TMI Blog2017 (6) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of Employees contribution to EPF/VPF - Held that:- As the payments have been made much before the due date filing of return of income, then we do not find any reason for making any disallowance as the same is covered by the decision of Hon'ble Supreme Court in the case of CIT vs. Alom Extrusions Ltd. (2009 (11) TMI 27 - SUPREME COURT ). Thus, the second ground as raised by the Revenue is dismissed. - ITA Nos. 761& 762/Del./2014 - - - Dated:- 22-5-2017 - SHRI AMIT SHUKLA, JUDICIAL MEMBER, AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER For The Revenue : Shri Anil Kumar Sharma, Sr. DR For The Assessee : None ORDER PER AMIT SHUKLA, JUDICIAL MEMBER: The aforesaid appeals have been filed by the Revenue against the separate order of even date 6.11.2013, passed by Learned CIT(Appeals)-13, New Delhi for the quantum of assessment passed u/s 143(3) for the A.Y. 2007-08 and 2010-11. Since in both the appeals common issues are involved arising out of identical set of facts, therefore, same have been heard together are being disposed off by way of this consolidated order. 2. We will first take up the appeal for the A.Y. 2007-08, whereby the Revenue has raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admitted that no stock register is maintained items-wise, no separate stock register is maintained for perishable goods, hence the declared dosing stock is not subject to verification. Even the purchase/sales are not fully/properly vouched. In reply to adjustment made or variance found in physical verification of stock, the A.R. admitted that shortfall in stock found on the physical verification was reduced from the inventory of the closing stock. Since such quantification is not possible on the pad of the assessee which is a testimony of the fact that the inventory of closing stock furnished during the assessment proceedings was prepared on estimate basis asked to furnish details of perished/stolen stock store-wise month-wise, the A.R. neither could quantify such perished /stolen stock store-wise month-wise nor could furnish value of such stock reduced from inventory as a whole during the year. Thus it can be safely said that the closing stock in value terms is declared arbitrarily without any basis. It is worthwhile to mention here no F.i.R. registered by the assessee for the stolen stock to substantiate its claim in this regard, in view of above facts the declared trading result ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the stock registers were maintained. This aspect was duly brought to the notice of AO and was duly recorded by him in the assessment order that the stock registers are maintained by the company. c) It is submitted that inventory of opening and closing stock was furnished to the Assessing Officer. Please note that inventory of stock was physically taken and the value of stock being less on the basis of physical inventory as compared toquantitative details as per books was reduced from the value of closing stock. Theassessee company had opened 17 stores during the year in addition to 3 storesstarted in Assessment year 2006-07. The company was new in the business andaccordingly could not have effective control on the smallsmall items lying in thestores. The relevant details were as under:- a) Value of stock as per stock records b) Less Stock Adjustmentfor variances found during Stock as per verification (Taken in P L Account) Please note that the stock variance d) Maintenance of Exhaustive Stock Records on ERP System It is submitted that the assessee company has a system of maintenance of books of account and stock records on ERP System in computer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer during the assessment proceedings to produce the stock records and detailed workings of stock variance from various stores, which are produced before your goodself for verification. e) It is submitted that all the purchases and sales are duly vouched and supported with bills. The Assessing Officer has not pointed out any items of purchases and sales which is not supported with vouchers and bills. In fact the Assessing Officer has completed the assessment on the basis of the details furnished and did not require the assessee company to produce books of accounts and accordingly the Assessing Officer has rejected the books of accounts even without examining the same. e) It is submitted that the reconciliation of Sales and purchases with VAT returns were furnished to the Assessing Officer (copies enclosed) which has not been disputed by the Assessing Officer and no fault was found therein. f) It is submitted that theft and shop lifting in the departmental stores is a common practice and is prevalent not only in India but in the whole world. Your goodself will appreciate that in case there is shop lifting of items comprising of grocery items or cosm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he items by the company and stocks are transferred to the various stores run by the company across the city. No defects have been pinpointed regarding the correctness of the accounts maintained by the appellant. The books of accounts have been rejected without highlighting any specific observations/ discrepancies noted during the proceedings. It is noteworthy to mention here that survey u/s 133A of the Act was conducted on the premises of the appellant during the subsequent year and no discrepancies were noted in the stocks maintained at various stores across the city. The present year was still the initial year when 17 stores were opened by the company and 12 stores were opened between September to March 2007. This was the period of consideration. The submissions of the appellant make it clear that shortage of stock was approximately 4.26% basically on account of thefts and wastage particularly in vegetables and other perishable goods. The percentage is well within the reasonable limits. The Hon ble ITAT New Delhi in the case of the appellant for A.Y. 2009-10 on the same issue has observed as under:- We have carefully considered the submissions. We note that assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same.Lastly, it is the assessee's contention that there is no case of any incriminatingmaterial either relating to trading activity or otherwise during the course ofsurvey or assessment proceedings.Thus, we find that assessee has cogently rebutted the shortcomings noted inthe appellate order. In our considered opinion, the assessee has maintainedproper books of accounts and there is no case for invoking section 145(3) ofthe IT Act. We further find that case laws relied upon by the Ld. Departmental Representatives were with regard to rejection of books in the particular factsof the case. Hence, they are not applicable here. Therefore, we set aside theorder of the lower authorities and decide the issue in favour of the assessee. Taking into consideration the various factors, it is held that the appellant had maintained proper books of accounts and there is no case for invoking provisions of section 145(3) of the Act. The adhoc addition of Rs. l,00,00,000/-made by the Assessing officer is therefore, deleted. 7. Since, none appeared on behalf of respondent assessee, therefore, we deciding the appeal after hearing the Ld. DR and on the basis of material placed on r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed upon the decision of Hon'ble Supreme Court in the case of CIT vs. Alom Extrusions Ltd. reported in 319 ITR 306. 11. After considering the finding of the Learned CIT(Appeals) that the payments have been made much before the due date filing of return of income, then we do not find any reason for making any disallowance as the same is covered by the decision of Hon'ble Supreme Court in the case of CIT vs. Alom Extrusions Ltd. (supra). Thus, the second ground as raised by the Revenue is dismissed. 12. Now we take up the appeal for the A.Y. 2010-11 wherein the revenue has raised following grounds which reads as under:- 1. On the facts and circumstances of the case and in law, the CIT (A) has erred in deleting the addition of ₹ 2,00,00,000/- made after rejecting the books of accounts u/s 145(3) of the Act. 2. The appellant craves leave to add, alter or amend any ground of appeal raised above at the time of hearing. 13. Admittedly this ground is similar to the ground raised by the revenue in the A.Y. 2007-08 and also the reasoning given by the Assessing Officer as well as the Learned CIT(Appeals) are exactly the same. Therefore,our finding give ..... X X X X Extracts X X X X X X X X Extracts X X X X
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