ITO, Ward-1, Nalgonda V. M/s Sri Taraka Jewellers, Nalgonda

ITA 1115/HYD/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69927 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 31-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A V RAGHURAM
• Keywords: Unexplained investment
• Section: 40A(3); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 1115/HYD/2013 ASSESSMENT YEAR: 2007-08 INCOME-TAX OFFICER, WARD 1, HYDERABAD. VS. M/S SRI TARAKA JEWELLERS, NEW PRAKASHAM BAZAR, NALGONDA. PAN ABGFS4722E APPELLANT RESPONDENT APPELLANT BY: SMT. K. HARITHA RESPONDENT BY: SRI A.V. RAGHURAM DATE OF HEARING: 13.11.2013 DATE OF PRONOUNCEMENT: 13.11.2013 O R D E R PER CHANDRA POOJARI, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-VI, HYDERABAD, DATED 20.05.2013 FOR THE ASSESSMENT YEAR 2007-08. THE GRIEVANCE OF THE REVEN UE IN THIS APPEAL IS WITH REGARD TO DELETION OF PENALTY L EVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SING OFFICER MADE THE ASSESSMENT IN THE CASE OF THE ASSE SSEE U/S 143(3) OF THE IT ACT AND MADE THE FOLLOWING ADDITIO NS TO THE INCOME RETURNED BY THE ASSESSEE: 1. UNEXPLAINED INVESTMENT IN PURCHASES 1,19,43,361 2. PROFIT @ 5% ON UNACCOUNTED SALES 5,89,677 3. DISALLOWANCE U/S 40A(3) 1,38,670 4. EXCESS CASH BALANCE 10,00,000 5. UNEXPLAINED INVESTMENT 1,17,000 ITA NO. 1115/HYD/2013 M/S SRI TARAKA JEWELLERS ============================= 2 3. ON APPEAL BEFORE THE CIT(A), THE CIT(A) UPHELD A LL THE SAID ADDITIONS MADE BY THE ASSESSING OFFICER. CONS EQUENT TO THE CONFIRMATION OF ADDITIONS BY THE CIT(A), THE AS SESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT ON THE GROUND THAT THE AMOUNTS OF ADDITIONS MADE WE RE CONCEALED IN NATURE. SINCE THE ASSESSEE DID NOT OFF ER A REASONABLE EXPLANATION ALONG WITH EVIDENCE/PROOF FO R NOT LEVYING PENALTY U/S 271(1)(C) AND FOR NOT TREATING THE AMOUNTS ADDED AS CONCEALED INCOME, THE ASSESSING OFFICER LE VIED A MINIMUM PENALTY OF RS. 45,94,800/- U/S 271(1)(C) OF THE ACT. 4. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN AP PEAL BEFORE THE CIT(A). 5. BEFORE THE CIT(A) IT WAS CANVASSED THAT IN THE Q UANTUM APPEAL PROCEEDINGS, THE TRIBUNAL VIDE ITS ORDER DAT ED 10/05/2012 IN ITA NO. 1007/HYD/2011, DELETED ALL TH E ADDITIONS MADE BY THE ASSESSING OFFICER AND CONFIRM ED BY THE CIT(A) EXCEPT THE ADDITION OF RS. 10,00,000/- ON AC COUNT OF EXCESS CASH. THE CIT(A) AFTER CONSIDERING THE SUBMI SSIONS OF THE ASSESSEE, HELD THAT BASED ON THE FINDINGS AND T HE DECISION OF THE TRIBUNAL THE ANGLE OF CONCEALED INCOME ATTR IBUTABLE TO SUCH OTHER ADDITIONS, DO NOT ARISE AND AS SUCH HE C ONFINED HIS DECISION TO THE PENALTY ON THE ADDITION OF RS. 10,0 0,000/- ATTRIBUTABLE TO THE EXCESS CASH BALANCE AS PER THE BALANCE SHEET. ACCORDINGLY, HE DIRECTED THE ASSESSING OFFI CER TO RE- COMPUTE THE PENALTY ONLY AGAINST THE ADDITION OF RS . 10,00,000/-, WHICH WAS CONFIRMED BY THE TRIBUNAL. 6. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENU E IS IN APPEAL BEFORE US. ITA NO. 1115/HYD/2013 M/S SRI TARAKA JEWELLERS ============================= 3 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORD. THE LEARNED COUNSEL BROUGHT TO OUR NOTICE THAT IN T HE QUANTUM APPEAL, THE TRIBUNAL DELETED THE ADDITIONS MADE BY THE REVENUE AUTHORITIES EXCEPT THE ADDITION OF RS. 10,0 0,000/- ON ACCOUNT OF EXCESS CASH VIDE ITS ORDER DATED 10/05/2 012 (SUPRA). A COPY OF THE ORDER OF THE ITAT HAS BEEN P LACED ON RECORD. WE FIND THAT WHEN THE REVENUE CARRIED THE M ATTER AGAINST THE ORDER OF ITAT BEFORE THE HONBLE AP HIG H COURT, THE HIGH COURT, DISMISSED THE APPEAL CONFIRMING THE ORDER OF ITAT VIDE ITTA NO. 274 OF 2013, JUDGMENT DATED 12 TH JULY, 2013, A COPY OF WHICH IS ON RECORD. BEING SO, WE A RE OF THE OPINION THAT SINCE THE QUANTUM ADDITION ITSELF IS N OT IN EXISTENCE, PENALTY LEVIED ON SUCH NON-EXISTENT ADDI TION CANNOT WITHSTAND IN THE EYE OF LAW. ACCORDINGLY, WE UPHOLD THE ORDER OF THE CIT(A) ON THIS COUNT AND WE DO NOT FIND ANY MERIT IN THE GROUNDS RAISED BY THE REVENUE AND THE SAME ARE DISM ISSED. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH NOVEMBER, 2013 SD/- (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED THE 13 TH NOVEMBER, 2013 KV COPY FORWARDED TO: 1. ITO, WARD 1, NEAR RAILWAY UNDER BRIDGE, HYDER ABAD ROAD, MARRIGUDA POST, NALGONDA 508 001. 2. M/S SRI TARAKA JEWELLERS, NEW PRAKASHAM BAZAR, NALGONDA 3. THE CIT(A)-VI, HYDERABAD. 4. THE CIT-VI, HYDERABAD 4. THE DR ITAT, HYDERABAD ITA NO. 1115/HYD/2013 M/S SRI TARAKA JEWELLERS ============================= 4