IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR

BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND

SHRI N.K.SAINI, ACCOUNTANT MEMBER

MA No. 70/JU/2013 [A/o ITA No. 526/JU/2010]

[A.Y: 2007-08] Radhey Shyam Chugh Vs ITO, Prop. M/s. Naren Singh Gurditta Ram Suratgarh Suragarh. PAN No. AAXPC9785F (Appellant) (Respondent)

Assessee by : Shri Suresh Ojha Shri Ashok Khatri Department by : Shri G.R. Kokani Date of Hearing : 15.07.2013 Date of Pronouncement : 30.08.2013

ORDER PER HARI OM MARATHA, J.M.

Through this Miscellaneous Application [MA], the

applicant [assessee] has sought rectification of alleged

mistakes u/s 254(2) of the Income-tax Act, 1961

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[hereinafter referred to as 'the Act', for short] in the

Tribunal Order [TO] dated 14.06.2011 passed in this case

in ITA No. 526/JU/2013 for A.Y. 2007-08.

2. We have heard the rival submissions and have

carefully perused the entire material on record. The

appellant moved an application u/s 254 of the tax Act by pointing

out mistakes in respect of the finding given by this Bench. We

rectify the mistakes one by one as submitted by the ld. A.R. as

under:

3. It was contended that ground No. 1 was not pressed. The

mistake pointed out is not a mistake apparent from the record, as

the memo of appeal is having first ground that too is a general in

nature. Hence Ground No. 1 is dismissed as being general in

nature.

4. Ground Nos. 2 and 3 are dismissed as not pressed. The

mistake is also not mistake apparent from record, the memo of

appeal is having signature for not pressing the ground No. 2nd, the

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ground No. 3rd is having direct bearing, therefore, the same was

decided.

5. The other ground of the application was that the grounds

taken in the memo of appeal were not decided. The decision

referred was also not adjudicated and the argument submitted in

writing was not appreciated. It has been submitted that non-

considering of vital piece of evidence as well as decision

tantamount to mistake apparent from record. The DR on the other

hand argued that the mistake is not mistake covered u/s 254(2) of

the Income-Tax Act and argued for dismissal of application.

6. We have considered the miscellaneous application in the light

of oral submission and found that the mistake mentioned above

could not be considered by the bench inadvertently while deciding

this case. The argument having force, the appellant took ground

and also submitted submission in writing before the bench. The

grounds taken in the memo of appeal were not disposed off. In

these circumstances the mistake is apparent from record in view of

the judgment of jurisdictional High Court decided in case of M/s

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Rajesh Chander Khatri reported in 249 ITR Page 323 and also

covered by the judgment of Hon'ble Allahabad High Court in case

CIT Vs. Keshav Fruit Mart reported in 199 ITR 771. Therefore, we

find a mistake apparent on record and decide this ground

accordingly.

7. The brief facts of the case are that survey was conducted and

certain loose papers were impounded including page No. 76 & 77

which are placed on record at page No. 59 of the paper book. The

Assessing Officer made addition on the ground of the loose paper of

76 & 77. The AR in the submission argued that this paper is a dumb

and deaf document, on the paper there is no name of the assessee.

The paper is not in the hand writing of any of the assessee the

Income-Tax Officer on the basis of this paper made addition which

is not in accordance with the law. On the paper the account so

prepared is account of labour. The language of the entries also

proves that the account is account of labour. The Income-Tax

Officer converted in the value which is not in accordance with the

law. It was also argued that paper has to be read as it is and no

adverse inference can be drawn. In nut shell it was argued that

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paper is dumb and deaf document and inference drawn thereupon is

arbitrary and against the law.

8. The assessee took ground No. 19 in the memo of appeal which

is against the addition of Rs. 4275.00, 91996.00, 35972.00, Rs.

7,65,355/-, 155550.00, 35084.00, 52294.00 and 8962.00, therefore,

we are deciding the issue addition wise.

9. The addition of Rs. 91996.00 has already been decided in the

appellate order.

10. The ground Nos. 2 and 3 relate to Rs. 4275.00 was decided in

the appeal but in fact the ground was not pressed. The relief

granted inadvertently in the appeal is hereby withdrawn and

treated as dismissed the addition of Rs. 4275.00 is confirmed.

