DB Income Tax Appeal No.599/2011

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN

AT JAIPUR BENCH, JAIPUR

:::

JUDGMENT

D.B. Income Tax Appeal No.599/2011

Commissioner of Income Tax, Jaipur-II, Jaipur

Vs.

Shri Babulal Gangawal,

DATE OF JUDGMENT:

5th July 2013.

PRESENT

HON’BLE MR. JUSTICE DINESH MAHESHWARI

HON’BLE MR. JUSTICE NARENDRA KUMAR JAIN-II

Mr.R.B.Mathur ]

Mr.Akhil Simlote ] for the appellant

BY THE COURT: (Per Dinesh Maheshwari,J.)

By way of this appeal under Section 260-A of the

Income Tax Act, 1961 [‘the Act’], the revenue seeks to

question the order dated 29.10.2010 passed by the Income

Tax Appellate Tribunal, Jaipur Bench, Jaipur [‘the ITAT’] in ITA

No.184/JP/2010 relating to assessment year 2006-07 whereby

the ITAT has allowed the appeal filed by the assessee in part.

The appellant has suggested that the following

substantial questions of law do arise for consideration in this

case:-

“i) Whether in the facts and circumstances of the case, the

ITAT was justified in deleting the additions made on the

basis of excess stock found during survey u/s. 133A and

the assessee voluntarily surrendered the same for

taxation.

ii) Whether in the facts and in circumstances of the case,

the ITAT was justified in deleting addition of

Rs.81,14,716/- made on account of excess stock found

during survey on assumptions only without there being any

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corroborative evidence.

The assessee voluntarily

surrendered the excess stock found during survey u/s

133A of the I.T.Act. Inventory of stock was prepared in

presence of the son of the assessee which was accepted

by assessee himself also. No objection was made to the

stock taking or preparation of inventory at that time. The

surrender made during survey was unconditional.

Therefore, the decision of allowing relief to the assessee is

perverse on facts.”

After having heard the learned counsel for the appellant

and having examined the detailed and considered order

passed by the ITAT on 29.10.2010, we are satisfied that the

matter essentially relates to the questions of fact; and that the

ITAT has adjudicated on the issues involved in a proper and

justified manner. Hence, this appeal does not involve any

substantial question of law and does not merit admission.

Briefly put, the relevant background aspects of the

matter are that the assessee, who is engaged in trading of

different varieties of suitings and shirtings in his proprietorship

concern M/s. Babu Lal Suresh Kumar, had filed the return of

income on 31.10.2006 declaring total income of

Rs.1,84,84,740/-. A survey was, however, conducted under

Section 133A of the Act at the business premises of the

assessee on 13.07.2005. The stock found during the course

of survey was inventorised at the different business premises

in the presence of son of assessee and other employees. It

had been the assertion of the department that the total

physical stock of cloth found at the premises was valued at

Rs.4,14,14,815/- whereas the assessee worked out the book

stock as on the date of survey at Rs.1,15,51,248/-. Thus, an

excess stock worth Rs.2,98,63,567/- was allegedly found at

the premises. A post dated cheque in the sum of

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Rs.1,00,00,000/- against the advance tax liability on the

excess stock found was also given by the assessee. However,

while filing his return of income, the assessee offered the value

of excess stock only at Rs.1,58,55,092/-, which was short by a

sum of Rs.1,40,08,475/- from the alleged value of excess

stock found at the survey i.e., Rs.2,98,63,567/-. As regards

this difference, the assessee stated that there had been

several discrepancies like arithmetical errors, duplication,

wrong measurement, rate differences etc. in the inventory

prepared by the department. The assessee quantified the

discrepancies in his expl