9911796707
TMI Blog2012 (10) TMI 787X X X X Extracts X X X X X X X X Extracts X X X X ..... essee is doing the business of trading in mobile phones and accessories, electronics goods and recharge coupons of cellular phones etc. Assessing Officer observed that on perusal of trading account of the assessee, it is noticed that assessee has declared closing stock of Rs. 17,67,341/- whereas as per stock statement submitted with Andhra Bank stock was declared at Rs. 33,15,510/-. The Assessing Officer asked the assessee to explain why the difference of Rs. 15,48,169/- may not be made to the taxable income in view of the Hon'ble Punjab and Haryana High Court in the case of M/s B.T. Steel Ltd. vs. C.I.T. in I.T.A. No. 186 of 2004. The assessee responded as under:- "The assessee who is proprietor of Xclusif Shoppee and Dua Distribution and the nature of business is same in both the firms. The assessee is availing cash credits facility from the bank against the hypothecation of stock not against the pledging of stock, thus it is the requirement to submit stock statement for working out drawing power against the limit sanctioned by the bank. The stock statement is submitted on the estimated basis to avail the maximum credit facility. The statement submitted by the assessee is never ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and same was shown in stock statement submitted with bank just to fill this gap for availment of cash credit limit." 3.1 Considering the above, Assessing Officer observed that submission of the assessee regarding the value of his total stock being Rs. 23,40,391/- and not Rs. 17,67,341/- is accepted. Assessing Officer did not agree with the other submissions of the assessee and he proceeded to add the difference in stock submitted to the bank and that submitted in accounts before the income tax department at Rs. 9,75,119/- as income. 4. Upon assessee's appeal Ld. Commissioner of Income Tax (A) observed that the stock statement furnished as per the books and as submitted to the bank have been verified. The quantitative stock of the mobile and hand sets of 1903 is same in both the statements. In respect of the recharge coupons, a round sum figure of Rs. 10,37,052/- was taken in the stock submitted to the bank as no physical stock was taken /practical to be taken. Further, the stock was valued at dealer price for the bank whereas it was valued at cost or market price, whichever is less, for the balance sheet. The Ld. Commissioner of Income Tax (A) further observed that taking into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatement is a mere formality and the difference in valuation has neither been questioned by bank nor any physical verification of stock made by bank. He further submitted that there is no difference in quantitative detail of stock of mobile handsets which is 1903 in both statements. Ld. Counsel of the assessee further placed reliance upon the decision of the following case laws:- - C.I.T. vs. Prem Singh & Co. (1987) 163 ITR 434 (Del.) - C.I.T. vs. Santosh Box Factory (P) Ltd. [2011] (P&H). - C.I.T. vs. Sidhu Rice & Gen. Mills. {2005] (P&H). - C.I.T. vs. N. Swamy, (2002) (Mad.). - C.I.T. vs. Laxmi Engineering Industries (2009) 308 ITR 279 (Raj.), C.I.T. vs. Veerdip Rollers (P) Ltd. {2010} 323 ITR 341 (Guj.) and C.I.T. vs. Sheena Exports, I.T.A. No. 382 of 2011 (P&H). - C.I.T. vs. Khan & Sirohi Steel Rolling Mills, (2006) (All.) & C.I.T. vs. Arrow Exim Pvt. Ltd. (2010) 230 CTR 293 (Guj.). 7. We have carefully considered the submissions and perused the records. We find that in this case the quantitative detail of stock was the same as in the statement submitted to the bank as well as that maintained for finalization of accounts for income tax purposes. The difference occu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of M/s Vodafone Essar Cellular Ltd. vs. ACIT (Ker.) and the decision of the Hon'ble Delhi High Court in the case of C.I.T. vs. Idea Cellular Ltd. is that certain individuals / assesses were trying to circumvent the provisions of the law by making certain payments and coining it under a different nomenclature when for all purpose the nature of the payments carried the identical characteristics. Applying the aforementioned case it is very clear that the assessee was making these payments to dealers, as per his own submission, and not the ultimate end user customer as a payment for services rendered. It is also a clear that these sub dealers functioned for all purposes as the assessee's agent and had such a relationship with the assessee. The contention of the assessee that the judgment aforementioned related only to recharge coupons and not sale of handsets is therefore not acceptable. As the assessee has not deducted tax under section 194H of the I.T. Act 1961, in light of the provisions of section 40(a)(ia) the expenses incurred on discount amounting to Rs. 2,81,453/- is hereby disallowed and added back to the returned income of the assessee." 9. Before the Ld. Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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