New Adarsh Industries v. Commissioner of Income-tax Amritsar and another
[Citation -2020-LL-0117-101]

Citation 2020-LL-0117-101
Appellant Name New Adarsh Industries
Respondent Name Commissioner of Income-tax Amritsar and another
Court HIGH COURT OF PUNJAB & HARYANA
Relevant Act Income-tax
Date of Order 17/01/2020
Assessment Year 1988-89
Judgment View Judgment
Keyword Tags business of manufacturing and sale • independent evidence • evidence on record • closing balance • stock register • excess stock • sales tax • unaccounted sales
Bot Summary: This appeal has been filed by the assessee under Section 260A of the Income Tax Act, 1961 against the order dated 21.2.2000 of the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar passed in Income Tax Appeal No. 849/1993 relating to Assessment year 1988-89 reversing the order of the Commissioner of Income Tax and maintaining the order of the Assessing Officer. Brief facts of the case are that the appellant was engaged in business of manufacturing and sale of conduit pipes and had filed its return of income relating to assessment year 1988-89 on 26.8.1988 disclosing an income of Rs.28,460/-. The Assessing Officer concluded that these were sales made outside the book of accounts and thereby added a sum of Rs. 2,44,242/-. The appellant filed an appeal which was allowed by the Commissioner primarily on the ground that even though this discrepancy was pointed out by the Assessing Officer yet the final sales, figures, stock and the book of accounts as on 31.3.1988 were accepted by ANURADHA 2020.01.23 17:25 I attest to the accuracy and integrity of this document ITA-115-2000 3 the Revenue authority which meant that whatever excess stock there may have been was sold during the year, was reflected in the books of accounts. Did not consider this aspect but went on to hold that the appellant had not been able to explain the discrepancies which had occurred in the value of the stock represented in the hypothication register and the stock at the premises and consequently, set aside the order of the Commissioner restoring the order of the Assessing Officer. Once the closing balance and the final books of accounts have been accepted it is clear that whatever goods were produced during the year were sold and thus the discrepancies which may existed on two days in an year would not be determinative. The appeal is allowed and the impugned order dated 21.2.2000 is set aside.


IN HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 386 ITA-115-2000 (O&M) Date of Decision : 17.1.2020 M/s. New Adarsh Industries Appellant Versus Commissioner of Income Tax Amritsar and another Respondents CORAM : HON'BLE MR.JUSTICE AJAY TEWARI : HON'BLE MR. JUSTICE AVNEESH JHINGAN Present : Mr. Alok Mittal, Advocate for appellant. Mr. Vivek Sethi, Senior Standing counsel with Mr. Vivek Issar, Jr. Standing counsel for respondents. AJAY TEWARI, J. (Oral) 1. This appeal has been filed by assessee under Section 260A of Income Tax Act, 1961 (for short 'the Act') against order dated 21.2.2000 of Income Tax Appellate Tribunal, Amritsar Bench, Amritsar passed in Income Tax Appeal No. 849 (ASR)/1993 relating to Assessment year 1988-89 reversing order of Commissioner of Income Tax (A) and maintaining order of Assessing Officer. appellant has raised following questions of law :- (a) Whether in facts and circumstances of case, orders Annexure P-1 and P-3 are legally sustainable ? (b) Whether in facts and circumstances of case, addition of Rs.2,44,242/- on account of alleged unaccounted ANURADHA 2020.01.23 17:25 I attest to accuracy and integrity of this document ITA-115-2000 (O&M) 2 for sales is legally sustainable inspite of stock as per books of account tallying with stock statement as furnished to bank ? (c) Whether in facts and circumstances of case, respondents were legally justified in making addition of Rs.2,44,242/- on account of unaccounted for sales on mere presumptions and sermises without there being any independent evidence on record to corroborate same ? (d) Whether in facts and circumstances of case, addition of Rs.2,44,242/- is legally sustainable same being based on mere presumptions and inspite of said sales having been accepted by Sales Tax Department as correct and also with their being no discrepancy in stock statement as per books of account of assessee and as per stock statement furnished to bank ? 2. Brief facts of case are that appellant was engaged in business of manufacturing and sale of conduit pipes and had filed its return of income relating to assessment year 1988-89 on 26.8.1988 disclosing income of Rs.28,460/-. Instead of accepting return notice under Section 143 (2) was issued. This was done primarily on ground that while going through hypothecation register of bank, it transpired that value of goods hypothecated to bank on two dates i.e. 10.10.1987 and 15.2.1988 were more than those reflected in stock register of appellant. Assessing Officer concluded that these were sales made outside book of accounts and thereby added sum of Rs. 2,44,242/-. appellant filed appeal which was allowed by Commissioner primarily on ground that even though this discrepancy was pointed out by Assessing Officer yet final sales, figures, stock and book of accounts as on 31.3.1988 were accepted by ANURADHA 2020.01.23 17:25 I attest to accuracy and integrity of this document ITA-115-2000 (O&M) 3 Revenue authority which meant that whatever excess stock there may have been was sold during year, was reflected in books of accounts. Tribunal however, did not consider this aspect but went on to hold that appellant had not been able to explain discrepancies which had occurred in value of stock represented in hypothication register and stock at premises and consequently, set aside order of Commissioner restoring order of Assessing Officer. Hence present appeal. 3. Learned counsel has reiterated argument which found favour with Commissioner's appeal and we also find those reasons to be more logical than decision of Tribunal. Once closing balance and final books of accounts have been accepted it is clear that whatever goods were produced during year were sold and thus discrepancies which may existed on two days in year would not be determinative. 4. Consequently, appeal is allowed and impugned order dated 21.2.2000 is set aside. 5. Since main case has been decided, pending application, if any, also stands disposed of. (AJAY TEWARI) JUDGE (AVNEESH JHINGAN) JUDGE 17.1.2020 anuradha Whether speaking/reasoned - Yes/No Whether reportable - Yes/No ANURADHA 2020.01.23 17:25 I attest to accuracy and integrity of this document New Adarsh Industries v. Commissioner of Income-tax Amritsar and another
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