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TMI Blog2015 (6) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... that the ld. Counsel for the assessee Shri K.C. Moondra and his son Shri Mukul Moondra are liable for suitable proceedings for their professional misconduct, misbehavior, wasting the time of court and unlawfully attempting to interfere in the process of judicial dispensation. Considering all the facts, circumstances and material on record by invoking rule 32A of the ITAT Rules we hold that Shri K.C, Moondra and Shri Mukul Moondra are liable for levy of costs as prescribed by said rule 32A. Consequently, we impose cost of ₹ 25,000/- on Shri K.C. Moondra and ₹ 10,000/- on Shri Mukul Moondra for their delinquencies as mentioned above. Separate proposal under Contempt of Court Act will be duly forwarded to Hon’ble Rajasthan High Court.The cost is recoverable u/r 32A(2) of the ITAT Rules and shall be deposited in the ‘Prime Minister Relief Fund. Copy of this order to be sent by registry to Institute of Chartered Accountants of India to take appropriate disciplinary action against them in terms of ICAI rules and guidelines. Matter of main appeal - Right from the time of survey and thereafter appellant and his CA Shri K.C. Mundra did not cooperate with the department in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en calculated by both the authorities judiciously. Therefore, we do not find any reason to intervene in the order of the ld CIT(A). According we uphold the order of the ld CIT(A). The assessee submitted a list of closing stock during the assessment proceedings at ₹ 2,54,98,772.93 and physical stock during the course of survey was found at ₹ 1,41,16,603/-. There was a shortage in stock at ₹ 1,13,82,169/-. The assessee has shown G.P. rate in immediate preceding year @ 16.22% on the basis of this GP rate, the total GP addition was made by the Assessing Officer and confirmed by the ld CIT(A) had ₹ 18,46,187/- is justified. There was a discrepancy during the course of survey on the basis of stock inventory prepared physically as well as stock position on the basis of books of account. Therefore, the Assessing Officer rightly rejected the book result U/s 145(3) of the Act. We do not find any reason to interfere with the order of the ld CIT(A). Accordingly, grounds No. 2,3,4 and 6 of the appeal are dismissed. The Assessing Officer had afforded opportunity to the assessee to explain the reason for decline in G.P. rate compared to preceding years. He had not gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld Assessing Officer is valid. This ground of appeal is dismissed. - Decided against the assessee. - ITA No. 401/JP/2012 - - - Dated:- 27-5-2015 - Shri R. P. Tolani, JM And Shri T. R. Meena, AM,JJ. For the Petitioner : Shri K C Moondra FCA, Shri Mukul Moondra --Adjournment rejected For the Respondent : Shri Rajesh Ojha, JCIT ORDER Per T. R. Meena, AM This is an appeal filed by the assessee against the order of the ld. CIT(A), Ajmer dated 13-03-2012 for the assessment year 2008-09. 2. Brief facts of the case are that this appeal of the assessee earlier dismissed by the ITAT vide order Dtd. 16-09-2014. Thereafter the assessee vide application dated 27-10-2014(received in this office on 30-10-2014) in Miscellaneous Application No. 32/JP/2014 prayed for showing leniency and recalling the original order. The present bench after hearing Shri K C Moondra FCA, in the interest of justice, vide order dated 26-02-2015 recalled the order of dismissal of appeal and restored the original appeal for hearing. This clearly indicates that this ITAT Bench was rather benevolent to Mr. Moondra and had no prejudice or bias whatsoever against the assessee or his coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ultimate sufferer of his counsel s misjudgment about how to conduct an appeal. Extending a gesture of equity, good conscience and fair play bench brought to his notice this grave omission, which he realized and voluntarily undertook to file a comprehensive affidavit. This again shows that bench was helpful to assessee and its counsel and not hostile to them in any manner. 2.5 On 29-04-2015, i.e. final date of hearing, his son Shri Mukul Moondra claiming to be an ACA (Chartered Accountant) who as not even in prescribed dress code as provided under Rule 17A of Income Tax Rules, appeared with an adjournment application mentioning as under:- Above said appeal is fixed for hearing for 29-04-2015 but on 28-04-2015 and 29-04-2015, under signed A/R has to attend the marriage in close relation and therefore, undersigned A/R will be unable to attend the hearing on 29-04-2015. 2.6 This adjournment application was found to be very inappropriate as it was bench was bound by its earlier order i.e. 4-3-2015 directing the hearing of 29-4-15 as final chance, with overriding direction, giving adjournment on such a flimsy excuse will amount to mockery of our own judicial order which was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al position, corruption, insulting him and son: colluding with retired income tax officers to harm his client so on and so forth. The severity of accusations and fury emerging from their language is highly derogatory, defamatory and contemptuous, sent with a scheme and clear intention to intimidate judicial officers to desist from passing an unfavorable order. The bench was taken aback at their venomous contents and decided to take suitable action on such baseless delinquent acts. 3. Without waiting for the order ld. Counsels prejudged the issues, though that bench may pass an adverse order; in order to salvage his professional interest to willy nilly win the case, by a hideous scheme he sent letter Dtd. 2-5-15 to Hon ble President ITAT and Hon ble Law Secretary Govt. of India and Asst. Registrar Jaipur making wild accusations of all sorts like corruption, collusion, insulting, bias, prejudice and what not. These contemptuous letters speak by themselves, frivolity of language, distorted contents and apparent self contradictory contents of his letter demonstrate that it is a crude attempt to influence independent judgment process for petty professional ends. 3.1 It shall be no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t bench was impartial and fair to the ld. Counsels and assessee. There is nothing to even remotely suggest any reason on the part of bench to show partiality, prejudice, bias or intention to insult Mr. K C Mundra or his son who are unknown to us as they come from a far away place Sumerpur and are rarely seen in the ITAT proceedings. They were treated with deserving dignity by offering help and guidance in open court proceedings. 3.5 Perhaps they are enraged on their own professional inaptitude which became visible in open court proceedings, it requires selfintrospection and hard preparation of appeal; instead they have misdirected their self fury on the bench indiscriminately. Their own professional infirmities can be improved from their side by mending their unprofessional attitude. They cannot score brownie points by telling the world that they can get desired orders by threatening to harm judicial officers and their delinquent conduct is justified. 3.6 Mr. K C Moondra s misadventure doesn t stop here, camouflaging under the self proclaimed virtue of an RTI activist, motivated to bully the judicial officers, he deliberately filed various RTI applications asking for abou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondra have not mentioned their ICAI registration no. Making their power of attorney again defective, inadmissible and in violation of ICAI guidelines. 4. Under these facts and circumstances, we find that the ld. Counsel for the assessee Shri K.C. Moondra and his son Shri Mukul Moondra are liable for suitable proceedings for their professional misconduct, misbehavior, wasting the time of court and unlawfully attempting to interfere in the process of judicial dispensation. 4.1 Considering all the facts, circumstances and material on record by invoking rule 32A of the ITAT Rules we hold that Shri K.C, Moondra and Shri Mukul Moondra are liable for levy of costs as prescribed by said rule 32A. Consequently, we impose cost of ₹ 25,000/- on Shri K.C. Moondra and ₹ 10,000/- on Shri Mukul Moondra for their delinquencies as mentioned above. Separate proposal under Contempt of Court Act will be duly forwarded to Hon ble Rajasthan High Court. 4.2 The cost is recoverable u/r 32A(2) of the ITAT Rules and shall be deposited in the Prime Minister Relief Fund. Copy of this order to be sent by registry to Institute of Chartered Accountants of India to take appropriate disciplin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computerized stock inventory as on 18/09/2007 is a creation of I.T. Officials and same is totally self-crated, unlawful, arbitrary and fabricated just for harassment of appellant. 5. Ld. Commissioner of Income Tax (Appeals) erred in law in confirming the trading addition of ₹ 16,53,869/- by creating an artificial fault of appellant and in absence of any defect in the computerized stock records of appellant. In fact, Ld. CIT(A) also erred in law in confirming by making comparison with an unnecessary and incomplete manual stock register for some items (which was required by any lawful provision) with the complete computerized stock register and in absence of any discrepancy between both the stock records except incompleteness of manual stock register of few items which was manually maintained by production section of the appellant s factory. 