AJAYBHAI MAHESHBHAI MAVANI, Surat V. THE ITO, Surat

ITA 1175/AHD/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57022 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-01-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 15-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Assessee Lawyers: D K PARIKH

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD , . .!'#$, % & BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ./ I.T.A. NO.1175/AHD/2009 ( ( ) ( ) ( ) ( ) / / / / ASSESSMENT YEAR : 2003-04) AJAYBHAI MAHESHBHAI MAVANI PROP. MANISHA TEXTILES 73, MAHATMA INDUSTRIAL ESTATE KAPODRA VARACHHA ROAD, SURAT ( ( ( ( / VS. THE ITO WARD-9 SURAT * % ./+, ./ PAN/GIR NO. : AFDPM 6254 L ( *- / // / APPELLANT ) .. ( ./*- / RESPONDENT ) *- 0 / APPELLANT BY : SHRI D.K.PARIKH, A.R. ./*- 1 0 / RESPONDENT BY : SHRI C.K. MISHRA, SR. D.R. (2 1 3% / / / / DATE OF HEARING : 04/1/2012 4') 1 3% / DATE OF PRONOUNCEMENT : 13.1.12 5 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE W HICH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-V S URAT DATED 17/03/2009. THE ASSESSEE HAS CHALLENGED THE CONFI RMATION OF PENALTY OF RS.92,333/- LEVIED U/S.271(1)(C) OF THE I.T.ACT. 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) OF THE I.T. ACT, 1961 DATED 30/0 1/2006 AND PENALTY LEVIED U/S.271(1)(C) OF THE I.T.ACT ORDER DATED 31/ 03/2008 WERE THAT A ITA NO.1175/AHD /2009 AJAYBHAI MAHESHBHAI VS. ITO ASST.YEAR 2003-04 - 2 - SURVEY U/S.133A WAS CARRIED OUT ON 26/02/2003. THE ASSESSEE HAS DISCLOSED EXCESS STOCK OF RS.18,29,953/-. HOWEVER, ON VERIFICATION DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT GROSS PROFIT RATE FOR THE PRE-SURVEY PERIOD WAS 15.66%, W HEREAS THE GROSS PROFIT RATE FOR POST-SURVEY PERIOD WAS ONLY RS.4,05 4/-. THE ASSESSING OFFICER HAS THEREFORE, CONCLUDED THAT THE PROFIT SH OWN FOR POST-SURVEY PERIOD WAS INADEQUATE. IN THE ABSENCE OF PRODUCTIO N REGISTER FOR THE POST- SURVEY PERIOD, SALES WERE ESTIMATED AND THE GROSS P ROFIT WAS WORKED OUT AT RS.3,36,584/-. 2.1 THE MATTER WAS CARRIED BEFORE THE FIRST APPEL LATE AUTHORITY WHO HAS CONFIRMED THE ADDITION TO THE EXTENT OF RS.2,93,115 /-. THEREUPON, THE MATTER WAS FURTHER CARRIED BEFORE THE TRIBUNAL AND THE RESPECTED ITAT AHMEDABAD (CAMP AT SURAT) IN ITA NO.2175/AHD/2006, A.Y. 2003-04 VIDE AN ORDER DATED 14/09/2009 TITLED AS AJAYBHAI MAHESHBHAI MAVANI VS. ACIT HAS HELD AS UNDER:- 7. WE FIND FROM THE ABOVE CHART THAT THE GP OF THE ASSESSEE FOR THREE YEARS IS CONSISTENT AND GP FOR 2003-04 11.62 % AND FOR 2002-03 12.61% AND FOR 2001-02 IT WAS 9.06%. WE FI ND THAT CONSIDERING THIS AND TO MAINTAIN THE CONSISTENCY IN GP, THEREFORE, ON ADHOC BASIS WE CONFIRM THE ADDITION OF 50% THAT IS RS.14655716 AND 4REST OF ADDITION IS DELETED. 3. WITH THIS FACTUAL BACKGROUND, WE HAVE HEARD BOTH THE SIDES. FROM THE ORDER OF THE RESPECTED CO-ORDINATE BENCH, IT IS APPARENT THAT AN ADHOC RELIEF OF 50% WAS GRANTED. IN SUCH A SITUAT ION, WHEN THE GROSS PROFIT RATE FOR THE POST-SURVEY PERIOD WAS ESTIMATE D, WHICH WAS MADE THE ITA NO.1175/AHD /2009 AJAYBHAI MAHESHBHAI VS. ITO ASST.YEAR 2003-04 - 3 - BASIS FOR LEVY OF PENALTY, AND THAT GROSS PROFIT WA S PARTLY REDUCED BY THE LEARNED CIT(APPEALS) AND THEREAFTER PARTLY REDUCED BY THE TRIBUNAL; A QUESTION HAS BEEN RAISED THAT WHETHER THE PENALTY F OR CONCEALMENT WAS RIGHTLY LEVIED. FROM THE SIDE OF THE APPELLANT, A DECISION OF ITAT B BENCH AHMEDABAD PRONOUNCED IN THE CASE OF LUTHRA DY EING & PRINTING MILLS (IN ITA NO.2934/AHD/2009 A.Y. 2004-05) DA TED 11/11/2011, THIS ISSUE WAS ADDRESSED AND HELD THAT IN A CASE WH ERE ONLY ESTIMATED ADDITION IS LEFT FOR LEVY OF PENALTY, THEN IT IS A WELL SETTLED LAW THAT ON ACCOUNT OF ESTIMATED INCOME FOR FALL IN GROSS PROFI T WOULD NOT ATTRACT LEVY OF PENALTY. IN THAT DECISION, A PRECEDENT OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. DHILLON R ICE MILLS 256 ITR 447 (P&H) AND HARIGOPAL SINGH VS. CIT 258 ITR 85 (P &H) HAVE BEEN RELIED UPON. RESPECTFULLY FOLLOWING THESE DECISION S, WE HEREBY HOLD THAT THE ADDITION WHICH WAS LEVIED WAS BASED UPON AN EST IMATE THEREFORE PENALTY WAS NOT JUSTIFIED. WE HOLD ACCORDINGLY AND THIS GROUND IS ALLOWED. 4. IN THE RESULT, ASSESSEES APPEAL STANDS ALL OWED. SD/- SD/- ( . .!'#$ ) ( ) % ( A.K. GARODIA ) ( M UKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 13/ 01 /2012 63..(, .(../ T.C. NAIR, SR. PS ITA NO.1175/AHD /2009 AJAYBHAI MAHESHBHAI VS. ITO ASST.YEAR 2003-04 - 4 - 5 1 .7 8 7) 5 1 .7 8 7) 5 1 .7 8 7) 5 1 .7 8 7)/ COPY OF THE ORDER FORWARDED TO : 1. *- / THE APPELLANT 2. ./*- / THE RESPONDENT. 3. 9 / CONCERNED CIT 4. 9() / THE CIT(A)-V, SURAT 5. 7 >> >/ // / + + + + ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION..9.1.2012 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 9.1.2012 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 13.1.12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 13.1.12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER