DCIT, New Delhi V. Sh. Pawan Kumar Sharma, New Delhi

ITA 1033/DEL/2010

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0026 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 23-04-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 09-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK WADEKAR
• Keywords: Document seized; Documents seized

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH F FF F : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA, VICE , VICE , VICE , VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI INTURI RAMA RAO INTURI RAMA RAO INTURI RAMA RAO INTURI RAMA RAO, , , , ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 1033/DEL/2010 1033/DEL/2010 1033/DEL/2010 1033/DEL/2010 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2004 2004 2004 2004 - -- - 05 0505 05 DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -09, 09, 09, 09, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. SHRI PAWAN KUMAR SHARMA, SHRI PAWAN KUMAR SHARMA, SHRI PAWAN KUMAR SHARMA, SHRI PAWAN KUMAR SHARMA, C CC C- -- -9/62, YAMUNA VIHAR, 9/62, YAMUNA VIHAR, 9/62, YAMUNA VIHAR, 9/62, YAMUNA VIHAR, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. PAN : ALWPS4681A. PAN : ALWPS4681A. PAN : ALWPS4681A. PAN : ALWPS4681A. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VIVEK WADEKAR, CIT - DR. RESPONDENT BY : NONE. DATE OF HEARING : 23.04.2015 23.04.2015 23.04.2015 23.04.2015 DATE OF PRONOUNCEMENT : 06.05.2015 06.05.2015 06.05.2015 06.05.2015 ORDER ORDER ORDER ORDER PER G.C. GUPTA PER G.C. GUPTA PER G.C. GUPTA PER G.C. GUPTA, VP , VP , VP , VP : :: : THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEAR 200 4-05 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-II, NEW DELHI DATED 18 TH DECEMBER, 2009. 2. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE- RESPONDENT NOR ANY APPLICATION FOR ADJOURNMENT OF TH E CASE WAS FILED BY THE ASSESSEE. IN THESE FACTS, WE PROCEED TO DECIDE TH IS APPEAL EX PARTE QUA THE ASSESSEE-RESPONDENT ON MERITS AFTER HEARING THE ARGUMENTS OF LEARNED DR. 3. THE ONLY GROUND OF APPEAL OF THE REVENUE IS AS UND ER:- 1(A) ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THIS CASE THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS.7,78,793/- LEVIED U/S 271(1)(C) AS THE QUANTUM ADDI TION ITA-1033/DEL/2010 2 WAS MADE BY THE ASSESSING OFFICER ON THE BASIS OF THE SEIZED DOCUMENTS AND NOT ON THE BASIS OF PURE GUESS WORK. 1(B) ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THIS CASE THE LD.CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS.7,78,793/- LEVIED U/S 271(1)(C) BY IGNORING THE N ON- PRODUCTION OF BOA AS ALSO NON-FILING OF APPEAL BY THE ASSESSEE AGAINST THE QUANTUM ADDITION. 4. LEARNED DR HAS RELIED ON THE ORDER OF THE ASSESSING O FFICER. HE SUBMITTED THAT THE TRADING ADDITION MADE HAS BECOME F INAL AND, THEREFORE, THE ASSESSEE SHOULD BE MADE LIABLE FOR PENAL TY UNDER SECTION 271(1)(C) OF THE ACT. THE ASSESSEE HAS NOT MAI NTAINED ACCOUNT BOOKS AND THERE WAS NO BASIS FOR THE ASSESSEE FOR DECLARIN G INCOME FROM ITS CASHEW NUT BUSINESS. THE ASSESSING OFFICER HAS ESTI MATED THE GP AT THE RATE OF 4% ON THE TOTAL TURNOVER OF `3.93 CRORES AND THE TURNOVER WAS ADOPTED BY HIM ON THE BASIS OF SEIZED MATE RIAL AND THAT THE GP RATE OF 4% APPLIED IS NORMAL IN THE LINE OF T RADE OF THE ASSESSEE. HE RELIED ON THE ORDER OF THE ASSESSING OFFICER. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED DR AND HAVE PERUSED THE ORDER OF THE ASSESSING OFFICER AND THE CIT(A ). WE FIND THAT MERELY BECAUSE THE ASSESSEE HAS NOT MAINTAINED THE BOOKS OF ACCOUNT, IT DOES NOT FOLLOW THAT THE ASSESSEE WOULD BE LIABLE FOR PENALTY FOR CONCEALMENT OF INCOME OR FOR FILING INACCURATE PART ICULARS OF INCOME, IN CASE SOME ADDITION TO THE TRADING RESULTS OF THE ASSESSEE W AS MADE BY THE ASSESSING OFFICER AND THE SAME HAS BECOME FINAL. THE SEIZED MATERIAL MAY BE A VALID BASIS FOR ESTIMATING THE TURNO VER OF THE ASSESSEE BUT THE FACT REMAINS THAT THE TRADING ADDITION HAS BEEN MADE BY APPLYING A FLAT GP RATE OF 4% ON THE TURNOVER OF THE ASSESSEE. THE GP RATE OF 4% WAS APPLIED BY THE ASSESSING OFFICER BY OB SERVING THAT IN THE TRADE OF DRY FRUIT, THE NORMAL GP RATE APPLIED WAS 4%. THE WHOLE CASE OF TRADING ADDITION MADE BY THE ASSESSING OFFICER I N THE QUANTUM CASE OF THE ASSESSEE IS BASED ON PREPONDERANCE OF PROBABIL ITIES AND ITA-1033/DEL/2010 3 ESTIMATE OF PROFIT WAS BASED ON GUESSWORK ONLY. THE FAC TS OF THE CASE MAY JUSTIFY THE ESTIMATION OF TURNOVER AND THE APPLIC ATION OF FLAT RATE OF GP AT 4% FOR MAKING THE TRADING ADDITION, BUT, ARE NOT SUFFICIENT TO LEVY PENALTY ON THE ASSESSEE UNDER SECTION 271(1)(C) OF THE ACT. LEARNED CIT(A), IN THE FACTS OF THE CASE, HAS CONCLUDED THAT T HE ADDITION MADE BY THE ASSESSING OFFICER WAS PURELY A GUESSWORK AND ESTIMAT ION WITHOUT ANY MATERIAL WHATSOEVER AND IT COULD NOT AMO UNT TO CONCEALMENT. THERE BEING NO MISTAKE IN THE ORDER OF LEARNED CIT(A) ON THIS ISSUE, THE SAME IS CONFIRMED AND THE GROUND OF APPE AL OF THE REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED . DECISION PRONOUNCED IN THE OPEN COURT ON 6 TH MAY, 2015. SD/- SD/- ( (( ( INTURI RAMA RAO INTURI RAMA RAO INTURI RAMA RAO INTURI RAMA RAO ) )) ) (G. (G. (G. (G. C. GUPTA C. GUPTA C. GUPTA C. GUPTA ) )) ) ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER VICE PRESIDE VICE PRESIDE VICE PRESIDE VICE PRESIDE NT NTNT NT VK. COPY FORWARDED TO: - 1. APPELLANT : DEPUTY COMMISSIONER OF INCOME TAX , DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -09, NEW DELHI. 09, NEW DELHI. 09, NEW DELHI. 09, NEW DELHI. 2. RESPONDENT : SHRI PAWAN KUMAR SHARMA, SHRI PAWAN KUMAR SHARMA, SHRI PAWAN KUMAR SHARMA, SHRI PAWAN KUMAR SHARMA, C CC C- -- -9/62, YAMUNA VIHAR, NEW DELHI. 9/62, YAMUNA VIHAR, NEW DELHI. 9/62, YAMUNA VIHAR, NEW DELHI. 9/62, YAMUNA VIHAR, NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR