1 Income-tax Appeal No. 191 of 2010 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH --- Income-tax Appeal No. 191 of 2010 Date of Decision: July 5, 2010 Rajesh Rice Mill through Rajesh Kumar its partner --- Appellant Versus C.I.T. AYYAKAR BHAWAN, ROHTAK, HARYANA --- Respondent CORAM: HON’BLE MR. JUSTICE ADARSH KUMAR GOEL HON’BLE MR. JUSTICE AJAY KUMAR MITTAL *** PRESENT: Mr. S.K. Mukhi, Advocate for the appellant. --- Ajay Kumar Mittal, J. This appeal under section 260A of the Income Tax Act, 1961, (in short “the Act”) against the order dated 24.8.2009, Annexure A-1, passed by the Income-tax Appellate Tribunal, Chandigarh Bench ‘B’ has been filed by the assessee-appellant. The appellant furnished return for the assessment year 2003-04, declaring net taxable income at Rs. 1,17,390/-. The return came to be processed under Section 143(1). The proceedings under Section 147 were initiated by issuing notice under Section 148 on 31.5.2005. During those proceedings, it transpired that on inspection made by the Market Committee, Narwana on 22.11.2002, an excess stock of paddy weighing 196 quintals worth Rs. 1,13,876/- was 2 Income-tax Appeal No. 191 of 2010 detected on which market fee of Rs.2,278/- was charged. The assessing officer, thus, held the appellant guilty of concealment of income and made an addition of an amount of Rs. 1,13,876/- on account of unexplained investment in purchase of paddy and Rs. 21,434/- on account of sale of bye products. The assessee challenged the order of the assessing officer passed on 11.12.2006, before the Commissioner of Income- tax (Appeals) (in short “the CIT (A)”. The appeal having been rejected by the CIT(A), vide order dated 11.3.2008, Annexure A-2, the assessee took the matter in appeal before the Income-tax Appellate Tribunal (in short “the Tribunal”). The Tribunal affirmed the view of the authorities below and dismissed the appeal vide order dated 28.11.2008, Annexure A-5. The assessee preferred a miscellaneous application against the said order which was also dismissed by the Tribunal, vide order dated 24.8.2009, Annexure P- 1. We have heard learned counsel for the appellant. The assessing officer while making addition of the amount on account of excess stock of 196 quintals of paddy recorded the following findings: “The above contentions of the assessee have been considered carefully. At the request of the assessee the then Secretary, Market Committee, Sh.Raj Kumar Khatri (now retired) was summoned u/s 131 and was examined on oath on 5.9.2006 in the presence of the assessee’s counsel. The counsel was also afforded an opportunity to 3 Income-tax Appeal No. 191 of 2010 cross examine the Secretary. It was confirmed by Sh. Khatri in his statement that excess stock of 196 quintal paddy was found during inspection on 22.11.2002. Moreover, had there been no excess stock, no market fee would have been paid by the assessee and the assessee would have gone in appeal against the charging of Market fee and cess. It was categorically accepted by the assessee in its reply dated 5.10.2005 that no appeal was filed by him against realization of market fee and cess. It is also undisputed that the case was compounded at the request of the assessee. Further, when the difference in stock was pointed out by the Govt. agency, the onus was upon the assessee to prove that there was no excess stock. The assessee failed to discharge this onus. Hence, the contention of the assessee that no excess stock was found is far from truth. 2.4 So far plea of the assessee that the payment of market fee was made to buy peace and avoid litigation is concerned the same is also not acceptable. There was huge difference of 196 quintal in the stock of paddy which was confirmed by the Secretary in his statement recorded in the presence of the assessee. It was no where stated by him that the market fee was paid by the assessee just to buy peace. The counsel of the assessee and the concerned secretary, both were present before me on 5.9.2006, but none of them stated the market fee was 4 Income-tax Appeal No. 191 of 2010 paid under compulsion or force on the assessee. Had there been no excess stock, there would have been no occasion for confrontation/litigation. So much so, no appeal was filed by the assessee against realization of Market fee and composition fee. Hence, it is just an after- thought and difference in stock was actually found by the inspecting authority. 2.5 As far as contention that no physical verification of the stock was made is concerned, the same is also not maintainable. The concerned secretary stated during deposition that the difference was detected by counting the gunny bags of paddy. When asked about the method of valuation of loose stock, the officer stated that the open stock was valued by the usual method of estimation. It was further clarified by the secretary that the estimation was not arbitrary and the assessee agreed to valuation at that point of time. When asked to clarify as to whether the ‘difference’ pointed out by him in form-M represented excess stock or short stock. It was stated by Sh. Khatri that the stock was found in excess because he used to charge market fee only on excess stock. In view of these facts, there is no force in the plea that the stock was not physically verified.” The aforesaid finding was affirmed by the CIT(A) in the appeal filed by the assessee and the same was dismissed vide order dated 11.3.2008. The Tribunal also affirmed the aforesaid finding of the authorities below on appreciation of evidence. 5 Income-tax Appeal No. 191 of 2010 Learned counsel for the appellant vehemently submitted that this Court should re-appreciate evidence and then record an independent finding on the basis thereon. This exercise is not permissible in law. Learned counsel, however, could not show to this Court that there was any mis-reading or mis-appreciation of evidence on the basis of which it may be concluded that the concurrent finding of fact so recorded by the authorities below was perverse or illegal in any manner. On appreciation of evidence it has been concurrently concluded that stock of 196 quintals of paddy was in excess on the date of inspection on 22.11.2002 which was not recorded in the books of accounts. The assessee had accepted the same to be so and had paid market fee thereon. It was also recorded that the difference of stock was found after physically counting the gunny bags of paddy. The view taken by the authorities under the Act was plausible and based on consideration of evidence and the material on record. No substantial question of law is shown to have arisen for consideration of this Court. In view of the above, the appeal is dismissed. (AJAY KUMAR MITTAL) JUDGE (ADARSH KUMAR GOEL) July 5, 2010 JUDGE *rkmalik*