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Income Tax Appellate Tribunal, MUMBAI BENCHES “A”, MUMBAI
Before: Shri JOGINDER SINGH, & Shri G. MANJUNATHA
आदेश / O R D E R
Per Joginder Singh (Judicial Member) The assessee is aggrieved by the impugned order dated 01/11/2016 of the First Appellate Authority, Mumbai. The first ground raised by the assessee pertains to confirming the addition of opening stock of Rs.4,30,176/-.
During hearing, the crux of argument advanced by Shri Vimal Punmiya, ld. counsel for the assessee, is that the basic concept of accounting is that the closing stock of last year should be treated opening stock of current year and if the Assessing Officer wanted to compare the amount, it should be last year closing stock with current year opening stock. It was contended that the difference of closing stock of Assessment Year 2013-14 and closing stock of Assessment Year 2012-13 (Rs.4,14,62,973 - 4,10,32,796/-) amounts to Rs.4,30,177/-, which cannot be treated as unexplained opening stock. Our attention was S.A. No.115/Mum/17 Aishloni Copper Alloys Pvt. Ltd. (Now Known as Brassco International Private Limited.) invited to page-19 of the paper book read with page-37 of the paper book consisting of raw material, work in progress and stores/other inventories. On the other hand, the Ld. DR, Shri Rajesh Kumar Yadav, strongly defended the addition made by the Ld. Assessing Officer and sustained by the Ld. Commissioner of Income Tax (Appeal) by contending that a reasonable view has been taken by the Ld. Assessing Officer and the necessary details were not filed by the assessee before the Assessing Officer.
2.1. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee declared nil income in its return filed on 30/09/2013. The assessment was completed on 22/02/2016 determining total income at Rs.56,35,840/- u/s 143(3) of the Act. The explanation of the assessee was not found satisfactory and as per the Revenue the variation in opening stock and resultant calculation of profit was affected by Rs.4,30,176/- and was not explained. The stand of the Revenue and also of the Assessing Officer was that the excess stock was found to be unexplained and added to the total income. Considering the totality of facts
S.A. No.115/Mum/17 Aishloni Copper Alloys Pvt. Ltd. (Now Known as Brassco International Private Limited.) narrated before us, we deem it appropriate to remand this issue (as agreed by the ld. counsel for the assessee also) to the file of the Ld. Assessing Officer to verify the figures/other details and decide as per law. The assessee be given opportunity to substantiate its claim. Thus, this ground of the assessee is allowed for statistical purposes.
The next ground pertains to upholding the addition of time deposits of Rs.25 lakh. The Ld. counsel for the assessee invited our attention to page-79 of the paper book and contended that the Ld. Assessing Officer may be directed to verify the claim of the assessee. However, the Ld DR contended that no fault has been pointed out in the objections raised by the Assessing Officer, therefore, the addition sustained by the Ld. Commissioner of Income Tax (Appeal) may be upheld.
3.1. We have considered the rival submissions and perused the material available on record. It is noted that before the Ld. Commissioner of Income Tax (Appeal) also written submissions were filed by the assessee and the Ld. First Appellate Authority has observed that it has not been S.A. No.115/Mum/17 Aishloni Copper Alloys Pvt. Ltd. (Now Known as Brassco International Private Limited.) properly considered as per the assessee the fixed deposits made from regular audited books of accounts. There were deposits of Rs.25 lakh in Bank of Baroda and the assessee was required to explain the source of such deposits in the bank account in the form of time deposits/FDRs. The addition was made by the Ld. Assessing Officer on the plea that no details and evidences of source were never filed by the assessee. Whereas, the stand of the assessee is that necessary details were filed. Considering the totality of facts, we direct the assessee to furnish the source of deposits and its genuineness to substantiate its claim. The Ld. Assessing Officer is directed to examine the claim of the assessee and decide in accordance with law. The assessee be given opportunity to substantiate its claim. Thus, this ground of the assessee is also allowed for statistical purposes.
The next ground pertains to upholding the addition of cash deposited in the bank account amounting to Rs.23,50,000/-. Identical is the argument from both sides as raised for time deposit of Rs.25 lakh. Considering the totality of facts, we direct the assessee to furnish the proof
S.A. No.115/Mum/17 Aishloni Copper Alloys Pvt. Ltd. (Now Known as Brassco International Private Limited.) of source and its genuineness of the cash deposited in the bank account. The Ld. Assessing Officer is to verify the claim of the assessee and decide in accordance with law.
The assessee be given opportunity. This ground is also allowed for statistical purposes.
Through ground no.4 confirmation of addition of bank interest income of Rs.10, 05,953/- has been challenged. It was claimed that the total interest income with the assessee Rs.25 lakh which was argued to be not considered properly by the Ld. Assessing Officer. The Ld. DR defended the addition. We have considered the rival submissions and perused the material available on record. The claim of the assessee is that the cash deposit was made out of regular audited books of accounts and further out of cash balance in hand. Considering the totality of facts, we direct the assessee to furnish the evidence of its claim before the Ld. Assessing Officer. The Ld. Assessing Officer is directed to examine the claim of the assessee and then decide as per law. The assessee be given opportunity. This ground is allowed for statistical purposes.
S.A. No.115/Mum/17 Aishloni Copper Alloys Pvt. Ltd. (Now Known as Brassco International Private Limited.) 6. The last ground pertains to confirming the disallowance of depreciation of Rs.5,17,252/-. The crux of argument is that the machinery was purchased on 15/11/2008 and installed after few years. The Ld. DR strongly objected to the claim of the assessee by inviting our attention to certain pages of the paper book.
6.1. We have considered the rival submissions and perused the material available on record. It is noted that the assessee in its schedule of assets made addition of certain machinery. The assessee claimed the addition of plant and machinery amounting to Rs.34,48,346/- As per the record, the machinery was claimed to be purchased on 01/04/2012 and put to use on the same day i.e. 01/04/2012. The assessee could not substantiate its claim. It is noted that the machinery was purchased from Fortune Furnace Corporation from Tarapur (Maharashtra) through invoice no.68/08-09 dated 15/11/2008 and was put to use on 01/04/2012. No proof of transportation of the machinery at the site of the assessee, proof of installation and other necessary evidence was never furnished by the assessee. Before us also, no evidence was S.A. No.115/Mum/17 Aishloni Copper Alloys Pvt. Ltd. (Now Known as Brassco International Private Limited.) furnished with respect to purchase, installation and use of the said machinery. Considering the totality of facts, we don’t find any merit in the claim of the assessee, thus, this ground of the assessee is dismissed.
Since, we have disposed of the appeal of the assessee on merit, therefore, there is no need to dispose of the Stay application of the assessee being in-fructuous.
Finally, the appeal of the assessee is partly allowed for statistical purposes.
This Order was pronounced in the open court in the presence of ld. representatives from both sides at the conclusion of the hearing on 29/01/2018.