M/s. Shree Sainath Photochem, Navsari V. The Income tax Officer,Ward-4, Navsari

ITA 1315/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6096 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 05-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SITA RAM MEENA
• Keywords: Business expenditure
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CAMP AT SURAT BEFORE SHRI RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH , ACCOUNTANT MEMBER ./ ITA NO. 1315 /AHD/201 4 / ASSTT. YEAR: 2007 - 08 M/S. SHREE SAINATH PHOTOCHEM, SURVEY NO. 454/P, N.H. NO.8, NR. HOTEL ALMAS, ALIPORE DIST : NAVSARI PAN : AAJFS 9455 Q VS. INCOME TAX OFFICER, WARD - 4 , NAVSARI / (APPELLANT) / (RESPONDENT) ASSESSEE BY : MR. RAJESH UPADHYAY REVENUE BY : MR. SITA RAM MEENA, SR DR / DATE OF HEARING : 2 7 / 0 4 /201 7 / DATE OF PRONOUNCEMENT: 28 / 0 4 /201 7 / O R D E R PER RAJPAL YADAV , JUDICIAL MEMBER : ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST ORDER OF THE LD.CIT(A), VALSAD DATED 06.02.2014 PASSED FOR THE ASSTT. YEAR 200 7 - 08 . 2. GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) ERRED IN CONFIRMING THE PENALTY OF RS. 1,94,267 / - IMPOSED BY THE ASSESSING OFFICER UNDER S ECTION 271(1)(C) OF THE INCOME - T AX ACT, 1961. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME ON 25 . 10 .200 7 DECLARING TOTAL INCOME AT RS. 2,31,190 / - . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRU TINY ASSESSMENT AND IN THE SCRUTINY ASSESSMENT THE ASSESSING OFFICER MADE A TOTAL ADDITION AMOUNTING TO ITA NO. 1315/AHD/ 2014 SHREE SAINATH PHOTOCHEM VS. ITO AY : 2007 - 2008 2 RS.16,75,687/ - ON ACCOUNT OF GP ADDITION (RS.9,53,260), CASH CREDIT U/S 68 OF THE ACT (RS.5,69,000), INTEREST PAID ON LOAN TO CREDITOR (RS.8,153/ - ) AND DISALLOWANCE OUT OF BUSINESS EXPENSES CLAIMED (RS.1,45,274/ - ). AGGRIEVED BY THE ORDER OF LD. ASSESSING OFFICER, THE ASSESSEE WENT IN APPEAL BEFORE THE LD. CIT(A) WHO DELETED THE ADDITION OF RS.9,53,260/ - & RS.1,45,274/ - MADE BY THE ASSESSING OFFICER ON A CCOUNT OF GP ADDITION AND DISALLOWANCE OUT OF BUSINESS EXPENDITURE RESPECTIVELY AND CONFIRMED THE REMAINING ADDITION OF RS.5,77,153/ - . SUBSEQUENT TO THE CIT(A)S ORDER, PENALTY U/S 271(1)(C) OF THE ACT WAS COMPLETED, IMPOSING A PENALTY OF RS. 1,94,267 / - VID E ORDER DATED 20 . 04 .201 1 . ON APPEAL, LD.CIT(A) HAS CONFIRMED THE PENALTY. 4. AT THE VERY OUTSET, THE LD. C OUNSEL FOR THE ASSESSEE SUBMITTED THAT ADDITION MADE BY THE AO QUA PENALTY HAS BEEN IMPOSED, WAS DELETED BY THE TRIBUNAL VIDE ORDER DATED 05 . 06 .20 1 5 PASSED IN CO NO. 63 /AHD/2011, THEREFORE, IMPUGNED PENALTY WILL NOT SURVIVE. THE LD. COUNSEL PLACED ON RECORD COPY OF THE TRIBUNALS ORDER. THE LD. DR WAS UNABLE TO CONTROVERT TO THIS CONTENTION OF THE LD. C OUNSEL FOR THE ASSESSEE. 5. WE HAVE DULY CONSID ERED RIVAL CONTENTIONS AND GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT SUB - CLAUSE (III) OF SECTION 271(1)(C) PROVIDES MECHANISM FOR QUANTIFICATION OF PENALTY. IT CONTEMPLATES THAT THE ASSESSEE WOULD BE DIRECTED TO PAY A SUM IN ADDITION TO TAXES, IF AN Y, PAYABLE HIM, WHICH SHALL NOT BE LESS THAN , BUT WHICH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OTHER WORDS, THE QUANTIFICATION OF THE PE NALTY IS DEPENDED UPON THE ADDITION MADE TO THE INCOME OF THE ASSESSEE. SINCE BASIS FOR VISITING THE ASSESSEE WITH PENALTY HAS BEEN EXTINGUISHED BY DELETING THE ADDITION VIDE ABOVE ORDER OF THE TRIBUNAL ITA NO. 1315/AHD/ 2014 SHREE SAINATH PHOTOCHEM VS. ITO AY : 2007 - 2008 3 DATED 05 . 06 .201 5 , THEREFORE, THERE CANNOT BE ANY PENALTY UPON THE ASSESSEE UNDER SECTION 271(1)(C) OF THE ACT, AND ACCORDINGLY, WE DELETE IMPUGNED PENALTY AND CANCEL ORDERS OF THE BOTH THE AUTHORITIES BELOW. ACCORDINGLY, THE A PPEAL OF THE ASSESSEE IS ALLOWED. 6. IN T HE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 2 8 T H APRIL, 2017 AT CAMP SURAT . SD/ - SD/ - ( AMARJIT SINGH ) ACCOUNTANT MEMBER ( RAJPAL YADAV) JUDICIAL MEMBER SURAT ; DATED 2 8 / 0 4 /201 7 * BT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , / DR, ITAT, 6. / GUARD FILE . / BY ORDER, T R U E C O P Y / (DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD