The Assistant Commissioner Of IncomeTax, Circle 2, JAMNAGAR V. M/s Silver Sea Foods, PORBANDAR

ITA 1366/RJT/2010

• Counselvise Citation: 136624914 RSA 2010
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 17-04-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 30-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: SANJAY R SHAH
• Keywords: Difference of opinion

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. . .. . . . . . , , , , . .. . . . . . , , , , $ $ $ $ BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K. S RIVASTAVA, AM. ITA NO.1366/RJT/2010. / ASSESSMENT YEAR 2004-05. THE ASSTT. C.I.T., CIRCLE-2, JAMNAGAR. ( */ APPELLANT) M/S. SILVER SEA FOODS, JAVARNAKA, PORBANDAR.. PAN: AALFS6372C. +,*/ RESPONDENT - / REVENUE BY SHRI M. K. SINGH, D. R /- / ASSESSEE BY SHRI SANJAY R. SHAH, C.A. - / DATE OF HEARING 17-04-2012 - / DATE OF PRONOUNCEMENT 20 - 04-2012 / / / / ORDER . .. . . . . . , , , , / T. K. SHARMA, J. M. : THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DATED 20-10-2010 OF CI T (A), JAMNAGAR CANCELING THE PENALTY OF RS.3,74,600/- LEVIED BY AO U/S.271(1 )(C) OF THE I.T. ACT FOR THE ASSESSMENT YEAR 2004-05. 2. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE I S A FIRM ENGAGED IN THE BUSINESS OF EXPORT IN FROZEN FOODS. 3. FOR THE ASSESSMENT UNDER APPEAL, THE AO IMPOSED THE PENALTY OF RS.3,74,600/- U/S.271(1)(C) OF THE I.T. ACT FOR ADD ITION MADE ON ACCOUNT OF EXCESS STOCK DECLARED AT THE TIME OF SURVEY. ON APPEAL, T HE LD. CIT(A) CANCELLED THE SAME FOR THE DETAILED REASON GIVEN IN PARAA-5 OF TH E IMPUGNED ORDER WHICH READS AS UNDER:- ITA NO 1366/RJT/2010 2 I HAVE CAREFULLY CONSIDERED THAT ISSUE. IT IS SEEN THAT ASSESSING OFFICER HAS IMPOSED PENALTY U/S.271(1)(C) ON ADDITION OF RS.10, 43,919 BEING DIFFERENCE IN VALUATION OF EXCESS STOCK FOUND AT THE TIME OF S URVEY AND AS DECLARED IN THE RETURN. IN THE SURVEY U/S.133A EXCESS STOCK OF 16650 KG OF SILVER POMPHRET WAS FOUND, WHICH WAS VALUED AT RS.40,00,00 0, HOWEVER AT THE TIME OF FILING RETURN OF INCOME APPELLANT HAS VALUE D THE SAID EXCESS STOCK AT RS.29,56,081. IT WAS EXPLAINED THAT AT THE TIME OF SURVEY THE STOCK WAS VALUED AT APPROXIMATE MARKET VALUE AND IN INCOME TA X RETURN THE SAME WAS VALUED AT COST. WORKING OF COST WAS SUBMITTED TO ASSESSING OFFICER AS WELL AS BEFORE ME. THOUGH ADDITION WAS CONFIRMED B Y CIT(A) AND ITAT, THE APPELLANT HAS FAIRLY DISCLOSED ALL MATERIAL FAC T LEADING TO DIFFERENCE IN VALUATION OF EXCESS STOCK. THE APPELLANT HAS NOT R EDUCED THE QUANTITY OF EXCESS STOCK FOUND AT THE TIME OF SURVEY, BUT ONLY IT WAS VALUED IN A DIFFERENT MANNER INSTEAD OF RATE ADOPTED AT THE TIM E OF SURVEY. THE ASSESSING OFFICER HAS REJECTED THE EXPLANATION OF A PPELLANT BUT HAS NOT FOUND THE SAID EXPLANATION AS TOTALLY FALSE. THE ON LY REASON FOR SUSTAINING THE ADDITION AND LEVY OF PENALTY IS THAT THE VALUE OF STOCK DECLARED SHOULD HAVE BEEN RS.40 LACS AND NOT WHAT WAS SHOWN IN THE RETURN OF INCOME ON THE BASIS OF SOME OTHER METHOD OF VALUATION. THUS IT IS CLEAR THAT THE DECLARATION IN QUANTITATIVE TERMS WAS THE SAME I.E. 16650 KG. AND MERELY BECAUSE VALUATION ADOPTED BY THE APPELLANT WAS NOT ACCEPTABLE, IT WOULD NOT MEAN THAT PENALTY HAS TO BE LEVIED. CONSIDERING THE FACTS OF THE CASE, I DO NOT FIND IT TO BE A FIT CASE FOR LEVY OF PENALTY U/S.271(1)(C) OF THE ACT, AND THE SAME IS CANCELLED. 4. AGGRIEVED WITH THE ORDER OF LD. CIT(A), THE REVE NUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING, ON BEHALF OF REVENUE, SH RI M. K. SINGH, D.R. APPEARED AND POINTED OUT THAT IN THE RETURN OF INCO ME FURNISHED, THE ASSESSEE HAS NOT CORRECTLY VALUED THE SILVER POMPHRET. THER EFORE, AO RIGHTLY LEVIED PENALTY OF RS.3,74,600/- U/S.271(1) OF THE I.T. ACT, 1961. AS AGAINST THIS, COUNSEL OF THE ASSESSEE POINTED OUT THAT DIFFERENCE IN VALUATION W AS DUE TO DIFFERENCE OF OPINION FOR WHICH PENALTY U/S.271(1)(C) IS NOT LEVIABLE. H E THEREFORE, CONTENDED THAT VIEW TAKEN BY THE LD. CIT(A) IN THIS REGARD BE UPHELD. 6. AFTER HEARING BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDER OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT AS SESSEE HAS NOT REDUCED THE QUANTITY OF EXCESS STOCK FOUND AT THE TIME OF SURVE Y. IT HAS VALUED THE STOCK FOUND ITA NO 1366/RJT/2010 3 AT A DIFFERENT MANNER INSTEAD OF RATE ADOPTED AT TH E TIME OF SURVEY. THE METHOD OF VALUATION OF STOCK ADOPTED BY AO IS NOT FOUND WH ILE BOTH THE DEPARTMENTAL AUTHORITIES AS TOTALLY FALSE. KEEPING IN VIEW THE P ECULIAR FACTS OF THE CASE, WE ARE OF THE OPINION THAT LD. CIT(A) HAS GIVEN COGENT REA SON FOR CANCELING THE PENALTY OF RS.3,74,600/- LEVIED BY AO U/S.271(1)(C) OF THE I.T . ACT, 1961. WE THEREFORE, INCLINED TO UPHELD THE ORDER OF LD. CIT(A). 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. - 4 20/04/2012 6 - THIS ORDER PRONOUNCED IN OPEN COURT ON 20/04/2012. SD/- SD/- ( .. / D. K. SRIVASTAVA) ( .. / T. K. SHARMA) / ACCOUNTANT MEMBER /JUDICIAL MEMBER 4/ ORDER DATE 20/04/2012. /RAJKOT - -- - +8 +8 +8 [phone] / COPY OF ORDER FORWARDED TO:- 1. * / APPELLANT-THE ASSTT. C.I.T., CIRCLE-2, JAMNAGAR. 2. +,* / RESPONDENT-M/S. SILVER SEA FOODS, JAVARNAKA, POR BANDAR. 3. > / CONCERNED CIT-, JAMNAGAR. 4. >- / CIT (A), JAMNAGAR. 5. 8 +, , / DR, ITAT, RAJKOT 6. / GUARD FILE. / BY ORDER , ASSTT. REGISTRAR , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.