Appellant M/S Anurag Sales (Assessee v. Resoondent : (Revenue

^ IN THE HON'BLE HIGH COURT OF JUDICATUREFOR CHHATTISGARH AT BILASPURTax Case No.5a2-0 UAppellantM/s. Anurag Sales, Dada Badi"(Assessee)JawaharNagarWard, M.G......^^^Road, Raipur(C.G.)..^••"""^.^^T'\^^^«->^"»»lVe^^•y^^^'-'"RespondentIncome Tax Officer,^Revenue)Circle 1(2), Raipur(C.G.)Memo of Appeal under sectLpn 260-A^Q^f theIncome Tax Act 1961 HIGH COURT OF CHHATTISGARH AT BILASPUR CORAM:HON'BLE SHRI YATINDRA SINGH, C.J.HON'BLE SHRI R.S. SHARMA, J. Tax Case No.03 of 201 1 AppellantM/s Anurag Sales(Assessee)VERSUS Resoondent :(Revenue) Income Tax Officer Income Tax Appeal under Section 260-A of Income Tax Act. 1961 Appearance: Shri Shashank Dubey, Senior counsel with Shri AnandMohan Tiwari, counsel for the AppellantShri Anand Dadaria, counsel for the Respondent. JUDGEMENT(29thJuly,2013) 1. This is a tax appeal against the order dated 14.07.2010 passed by theIncome Tax Appellate Tribunal, Bilaspur Bench, Bilaspur (the Tribunal) inthe appeal filed by M/s. Anurag Sales (the Assessee) in respect of theAssessment Year (AY) 2006-07. THE FACTS 2. The Assessee filed his return under the Income Tax Act (the Act) on31.10.2006.The Assessing Officer (the AO) issued a notice to theAssessee on 12.10.2007 under section 143(2) of the Act to come andexplain the certain points in the accounts. 3. The AO was changed and thereafter another notice was issued to theAssessee on 24.11.2008 to appear and explain the points.Thereafter,the AO by order dated 26.12.2008 enhanced the income by makingaddition of of ^26,45,032/- as unexplained investment. 4. Aggrieved by the aforesaid order, the Assessee filed an appeal beforethe Commissioner of the Income Tax (Appeals) (the CIT-A).The CIT-Apartly allowed the appeal on 06.10.2009 and restricted the addition to^13,13,014/-. 5. Aggrieved by the aforesaid order, the Assessee filed an appeal beforethe Tribunal.It was dismissed on 14.07.2010.Hence, the presentappeal. THE DECISION 6. We have heard counsel for the parties. 7. This appeal was admitted on 07.06.2011 on the following substantialquestions of law: *(i) Whether the proceedings drawnand assessmentmade by service of notice under Section 143(2) of theIncome Tax Act 1961, after prescribed period as perproviso to sub clause (ii) of clause (2) was valid?(ii)Whether the finding of the assessing officer as alsothe appellate authority regarding difference in stock wasperverse and contrary to the facts and material availableon record?' 1stPoint: 8.The first point was not raised before any authorities below.It hasbeen raised for the first time before this court.However, the counsel forthe Assessee submits that: (i)The question relates to the jurisdiction and it could be raised atany time;any time; (ii)The notice under section 143(2) of the Act could be issued within12 months from the date offiling ofthe return;12 months from the date offiling ofthe return; (iii)The notice dated 24.11 .2008 was beyond 12 months from the dateOffiling ofthe return, namely, 31.10.2006 and as such the noticewasillegal.Offiling ofthe return, namely, 31.10.2006 and as such the noticewasillegal. The counsel for the Income Tax Department (the Department) submitsthat the invalidity of the notice cannot be raised for the first time beforethis court. f"€ ^..-I?'. ¥te?^%^ •^••^^ 1j^^ 9.It is not necessary for us to deal the first submission raised by thecounsel for the Assessee or the submission of the counsel for theDepartment as on merits the first point is to be decided againsttheAssessee. 10. The first notice was issued on 12.10.2007, within 12 months from thedate of filing of the return. The subsequent notice was merely a notice toappear on a particular date. As the first notice was within time, it cannotbe said to be invalid. 2"d Point: 11.The Assessee does business of purchasing and selling of iron andsteel.It has also hypothecated the stock of iron and steel items withPunjab National Bank, Raipur (the Bank). f"€ ^..-I?'. ¥te?^%^ •^••^^ 1j^^ 9.It is not necessary for us to deal the first submission raised by thecounsel for the Assessee or the submission of the counsel for theDepartment as on merits the first point is to be decided againsttheAssessee. 10. The first notice was issued on 12.10.2007, within 12 months from thedate of filing of the return. The subsequent notice was merely a notice toappear on a particular date. As the first notice was within time, it cannotbe said to be invalid. 2"d Point: 11.The Assessee does business of purchasing and selling of iron andsteel.It has also hypothecated the stock of iron and steel items withPunjab National Bank, Raipur (the Bank). 12.The AO called for the information from the Bank and the Bank hadinformedthattheAssesseehadshowedtheclosingstockat^2,62,11,000/-, whereas in the audit report the closing stock was shownto be ^2,35,65,968/-.It is for this reason, that the AO had added thedifference of ^26,45,032/- as unexplained amount. 13.The CIT-A did not agree with the method adopted by the AO.Itconsidered the amount of quantity shown in the books of the[Assessee]as well as the quantity shown to the Bank.As the more quantity wasshown, so faras plate was concerned, ittook that excess of 49.16MT intoaccount. 14.The CiT-A took this excess quantity and after multiplying itwith thevalue of plates per MT at ^26,709/- per tonne, restricted the addition to^13,13,014/-. This calculation was upheld by the Tribunal. 15. The counsel for the Assessee submits that: In respect of the plates the excess quantity by 49.16 MT wasshown, but in respect of other items of iron and steel, the lesserquantity[was][ shown][ to][ the][ Bank;]shown, but in respect of other items of iron and steel, the lesserquantity[was][ shown][ to][ the][ Bank;] nimmi ^ The total quantity shown to the Bank was 951 MT, whereas in thebooks was shown to be 953.540MT;books was shown to be 953.540MT; The quantity shown in the books was more than the quantityshown to the Bank;shown to the Bank; The unexplained amount cannot be more, but could be less thanthe one shown in the Bank.the one shown in the Bank. 16.It is not disputed by the Assessee that there was difference in thequantity as well as price shown to the Bank and submitted in theaccounts. 17. The Assessee does not deal with one item ofthe iron and steel, but itdeals with the five different items. The submission of the counsel for theAssessee would have merit if the price of every item was one and thesame. But there is nothing on the record to that it was the same. 18. In the above-mentioned facts scenario, if the Tribunal and the CIT-A,the two authorities below, taken the access amount of plates asunexplained and added its value as an unexplained investment then itcannot be said that this finding was perverse. 19.Both substantial question of law are decided against the Assesseeand in favour of the Department.The tax appeal has no merit.It isdismissed.J^.__ Sd/-R.S. SharmaJudge Sd/-Chief Justice