SUN & SUN COLD & TRADE PVT. LTD.,RAIPUR vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-(1), RAIPUR, RAIPUR

The present appeal filed by the assessee company is directed against the order passed by the CIT(Appeals)-3, Bhopal dated 22.06.2022, which in turn arises from the order passed by the A.O u/s. 143(3) of the Income-tax Act, 1961 (for short ‘Act’) dated 31.03.2022 for A.Y 2020-21. The assessee has assailed the impugned order on the following effective ground of appeal before us:

Survey proceedings were conducted on the assessee company u/s.133A of the Act on 08.04.2019. The survey team on a perusal of the records in the backdrop of the physical stock taking came across short/deficit stock of Rs.16,19,767/- on the date of survey, viz. (i). stock as per the books of account: Rs.2,17,05,666/-; and (ii). stock as per physical verification: Rs. 2,00,85,889/-.

During course of the assessment proceedings, the assessee on being called upon to put forth an explanation as regards the aforesaid short/deficit

Aggrieved the assessee carried the matter in appeal before the CIT(Appeals). On a perusal of the documentary evidence, the CIT(Appeals) observed that the assessee had though issued delivery challans of Rs.23,561/- on the date of survey but had prepared the corresponding sale bills on a later date, as under:

The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us.

We have heard the Ld. Authorized Representatives of both the parties, and perused the orders of the lower authorities as well as the material available on record.

Shri R.B Doshi, Ld. Authorized Representative (for short ‘AR’) for the assessee company explaining the reason that had led to the impugned short/deficit of stock of Rs.15.96 lacs (approx.), submitted that the same was for the reason that the assessee company had on the date of survey i.e.

Per contra, Shri Choudhary N.C. Roy, Ld. Departmental Representative (for short ‘DR’) relied on the orders of the lower authorities.

We have given a thoughtful consideration to the aforesaid issue in hand, i.e. sustainability of the explanation of the assessee company as regards the short/deficit stock of Rs.15.96 lacs (supra). Considering the totality of the facts involved in the present appeal before us, we are unable to persuade ourselves to subscribe to the claim of the Ld. AR that the short/deficit stock that had surfaced during the course of survey proceedings was for the reason that the assessee company had though issued delivery challans for the sales that were carried out on the date of survey i.e on 18.04.2019 but the corresponding sale bills were issued and accounted for in its books of accounts on a later date. If that would have been so, then in our considered view the assessee company during the 6 Sun & Sun Cold & Trade Pvt. Ltd.Vs. ACIT, CC-1, Raipur course of survey proceedings would have surely come forth with the said explanation as regards the short/deficit stock that had so surfaced. However, no such explanation was given by the assessee company during the course of survey proceedings. Apart from that, the fact that the assessee company during the year had a total turnover of Rs.27.93 crore (approx.) i.e. an average sale of Rs.7.65 lacs per day in itself belies its claim of having issued delivery challans of Rs.15.96 lacs (supra) on the date of survey. Be that as it may, as the assessee company had neither before the lower authorities nor before us been able to substantiate on the basis of any supporting material its explanation as regards the short/deficit, therefore, the same cannot be subscribed on our part.

Apropos the alternative contention of the Ld. AR that now when the assessee company had accounted for the sale bills of Rs.15.96 lacs (supra) subsequent to the survey proceedings, and thus, had offered the profit on the same for tax, then the impugned addition of Rs. 3.67 lacs (supra) sustained by the CIT(Appeals) on the same amount of sales would lead to double taxation in the hands of the assessee company, we are afraid that the said unsubstantiated claim of the Ld. AR which is devoid and bereft of any supporting evidence cannot be summarily accepted on the very face of it. We, thus, in terms of our aforesaid observations finding no infirmity in the view taken by the CIT(Appeals), uphold his order. Thus, the ground of 7 Sun & Sun Cold & Trade Pvt. Ltd.Vs. ACIT, CC-1, Raipur appeal raised by the assessee is dismissed in terms of our aforesaid observations.

In the result, appeal of the assessee is dismissed in terms of our aforesaid observations.