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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI RAVISH SOOD & SHRI JAMLAPPA D BATTULL
आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the CIT (Appeals)-II, Raipur, dated 01.06.2017, which in turn arises from the order passed by the A.O under Sec.143(3) of the Income-tax Act, 1961 (in short ‘the Act’) dated 31.03.2014 for assessment year 2011-12. Before us the assessee has assailed the impugned order on the following grounds of appeal:
“1. In the facts and circumstances of the case, the Ld. Commissioner of Income tax (Appeals) has erred in making disallowance of Rs.13,75,203/- u/s.69C on account of purchase of raw material and stores. 2. The impugned appeal order is bad in law and on facts. 3. The appellant reserves the right to add, alter, amend, omit all or any of the grounds of appeal with permission of the Hon’ble appellate authority.”
Briefly stated, survey action u/s.133A of the Act was conducted at the business premises of the assessee firm on 20.03.2011. Excess stock of Rs.28,49,800/- was, inter alia, found in the course of survey
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proceedings. As the assessee could not explain the source of acquiring the aforesaid excess stock, therefore, the same was offered for tax. Subsequently, the assessee firm filed its return of income for assessment year 2011-12 on 29.09.2011, declaring a loss of Rs. (-) 11,16,579/-. On verification of the Profit & loss account, it was observed by the Assessing Officer that the assessee had disclosed the entire amount of surrendered income under the head ‘Other income’. On a conjoint perusal of the Profit & loss account provided by the assessee to the survey team for the period 01.04.2010 to 29.03.2011 and the audited Profit & loss account, it was, inter alia, observed by the Assessing Officer that there were differences in the trading account. Observing that the assessee had not carried out any trade between 30.03.2011 to 31.03.2011, the Assessing Officer called upon it to explain the aforesaid difference. In reply, the assessee filed a reconciliation which revealed entries of purchase of raw materials and stores during the period 29.03.2011 to 31.03.2011 amounting to Rs. 12,55,838/- and Rs.1,19,365/-, respectively. As the assesee had not carried out purchases or sales during the period 29.03.2011 to
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31.03.2011, therefore, the Assessing Officer called upon it to substantiate its claim of having made the purchases in question on the basis of supporting documentary evidence. In reply, it was claimed by the assessee that though the purchases in question were made earlier, i.e, prior to the survey proceedings but the same had remained omitted to be entered in books of account. It was also claimed by the assessee that the entries as regards the purchases in question were made at the relevant point in the stock register. In sum and substance, it was the claim of the assessee that though the purchases in question were made prior to the date of survey i.e. 29.03.2011 and were duly entered in the stock register, but the same had inadvertently remained omitted to debited in the purchase account. In order to verify the veracity of its aforesaid claim, the Assessing Officer directed the assessee to produce the so called stock register wherein entries qua the incoming stock of raw materials and stores were made at the time of receipt of goods. However, the assessee despite specific directions by the Assessing Officer failed to produce the stock register.
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Observing, that the during the course of survey proceedings books of account and relevant documents were duly verified and inventorised, the Assessing Officer was of the view that in case any entry had remained omitted to be recorded in the books of account, then, the assessee ought to have informed the said fact, which however was not done at the relevant point of time. Backed by the aforesaid facts, the Assessing Officer was of the view that the concocted story projected by the assessee was nothing but an attempt on its part to inflate the expenses in the grab of bogus entries of purchases of raw materials and stores aggregating to Rs.13,75,203/-. Accordingly, the Assessing Officer disallowed the assessee’s claim for deduction of expenses incurred towards purchase of raw materials and stores of Rs.13,75,203/-(supra) and added the same to its total income under section 69C of the Act.
On appeal, the CIT(Appeals) concurred with the view taken by the Assessing Officer and dismissed the appeal.
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The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. As the assessee appellant despite having been intimated about the hearing of appeal had failed to put up an appearance before us, therefore, we are constrained to proceed with and dispose off the appeal as per Rule 24 of the Income Tax Appellate Tribunal Rules, 1963, i.e, after hearing the respondent revenue and perusing the orders of the lower authorities.
We have heard the Ld. Departmental Representative (for short ‘DR’) and perused the orders of the lower authorities. After having given a thoughtful consideration to the issue in hand, we find that it is an admitted fact that the assessee’s claim of having made the aforesaid two purchases transactions aggregating to Rs.13,75,203/- ( Rs.12,55,830/- (+) Rs.1,19,365/-) could not be substantiated by it in the course of proceedings before the lower authorities. In our considered view, now when it was claimed by the assessee that it had purchased goods prior to the date of survey on 29.03.2011 and had though entered the same in the stock register, but inadvertently omitted to record the same in the purchase account, then, the onus
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was cast upon it to substantiate its aforesaid claim on the basis of irrefutable documentary evidence. As observed by us herein above, the assessee despite specific directions by the Assessing Officer to produce the stock register wherein the receipt of goods in question were entered by him, had however, failed to do the needful. Backed by the aforesaid facts, we concur with the view taken by the lower authorities that the assessee in the grab of its claim of having made purchases of Rs.13,75,203/-, had in fact tried to neutralize the amount of undisclosed income that was surrendered by it in the course of the survey proceedings. Considering the totality of facts involved in the case before us, we find no infirmity in the view taken by the CIT(Appeals) who had on the basis of well-reasoned order sustained the addition made by the Assessing Officer. We, thus, in terms of our aforesaid observations uphold the order of the CIT(Appeals) qua sustaining of the addition of Rs.13,75,203/- made by the Assessing Officer. The Ground of appeal No.1 raised by the assessee is dismissed in terms of our aforesaid observations.
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Grounds of appeal No (s)2 & 3 being general in nature are dismissed as not pressed.
In the result, appeal of the assessee is dismissed in terms of our aforesaid observations. Order pronounced in open Court on 30th day of March 2022.
Sd/- Sd/- JAMLAPPA D BATTULL RAVISH SOOD (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायपुर/ RAIPUR ; �दनांक / Dated : 30th March, 2022 SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant. 2. ��यथ� / The Respondent. 3. The CIT(Appeals)-II, Raipur (C.G) 4. The Pr. CIT-II, Raipur (C.G) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण,रायपुरब�च, रायपुर / DR, ITAT, Raipur Bench, Raipur. गाड� फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER,
// True Copy // �नजी स�चव / Private Secretary आयकर अपील�य अ�धकरण, रायपुर / ITAT, Raipur.
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Date 1 Draft dictated on 15.03.2022 Sr.PS/PS 2 Draft placed before author 20.03.2022 Sr.PS/PS 3 Draft proposed and placed JM/AM before the second Member 4 Draft discussed/approved by AM/JM second Member 5 Approved draft comes to the Sr.PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order