Nareshkumar P.Kapadia, Surat V. The ACIT.,Circle-2, Surat

ITA 1123/AHD/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0211 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-07-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 12-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SAHRI R N VEPARI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI D.C. AGRAWAL, ACCOUNTANT MEMBER DATE OF HEARING : 30/07/2010 DRAFTED ON: 05/ 08/2010 1. ITA NO.1124/AHD/2010 - A.Y. 2004-05 2. ITA NO.1123/AHD/2010 - A.Y. 2004-05 1. PUNAMCHAND MAGANLAL KPADIA PROP.P.M. TEXTILES 49/1542,OUTSIDE KAMELA DARWAJA PIMTEX SUB STATION COMPOUND UMARWADA TEKRA, SURAT PAN : ADWPK 8342C VS. THE ASST.CIT CIRCLE-2 SURAT 2. NARESHKUMAR PUNAMCHAND KAPADIA PROP: MAGANLAL JIVAN RAM 49/1542,OUTSIDE KAMELA DARWAJA PIMTEX SUB STATION COMPOUND UMARWADA TEKRA, SURAT PAN : ADWPK 8344E VS. THE ASST.CIT CIRCLE-2 SURAT ( APPELLANTS ) ( RESPONDENT ) ASSESSEES BY: SAHRI R.N.VEPARI REVENUE BY : SHRI K.MADHUSUDAN SR.D.R. O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : BOTH THESE APPEALS HAVE BEEN CONSOLIDATED FOR THE SAKE OF CONVENIENCE HAVING IDENTICAL FACTS WHICH HAVE EMAN ATED FROM THE SEPARATE ORDERS OF LEARNED CIT(APPEALS)-II, SURAT F OR ASSESSMENT YEAR 2004-05 RESPECTIVELY DATED 23/02/10 & 24/02/2010. 2. THE ASSESSEE HAS CHALLENGED THE LEVY OF PENALTY U/S.271(1)(C) OF THE I.T. ACT, 1961. IN THE CASE OF SHRI NARESH P.KAP ADIA THE QUANTUM OF ITA NOS.1124/AH D/2010 AND 1123/AHD/2010 PUNAMCHAND M.KAPADIA VS.ACIT AND NARESHKUMAR P.KAPADI VS. ACIT (RESPECTIVELY) ASST.YEAR 2004-05 - 2 - PENALTY IS RS.69,000/- AND IN THE CASE OF SHRI PUNA MCHAND M.KAPADIA THE QUANTUM OF PENALTY IS RS.4,87,800/-. VIDE PENA LTY ORDERS, BOTH IDENTICALLY DATED 27/03/2009, IT WAS NOTICED THAT T HE ADDITION WAS MADE ON ACCOUNT OF DECLINE IN THE PERCENTAGE OF GROSS PR OFIT. IN THE CASE OF SHRI PUNAMCHAND M.KAPADIA, THE GROSS PROFIT WAS ADO PTED AT 17.77% AND SUBSEQUENT THEREUPON ADDITION WAS MADE. IN THE CASE OF SHRI NARESH P.KAPADIA GROSS PROFIT AT 16.09% WAS ADOPTED AND SU BSEQUENTLY AN ADDITION WAS MADE. AS PER ASSESSING OFFICER, THE ASSESSEE HAS DELIBERATELY CONCEALED THE INCOME, THEREFORE, LEVIE D THE IMPUGNED PENALTIES. WHEN THE ISSUE WAS CARRIED BEFORE THE F IRST APPELLATE AUTHORITY, AN OBSERVATION WAS MADE THAT THE IMPUGNED QUANTUM A DDITIONS HAVE BEEN AFFIRMED BY THE RESPECTED TRIBUNAL AND ONCE THE QU ANTUM ADDITION HAS BEEN CONFIRMED, THEREFORE, THE LEVY OF PENALTY WAS JUSTIFIABLE. 3. NOW BEFORE US, A DECISION OF RESPECTED CO-ORDINA TE BENCH D AHMEDABAD IN THE CASE OF BHARATKUMAR PUNAMCHAND KAP ADIA VS. ASSISTANT CIT BEARING ITA NOS.1121 & 1122 FOR ASSES SMENT YEARS 2003-04 & 2004-05 RESPECTIVELY ORDER DATED 23/07/20 10 HAS BEEN CITED FOR THE PROPOSITION THAT ON IDENTICAL FACTS IN ONE OF THE GROUP CASES, THE PENALTY U/S.271(1)(C) HAS ALREADY BEEN DELETED. IT HAS ALSO BEEN ARGUED THAT THE SAID CITED DECISION IS ALSO IN RESPECT OF THE BUSINESS OF MANUFACTURING AND SALE OF ART SILK CLOTH AND TRADIN G OF YARN. ON HEARING THE RIVAL SUBMISSIONS, WE HAVE FOUND THAT THE RESPE CTED CO-ORDINATE BENCH HAS FOLLOWED THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT.LTD. REPORTED AS (2010) 322 ITR 158 (SC) ITA NOS.1124/AH D/2010 AND 1123/AHD/2010 PUNAMCHAND M.KAPADIA VS.ACIT AND NARESHKUMAR P.KAPADI VS. ACIT (RESPECTIVELY) ASST.YEAR 2004-05 - 3 - AND VIDE PARAGRAPH NO.9 DIRECTED TO DELETE THE PEN ALTY; FOR READY REFERENCE THE SAME IS REPRODUCED BELOW:- 9. ON PERUSAL OF THE REASONING GIVEN BY THE ASSES SING OFFICER IN THE ASSESSMENT ORDER AND LEARNED COMMISSIONER OF IN COME TAX (APPEALS) IN QUANTUM APPEAL AND KEEPING IN VIEW THA T IN QUANTUM APPEAL, THE ADDITIONS, WHICH WERE MADE BY THE ASSES SING OFFICER AND CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), WERE MADE ON ACCOUNT OF DIFFERENCE OF OP INION BETWEEN THE ASSESSEE AND ASSESSING OFFICER. ALL THE MATERI AL FACTS WERE DISCLOSED IN THE RETURN AND, THEREFORE, IT CANNOT B E SAID THAT ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OR CO NCEALED INCOME. ADMITTEDLY, THE CASE OF THE ASSESSEE DOES NOT FALL WITHIN THE MISCHIEF OF MAIN PROVISION OF SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 BECAUSE MERE REJECTION OF ASSESSEES CLAIM WOULD NOT BE SUFFICIENT TO HOLD THE ASSESSEE TO BE GUILTY OF CONCEALMENT. THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF SARAB HAI CHEMICAL (P) LTD. (2002) 257 ITR 355 (GUJ.) HELD AS UNDER:- THE DEEMING FICTION THAT THE ADDED/DISALLOWED AMOUNTS REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED CONTAINED IN EXPLANATION 1 WILL NOT APPLY IF THE EXPLANATION THA T WAS GIVEN BY THE ASSESSEE IN THE QUANTUM PROCEEDINGS WHICH HE COULD NOT SUBSTANTIATE IN THOSE PROCEEDINGS WAS (I) BONA FIDE AND (II) IF HE HAD DISCLOSED ALL THE FACTS RELATING TO THE SAME AN D MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME. IN ITA NOS.1124/AH D/2010 AND 1123/AHD/2010 PUNAMCHAND M.KAPADIA VS.ACIT AND NARESHKUMAR P.KAPADI VS. ACIT (RESPECTIVELY) ASST.YEAR 2004-05 - 4 - CASES WHERE EXPLANATION WAS OFFERED, BUT WAS REJECTED AS IT COULD NOT BE SUBSTANTIATED BY THE ASSESSEE, THERE WOULD ARISE NO PRESUMPTION OF CONCEALMENT OF THE PARTICULARS OF INCOME THAT WAS ADDED OR DISALLOWED AND SUCH ASSESSEE CAN SHOW THAT THE SAID EXPLANATION OFFERED BY HIM WAS A BONA FIDE ONE AND THAT HE HAD DISCLOSED ALL FACTS RELATI NG TO SUCH EXPLANATION AND MATERIAL TO THE COMPUTAIT8ON OF HIS TOTAL INCOME DURING THE QUANTUM PROCEEDINGS. IN THE PRESENT CASE, THE ASSESSEE HAS DISCLOSED ALL THE MATERIAL FACTS. WE, THEREFORE, BY RELYING ON THE JUDGMENT O F THE HON'BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCT S PVT.LTD.(SUPRA) ARE, OF THE VIEW THAT LEARNED COMMI SSIONER OF INCOME TAX (APPEALS) IS NOT LEGALLY AND FACTUALLY C ORRECT IN LEVYING THE PENALTY ON BOTH THE ASSESSMENT YEARS UN DER APPEAL. WE, THEREFORE, CANCEL THE PENALTY LEVIED BY THE ASS ESSING OFFICER UNDER SECTION 271(1)(C) FOR BOTH THE ASSESSMENT YEA RS UNDER APPEALS. 4. ONCE ON IDENTICAL FACTS IN ONE OF THE CASES OF T HIS GROUP THE RESPECTED CO-ORDINATE BENCH HAS TAKEN A VIEW, THERE FORE, CONSIDERING THE ENTIRETY OF THE CIRCUMSTANCES AND A VIEW ALREAD Y TAKEN, THE JUDICIAL PROPRIETY REQUIRES ONE BENCH OF THE TRIBUNAL TO FOL LOW ANOTHER BENCH WHERE FACTS ARE THE SAME. WE FIND NO REASON TO ADO PT ANY OTHER VIEW BECAUSE ON IDENTICAL FACTS AND CIRCUMSTANCES, THE AFORESAID RESPECTED CO-ORDINATE BENCH HAS ALREADY TAKEN A DECISION WHIC H OUGHT TO BE ITA NOS.1124/AH D/2010 AND 1123/AHD/2010 PUNAMCHAND M.KAPADIA VS.ACIT AND NARESHKUMAR P.KAPADI VS. ACIT (RESPECTIVELY) ASST.YEAR 2004-05 - 5 - FOLLOWED IN THE PRESENT APPEALS. ACCORDINGLY, WE H EREBY DELETE THE PENALTY IN BOTH THE CASES. 5. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 6 TH AUGUST, 2010. SD/- SD/- ( D.C. AGRAWAL) ( MUKUL KR. SH RAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBE R AHMEDABAD; DATED 06 / 08 /2010 T.C. NAIR, SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEPARTMENT. 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-II, SURAT 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD