M/s. Shree Chem Intermediates, Ahmedabad V. The Dy.CIT.,Circle-11, Ahmedabad

ITA 1342/AHD/2011

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6857 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 02-12-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 05-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: H V GANDHI

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, C BENCH . .. . . .. . , !' !' !' !', , , , #$ #$ #$ #$ # ## #. .. .% $% % $% % $% % $%, , , , &' ( &' ( &' ( &' ( & ' & ' & ' & ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER) ITA NO.1342/AHD/2011 [ASSTT.YEAR : 2006-2007] M/S.SHREE CHEM INTERMEDIATES H-3, VIJAY TOWER OPP: ABAD DAIRY, KANKARIA AHMEDABAD. PAN : AADFS 2091 L /VS. DCIT, CIR.11 AHMEDABAD. ( (( (*+ *+ *+ *+ / APPELLANT) ( (( (,-*+ ,-*+ ,-*+ ,-*+ / RESPONDENT) ./ 0 1 &/ ASSESSEE BY : SHRI H.V. GANDHI ( 0 1 &/ REVENUE BY : SHRI VINOD TANWANI 3 0 /4'/ DATE OF HEARING : 2 ND DECEMBER, 2011 5%6 0 /4'/ DATE OF PRONOUNCEMENT : 9 TH DECEMBER, 2011 &7 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL OF THE ASSESSEE FOR A.Y.2006-2007 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-XVI, AHMEDABAD. 2. THE FOLLOWING GROUNDS ARE RAISED IN THE APPEAL O F THE ASSESSEE: 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN REDUCING THE PENALTY FROM RS.47,613/- TOP RS.26,782/- INSTEAD OF DELETION OF ENTIRE PENALTY OF RS.47,613/-. ITA NO.1342/AHD/2011 -2- 2. THE LD.CIT(A) HAS ALSO ERRED IN LAW AND ON FACTS IN CONFIRMING THE PENALTY ON RS.79,545/- IN RESPECT OF SO CALLED UNEXPLAINED PURCHASES. 3. THE LD.CIT(A) HAS ALSO ERRED IN LAW AND ON FACTS IN NOT CONSIDERING THE DIFFERENCE BETWEEN THE ASSESSMENT P ROCEEDINGS AND THE PENALTY PROCEEDINGS. THE APPELLANT HAS NEITHER CONCEALED THE INCOME NOR FURNISHED INACCURATE PARTICULARS OF INCO ME. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS LEVIED BY THE AO O N TWO AMOUNTS I.E. DISALLOWANCE OF UNPAID P.F. OF RS.64,717/- AND UNEX PLAINED PURCHASES OF RS.79,565/-. HE SUBMITTED THAT THE CIT(A) HAS DELE TED THE PENALTY IMPOSED ON DISALLOWANCE OF UNPAID PF AMOUNT OF RS.6 4,717/- BUT HAS CONFIRMED THE PENALTY ON OTHER ISSUE OF UNEXPLAINED PURCHASE OF RS.79,656/-. HE SUBMITTED THAT THE ASSESSEE HAS SH OWN PURCHASE OF RS.79,656/- FROM M/S.GRASIM INDUSTRIES LTD. HOWEVE R, ON VERIFICATION OF BILLS, IT WAS FOUND THAT THE PURCHASE PAYMENT WAS I N THE NAME OF M/S.RAMESH BROS. THE CLAIM OF THE ASSESSEE WAS THA T THE GOODS WERE PURCHASED THROUGH M/S.RAMESH BROS AND THE RELEVANT ENTRIES WERE MADE IN THE BOOKS OF ACCOUNTS. THE CIT(A) DID NOT AGREE AND PENALTY WAS CONFIRMED ON THIS AMOUNT OF ADDITION MADE BY THE AO . HE SUBMITTED THAT THIS WAS MERELY AN ACCOUNTING ERROR IN SHOWING THE GOODS AS PURCHASED DIRECTLY FROM M/S.GRASIM INDUSTRIES LTD. AND THERE WAS NO MALA FIDE CONDUCT ON THE PART OF THE ASSESSEE. THE LD. DR HA S RELIED UPON THE ORDERS OF THE AO AND THE CIT(A). 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND HAVE PE RUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE ASSESSE E HAS PURCHASED THE GOODS AMOUNTING TO RS.79,565/- AND THE SAME WERE SH OWN AS HAVING PURCHASED FROM M/S.GRASIM INDUSTRIES LTD. VERIFICA TION OF THE BILLS ITA NO.1342/AHD/2011 -3- SHOWED THAT THE BILL WAS IN THE NAME OF M/S.RAMESH BROS AND THE ASSESSEE HAS NOT MADE ANY PURCHASE FROM THIS PARTY. THAT IN THE ASSESSMENT ORDER FRAMED BY THE AO, THE SAME FACTS H AVE BEEN RECORDED AND IT WAS FURTHER RECORDED THAT THE ASSESSEE WAS A SKED TO EXPLAIN THE ABOVE TRANSACTION AND THE ASSESSEE COULD NOT FURNIS H ANY SATISFACTORY EXPLANATION. WE FIND THAT MERELY BECAUSE THE ASSES SEE COULD NOT FURNISH ANY SATISFACTORY EXPLANATION FOR HAVING SHOWN THE G OODS PURCHASED DIRECTLY FROM M/S.GRASIM INDUSTRIES LTD. AND THAT T HE ADDITION WAS CONFIRMED BY THE CIT(A) IN THE QUANTUM APPEAL OF TH E ASSESSEE, COULD NOT BE HELD AS SUFFICIENT GROUND FOR IMPOSITION OF PENA LTY UNDER SECTION 271(1)(C) OF THE ACT. THE PURCHASE BILL PRODUCED B Y THE ASSESSEE WAS FOR THE IDENTICAL AMOUNT OF PURCHASE OF GOODS OF RS.79, 565/- AND THE DIFFERENCE WAS IN THE NAME OF THE SUPPLIER. THE CL AIM OF THE ASSESSEE THAT IT HAS PURCHASED GOODS FROM M/S.RAMESH BROS AND REL EVANT ENTRIES IN THE BOOKS OF ACCOUNTS WERE MADE, COULD NOT BE CONTROVER TED BY THE AO AND THE CIT(A). NO OTHER MATERIAL WAS BROUGHT ON RECOR D BY THE REVENUE TO SUGGEST THAT THE CONDUCT OF THE ASSESSEE WAS MALA FIDE . THE ERROR IN THE ACCOUNT BOOKS COULD BE SUFFICIENT TO UPHOLD THE ADD ITION MADE IN THE QUANTUM CASE BY THE AO, BUT THEY WERE NOT SUFFICIEN T TO VISIT THE ASSESSEE WITH THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT . IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE HOLD THAT IT WAS NOT A FIT CASE TO IMPOSE PENALTY UNDER SECTION 271(1)(C) OF THE ACT WHICH IS ACCORDINGLY CANCELLED AND THE GROUNDS OF THE APPEAL OF THE ASSESSEE ARE A LLOWED. 5. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( #.% $% /A.MOHAN ALANKAMONY) &' ( /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT