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TMI Blog2018 (6) TMI 729X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness premises of the assessee were not under his ownership and merely submitting that it is not his responsibility to maintain identity of customers due to nature of business ? 3. That the order of the Ld. CIT(A) be set aside and that of the Assessing Officer be restored. 2. The Ld. Sr. DR inviting attention to the assessment order dated 27/03/2014 submitted that the assessee was subjected to a survey and the assessing officer in the scrutiny proceedings required the assessee to address the information received from ADIT(Inv.)-IV, Ludhiana vide his letter dated 20.07.2011. It was submitted that in the course of survey, 20957 boxes of apples (15kg each) were found lying in the business premises of the assessee. Thus the AO concluded that there were 3,14,355 kg. apples available with the assessee. By taking the value of appleas @ Rs. 50 per kg. i.e the minimum cost of apples at the time of survey, total value was worked out to Rs. 1,57,17,750/- which the assessee was required to explain. It was his submission that the assessee could not provide the details of parties to whom these apples belonged to neithe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I have carefully considered the facts of the case, the basis of the addition made and the arguments of the AR. The appellant firm is engaged in the business of running a cold storage. During the course of the survey operations , 20,00,957 boxes of apples, 15 kgs each, were found lying at the business premises of the assessee. The assessee was asked to furnish confirmations from the said parties which could not be filed. Therefore, by taking the value of apples @ Rs. 50/kg, the said addition was made by treating the said income as income from undisclosed sources. The addition was made by mainly by relying on the report of the investigation wing. No independent enquiry was conducted and no other material was brought on file by the Assessing Officer. The AR explained that the appellant firm charges monthly rent on fruit and Karyana and for the season for potato storage. No evidence was found either during the survey or during the assessment proceedings to prove that the appellant firm is engaged in the business of trading the said items. From the records found during the survey, no adverse evidence could be gathered to show that the appellant is engaged in trading of the said items. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... books as such and nothing adverse in the said records was confronted to the appellant at the time of the assessment proceedings. Further, during the course of the appellate proceedings, the AR produced copies of incoming receipts and outgoing which were test-checked. It is not the case of the Assessing Officer that the rent received from the storage of different items is not accounted for in the books of accounts. According to the AR, it is not possible to know the complete postal address of the persons whose goods are stored and neither is the appellant is under any legal or other obligation to know the PAN no. of these persons since the goods were carried by the rehri-walas and rickshaw-walas. The AR explained that appellant company is not legally entitled to ask for the PAN cards as per the nature and practice in trade of cold storage, the assessee charges rent only on the items to stay in the business, the assessee is concerned with the maximum storage and to earn income by rent from storage. The AR further explained that if the assessee starts enquiring about all the details of the person to bring the goods, he is bound to lose the business and the said persons will opt for o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sons who bring the items of storage. In view of the said practice in the line of business of cold storage explained by the appellant and supported by the records maintained, which has not been countered/ questioned by the Assessing Officer in the remand report, the addition could not have been made merely because the confirmations from the owners were not produced. The said evidence proves that the appellant is not the owner of the apples and there is no evidence brought on record by the Assessing Officer during the assessment to show that the appellant is actually the owner of these goods. There is nothing recorded in the assessment order to show that the Assessing Officer examined these books of accounts which were lying impounded with him. Thus, the said evidence and the supporting books of accounts have not been discussed by the Assessing Officer. The AR has made another contention that the Assessing Officer has accepted the goods and receipts of the parties who had stored other items of karyana, potatoes, vegetables etc. thus, accepting the fact that these other goods stored did not belong to the appellant. Whereas, only the ownership of boxes of apples were questioned and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the owners was not filed by the appellant but rather a case where the appellant has explained the prevalent practice in the business of the cold storage and thus shown why there is no requirement for keeping the details of the actual owners of the items, the said explanation not having been countered by the Assessing Officer in the remand report. Moreover, for the A.Y 2013-14; no addition on account of investments in any items stored was made and the Assessing Officer thus accepted that the goods stored in the cold storage do not belong to the appellant. There is no finding in the subsequent year that the appellant is investing in these items and trading in them. The AR has pleaded that on similar facts different view cannot be taken in different assessment years. The AR satisfactorily established that the apples did not belong to the appellant by explaining the prevalent practice in the business of cold storage and also on the basis of records maintained by the appellant in the form of respective registers as per the general practice in this line of business. In view of the said facts and circumstances, the Assessing Officer was not justified in making the said addition and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceipt of the rent the goods are handed over to the person who has brought these for storage and the identification is based on a " nishan" / "mark" accepted by both the parties. We find that though the Ld. Sr. DR has relied upon the assessment order however nothing has been placed on record to rebut this argument of the assessee namely that there was no legal requirement or mandate for a cold storage facility to accept perishable goods for storage only from people who had PAN card identification proofs etc or after satisfying itself completely about the real identity of the persons storing his goods. We find that the assessee has also argued that in case the assessee would start enquiring about the details of the persons who bring the goods for storage it was the assessee's apprehension that he was bound to lose business to some other Cold storage. We note that the argument that as far as the assessee is concerned the owner is virtually the person who bring the items for storage; pays the rent and takes back the goods stored is sufficient. We find that the assessee has also argued that similar modus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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