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2015 (4) TMI 1 - ITAT LUCKNOW

2015 (4) TMI 1 - ITAT LUCKNOW - TMI - Excess stock valuation - CIT(A) deleted the addition - Held that:- a clear finding has been given by CIT(A) that physical removal from stacks and weighment in respect of approximately 1,00,000 bags of agricultural products was not possible in such time frame. He has further noted that the assessee on the very next day of survey had given an affidavit of the incorrect taking of stocks by the department and retraction as to the surrender which was done under p .....

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g uniform weight. Considering all these facts, we do not find any reason to interfere in the order of CIT(A) on this issue. - Decided against revenue.

Rejection of books of accounts - CIT(A) accepting the books reliable - Held that:- a clear finding has been given by CIT(A) that mistake pointed out by the Assessing Officer in the assessment order regarding some mistakes noted for recording of vouchers etc. cannot lead to the rejection of the entire accounts because no mistake has been .....

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R. of the Revenue and we also find that in the present year, the assessee has reported a gross profit of 12.84% as against 12.62% in assessment year 2004-05 and 11.66% in assessment year 2003- 04. Hence, it is seen that the gross profit rate reported by the assessee is also higher than the preceding two years. Considering all these facts, we are of the considered opinion that no interference is called for in the order of CIT(A) on this issue also.- Decided against revenue.

Negative ca .....

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tention of the assessee that the software program was corrupt because if the software program was not corrupt then how the sales as per this trial balance can be so much lower as compared to sales reported by the assessee as per its books of account. These findings of CIT(A) could not be controverted - Decided against revenue.

Deduction under section 80IB - CIT(A) allowed the claim - Held that:- A clear finding is given by him that this issue is covered in favour of the assessee by th .....

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addition of ₹ 19.70 lac for which advances were received in cash but he has accepted the balance amount of ₹ 35.67 lac for which advances were received through cheque. In our considered opinion, only because the advances were received in cash, it cannot be said that the advances are not genuine. The assessee has submitted all the confirmations but the Assessing Officer had not verified the same. This is also noted by him that the sales against these advances were made in subsequent .....

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t year i.e. assessment year 2005-06 and these appeals are directed against two separate orders of learned CIT(A)-II, Kanpur both dated 01/10/2010. Both the appeals were heard together and are being disposed of by way of this common order for the sake of convenience. 2. First we take up the appeal of the Revenue in the case of Kapila Krishi Udyog Ltd. i.e. I.T.A. No.751/Lkw/2010. 3. Ground No. 1 is as under: 1. That the Ld.CIT(A) has erred in law and on facts in deleting the excess stock valuatio .....

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dences were not produced by the Department and thereafter again on 25/11/2014, similar directions were given to the Revenue with last opportunity and the date was fixed for compliance on 16/12/2014. The required evidence was not produced on 16/12/2014. Again opportunity was given to the Revenue for producing those evidences and the date was fixed on 15/01/2015. On this date also, such evidences were not produced and one final last opportunity was given to the Revenue for making compliance and th .....

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able on record and gone through the orders of the authorities below. We find that this issue was decided by CIT(A) as per Para 9 & 10 of his order, which are reproduced below for the sake of ready reference:- 9. I have gone through the above submissions and the various case laws given by the appellant. From the facts stated above it is abundantly clear that physical removal from stacks and weighment in respect of approximately 1,00,000 bags of agricultural products was not possible in such t .....

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the fact that the stock shown by the department was more than the capacities of godown of the appellant. The appellant has also filed copies of orders of the sales tax department wherein the trading results of the appellant for the relevant year under appeal have been accepted as such. As such the entire stock has been taken on estimation and thus cannot be taken as an evidence against the appellant as has been held in Commissioner Of Income-tax, Delhi-I, New Delhi V. Bansal High Carbons (P.) L .....

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rder of CIT(A), it is seen that a clear finding has been given by CIT(A) that physical removal from stacks and weighment in respect of approximately 1,00,000 bags of agricultural products was not possible in such time frame. He has further noted that the assessee on the very next day of survey had given an affidavit of the incorrect taking of stocks by the department and retraction as to the surrender which was done under pressure. He has also noted that the Assessing Officer has also not commen .....

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to interfere in the order of CIT(A) on this issue. Accordingly, this ground of Revenue is rejected. 7. Ground No. 2 is as under: 2. That the Ld. Commissioner of Income-tax (A) has erred in law and on facts in accepting the books reliable, without appreciating the fact that the difference in stock was found at the time of survey. 8. Learned D. R. of the Revenue supported the assessment order. 9. We have considered his submissions. We find that this issue was decided by CIT(A) as per Para 14 of hi .....

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ding of vouchers etc. but the same by no stretch of imagination shall lead to the rejection of the entire accounts as there have been no mistakes pointed out in respect of the books of account maintained by the appellant. As no separate addition has been made on this score, I uphold that no addition is required to be made. 9.1 From the above para from the order of CIT(A), it is seen that a clear finding has been given by CIT(A) that mistake pointed out by the Assessing Officer in the assessment .....