11. Now, we are deciding the addition made on the basis of loose

paper of 76 & 77. The other addition was in respect of Rs. 35972.00

the Income-tax Officer made addition by applying GP of 4.70% on

sales of Rs. 765355.00. The grounds of appeal No. 6 seems to be

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wrongly taken being addition of Rs. 765355.00 because this was the

total sales. The Income-tax Officer treated the sales as out of the

books as dealt with in assessment order at page No. 4 and applied

the GP rate as has been declared by the assessee therefore, made

this addition, the AR of the assessee contended that the addition is

illegal based on loose paper 76 and 77. It was also argued that the

page No. 76 & 77 is nothing but a dumb and deaf document placed

on record in the paper book at page No. 59 of the paper book. It

was also contended that the paper is not at all speaking and the

entries available therein is nothing but account of labour related

partly to the assessee and partly to the others, therefore, the

inference drawn is not justified. The DR supported the order of

lower authority.

12. We have considered the rival submissions and also perused the

material placed on record, we are in agreement with the contention

of the ld. counsel for the assessee that the paper is dumb and deaf

document, therefore, the addition made on the basis thereof

cannot be sustained by following the order of the Delhi Bench in

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case of the Ashwani Kumar Vs. Income-Tax Officer reported in 39

ITD 183 therefore, the addition is deleted.

13. The next addition is in respect of Rs. 155550.00, the Income-

tax Officer made the addition of Rs. 155550.00 also considering the

loose paper No. 76 & 77. The Income-tax Officer treated the

purchases on the basis of said paper, by converting the number of

bags in Rs. and took peak of purchases amount arrived on the basis

of said paper and made addition being investment made in the

items recorded on the said paper.

14. The AR of the assessee argued that the investment added by

the Income-tax Officer was not in accordance with the law. It was

also submitted that the paper is dumb and deaf document,

therefore, no addition can be made.

15. We have considered the argument and found that the

investment cannot be made in the income of the assessee, at the

most, if at all the sales can be considered only for the purpose of

application of profit rate. The judgment of Supreme Court reported

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in 237 ITR 570 in case of Commissioner of Income-tax Vs. Smt. P.K.

Noorjahan is applicable in toto, in which it was held that

investment cannot be added in the total income therefore,

respectfully following the ration laid down in the said decision, we

hold that investment cannot be added in the income. We have

already given our finding in the earlier para that the paper is dumb

and deaf document, therefore, we delete this addition.

16. The Income-tax Officer also made the addition in the closing

stock amounting to Rs. 35084.00. The Income-tax Officer observed

that the value taken by the assessee is not correct. The Assessing

Officer made the addition by taking the value @ 1650.00 per qtl. As

per the instant sale dated 7.3.2007, the Assessing Officer also not

considered the evidence submitted by the assessee in the shape of

certificate from Krishi Mandi etc.

17. The AR of the assessee submitted that the closing stock

cannot be disturbed without any evidence. He relied on order of

this Bench in case of the Kedar Dargad. It was argued that addition

made is illegal and the certificate of Krishi Mandi cannot be

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rejected without any concrete evidence, therefore requested for

deletion the addition.

18. We have considered the argument and found force because

the certificate issued by the Krishi Upaj Mandi submitted in course

of hearing was not accepted and appreciated. The certificate issued

is having the evidential value because the Krishi Upaj Mandi is a

Semi Government Department and certificate thereof cannot be

ignored in absence of any contrary evidence, we accept the same

and addition made on this account amounting to Rs. 35084.00

deleted.

19. The Income-tax Officer also made the addition of Rs. 52294.00

on the basis of page No. 76 & 77. The paper 76 & 77 have already

been considered in earlier para and we have treated it as dumb and

deaf documents, therefore, the addition made on the basis of these

pages cannot be sustained, and deleted.

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20. The addition of Rs. 8962.00 is out of disallowances of

telephone expenses etc. The Income-tax Officer made

disallowances mentioning that the assessee is not maintaining call

register and in absence thereof it cannot be verified. We are of the

view that personal utilization cannot be denied, therefore, the

addition made on account of disallowances is sustained.

21. In the result, the M.A. of the assessee is allowed.

Order Pronounced in the Court on 30 th August, 2013.

Sd/- sd/- (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 30 th August, 2013. VL/- Copy to:

1. The Appellant 2. The Respondent 3. The CIT By order 4. The CIT(A) 5. The DR

Assistant Registrar ITAT, Jodhpur