUMAR GADALE
O R D E R
PER SHRI PAVAN KUMAR GADALE, JM :
The assessee has filed an appeal against the order of learned Commissioner of Income Tax (Appeals), Mysore under Section 143(3) and 250 of the Income Tax Act, 1961.
The assessee has raised various grounds of appeal but at the time of hearing, the ld. AR has not pressed the Ground Nos.7 & 8 and argued in respect of Ground Nos. 3 & 11 and other grounds are general in nature which are as under :
The brief facts of the case are that the assessee filed the Return of Income on 31.7.2008 with total income of Rs.4,43,428 and the Return of Income was processed under Section 143(1) of the Act. The assessee is a wholesale dealers in Plantain and Paddy. Whereas the case was taken up for scrutiny based on the verification of CIB information and assessment was completed on 6.12.2010 with total income of Rs.65,53,166. Aggrieved by the order, the assessee has filed an appeal with the learned CIT (Appeals) and on further appeal to the ITAT. The ITAT considering the submissions of the assessee has set aside the assessment to the file of Assessing Officer to pass a fresh order after providing adequate opportunity of hearing. Accordingly the Assessing Officer has provided fresh opportunity to the assessee to explain with evidence on the date mentioned in page 2 of the assessment order. The main disputed issue is regarding unexplained stocks. The Assessing Officer found that there is a difference in stock reported by the assessee in the financial statement and in respect of stock statement filed with the bank for obtaining loan. Since the Assessing Officer was not satisfied with the explanation and the value of stock difference could not be reconciled made addition of Rs.4,82,935 and also addition in respect of difference in value of movable assets of Rs.6,29,251 and immovable assets of Rs.10,96,356 and along with other incomes determined the total income of Rs.29,45,380 and passed order under Section 143(3) and 254 of the Act Dt.27.3.2015. Aggrieved by the order, the assessee has filed an appeal with the learned CIT(Appeals). In the appellate proceedings, it was brought to the notice of the CIT(Appeals) that the assessee has raised grounds in respect of addition made by the Assessing Officer including unexplained investment in respect of movable and immovable properties and undisclosed stocks. Whereas the learned CIT(Appeals) has confirmed the addition of undisclosed stock of Rs.4,82,935 whereas in respect of Ground No.3 of unexplained investment in movable assets of Rs.6,29,251 and immovable assets of Rs.10,96,356. The CIT(Appeals) observed that the additions were not part of the disputed issues that were remitted back to the Assessing Officer. Hence the CIT (Appeals) dismissed the grounds of appeal
of assessee. Aggrieved by the order of CIT(Appeals), the assessee has filed appeal before us.
4. The learned Authorised Representative submitted on the disputed issue of undisclosed stock addition that the assessee has offered income on estimation basis which has been accepted by the revenue and therefore addition in respect of stock is not sustainable and emphasized that when there is an estimation, no addition can be made on stock difference and relied on the decision of CIT Vs. Bahubali Neminath Muttin 388 ITR 608 (Kar) whereas the CIT(Appeals) has confirmed the addition without considering the fact that the assessee has filed the Balance Sheet to the Bank for obtaining loan and whereas there is a difference in the Balance Sheet filed for the Income Tax purpose which could not be reconciled.
Further the learned Authorised Representative emphasized on the issue that the value of stock submitted to SBI is lesser than the statement filed before the Assessing Officer in the assessment proceedings. Therefore the learned Authorised Representative submitted that the assessee has merits in the case and supported with judicial decisions and prayed for deletion of addition.
On the Second disputed issue being addition in respect of undisclosed investment in movable and immovable assets. The learned Authorised Representative emphasized that the learned CIT(Appeals) has not adjudicated or decided the ground of appeal
. Therefore the ld. AR prayed that the matter be remitted to the file of the learned CIT(Appeals) to consider afresh were in the assessment proceedings the addition made vide order under Section 143(3) r.w. 254 of the Act. Contra learned Departmental Representative supported the order of CIT (Appeals).
6. We heard the rival contentions and perused the material on record. Prima facie, the stock statement filed with the SBI is for credit facilities and the stock statements was filed for Income Tax purpose in the assessment proceedings, we find the assessee has filed stock statement with Bank as on 31.3.2008 where the value of the stock disclosed at Rs.7,32,065 and the assessee has filed Balance Sheet in the regular proceedings where the stock declared at Rs.12,15,000. We find in the peculiar circumstances, the stock declared with the Bank is lesser than the stock disclosed with the revenue authorities and the Assessing Officer has made addition for the difference without considering the fact that the assessee opted for provisions of Section 44F of the Act and estimated the income and whereas Assessing Officer has made addition of stock difference due to non- reconciliation. We find that the assessee has filed the stock statement which is not disputed by the revenue and we are not in a position to understand why the difference was added when the assessee has disclosed stocks at a higher value with the revenue. We are of the opinion that the action of the Assessing Officer is not sustainable as the assessee has opted for presumptive taxation of offering of income on estimation and further the stock statement filed with the Bank is less than the value filed with the Income Tax Department. Accordingly, considering the judicial decisions and the facts and circumstances, we are inclined to set aside the order of the CIT(Appeals) on this ground and direct the Assessing Officer to delete the addition of Rs.4,82,935 and allow the ground of appeal
. On the second disputed issue in respect of additions made by the Assessing Officer on unexplained investment in movable assets and immovable assets, we find subsequent to the Directions of Hon'ble ITAT, the Assessing Officer has passed order under Section 143(3) and 254 of the Act with addition of unexplained investments but there is no finding by the CIT(Appeals) on this ground of appeal in appellate proceedings. Accordingly, we restore this disputed issue to the file of CIT(Appeals) for limited purpose to adjudicate afresh and pass a reasoned and speaking order on the ground of appeal and allow the ground of appeal of assessee for statistical purposes.