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ing that the Assessing Officer could not point out any purchase or sales which is sham. None of these findings could be controverted by Learned D.R. of the Revenue and we also find that in the present year, the assessee has reported a gross profit of 12.84% as against 12.62% in assessment year 2004-05 and 11.66% in assessment year 2003- 04. Hence, it is seen that the gross profit rate reported by the assessee is also higher than the preceding two years. Considering all these facts, we are of the .....

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Para 18 of his order, which is reproduced below for the sake of ready reference:- 18. I have gone through the trial balance and written submissions given by the appellant. The appellant had pointed out specific reasons why this document is incorrect and cannot be relied upon. It had given such detailed explanations to the AO during the course of assessment and had requested the AO to get the same compared with the documents seized during the course of survey. The AO did not point out any defect .....

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- and the sales and purchases have been duly accepted by the AO further the balances of bank, parties, fixed assets etc. were different in that trial balance and as per regular books which have been accepted by the AO. From the facts placed it is clear that the trial was incorrect and the AO could not, in isolation, agree to all other entries except cash in hand of the trial. Either the document has to be accepted in total or rejected in total. The AO is not at a liberty to accept all other figu .....

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; 6,34,57,711/- only whereas the sales as on that date as per regular books of accounts were ₹ 17,35,36,988/-. This goes to show that there is ample force in this contention of the assessee that the software program was corrupt because if the software program was not corrupt then how the sales as per this trial balance can be so much lower as compared to sales reported by the assessee as per its books of account. These findings of CIT(A) could not be controverted by Learned D.R. of the Rev .....

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allowing the deduction under section 80IB of Income Tax Act amounting to ₹ 20,62,732/- without appreciating the fact that the production/manufacturing of cattle feed to M/s Kamdhenu Cattle Feed and M/s Kapila Krishi Udyog Ltd. (sister concern of the assessee firm) were carried out at the same premises and the manufacturing process of the assesses firm and its sister concern was found to be intermingled. 2. That the learned Commissioner of Income Tax (Appeals)- I, Kanpur as erred in law an .....

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at the order of the learned CIT(A) is erroneous in law and on facts as learned CIT(A) has ignored the ratio of the judgment passed by the Hon'ble Supreme Court in the case of Textile Machinery Ltd. vs. CIT [1977] 107 ITR 195 and CIT vs. Orient Paper Mills ltd. [1989] 176 ITR 110. The ratio of this decision is squarely applicable to the facts of the present case. 4. That the order of the Learned Commissioner of Income Tax (Appeals)-I, Kanpur is erroneous in law and on facts as he has not reli .....

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n in assessee s own case for assessment year 2003-04 and 2004-05 and copies of these Tribunal decision are available from pages 38 to 60 and 61 to 63 of the paper book. 17. We have considered his submissions. We find that this issue was decided by CIT(A) as per Para 5 of his order, which is reproduced below for the sake of ready reference:- 5. Grounds No. 1 and 2 relate to allowability of claim of the appellant in respect of section 80IB of the Act. In respect of the same the issue stands decide .....

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r of the appellant and the AO is directed to grant him deduction u/s.801B for the reasons discussed in earlier appellate orders. Hence, Grounds No. 1 and 2 of appeal are allowed. 17.1 From the above Para from the order of CIT(A), we find that a clear finding is given by him that this issue is covered in favour of the assessee by the Tribunal order in assessee s own case for assessment year 2003-04. In the paper book, the assessee has furnished a copy of the Tribunal order for assessment year 200 .....

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w and on facts in deleting the addition of ₹ 17,24,487/- made u/s 68 without appreciating the fact that the assessee failed to prove identity, credit worthiness and genuineness of the transactions. 19. Learned D. R. of the Revenue supported the assessment order. 20. We have considered his submissions. We find that this issue was decided by CIT(A) as per Para 9 of his order, which is reproduced below for the sake of ready reference:- 9. From the above, it is evident that the facts of the ca .....

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ails on this account itself Furthermore the appellant has pointed out that the AO tended to make additions due to the fact that he was of the opinion that there was a variation in the regular books of the appellant and the impounded registers. The appellant has clearly shown that except for 2 parties there is no such variation as is evident form Para 19 of the assessment order Thus here again the facts stated by the AO are contrary to his reasoning. Furthermore, I have gone through the written s .....

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ion of ₹ 19.70 lacs being advance received in cash and has accepted an amount of ₹ 35.67 lacs as advance from customers as the same was received through cheque/ drafts. This only cannot be a gauging factor for the genuineness of advance. The appellant had submitted all the confirmations in respect of the same which were not cross verified. Furthermore, sales against these advances made in the subsequent years have been accepted as genuine in A.Y.2006- 07 wherein the sales of the appe .....

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noted by CIT(A) that in all the earlier years and subsequent years, the advance of customers as reported by the assessee were accepted by the Assessing Officer in the assessment order framed u/s 143(3) of the Act. In the present year also, the Assessing Officer has accepted this practice and out of total amount of ₹ 55.37 lac, he has made addition of ₹ 19.70 lac for which advances were received in cash but he has accepted the balance amount of ₹ 35.67 lac for which advances we .....

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