6. Ld. Commissioner of Income Tax (Appeals) erred in law in confirming the trading addition on account just for creating high-pitched demand ignoring the fact that the manual stock register is maintained by the production section of appellant for few items and that too was incomplete and stock of goods (work in progress) and stock on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alongwith Shri Rajendra Mundra brother of director of the assessee attended the proceeding and filed submission vide letter dated 05/10/2010 alongwith details. The Assessing Officer as per letter dated 19/10/2010 asked to file further information from the assessee and case was fixed for 26/10/2010. As the Assessing Officer observed that in response to above letter, Shri K.C. Mundra, AR of the assessee attended the proceeding time to time and filed details. Produced books of accounts, which were examined on text checked basis and the case was discussed with him. During the course of survey operation, following books/Papers were found and impounded, the details are as under:- S. No. Particulars F.Y. Remarks 1 Stock Register 2006-07 Not pertain to relevant F.Y. 2. Stock Register 2007-08 Checked and verified 3. Log Register 2006-07 Not pertain to relevant F.Y. 4. Purchase Sales Register 2007-08 Checked and verified 5. Tax Audit Reports 2004-05 Not pertain to rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of M/s Altayyor Est. for trading contracting, Saudi Arabia 2007-08 Checked and verified 28. File of M/s Khifaf trading Ext. Damman, Saudi Arabia 2007-08 Checked and verified 29. M/s Al Hezam Intl. trading Contracting, Est. 2007-08 Checked and verified 30. Consignment bill book S.No. 287 to 320 2005-06 2006-07 Not pertain to relevant F.Y. 31. Bonus File 97-98 to 06- 07 2006-07 Not pertain to relevant F.Y. 32. File Containing PF yearly returns (96-97 to 2006-07) ----- Workers registers having entered 56 workers 33. Export file F.Y. 2007- 08 ------- Record of yarn export verified 34. M/s Khifaf Trading Est. Damman, Saudi Arabia 2007-08 Checked and Verified 35. C-form D-form issue register F.Y. 2003-04, 04-05 and 2005-06 2003-04 to 2005-06 Not pertain to relevant F.Y. 36 Muster Roll Register w.e.f. 01/4/2007 2007-08 Checked and Verified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inventory of S.No. 10,12,13,17,19,22 and 23 of items pertain to M/s Mundra Co. as reported by survey team (on record). The photocopy of above inventory had already been taken by the assessee and during the course of assessment proceedings after applying the rate and calculating the value of the items the value of total inventory produced before the undersigned having the total amount of the stock found on the date of survey was 2,26,167 kg. amounting to ₹ 1,41,16,603/- (Value calculated by the assessee). (b) The stock found in stock register impounded at the time of survey having the stock of total weight 2,23,274 kg. calculated at the rate of 50.66 (Average) declared by the assessee during submission calculated and value of stock comes to ₹ 1,13,11,060/-. The details of quantity of stock mentioned in the stock register impounded are as under:- Stock position as per stock register found in the premises of Mundra Woolen Mills, Kekri during the survey. S. No. Date Stock Page No. of the stock register Particulars 1. 17.09.2007 95287.04 6 Indian Wool 2. 17.09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usion of inventory of stock was not asked. The ld Assessing Officer had reproduced the statement U/s 133A of the Act as under:-- The Assessing Officer held that during the course of survey, statement of Shri Shivratan Mundra was recorded and signed by him. Copy of statement was provided vide ordersheet entry dated 22/10/2007 and 25/10/2007. The ordersheet entry was as under:- 22/10/2007 Sh. Shivratan Mundra Director of the company alongwith Sh. K.C. Mundra FCA/AR present inspection of the documents allowed and copy of documents/statements given as desire. Inspection done and Sd/- Copies as stated above (Ramesh Singhal) Received Signature of ITO Sd/- Signature of assessee Sh. Shivratan Mundra 25/10/2007 Photocopy of all impounded registers/files/books as in order of impounding dated 20/10/2007 has been provided/supplied. Sd/- (Ramesh Singhal) Signature of ITO Sd/- Aashutosh 25-10-2007 5.4 The assessee through his AR vide letter dated 06/12/2010 had explained the discrepancy in stock at the time of survey that all books of accounts are being produced for verification with impounded material and so far as reconciliation of stoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome of the assessee and penalty proceeding U/s 271(1)(c) of the Act had been initiated for furnishing inaccurate particulars of