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TMI Blog2020 (10) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the order of CIT(A) without giving any cogent reasons whatsoever and without giving any finding for deciding the appeal against the appellant? (c) Whether in the facts and under the circumstances of the case, the decision of the ITAT was not perverse inasmuch as: (i) all the details were filed before the Tribunal and the same ought to have been looked into and decided the appeal; (ii) while deciding the appeal extracts of assessment order and finding of CIT(A) has been reproduced; (iii) only stating that CIT(A) has not given finding for holding in favour of appellant; (iv) detailed paper book ought to have been looked into which has not been done." 3. The appellant assessee is a HUF having a proprietary concern by the name Nirav Industries. It is engaged in the business of trading in non-traders metal working as commission agent. A survey under Section 133A of the Act, 1961 was carried out on 13th September 2000 at the business premises of the appellant assessee. During the course of survey, discrepancy of 25115 kg. of stock was worked-out. The appellant assessee submitted the explanation that the scrap material was received in two parts from M/s. Shubham Enterprise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the goods belongs to Shubam Enterprise, which is the concern situated at Bhavnagar whereas the goods are found at Jamnagar. Why the firm situated at Bhavnagar would send the goods for cutting to Jamnagar. If the goods are send from Bhavnagar to Jamnagar for cutting job work there must be fixed rate/charges of cutting otherwise how huge stock more than 10,000 Kg would have been sent to Jamnagar. 3. On verification of the copies of the bill it is clearly mentioned in the Bill "Sold to M/s. Nirav Industries, Post Khodiyar Colony, Village - Naghedi, Jamnagar". 4. The assessee could not produce transporter receipt at the time of survey as well as during the course of assessment proceedings. 5. At Bhavnagar no godown was found only open plot of land was found where no goods of brass can be stored. 6. These bills were not found at the time of survey. 7. There is no proof for any payment of octroi or any cartage charges paid for bringing the goods to Naghedi. 8. The assessee has denied the identity of the Shri Sagarmal J. Shah and the goods are claimed to be belonging to Shri Sagarmal J. Shah. 9. Shri Sagarmal J. Shah has filed revised return on 29.10.2001 i.e. after dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch could not be satisfactorily explained at the time of survey, be added as assessee's income. We do not find anything wrong in AO's asking the assessee to explain the excess stock and rather it was in the interest of natural justice in giving one more opportunity to the assessee to explain at the time of framing the final assessment. No material has been brought on record by the CIT (A) for holding that excess stock was anyhow explained by the assessee either neither during the course of survey nor during the course of assessment proceedings nor during the course of appellate proceedings before him. There is no discussion in the order of the CIT (A) as to how he reached to the conclusion that statement given during the course of survey was verified and found to be correct. 9. As per provisions of subsection 6 of section 250, the order of the CIT (A) disposing of the appeal should mandatorily state the points of determinations and decision thereon and the reasons for the decision. Therefore, while exercising the powers u/s. 251, the CIT (A) should mandatorily give reasons and justification in writing for reaching to the decision. Provisions contained under subsection 6 of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of above submissions and documents, statements placed on record, it emerges that : a) On 13/9/2000, statement of the appellant's brother Shri Satyanarayan Khatod was recorded u/s 133A and in response to that statement he stated that the goods of Pankajbhai was received for cutting and was lying at the godown. He further stated that the goods for job work were received before four days of survey and further goods were received in the morning of the date of survey. b) On the same day statement of Shri Pankajbhai was also recorded by survey party and Shri Pankajbhai confirmed the above facts. c) Shri Pankajbhai also gave the copies of bills of shubham enterprises whose goods were sent for job work. d) Statement of appellant was also recorded wherein he stated that goods of bill no 5 were lying at shed non 424/2 and goods of bill No 6 were lying at Naghedi Godown. He further stated that these goods were received for job work. e) Proof of goods lying at godown were delivered to the principal after job work were also produced in the form of bills for job work. f) Copy of confirmation charges of Job work and copy of acknowledgement of return of the principal were also pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord by the CIT(A) for holding that excess stock was explained by the assessee during the course of survey or during the course of assessment proceedings nor during the course of appellate proceedings. The onus is clearly on the assessee to prove that the goods in question belonged to M/s Shubham Enterprises and, not the assessee, which has been discharged by the assessee. The onus is on the assessee to prove the actual transportation of goods in question and also payment of octroi, etc., paid, if any for such transportation and ownership of such goods by the third party. There is no discussion in the order of the CIT(A) as to how he reached to the conclusion that the statements given during the course of survey were verified and found to be correct. No such finding was recorded by the CIT(A) regarding assessee's ownership of such goods and transportation thereof. We therefore do not agree with the findings of the CIT(A) and reverse the order of the CIT(A) and restore that of the AO." 10. Mr. B. S. Soparkar, learned advocate appearing for the appellant assessee submitted that after the matter was remanded back to the CIT(A), the assessee explained in detail each of the points r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Book filed with Hon. ITAT. d) If all evidences draw attention to the fact that the Propeller was sent only for Job Work, ownership cannot be shifted merely on the basis that Job Work rate was not pre fixed. e) It was a business decision of a businessman and in business it happens many times. In addition, it is evident that afterwards Job Work rate has been decided and paid to the assessee. Copy of the bills were produced before the learned A. O. and the same is produced at Page No.20 & 21 of Paper Book filed with Hon. ITAT. 3. On verification of the copies of the bill it is clearly mentioned in the bill "Sold to M/s.Nirav Industries, Post Khodiyar Colony, VillageNaghedi, Jamnagar." a) Copies of the bills were produced at the time of Survey. Page No.16 & 17 of Paper Book filed with Hon. ITAT. If one refer the bills, it is clearly making out that actually copies of the bills are used as Delivery Memo. "Sold to", the word highlighted is just pre printed word. b) If one reads the bill fully, it is clearly mentioned that the goods are sent for Job Work and that's why Rate and Amount column was kept empty. c) If the goods were sold to the assessee, then bill would not have pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opeller having weight of 20 Tons are of very big size and can block High Way. c) It can neither be loaded on a Truck nor can be kept in any closed godown. Open plots are used to keep these type of propellers. It can be loaded on a truck only after cutting. 6. These Bills were not found at the time of survey. a) Please refer Q 13 at page No.50 and Q 7 at Page 36 of Paper Book filed with Hon. ITAT. The bills were found/ produced at the time of Survey only. b) Please refer issue no.1 where AO has stated that bills were found at the time of survey. c) This contradicts the stand of AO. 7. The assessee has denied the identity of Shri Sagarmal J. Shah and the goods are claimed to be belonging to Sagarmal J. Shah. a) The assessee has in fact never denied the identity of Sagarmal Shah, however, he has mentioned that he was not knowing and has not met Mr. Sagarmal before. However, is it necessary for all time to meet/ know the person personally before doing business and further to do only Job Work, which involves lower amount of income and risk. Mr. Sagarmal has talked on phone with the assessee. Without prejudice the assessee has produced all information at the time of survey ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Shubham Enterprise, transportation details, copy of delivery challans received from Ms/. Shubham Enterprise by the assessee. It is, therefore, submitted that the impugned order passed by the Tribunal is a perverse order as the Tribunal failed to take into consideration the relevant factors and has taken into consideration irrelevant factors and documents in form of statements of Pankajbhai Jain and Shri Sagarmal J. Shah, proprietor of M/s. Shubham Enterprise and the Tribunal has arrived at the conclusion that the assessee was unable explain the excess stock found during the course of survey without discussing as to how on the basis of such statements, such conclusion could be arrived at by the Tribunal. Learned advocate also submitted that in the first round of litigation before the Tribunal, directions were given to the CIT(A) to give reasons and justification in writing for reaching to the decision for deletion of the addition of value of excess stock. Accordingly, the CIT(A) has given detailed reasons in paras7 and 8 of the order passed after remand. The Tribunal has not given any reason as to how the findings arrived at by the CIT(A) were not justified on the basis of materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s prior to the date of survey for job work and some of the goods received in the morning of the date of survey. Pankajbhai in his statement recorded by the Survey Party also confirmed the facts stated by Shri Satyanarayan Khatod. The statement of Sureshchandra Khatod was also recorded, wherein he stated that goods of bill no.5 were lying at Shed no.424/2 and goods of bill no.6 were lying at Naghedi godown. He also confirmed that the said goods were received for job work. By way of job work charges, the proof of goods lying at godown delivered after the job work was over were also produced in the form of bills for job work. M/s. Shubham Enterprise also issued confirmation with regard to return of the goods after the job work was over. The Assessing Officer has also recorded in the assessment order that the bill nos.5 and 6 were found at the time of survey pertaining to the goods of M/s. Shubham Enterprise received by the assessee for job work. With regard to the transportation charges, the assessee explained and submitted that it was the responsibility of the Pankajbhai to deliver the goods for job work at the door step of the appellant assessee and the bills of M/s. Shubham Enterpr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce to any evidence or material. An assessment under section 23(3) of the Act could not be made only on bare suspicion. An assessment so made without disclosing to the assessee the information supplied by the departmental representative and without giving any opportunity to the assessee to rebut the information so supplied and declining to take into consideration all materials which the assessee wanted to produce in support of his case constituted a violation of the fundamental rules of justice and called for exercise of the powers under article 136 of the Constitution. 28. The last case to which reference need be made in this context is that of Sree Meenakshi Mills, Madurai V. Commissioner of Incometax, where this court observed at page 720 : "The position that emerges on the authorities may thus be summed up : (1) When the point for determination is a pure question of law such as construction of a statute or document of title, the decision of the Tribunal is open to reference to the court under section 66(1). (2) When the point for determination is a mixed question of law and fact, while the finding of the Tribunal on the facts found is final its decision as to the legal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to arrive at such conclusion of fact after due consideration of the evidence before it as the Tribunal is a fact finding Tribunal and as such it was the duty of the Tribunal to give its finding in a manner after due consideration of every facts for and against the assessee in a manner which could clearly indicate what were the questions which arose for determination and what was evidence pro and contra in regard to each of them and what were the findings based on the evidence on record before it. In the facts of the case, it appears that the conclusion reached by the Tribunal is coloured by the irrelevant consideration ignoring the relevant documents produced by the appellant assessee, resulting into the findings based on such conjecture and surmises without reference to the material and relevant evidence and therefore, such findings of the Tribunal even though on question of fact are liable to be set aside by this Court. 24. In view of the above, we are of the opinion that the impugned order passed by the Tribunal being perverse is liable to be quashed and set aside though it is on the facts of the case. As the CIT(A) has arrived at findings of fact based on material on record, w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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