income. The Assessing Officer further observed that the assessee was running business of purchase and sale of woolen Yarn raw wool, woolen yarn and manufacturing of carpet woolen yarn. The assessee has disclosed the comparison of GP ratio of 3 years are as under:- Particulars /A.Y. 2006-07 2007-08 2008-09 Sales 70468340 85479801 76823116 Gross profit 11388197 13871684 10806840 % of G.P. 16.16% 16.22% 14.08% There was decline in G.P. rate, the assessee s explanation was not found tenable to the Assessing Officer, accordingly, he rejected the books U/s 145(3) of the Act. The Assessing Officer applied the G.P. rate of preceding year i.e. 16.22% on declared sale at ₹ 7,68,23,116/-, which gives G.P. at ₹ 1,24,60,709/- after reducing the gross profit declared by the assessee in return at ₹ 1,08,06,840/-. The net difference of ₹ 16,53,869/- had been added to the total i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 232147.750 Kg On this page it is further mentioned that items mentioned at Serial No. 10, 12, 13, 17, 19, 22 and 23 pertain to M/s Mundra Company. It was not possible to mention this fact by the survey team, unless the same was intimated by Shri Shiv Ratan Mundra or one of his employees. This also proves that the inventory was prepared by survey team only with the help of appellant and his people. e. No evidence has been produced before the undersigned by appellant that signature of Shri S.R. Mundra on the stock inventory is forged. This allegation of appellant is absurd and deserves rejection on the face of it. Similarly the allegation that his signature was obtained in hospital in semi conscious state is also absurd. Shri Shiv Ratan Mundra refused to sign the statement and the statement was concluded without his signature. If survey team had to obtain his signature on stock inventory in semi conscious state, there is no reason as to why his signature on statement was also not obtained. Moreover medically it is not possible for a person to put his signature in semi conscious state. f. I, therefore, hold that stock inventory was p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gineering Co. (P) Ltd. Vs. CIT, (1990) 186 ITR 383, 385 (All). c. Laxmi Saw Mill Vs. CST (1997) 104 STC 307, 308 (MP) d. Raza Textiles Ltd. Vs. CIT (1972) 86 ITR 673 (All) e. Titaghur Paper Mills Co. Ltd. Vs. State of Orissa (1981) 47 STC 240 (Orissa). f. Kishanchand Chellaram Vs. CIT (1978) 114 ITR 671 (Bom) g. Ratanlal Omprakash Vs. CIT (1981) 132 ITR 640 (Ori) h. Bharat Milk Products Vs. CIT (1981) 128 ITR 682 (All) i. CIT Vs Pareek Bros 167 ITR 344 (Pat). 6.3 The estimation of income by applying GP rate of 16.22% on total sales by A.O. is also justified on the basis of GP declared by appellant itself in the earlier year. No satisfactory reasons were given either before the A.O. or the undersigned for fall in GP during the year. Therefore, estimation of income by applying GP rate of 16.22% by A.O. is found to be in order. His action is confirmed. Trading addition of ₹ 16,53,869/- is confirmed. Ground No. 4 and 5 of the appeal are thus dismissed. For service of notice U/s 143(2) of the Act, the ld CIT(A) has held as under:- 8.2 From the perusal of records it is found that notice U/s 143(2) was duly issued in this case by the A.O. on 13.08.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Shiv Ratan Mundra. The survey party asked the appellant to provide help in stock taking for preparation of inventory of physical stock found at the premises. Shri Shiv Ratan Mundra stated that he himself will get this job done. He sent one of his employees to bring labour but nobody came back till the evening of 18.09.2007. The authorized officer started recording statement of Shri Shiv Ratan Mundra, but he left the premises in night without completing the statement. On next day i.e. 19.09.2007 Shri Shiv Ratan Mundra came at around 11.30 A.M. and again left on the pretext that he will arrange labour for stock taking. He came back in the afternoon with four labour and thereafter stock taking was started. Again he left in the night without completing his statement. On the third day i.e. 20.09.2007 he came back and stock taking was resumed which continued till the evening. During all this period Shri Shiv Ratan Mundra kept misbehaving with survey team. He used abusive and threatening language and also called his German Shepherd dog for harassment of survey team. At the time of survey books of accounts were incomplete and therefore stock as per books could not ascertained. Howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fy the cash on the date of survey and make inventories of stock and books of account found during the course of survey. As per stock register/ledger, they prepared stock position as on date of survey. The part of the survey team is deputed to verify the stock physically and prepared stock inventory with the help of staff or assessee himself. It is found that assessee was non cooperative with the survey team as he has not given statement U/s 133A and also not signed on it. From the record, it is fact that a survey took three days to complete the survey proceeding which shows that there was non-cooperation from the Director of the company. As per assessment order also, there was non-cooperation and the survey team had impounded 51 books of account, which were relevant to various assessment years, which has been reproduced by the Assessing Officer on page 2 to 4 of the assessment order but no adverse inference has been drawn by the Assessing Officer. Only discrepancy was found in the stock position on the date of survey which has been calculated by both the authorities judiciously. Therefore, we do not find any reason to intervene in the order of the ld CIT(A). According we uphold the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le. The ld CIT(A) has held that the stock inventory was signed by the Director of the assessee and was prepared with the assistance of employees of the company. Shri Shiv Ratan Mundra had left the business premises i.e. why the question regarding conclusion of inventory of stock was not asked by the survey team. However, as per answer to question No. 5 of the statement Shri Shiv Ratan Mundra was taken during the course of survey operation. The statement regarding stock is reproduced as under:- 10.2 This statement was duly signed by the Director of the company Shri Shiv Ratan Mundra. Ld. AR claimed that no copy of inventory was supplied by the survey team to the assessee but the ld CIT(A) held that as per ordersheet of Assessing Officer dated 22/10/2007 and 25/10/2007 revealed that Shri Shiv Ratan Mundra Director of the company alongwith Shri KC Mundra, CA/AR present, inspection of documents allowed and copy of documents/statement given as desired, which was signed by Shri Ramesh Singhal, who received the copy of documents, which was also signed by Shri Shiv Ratan Mundra, director of the company. On 25/10/2007, photo copy of all impounded register/file/books as in order of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee in A.Y. 2007-08. Thus, the value calculated comes to ₹ 18,46,187/- and added in the total income of the assessee. The assessee filed. Written submission before the ld CIT(A), which has been reproduced by him at page 9 to 15 of the order. 10.3. The ld CIT(A) has given his detailed finding on survey proceedings regarding the preparation of inventory of stock obtaining signature of director, therefore, this list was prepared by the IT official manually with the help of staff of assessee. The assessee submitted a list of closing stock during the assessment proceedings at ₹ 2,54,98,772.93 and physical stock during the course of survey was found at ₹ 1,41,16,603/-. There was a shortage in stock at ₹ 1,13,82,169/-. The assessee has shown G.P. rate in immediate preceding year @ 16.22% on the basis of this GP rate, the total GP addition was made by the Assessing Officer and confirmed by the ld CIT(A) had ₹ 18,46,187/- is justified. There was a discrepancy during the course of survey on the basis of stock inventory prepared physically as well as stock position on the basis of books of account. Therefore, the Assessing Officer rightly rejecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also filed submissions before the Assessing Officer vide letter dated 05/10/2010 alongwith details. Shri KC Mundra ld AR of the assessee again appeared before the Assessing Officer and filed detail and produced the books of account. This issue challenged before the ld CIT(A), who had dismissed the appeal by observing that the assessee claimed that an anonymous letter was received by him who refused to identify himself and his own words admitted that- 13.1 The ld CIT(A) found that 143(2) notice was dispatched through speed post on 18/8/2009. Therefore, he found that allegation of the appellant that notice U/s 143(2) of the Act was fabricated by the Assessing Officer is baseless and not acceptable. The appellant also had not brought any evidence regarding fabrication of notice as well as allegation made in anonymous letter. Therefore he dismissed the assessee s ground of appeal. 13.2 We have gone through the order of lower authorities. The assessee had not brought on record any evidence against the notices issued by the Assessing Officer even his objection has been considered by the Assessing Officer. The alleged anonymous complaint had no relevance with reference to servi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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